2.7 Provisions and contingent liabilities

Provisions are recognized when there is a
present obligation as a result of a past event,
it is probable that an outflow of resources
embodying economic benefits will be required
to settle the obligation and there is a reliable
estimate of the amount of the obligation.
Provisions are measured at the best estimate
of the expenditure required to settle the
present obligation at the Balance sheet date.

If the effect of the time value of money is
material, provisions are discounted using
a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability.
When discounting is used, the increase in
the provision due to the passage of time is
recognized as a finance cost.

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
or a reliable estimate of the amount cannot
be made.

Provisions, contingent liabilities and
contingent assets are reviewed at each
Balance Sheet date. Where the unavoidable
costs of meeting the obligations under the
contract exceed the economic benefits
expected to be received under such contract,
the present obligation under the contract is
recognised and measured as a provision.

2.8 Commitments

Commitments are future liabilities for
contractual expenditure, classified and
disclosed as follows:

a) estimated amount of contracts remaining
to be executed on capital account and
not provided for;

b) uncalled liability on shares and other
investments partly paid;

c) funding related commitment to
subsidiary, associate and joint venture
companies; and

d) other non-cancellable commitments,
if any, to the extent they are considered
material and relevant in the opinion of
management.

2.9 Financial instruments

A financial instrument is any contract that
gives rise to a financial asset of one entity
and a financial liability or equity instrument of
another entity.

(a) Financial assets

(i) Initial recognition and measurement

At initial recognition, financial asset is
measured at its fair value plus, in the case of a
financial asset not at fair value through profit
or loss, transaction costs that are directly
attributable to the acquisition of the financial
asset. Transaction costs of financial assets
carried at fair value through profit or loss are
expensed in the Statement of Profit and Loss.

(ii) Subsequent measurement

For purposes of subsequent measurement,
financial assets are classified in following
categories:

a) at amortized cost; or

b) at fair value through other comprehensive
income; or

c) at fair value through profit or loss.

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

Amortized 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
amortized cost. Interest income from these
financial assets is included in finance income
using the effective interest rate method (EIR).

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 recognized in Statement
of Profit and Loss. When the financial asset
is derecognized, the cumulative gain or loss
previously recognized in OCI is reclassified
from equity to Statement of Profit and Loss
and recognized in other gains/ (losses).
Interest income from these financial assets is
included in other income using the effective
interest rate method.

Fair value through profit or loss: Assets that
do not meet the criteria for amortized cost
or FVOCI are measured at fair value through
profit or loss. Interest income from these
financial assets is included in other income.

The company has currently excercised
the irrevocable option to present in Other
comprehensive Income , subsequent changes
in the Fair value of Equity Instruments. Such an
election has been made on instrument-by¬
instrument basis. The classification is made
on initial recognition and is irrevocable.

(iii) Impairment of financial assets

In accordance with Ind AS 109, Financial
Instruments, the Company applies expected
credit loss (ECL) model for measurement and
recognition of impairment loss on financial
assets that are measured at amortized cost
and FVOCI.

For recognition of impairment loss on
financial assets and risk exposure, the
Company determines that whether there has
been a significant increase in the credit risk
since initial recognition. If credit risk has not
increased significantly, 12-month ECL is used
to provide for impairment loss. However, if
credit risk has increased significantly, lifetime
ECL is used. If in subsequent years, credit
quality of the instrument improves such that
there is no longer a significant increase in
credit risk since initial recognition, then the
entity reverts to recognizing impairment loss
allowance based on 12 month ECL.

Life time ECLs are the expected credit losses
resulting from all possible default events over
the expected life of a financial instrument.
The 12 month ECL is a portion of the lifetime
ECL which results from default events that are
possible within 12 months after the year end.

ECL is the difference between all contractual
cash flows that are due to the Company in
accordance with the contract and all the
cash flows that the entity expects to receive
(i.e. all shortfalls), discounted at the original
EIR. When estimating the cash flows, an
entity is required to consider all contractual
terms of the financial instrument (including
prepayment, extension etc.) over the expected
life of the financial instrument. However, in rare
cases when the expected life of the financial
instrument cannot be estimated reliably, then
the entity is required to use the remaining
contractual term of the financial instrument.

ECL impairment loss allowance (or reversal)
recognized during the year is recognized as
income/expense in the statement of profit and
loss. In balance sheet, ECL for financial assets
measured at amortized cost is presented as
an allowance, i.e. as an integral part of the
measurement of those assets in the balance
sheet. The allowance reduces the net carrying
amount. Until the asset meets write off criteria,
the Company does not reduce impairment
allowance from the gross carrying amount.

(iv) Derecognition of financial assets

A financial asset is derecognized only when

a) the rights to receive cash flows from the
financial asset is transferred or

b) retains the contractual rights to receive
the cash flows of the financial asset, but
assumes a contractual obligation to pay
the cash flows to one or more recipients.

Where the financial asset is transferred then in
that case financial asset is derecognized only if
substantially all risks and rewards of ownership
of the financial asset is transferred. Where the
entity has not transferred substantially all
risks and rewards of ownership of the financial
asset, the financial asset is not derecognized."

(b) Financial liabilities

(i) Initial recognition and measurement

Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss and at amortized cost,
as appropriate.

All financial liabilities are recognized initially
at fair value and, in the case of borrowings
and payables, net of directly attributable
transaction costs.

(ii) Subsequent measurement

The measurement of financial liabilities
depends on their classification, as described
below:

Financial liabilities at fair value through profit
or loss

Financial liabilities at fair value through profit or
loss include financial liabilities held for trading
and financial liabilities designated upon initial
recognition as at fair value through profit
or loss. Separated embedded derivatives
are also classified as held for trading unless
they are designated as effective hedging
instruments. Gains or losses on liabilities held
for trading are recognized in the Statement of
Profit and Loss.

Loans and borrowings

After initial recognition, interest-bearing
loans and borrowings are subsequently
measured at amortized cost using the EIR
method. Gains and losses are recognized
in Statement of Profit and Loss when the
liabilities are derecognized as well as through
the EIR amortization process. Amortized cost
is calculated by taking into account any
discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The
EIR amortization is included as finance costs in
the Statement of Profit and Loss.

(iii) Derecognition

A financial liability is derecognized when the
obligation under the liability is discharged
or cancelled or expires. When an existing
financial liability is replaced by another from
the same lender on substantially different
terms, or the terms of an existing liability are
substantially modified, such an exchange or
modification is treated as the derecognition
of the original liability and the recognition of
a new liability. The difference in the respective
carrying amounts is recognized in the
Statement of Profit and Loss as finance costs.

(c) Offsetting financial instruments

Financial assets and liabilities are offset and
the net amount is reported in the balance
sheet where there is a legally enforceable
right to offset the recognized amounts and
there is an intention to settle on a net basis
or realize the asset and settle the liability
simultaneously. The legally enforceable right
must not be contingent on future events and
must be enforceable in the normal course
of business and in the event of default,
insolvency or bankruptcy of the Company or
the counterparty.

3 Significant accounting judgments, estimates
and assumptions

The preparation of financial statements requires
management to make judgments, estimates and
assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure
of contingent liabilities. Uncertainty about these
assumptions and estimates could result in
outcomes that require a material adjustment to
the carrying amount of assets or liabilities affected
in future years.

4 Estimates and assumptions

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

(a) Taxes

The extent to which deferred tax assets can
be recognized is based on an assessment
of the probability that future taxable
income will be available against which the
deductible temporary differences and tax
loss carryforwards can be utilized. In addition,
significant management judgment is required
to determine the amount of deferred tax
assets that can be recognized, based upon
the likely timing and the level of future taxable
profits together with future tax planning
strategies.

(b) Construction Contracts

Recognizing construction contract revenue
requires significant judgement in determining
actual work performed and the estimated
costs to complete the work, provision for
rectification costs, variation claims etc"

(c) In assessing the recoverability of the
trade receivables and contracts assets,
management's judgement involves
consideration of ageing status, evaluation
of litigations and the likelihood of collection
based on the terms of the contract

5 Standards (including amendments) issued but
not yet effective

Recent Indian Accounting Standards (Ind AS)

The Ministry of corporate Affairs ("MCA") notified
amendments on 7 May 2025 and 13 August

2025 under the Companies (Indian Accounting
Standards) Amendment Rules, 2025 and the
Companies (Indian Accounting Standards)
Second Amendment Rules, 2025, respectively,
which is effective from annual reporting periods
beginning on or after 1 April 2025.

(a) Amendment to Ind AS 7 and Ind AS 107 -
Supplier Finance Arrangement:

The amendments to Ind AS 7 'Statement of Cash
Flows' and Ind AS 107 'Financial Instruments:
Disclosures' clarify the characteristics of
supplier finance arrangements and require
additional disclosures for such arrangements.
The disclosure requirements in the
amendments are intended to assist users of
financial statements in understanding the
effects of supplier finance arrangements on
an entity's liabilities, cash flows and exposure
to liquidity risk.

The Company does not have any supplier
finance arrangements during the reporting
period."

(b) Amendment to Ind AS 1 - Classification of
liabilities as current or non-current and
non-current liabilities with covenants:

The amendment specifies the requirements
for classifying liabilities as current or non¬
current in the balance sheet, and clarifies the
following:

a) An entity's right to defer settlement of a
liability for at least twelve months after the
reporting period must have substance
and must exist at the end of the reporting
period. The classification of a liability as
current or non-current is unaffected by
the likelihood that the entity will exercise
its right to defer settlement.

b) I f an entity's right to defer settlement of
a liability is subject to covenants, such
covenants affect whether that right exists
at the end of the reporting period only if
the entity is required to comply with the
covenant on or before the end of the
reporting period.

c) I n case of a liability that can be settled,
at the option of the counterparty, by
the transfer of the entity's own equity
instruments, such settlement terms do
not affect the classification of the liability
as current or non-current only if the option
is classified as an equity instrument.

These amendments have no effect on the
measurement of any items in the standalone
financial statements of the Company.
The Company did not make retrospective
adjustments as a result of adopting the
amendments to Ind AS 1"

c) Amendment to Ind AS 12 - Pillar-Two Tax
Reforms:

The Company is not within the scope of the
OECD Pillar Two Model Rules, as Pillar Two
legislation has not yet been enacted in any
of the jurisdiction in which the Company
operates.

d) Amendment to Ind AS 21-Lack of
exchangeability

The Amendments introduces requirement
to assess when a currency is exchangeable
into another currency and when it is not. The
amendment requires an entity to estimate the
spot exchange rate when it concludes that a
currency is not exchangeable into another
currency. These amendments had no effect
on the standalone financial statements of the
Company.

The below amendments are notified but not
yet effective

Amendment to Ind AS 1 'Presentation of
Financial Statements'- Classification of
Liabilities as current or non-current and non¬
current liabilities with covenants:

The amendment includes specific
provisions that will take effect for reporting
periods beginning on or after 1 April 2026,
retrospectively, as outlined below:

a) Breach of material covenant for long¬
term loan arrangement on or before end
of reporting period with effect that liability
becomes payable on demand as on
reporting date, then it shall be classified
as current liability, if lender agreed after
reporting period and before approval
of financial statements to not demand
payment as a consequence of breach.

b) Classify as non-current liability, if lender
agreed by end of reporting period to
provide grace period ending at least
12 months after reporting period within
which entity can rectify the breach
provided lender does not demand
immediate repayment.

c) Disclose information about the timing of
settlement to understand the impact of
the liability on the financial statements.

The Company does not expect this
amendment to have an impact on
its operations of standalone financial
statements.

The Company has not revalued any Property, Plant and equipment during the year

The immovable properties are held in the name of the Company as at March 31, 2026 and March 31, 2025

Refer Note no 24 for property, plant and equipment pledged as security in respect of borrowings.

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

The aggregate depreciation expense for the year is included under "Depreciation and Amortisation" expense in the
Statement of Profit and Loss- Refer Note 39

(e) Terms/rights attached to the shares

The Company has issued equity shares having a par value of g 10 per share. All these shares have the same
rights and preferences with respect to payment of dividend, repayment of capital and voting rights.

I n 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 all preferential amounts. The distribution will be in proportion to the
number of equity shares held by the shareholders.

The Company has only one class of share capital, i.e., equity shares having face value of g 10 per share. Each
holder of equity share is entitled to one vote per share.

(f) Preferential issue of equity shares during past five years:

There is no Preferential issue of Equity during the year ended March 31, 2021, March 31, 2022, March 31, 2024 &
March 31, 2025.

g) a) During the year ended March 31, 2026, the company has alloted 35,00,00,000 equity shares of Rs 10 each,

aggregating to Rs 35,000 Lakhs to eligible equity shareholders on right basis, after obtaining necessary
approvals, in respect of which application money of Rs.17,500 lakhs has been received. The first and final
call was due on November 07, 2025, in respect of which the Company has received Rs.14,994.88 lakhs.The
rights issue committee and board of directors in their meeting held on November 12, 2025 has approved the
conversion of 29,98,97,579 partly paid-up equity shares into fully paid-up equity shares of the Company.

b) During the year ended March 31, 2026 the Rights Issue Committee and the Board of Directors in their
meeting held on February 02, 2026 has approved the variation in objects of the Rights Issue as set out in
the Letter of Offer dated May 22, 2025.

h) During the year ended March 31, 2026, the Company has converted 33,15,000, 37,68,000 and 4,19,000
Compulsorily Convertible Debentures (CCDs) issued to Assets Care and Reconstruction Enterprise Limited,
Central Bank of India and Axis bank Limited respectively, into 1,24,01,796, 1,40,96,521 and 31,64,653 fully paid-up
equity shares at a fair value of Rs.26.73, Rs.26.73 and Rs.13.24 per equity share. As a result the company has
recognised securites premium of Rs 4,535.71 lakhs(Refer Note 23(i)).

Nature and Purpose of Reserves
Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve will be utilised in
accordance with provisions of the Act.

General Reserve

The Company created a General Reserve in earlier years pursuant to the provisions of the Companies Act wherein
certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per
the Companies Act 2013, the requirement to transfer profits to General Reserve is not mandatory. General Reserve
is a free reserve available to the Company.

Capital reserve

Capital reserve was created under the previous GAAP out of the profit earned from a specific transaction of capital
nature. Capital reserve is not available for the distribution to the shareholders.

Investments FVTOCI Reserve on equity instruments

The Company has elected to recognise changes in the fair value of certain investments in equity securities in
other comprehensive income. These changes are accumulated within FVTOCI reserve within equity. The Company
transfers Amount from this reserve to retained earnings when the relevant equity securities are disposed off.

Re-measurement gain on post employment benefit obligation (net of tax)

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

Security

" (**) a) Primary - First Pari-Passu charge over the pooled Assets i.e., Movable & Immovable (both Fixed and
Current) Assets of the Company with other Working Capital Lenders.

b) Collateral (EM) - Equitable Mortgage of Land & Building admeasuring 0.96 Acres at Ambattur Industrial
Estate, Korattur, Chennai on Pari-Passu basis

c) Collateral (Pledge)- Pledge of 14,24,89,592 equity shares of SEPC Limited held by Mark AB Welfare
Trust on Pari-Passu basis

d) Collateral (cg) - Corporate Guarantee of Mark AB Capital Investment LLC, Dubai & Mark AB Investment
India Pvt Ltd, New Delhi

24.2 During the year ended March 31, 2026, the Company has obtained unsecured loan from a related party
amounting to Rs.737.73 Lakhs ( March 31, 2025 Rs 325.00 lakhs) . The terms of repayment is bullet repayment
of principal on 31-December-2035. The loan carries interest rate at 0.10% per annum payable half yearly from
March 2025 till December 2035. The said loan has been recognised at amortised cost and the resultant gain
on initial recognition amounting to Rs 427.03 lakhs (March 31, 2025 Rs 213.17 lakhs) is credited to other income
in the statement of profit and loss under INDAS 109-Financial Instruments. (Also refer note 35).

24.3 The Company has not been declared a wilful defaulter by any bank or financial institution or any other lender
during the current year.

24.4 The Company has utilised the funds as per the terms of the Borrowings.

28.1 a) Primary -First Paripassu charge over the Pooled Assets ie., all movable and immovable assets (both Fixed

and Current) assets of the company with other Working Caputal Lenders.

b) Collateral(EM)- Equitable Mortgage of Land and Building admeasuring 0.96Acres at Ambattur Industrial
Estate, Korattur, Chennai on Pari Passu basis.

c) Collateral(Pledge) - Pledge of 14,24,89,592 Equity Shares of SEPC Limited held by MARK AB Welfare Trust on
Pari- Passu basis

d) Collateral(CG) - Corporate Guarantee of Mark AB Capital Investment LLC, Dubai & Mark AB Investment
India Pvt Ltd, New Delhi.

28.2 The quarterly statements filed by the Company with the banks and financial institutions are in agreement with
the books of accounts.

41.1 Exceptional items for the year ended March 31, 2026 and March 31, 2025 of Rs 109.06 lakhs and Rs 1,389.25
lakhs respectively, represents loss on extinguishment of financial liability upon conversion of Compulsorily
convertible debentures (CCDs) into equity.On 28.06.2022 consequent to the approval of Resolution Plan under
RBI Circular dt.07-06-2019 on Prudential Framework for Resolution of Stressed Assets, CCDs were issued upon
conversion of partial debt. The CCDs were converted into equity shares based on the option excercised by
the CCD holders and approved by the Board of Directors on 28.11.2024, 28.11.2024, 14.11.2025 and 06.01.2026 for
Assets Care and Reconstruction Enterprise Limited, Central Bank of India, Axis bank and Theta Management
consultancy respectively. These equity shares are issued to Assets Care and Reconstruction Enterprise Limited,
Central Bank of India Axis bank Limited and Theta Management at price of Rs 26.73, Rs.26.73, Rs.13.24 and Rs
11.96 per share respectively, which is determined based on the minimum price of equity shares being higher of:

a) the volume weighted average price of the related equity shares quoted on the recognised stock exchange
during the ninety trading days preceding the relevant date; and

b) the volume weighted average prices of the related equity shares quoted on a recognised stock exchange
during the ten trading days preceding the relevant date.

Approval from stock exchanges are awaited for listing and trading of the equity shares issued to Theta
Management consultancy.

(b) The Company has business losses which are allowed to be carried forward and set off against available future
taxable profits under the Income Tax Act, 1961, in respect of which the Company has created Deferred Tax Assets
("DTA"). The Company has recognised DTA on the carry forward unabsorbed business losses to the extent of
Rs.80,665.52 lakhs (March 31, 2025: Rs.84,559.48 lakhs) out of the total carry forward unabsorbed business
losses of Rs.87,285.97 lakhs that was available as at March 31, 2026 (March 31, 2025- Rs.92,648.02 lakhs). The
DTA amount recognised by the Company on these carry forward unabsorbed business losses amounts to
Rs.28,187.76 lakhs as at March 31, 2026 (March 31, 2025- Rs. 29,548.46 lakhs). Considering the potential order
book as on date, the current projects in the pipeline and a positive future outlook for the Company, the
management of the Company is confident of generating sufficient taxable profits in the future and adjust
them against these unabsorbed business losses, and accordingly, the DTA as on March 31, 2026,can be utilised
before the expiry of the period for which this benefit is available.

(d) The Company has business losses which are allowed to be carried forward and set off against available future
taxable profits under the Income Tax Act, 1961, in respect of which the Company has created Deferred Tax Assets
("DTA"). The Company has recognised DTA on the carry forward unabsorbed business losses to the extent of
Rs.84559.48 lakhs (March 31, 2024: Rs.88,343.94 lakhs) out of the total carry forward unabsorbed business
losses of Rs.92,648.02 lakhs that was available as at March 31, 2025 (March 31, 2024- Rs.1,04,486.51 lakhs). The
DTA amount recognised by the Company on these carry forward unabsorbed business losses amounts to
Rs.29,548.46 lakhs as at March 31, 2025 (March 31, 2024- Rs. 30,870.91 lakhs). Considering the potential order
book as on date, the current projects in the pipeline and a positive future outlook for the Company, the
management of the Company is confident of generating sufficient taxable profits in the future and adjust
them against these unabsorbed business losses, and accordingly, the DTA as on March 31, 2025,can be utilised
before the expiry of the period for which this benefit is available.

46 Disclosure in respect of leases pursuant to Indian Accounting Standard (Ind AS) 116, "Leases"

(a) Finance leases where Company is a lessee:

The following is the summary of practical expedients elected on application:

1. Used a single discount rate to a portfolio of leases with reasonably similar characteristics

2. Applied the short-term leases exemptions to leases with lease term that ends within 12 months of the date
of initial application

3. Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial
application

The Company has lease contracts for its head office building and furniture and fixtures. lessee is restricted
from assigning and subleasing the leased assets. The Company applies the "short term Lease" and "lease of
Low value assets" recognition exemptions for these leases.

The effective interest rate for lease liabilities is 9%.

The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk
and liquidity risk. The Company's risk management is coordinated by the Board of Directors and focuses on
securing long term and short term cash flows. The Company does not engage in trading of financial assets for
speculative purposes.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other
price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include
borrowings and financial instruments.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company's outstanding debt in local currency is on fixed
rate basis and hence not subject to interest rate risk.

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign
exchange rates relates primarily to the Company's operating activities (when revenue or expense is
denominated in a different currency from the Company's functional currency).

Foreign currency sensitivity analysis:

Movement in the functional currencies of the various operations of the Company against major foreign
currencies may impact the Company's revenues from its operations. Any weakening of the functional currency
may impact the Company's import payments and cost of borrowings.

The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign
exchange rate exposure of a currency and a parallel foreign exchange rates shift in the foreign exchange rates
of each currency by 2%, which represents Management's assessment of the reasonably possible change in
foreign exchange rates.

The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency
denominated financial instruments. The following table details the Company's sensitivity movement in the
increase / decrease in foreign currencies exposures (net):

The credit risk to the company arises from two sources:

a) Customers, who default on their contractual obligations, thus resulting in financial loss to the Company

Company evaluates the credentials of a customer at a very early stage of the bid. Company has adopted
a policy of 3 tier verification before participating for any bid. The first step of such verification includes
verification of customer credentials. The company, as part of verification of the customer credentials,
ensures the compliance with the following criterion

(i) Customer's financial health by examining the audited financial statements

(ii) Whether the Customer has achieved the financial closure for the work for which the company is
bidding

(iii) Where the customer is Public Sector Undertaking, sanction and availability of adequate financial
resources for the proposed work.

Company makes provision on it's financial assets, on every reporting period, as per Expected Credit Loss
Method. The provision is made separately for each financial assets of each business line. The percentage
at which the provision is made, is determined on the basis of historical experience of such provisions,
modified to the current and prospective business and customer profile.

Trade receivables consist of large number of customers, spread across diverse industries and geographical
areas. Majority of the customers of the company comprise of Public Sector Undertakings, with whom
the company does not perceive any credit risk. As regards the customers from private sector, company
carries out financial evaluation on regular basis and provides for any amount perceived as non realisable,
in the books of accounts."

b) Non certification by the customers, either in part or in full, the works billed as per the contract, being non
claimable cost as per the terms of the contract with the customer

Non certification of works billed The Company has contract claims from customers including costs on
account of account of delays / changes in scope / design by them etc. which are at various stages of
discussions / negotiations or under arbitrations. The realisability of these claims are estimated based
on contractual terms, historical experience with similar claims as well as legal opinion obtained from
internal and external experts, wherever necessary. Changes in facts of the case or the legal framework
may impact realisability of these claims

The Company provides for doubtful receivables/advances and expected credit loss based on 12 months
and lifetime expected credit loss basis for following financial assets:

Company being an EPC contractor, has a constant liquidity pressures to meet the project requirements. These
requirements are met by a balanced mix of borrowings and project cash flows. Cash flow forecast is made
for all projects on monthly basis and the same are tracked for actual performance on daily basis. Shortfall in
cash flows are matched through short term borrowings and other strategic financing means. The daily project
requirements are met by allocating the daily aggregated cash flows among the projects. Company has
established practice of prioritising the site level payments and regulatory payments above other requirements.
The table below summarizes the maturity profile of the Company's financial liabilities:

For the purpose of the Company's capital management, capital includes issued equity capital, share premium
and all other equity reserves attributable to the equity holders. The primary objective of the Company's capital
management is to maximize the shareholder value and to ensure the Company's ability to continue as a going
concern.

The Company has not distributed any dividend to its shareholders. The Company monitors Net Debt to Capital
ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt comprises of
term loans and cash credits. The Company manages the capital structure and makes adjustments to it in the
light of changes in economic conditions and the risk characteristics of the underlying assets.

59 There are no transactions with vendors under the Micro, Small and Medium Enterprises Development Act, 2006,
this has been determined on the basis of information available with the Company.

60 The Company, SEPC Limited ("the Company"), along with Twarit Consultancy Services Private Limited ("TCPL"),
were the Respondents in an international arbitration proceeding initiated before the Singapore International
Arbitration Centre (SIAC) by GPE (India) Limited, GPE JV1 Limited, and Gaja Trustee Company Private Limited
(collectively referred to as "the Claimants"). The dispute arose in connection with the investments made by the
Claimants in an associate company of SEPC.

Pursuant to the SIAC Award dated January 7, 2021, damages amounting to Rs.19,854.10 lakhs and SGD 372,754.79
towards arbitration expenses were awarded against the Respondents, along with simple interest at 7.25% per
annum from July 21, 2017, until the date of payment. The Respondents' appeal before the High Court of the
Republic of Singapore challenging the SIAC Award was dismissed, and the award was upheld in favour of the
Claimants. Subsequently, upon a Recognition and Enforcement Petition filed by the Claimants, the Madras
High Court recognised the foreign award, subject to obtaining prior approval from the Reserve Bank of India
(RBI). Aggrieved by this order, the Claimants approached the Hon'ble Supreme Court of India seeking further
directions. The Hon'ble Supreme Court, vide its order, directed the Respondents to pay a sum of Rs.12,500
lakhs along with interest at 7.25% per annum from January 7, 2021, until the date of payment. In accordance
with the Inter-se Arrangement dated September 29, 2015, executed between SEPC, TCPL, and Shri Housing
Private Limited, which provides for full indemnification of any liability arising out of suits, proceedings, disputes,
or damages payable by SEPC, TCPL remitted the entire amount, including interest, aggregating to ^16,450
lakhs. The Hon'ble Supreme Court, vide its order dated August 26, 2025 has disposed off the petition and
concluded that there is no impediment in law insofar as enforcement of the SIAC Award is concerned and that
the execution petition in Madras High Court shall be proceeded with.

Meanwhile, the lenders of the Company have filed an Impleading Petition before the Madras High Court
seeking to be added as additional respondents, citing their prior charge over the assets of the Company.
Further, Madras High Court vide their order dated February 19, 2026, passed an order of interim attachment of
trade receivables to the tune of Rs. 15,463.23 lakhs (being the balance amount payable to claimants as per
the Court Order). TCPL along with SEPC has filed separate petition in the Madras High Court where TCPL has
committed to pay Rs. 250 Lakhs as initial amount and Rs. 750 Lakhs per quarter through an affidavit. The initial
payment of Rs. 250 Lakhs has been paid on May 13, 2026, and the quarterly payments will commence from July
2026. Based on the affidavit filed by TCPL and their commitments to make the payments to Claimants through
Madras High Court, the Company is of the view that no liability will arise out of this case.

Further based on the above affidavit the Hon'ble High Court in the hearing dated April 30, 2026 has given
partial relief from attachment of trade receivables as follows:

The consortium of banks is permitted to appropriate a maximum sum of Rs.1,569 Lakhs ( Rs.1,369 Lakhs towards
bank dues and Rs. 200 Lakhs towards salary payments) from and out of amounts received in the Trust and
Retention Account. The matter is currently listed for hearing on June 23, 2026. The Company is hopeful of
removing this attachment. The management is confident that no financial or legal liability will devolve upon
the Company, as the same is fully indemnified under the said Inter-se Arrangement.

61 Mokul Shriram EPC JV (JV Company) where SEPC Limited is a JV partner, has won the complaint against Export
Credit Guarantee Corporation of India Limited (ECGC) before the National Consumer Disputes Redressal
Commission,(NCDRC) New Delhi, in connection with the project executed in Basra, Iraq. NCDRC, vide their order
dated January 27, 2021, allowed the claims and directed ECGC to pay a sum of Rs. 26,501 lakhs along with
simple interest @ 10% pa. with effect from September 19, 2016 till the date of realisation to the JV Company
within a period of three months from the date of order, failing which ECGC will be liable to pay compensation

in the form of simple interest @ 12% pa. ECGC had filed an appeal against the order of NCDRC New Delhi, before
Supreme Court, and the case is pending for disposal.

62 The Company has made net profit during the year ended March 31, 2026 amounting to Rs 2,097.05 lakhs and as
of that date has accumulated losses aggregating Rs. 2,08770.52 Lakhs. Considering the positive developments
of implementation of resolution plan approved in the previous year, completion of Rights issue, additional
funding by Investor for working capital together with plans to meet financial obligations in future out of the cash
flows from execution of the pipeline of orders in hand, business plans, sanctioned non-fund based facilities etc,
these financial statements are prepared on a going concern basis.

63 On November 21, 2025, the Government of India has consolidated 29 existing labour legislations into a united
framework comprising four Labour codes viz Code on wages 2019, Code on Social Security 2020, Industrial
Relation Code 2020 and Occupational Safety, Health and Working Condition Code 2020 (collectively referred
to as the New Labour Codes). 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 is already in compliance with the basic wages criteria as prescribed under New Labour Codes for
own employees and there is no material impact on the company. The Company is in the process of evaluating
the possible impacts for contract workforce. However, the management is of the view that impact, if any, is
unlikely to be material.

Once the Central/State Rules are notified by the Government on all aspects of the New Labour Codes, the
Company will evaluate impact, if any, on the measurement of the employee benefits and would provide
appropriate accounting effect on the basis of such development as needed.

64 Relationship with Struck off Companies under section 248 of the Companies Act, 2013 or section 560 of
Companies Act, 1956,

The Company does not have transactions with companies struck off under section 248 of the Companies Act,
2013 or section 560 of Companies Act, 1956 , during the year.

65 "Utilisation of Borrowed funds and Securities Premium:

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

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

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

ii) 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

66 Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act
read with the Companies (Restriction on number of Layers) Rules, 2017.

67 Undisclosed income

The Company does not have any undisclosed income which is not recorded in the books of account that has
been surrendered or disclosed as income during the year (previous 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.)

68 Details of Crypto Currency or Virtual Currency

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

69 Registration of charges or satisfaction with Registrar of Companies (ROC)

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.

70 The Board, duly taking into account all the relevant disclosures made has approved these financial statements
in its meeting held on May 25, 2026.

71 Figures for the previous year have been regrouped/reclassified to conform to the figures of the current year.