3.17 Provisions

A provision is recognized 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. If the effect of the time value of money is
material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money
and the risks specific to the liability. Where discounting
is used, the increase in the provision due to the passage
of time is recognized as a finance cost.

Warranties:

The estimated liability for product warranties is recorded
when products are sold based on technical evaluation/

management’s best estimate of expenditure required to
settle the possible future warranty claims.

The timing of outflows will vary as and when warranty claim
will arise being typically upto six years. The Company
also has back-to-back contractual arrangement with its
suppliers in the event that a vehicle fault is proven to be
a supplier’s fault.

3.18Contingent liabilities & contingent assets

A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may,
but probably will not, require an outflow of resources.
Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is made.

Contingent assets are not recognised in the financial
statements. However, contingent assets are assessed
continually and if it is virtually certain that an inflow of
economic benefits will arise, the asset and related income
are recognised in the period in which the change occurs.

3.19Financial instruments

a. Recognition and Initial recognition

The company recognizes financial assets and
financial liabilities when it becomes a party to the
contractual provisions of the instrument. All financial
assets and liabilities are recognized at fair value
on initial recognition, except for trade receivables
which are initially measured at transaction price.
Transaction costs that are directly attributable
to the acquisition or issues of financial assets
and financial liabilities that are not at fair value
through profit or loss, are added to the fair value on
initial recognition.

A financial asset or financial liability is initially
measured at fair value plus, for an item not at fair
value through profit and loss (FVTPL), transaction
costs that are directly attributable to its acquisition
or issue.

b. Classification and Subsequent measurement
Financial assets:

On initial recognition, a financial asset is classified
as measured at

- amortised cost;

- FVTPL

Financial assets are not reclassified
subsequent to their initial recognition, except
if and in the period the company changes its
business model for managing financial assets.

Transfers of financial assets to third parties in
transactions that do not qualify for derecognition
are not considered sales for this purpose, consistent
with the company’s continuing recognition of
the assets.

Financial assets that are held for trading or are
managed and whose performance is evaluated on
a fair value basis are measured at FVTPL.

Financial assets: Assessment whether contractual
cash flows are solely payments of principal
and interest

For the purposes of this assessment, ‘principal’
is defined as the fair value of the financial asset
on initial recognition. ‘Interest’ is defined as
consideration for the time value of money and for
the credit risk associated with the principal amount
outstanding during a particular period of time
and for other basic lending risks and costs (e.g.
liquidity risk and administrative costs), as well as a
profit margin.

I n assessing whether the contractual cash flows
are solely payments of principal and interest, the
company considers the contractual terms of the
instrument. This includes assessing whether the
financial asset contains a contractual term that could
change the timing or amount of contractual cash
flows such that it would not meet this condition. In
making this assessment, the company considers:

- contingent events that would change the
amount or timing of cash flows;

- terms that may adjust the contractual coupon
rate, including variable interest rate features;

- prepayment and extension features; and

- terms that limit the company’s claim to cash
flows from specified assets (e.g. non- recourse
features).

A prepayment feature is consistent with the solely
payments of principal and interest criterion if the
prepayment amount substantially represents unpaid
amounts of principal and interest on the principal
amount outstanding, which may include reasonable
additional compensation for early termination
of the contract. Additionally, for a financial asset
acquired at a significant discount or premium to its
contractual par amount, a feature that permits or
requires prepayment at an amount that substantially
represents the contractual par amount plus accrued
(but unpaid) contractual interest (which may also
include reasonable additional compensation for
early termination) is treated as consistent with this

criterion if the fair value of the prepayment feature
is insignificant at initial recognition.

Financial assets: Subsequent measurement and
gains and losses

Financial assets at FVTPL: These assets are
subsequently measured at fair value. Net gains and
losses, including any interest or dividend income,
are recognised in profit or loss.

Financial assets at amortised cost: These assets
are subsequently measured at amortised cost using
the effective interest method. The amortised cost
is reduced by impairment losses. Interest income,
foreign exchange gains and losses and impairment
are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.

Financial liabilities:

Classification, Subsequent measurement and gains
and losses

Financial liabilities are classified as measured
at amortised cost or FVTPL. A financial liability is
classified as at FVTPL if it is classified as held- for-
trading, or it is a derivative or it is designated as
such on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net gains
and losses, including any interest expense, are
recognised in profit or loss. Other financial liabilities
are subsequently measured at amortised cost using
the effective interest method. Interest expense and
foreign exchange gains and losses are recognised
in profit or loss. Any gain or loss on derecognition is
also recognised in profit or loss.

c. Derecognition
Financial assets

The company derecognises a financial asset when
the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to
receive the contractual cash flows in a transaction
in which substantially all of the risks and rewards
of ownership of the financial asset are transferred
or in which the company neither transfers nor
retains substantially all of the risks and rewards
of ownership and does not retain control of the
financial asset.

I f the company enters into transactions whereby it
transfers assets recognised on its balance sheet,
but retains either all or substantially all of the
risks and rewards of the transferred assets, the
transferred assets are not derecognised.

Financial liabilities

The company derecognises a financial liability
when its contractual obligations are discharged or
cancelled, or expire.

The company also derecognises a financial liability
when its terms are modified and the cash flows
under the modified terms are substantially different.
In this case, a new financial liability based on the
modified terms is recognised at fair value. The
difference between the carrying amount of the
financial liability extinguished and the new financial
liability with modified terms is recognised in profit.

d. Offsetting

Financial assets and financial liabilities are offset
and the net amount presented in the balance
sheet when and only when, the company currently
has a legally enforceable right to set off the
amounts and it intends either to settle them on
a net basis or to realise the asset and settle the
liability simultaneously.

e. Impairment

The company recognises loss allowances for
expected credit losses on financial assets measured
at amortised cost;

At each reporting date, the company assesses
whether financial assets carried at amortised
cost and debt securities at fair value through
other comprehensive income (FVTOCI) are credit
impaired. A financial asset is ‘credit- impaired’ when
one or more events that have a detrimental impact
on the estimated future cash flows of the financial
asset have occurred.

Evidence that a financial asset is credit- impaired
includes the following observable data:

- significant financial difficulty of the borrower
or issuer;

- the restructuring of a loan or advance by the
company on terms that the company would
not consider otherwise;

- it is probable that the borrower will enter
bankruptcy or other financial reorganisation; or

- t he disappearance of an active market for a
security because of financial difficulties.

The company measures loss allowances at an
amount equal to lifetime expected credit losses,
except for the following, which are measured as 12
month expected credit losses:

- debt securities that are determined to have
low credit risk at the reporting date; and

- other debt securities and bank balances
for which credit risk (i.e. the risk of default
occurring over the expected life of the financial
instrument) has not increased significantly
since initial recognition.

Loss allowances for trade receivables are always
measured at an amount equal to lifetime expected
credit losses.

Lifetime expected credit losses are the expected
credit losses that result from all possible
default events over the expected life of a
financial instrument.

12-month expected credit losses are the portion
of expected credit losses that result from default
events that are possible within 12 months after the
reporting date (or a shorter period if the expected
life of the instrument is less than 12 months).

In all cases, the maximum period considered when
estimating expected credit losses is the maximum
contractual period over which the company is
exposed to credit risk.

When determining whether the credit risk of a
financial asset has increased significantly since
initial recognition and when estimating expected
credit losses, the company considers reasonable
and supportable information that is relevant and
available without undue cost or effort. This includes
both quantitative and qualitative information
and analysis, based on the company’s historical
experience and informed credit assessment and
including forward- looking information.

Measurement of expected credit losses

Expected credit losses are a probability-weighted
estimate of credit losses. Credit losses are
measured as the present value of all cash shortfalls
(i.e. the difference between the cash flows due
to the company in accordance with the contract
and the cash flows that the company expects to
receive).

Presentation of allowance for expected credit
losses in the balance sheet

Loss allowances for financial assets measured
at amortised cost are deducted from the gross
carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is
written off (either partially or in full) to the extent

that there is no realistic prospect of recovery. This is
generally the case when the company determines
that the trade receivable does not have assets or
sources of income that could generate sufficient
cash flows to repay the amounts subject to the
write- off. However, financial assets that are written
off could still be subject to enforcement activities in
order to comply with the company’s procedures for
recovery of amounts due.

ii. First charge by way of hypothecation/ assignment of all present and future book debts, bills, receivables, monies
including bank accounts, claims of all kinds and stocks including consumables and general stores in respect of
the project of 40 E-buses.

The aforementioned loan was sanctioned for procurement of TSRTC project buses by SSISPL-OGL-BYD Consortium,
Joint Venture of the Company. As per back to back arrangement between REC, OGL and SSISPL-OGL-BYD
Consortium(JV), the loan was sanctioned to the Company which in turn was passed on to the JV carrying the same
interest rate being charged by REC and the same is reflected as “”Loan to Related Parties”” in Note -7 .The above
loan was repaid and closed on 29^th December 2025.

Term Loans from Banks

SBI has sanctioned Term loan of C50,000 Lakhs to the company for establishing Greenfield EV manufacturing unit
at Seethramapur village, Shabad Mandal, Telangana. Against the sanctioned term loan the company has availed
C19,960 Lakhs and declared DCCO as at 31^st December 2025. Currently the above loan carries an interest rate of
9.05% p.a. i.e. 0.45% above 6M MCLR. The above Term loan repayable in 20 equal quarterly instalments from Q1 of
FY2027 to Q4 of FY2031 after a moratorium of 2 quarters i.e. Q3 of FY2026 & Q4 of FY2026.

During the year ended 31 March 2026, borrowing costs amounting to C 1,368.09 Lakhs (Previous Year: C 477.87
Lakhs) were capitalised as part of the cost of qualifying assets in accordance with Ind AS 23, Borrowing Costs.

The above Term loan is secured by:-
Primary Security

i. A first charge by way of mortgage on the Seetharampur Project Land; provided the Insulator WC Lender and the
SBI Consortium shall have a second pari passu charge;

ii. A first charge by way of hypothecation on the Seetharampur Project Movable Fixed Assets; provided the
Insulator WC Lender and the SBI Consortium shall have a second pari passu charge;

Collateral Security

i. A second pari-passu charge by way of hypothecation on E-Bus Current Assets along with Insulator WC Lender,
subject to the first pari-passu charge held by the SBI Consortium;

ii. A second pari-passu charge by way of hypothecation on Insulator Unit Current Assets, along with SBI Consortium,
subject to the first charge held by the Insulator WC Lender;

iii. A first charge by way of hypothecation on E-Bus Movable Fixed Assets; provided the Insulator WC Lender and
the SBI Consortium shall have a second pari passu charge;

iv. A second pari-passu charge by way of mortgage on Cherlapally 1 Immovable Property and Cherlapally 2
Immovable Property along with SBI Consortium, subject to the first charge held by the Insulator WC Lender;

v. A second pari-passu charge by way of hypothecation on Insulator Unit Movable Fixed Assets along with SBI
Consortium, subject to the first charge held by the Insulator WC Lender;

vi. A second charge by way of hypothecation on the Movable Assets - BG, subject to the first charge held by the
BG Lender;

vii. Shortfall Undertaking by the Ultimate Promoter.

B. Working capital loans from Banks:

Working Capital Facilities from Banks carries an interest rate ranging from 7% to 11.25% are secured by:

Insulator Division Lender- SBI:

i. Exclusive first charge to SBI on current assets of the company pertaining to Insulators division both present
and future.

ii. Exclusive first charge to SBI on movable assets of the company both present & future of Insulators Division for
insulator division limits with 2^nd charge in favour of other e-bus division lenders.

iii. Exclusive first charge to SBI by way of equitable mortgage of factory land & building of the Company with 2^nd
charge in favour of other e-bus division lenders.

iv. Exclusive charge to SBI by way of equitable mortgage of immovable property of M/s.Megha Fibre Glass
Industries Ltd for Insulator Division limits with SBI.

v. Corporate guarantee given by M/s.Megha Fibre Glass Industries Limited for Insulator Division limits with SBI to
the extent of value of Securities offered.

vi. Cash Collateral of C1.76 Crs

vii. 2^nd Charge to SBI on movable fixed assets of E-Bus division both present and future and 2^nd charge on
seetharampur project land for insulator division’s limits with SBI.

E Bus Division Lenders- SBI,Yes Bank , ICICI & IDBI:

i. Paripassu First Charge on current assets of the company’s E-bus division for all the lenders in consortium both
present and future.

ii. Pari passu second charge on the Movable Fixed Assets of E-Bus Division both present & future for all the E-bus
division lenders excluding e Buses (supplied to PMPML 150 e buses with 5 spare buses) with 2^nd charge on
seetharampur project land for all E bus division lenders.

iii. Pari passu second charge on all moveable and immovable assets of Insulator division both present and future.

iv. Exclusive Hypothecation of 150 Electric Buses with respect to PMPML contract for e-Bus division to SBI.

Project specific Working capital limits sanctioned by IDBI in E bus division:-

i. I DBI Bank has sanctioned project-specific working capital facilities of P250 Crores for the HRTC project for
supply of 297 buses on outright sale and maintenance basis.

ii. Secured by “Exclusive charge on all the Current Assets (Raw Materials, Work in progress, Finished goods and
receivables) of HRTC Project both present and future”.

iii. Routing of cashflows of HRTC project with IDBI in form of Escrow arrangement during currency of project
specific working capital limits.

iv. Repayable on demand/ one year from the date of sanction.

The company has availed Corporate Guarantee from Megha Fibre Glass Industries Limited to the extent of the value of
Security offered - C30.28 Crs as collateral for bank facilities.

d) Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions.

34 Segment information

I nd AS 108 “Operating Segment” (“Ind AS 108”) establishes standards for the way that public business enterprises
report information about operating and geographical segments and related disclosures about products and services,
geographic areas, and major customers. Based on the “management approach” as defined in Ind AS 108, Operating
segments and geographical segments are to be reported in a manner consistent with the internal reporting provided to
the Chief Operating Decision Maker (CODM).The CODM evaluates the Company’s performance and allocates resources
on overall basis.

The Company has two reportable segments during the year, i.e. Composite Polymer Insulators, e vehicle division which
includes e- buses & e trucks.

Key Actuarial Assumptions
Discount Rate:

The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date
for the estimated term of the obligations. The government security yields for the relevant tenure of the obligations have
been derived from the rates published by Financial Benchmarks India Private Limited (FBIL).

Salary Escalation Rate:

The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant
factors

Description of Risk Exposure

a. Inherent Risk

The plan is of a final salary defined benefit in nature which is sponsored by the Company and hence it underwrites
all the risks pertaining to the plan. In particular, there is a risk for the Company that any adverse salary growth or
demographic experience can result in an increase in cost of providing these benefits to employees in future. Since
the benefits are lump sum in nature the plan is not subject to any longevity risks.

b. Discount Rate Risk

I t is the financial risk that fluctuations in market interest rates will cause significant, volatile changes to the present
value of the promised future pension payments. Variations in the discount rate used to compute the present value of
the liabilities may seem small, but in practice can have a significant impact on the defined benefit liabilities.

c. Future Salary Escalation Risk

Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities
especially unexpected salary increases provided at management’s discretion may lead to estimation uncertainties
increasing this risk.

These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and
assuming there are no other changes in market conditions at the accounting date. There have been no changes
from the previous periods in the methods and assumptions used in preparing the sensitivity analyses.

37 Dues to Micro, small and medium enterprises

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. 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. Further in view of the management, the impact of interest, if any,
that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act,
2006 (‘The MSMED Act’) is not expected to be material. The Company has not received any claim for interest from
any supplier.

38 Leases

Where the Company is a lessee:

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 amounting to 7 13760 Lakhs (7 241.12 Lakhs Previous Year) are recognised as an expense on a straight¬
line basis over the lease term.

39 Earnings per share

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

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

Fair value hierarchy

The carrying amount of the current financial assets and current financial liabilities are considered to be same as their fair
values, due to their short term nature. In absence of specified maturity period, the carrying amount of the non-current
financial assets and non-current financial liabilities such as security deposits (assets) are considered to be same as their
fair values.

The fair value of mutual funds is classified as Level 2 in the fair value hierarchy as the fair value has been determined
on the basis of Net Assets Value (NAV) declared by the mutual fund. The fair value of Financial derivative contracts has
been classified as Level 2 in the fair value hierarchy as the fair value has been determined on the basis of mark-to-market
valuation provided by the bank, The corresponding changes in fair value of investment is disclosed as ‘Other Income’.

41 Financial risk management objectives and policies

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose
of these financial liabilities is to finance and support Company’s operations. The Company’s principal financial assets
include inventory, trade and other receivables, cash and cash equivalents and refundable deposits that derive directly
from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the
management of these risks. The Board of Directors reviews and agrees policies for managing each of these risks, which
are summarized below.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises two types of risk: interest rate risk and other price risk, such as commodity risk.
Financial instruments affected by market risk include loans and borrowings and refundable deposits. The sensitivity
analysis in the following sections relate to the position as at March 31, 2026 and March 31, 2025. The sensitivity
analyses have been prepared on the basis that the amount of net debt and the ratio of fixed to floating interest rates
of the debt.

The analysis excludes the impact of movements in market variables on: the carrying values of gratuity and other post
retirement obligations; provisions.

The below assumption has been made in calculating the sensitivity analysis:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This
is based on the financial assets and financial liabilities held at March 31, 2026 and March 31, 2025.

Interest rate risk

I nterest 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 exposure to the risk of changes in market interest rates relates
primarily to the Company’s short-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of variable rate borrowings. The Company
does not enter into any interest rate swaps.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion
of loans and borrowings affected. With all other variables held constant, the Company’s profit before tax is affected
through the impact on floating rate borrowings, as follows:

b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The credit risk arises principally from its operating activities (primarily trade receivables) and
from its investing activities, including deposits with banks and financial institutions and other financial instruments.

Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom
credit has been granted after obtaining necessary approvals for credit. The collection from the trade receivables are
monitored on a continuous basis by the receivables team.

The top customers profile includes sale of e-buses under the Department of Heavy Industries (DHI) FAME - II frame
work/ GCC Contracts to Special Purpose Vehicles(SPV’s) formed for execution of contracts with the STUs and hence
the concentration of revenue risk is minimal.

Credit risk on cash and cash equivalent is limited as the Company generally transacts with banks and financial
institutions with high credit ratings assigned by international and domestic credit rating agencies.

c) Liquidity risk

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of
bank deposits and loans.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual
undiscounted payments:

42 Capital management

The Company’s policy is to maintain a stable capital base so as to maintain investor, creditor and market confidence and
to sustain future development of the business. Management monitors capital on the basis of return on capital employed
as well as the debt to total equity ratio.

For the purpose of debt to total equity ratio, debt considered is long-term and short-term borrowings. Total equity comprise
of issued share capital and all other equity reserves.

44 The Board of Directors have recommended a dividend of C 0.60 per share( Face value of C 4/- each) for the year ended
March 31, 2026.

45 The Government of India has consolidated 29 existing labour legislations into a united framework comprising four Labour
Code 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. These Codes have been
made effective from November 21,2025.

The Company has assessed the implications of the New Labour Codes and has recognised incremental cost towards
employee benefits during the year ended 31 March 2026 which is not material. The Company continues to monitor the
developments pertaining to the implementation of New Labour Codes, including related rules there to and the impact of
these will be accounted with applicable accounting standards.

46 Other statutory information

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

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

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

(iv) 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 to or on behalf of the Ultimate Beneficiaries.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries)
or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(vi) The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies
Act,2013 read with the Companies (Restriction on number of Layers) Rules, 2017 (as amended).

(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during theyear in the tax assessments under the Income Tax Act, 1961 (such as, search
or survey or any other relevant provisions of the Income Tax Act, 1961.

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

(ix) The Company does not have any transactions with companies struck off.

47 Prior year comparatives

The figures of the previous year have been regrouped/reclassified, where necessary, to conform with the current year’s
classification.