Provision for decommissioning and site restoration

The Company has a legal obligation for decommissioning
of windmills and restoring the site back to its original
condition. Decommissioning and restoration costs are
measured initially at its best estimate using expected
value method. The present value of initial estimates
is provided as a liability and corresponding amount
is capitalised as a part of the windmill. The estimated
future costs of decommissioning are reviewed annually
and adjusted as appropriate. Changes in the estimated
future costs or in the discount rate applied are added to
or deducted from the cost of the asset.

Contingent liabilities

Contingent liability is disclosed when,

• company has a present obligation arising from past
events, when it is not probable that an outflow of
resources will be required to settle the obligation;
or

• present obligation arising from past events, when
no reliable estimate is possible; or

• A possible obligation arising from past events
where the probability of outflow of resources is not
remote.

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

2.20 Leases

Lease is a contract that provides to the customer (lessee)
the right to use an asset for a period of time in exchange
for consideration.

Company as a Lessee

A lessee is required to recognise assets and liabilities
for all leases with a term that is greater than 12 months,
unless the underlying asset is of low value, and to
recognise depreciation of leased assets separately from
interest on lease liabilities in the statement of Profit and
Loss.

Initial Measurement
Right to use asset

At the commencement date, the Company measures
the right-of-use asset at cost.

The cost of the right-of-use asset shall comprise:

• the amount of the initial measurement of the lease
liability

• any lease payments made at or before the
commencement date, less any lease incentives
received;

• any initial direct costs incurred by the lessee; and

• an estimate of costs to be incurred by the lessee
in dismantling and removing the underlying asset,
restoring the site on which it is located or restoring
the underlying asset to the condition required by
the terms and conditions of the lease, unless those
costs are incurred to produce inventories. The
lessee incurs the obligation for those costs either
at the commencement date or as a consequence
of having used the underlying asset during a
particular period.

Lease liability

At the commencement date, the Company measures the
lease liability at the present value of the lease payments
that are not paid at that date. 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 its incremental
borrowing rate.

Lease payments included in the measurement of the
lease liability comprise the following payments:

• fixed payments (including in-substance fixed
payments), less any lease incentives receivable;

• variable lease payments that depend on an index
or a rate, initially measured using the index or rate
as at the commencement date;

• amounts expected to be payable by the Company
under residual value guarantees;

• the exercise price of a purchase option if 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.

Subsequent measurement
Right to use assets

Subsequently the Company measures the right-of-use
asset at cost less any accumulated depreciation and
any accumulated impairment losses. ROU assets are
depreciated from the commencement date on a straight¬
line basis over the shorter of the lease term and useful
life of the underlying asset. ROU assets are evaluated
for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may
not be recoverable.

Subsequently the Company measures the lease liability
by:

• increasing the carrying amount to reflect interest on
the lease liability at the interest rate implicit in the
lease, if that rate can be readily determined or the
Company's incremental borrowing rate.

• reducing the carrying amount to reflect the lease
payments made; and

• re-measuring the carrying amount to reflect any
reassessment or lease modifications or to reflect
revised in substance fixed lease payments.

Company as a Lessor

Leases in which the company does not transfer
substantially all the risks and rewards of ownership
of an asset are classified as operating leases. Rental
income from operating lease is recognised on a straight¬
line basis over the term of the relevant lease unless
the payments to the lessor are structured to increase
in line with expected general inflation to compensate
for the lessor's expected inflationary cost increases or
another systematic basis is available. Initial direct costs
incurred in negotiating and arranging an operating lease
are added to the carrying amount of the leased asset
and recognised over the lease term on the same basis
as rental income. Contingent rents are recognised as
revenue in the period in which they are earned.

Leases are classified as finance leases when substantially
all of the risks and rewards of ownership transfer from
the company to the lessee. Amounts due from lessees
under finance leases are recorded as receivables at the
company's net investment in the leases. Finance lease
income is allocated to accounting periods to reflect a
constant periodic rate of return on the net investment
outstanding in respect of the lease.

2.21 Impairment of non-financial assets

The company assesses at each balance sheet date
whether there is any indication that an asset or cash
generating unit (CGU) may be impaired. If any such
indication exists, the company estimates the recoverable
amount of the asset. The recoverable amount is the
higher of an asset's or CGU's fair value less costs of
disposal or its value in use. Where the carrying amount
of an asset or CGU exceeds its recoverable amount, the
asset is considered impaired and is written down to its
recoverable amount.

In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax
discount rate that reflects current market assessments

of the time value of money and the risks specific to the
asset.

An impairment loss is recognised if the carrying amount
of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognised in the statement of
profit and loss.

An impairment loss in respect of goodwill is not reversed.
For other assets, an impairment loss is reversed only
to the extent that the asset's carrying amount does
not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no
impairment loss had been recognised.

2.22 Fair value measurement

Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability
takes place either:

• In the principal market for the asset or liability; or

• In the absence of a principal market, in the most
advantageous market for the asset or liability.

The principal or the most advantageous market must be
accessible by the company. The fair value of an asset or
a liability is measured using the assumptions that market
participants would use when pricing the asset or liability,
assuming that market participants act in their economic
best interest.

A fair value measurement of a non-financial asset
considers a market participant's ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another.

The company uses valuation techniques that are
appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the
use of relevant observable inputs and minimising the
use of unobservable inputs.

• Level 1- Quoted (unadjusted) market prices in
active markets for identical assets or liabilities

• Level 2-Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is directly or indirectly observable

• Level 3-Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is unobservable

For assets and liabilities that are recognised in the
financial statements on a recurring basis, the company

determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each
reporting period.

For the purpose of fair value disclosures, the company
has determined classes of assets and liabilities based
on the nature, characteristics and risks of the asset
or liability and the level of the fair value hierarchy as
explained above.

2.23 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.

Financial assets

Initial recognition and measurement

All financial assets except trade receivables are
recognised initially at fair value plus or minus the
transaction cost. Trade receivables that do not contain
financial component are measured at transaction price
in accordance with Ind AS 115. Purchases or sales of
financial assets that require delivery of assets within a
time frame established by regulation or convention in
the market place (regular way trades) are recognised on
the trade date, i.e., the date that the Group commits to
purchase or sell the asset

Subsequent measurement

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

• Debt instruments at amortised cost

• Debt instruments at fair value through other
comprehensive income (FVTOCI)

• Debt instruments, derivatives and equity instruments
at fair value through profit or loss (FVTPL)

• Equity instruments measured at fair value through
other comprehensive income (FVTOCI)

Financial assets are subsequently measured at
amortised cost if,

• the asset is held within a business model whose
objective is to hold assets in order to collect
contractual cash flows; and

• The contractual terms of instrument give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.

Derecognition

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 retain substantially all of the risks and rewards of
ownership and it does not retain control of the financial
asset.

Impairment of financial asset

Company applies expected credit loss (ECL) model for
measurement and recognition of impairment loss on the
following financial assets and credit risk exposure:

• Financial assets that are debt instruments, and
are measured at amortised cost e.g., loans, debt
securities, deposits, trade receivables and bank
balance

• Financial assets that are debt instruments and are
measured as at FVTOCI

• Lease receivables

• Trade receivables or any contractual right to receive
cash or another financial asset that result from
transactions that are within the scope of Ind AS
115.

• Loan commitments which are not measured as at
FVTPL

• Financial guarantee contracts which are not
measured as at FVTPL

The company follows ‘simplified approach' for
recognition of impairment loss allowance on:

• Trade receivables or contract revenue receivables;
and

• All lease receivables resulting from transactions
within the scope of Ind AS 116

The application of simplified approach does not
require the Company to track changes in credit risk.
Rather, it recognises impairment loss allowance based
on lifetime ECLs at each reporting date, right from its
initial recognition. For recognition of impairment loss on
other 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.

Initial recognition and measurement

The company initially recognises loans and advances,
deposits, debt securities issued and subordinated
liabilities on the date on which they are originated.
All other financial instruments (including regular-way
purchases and sales of financial assets) are recognised
on the trade date, which is the date on which the
company becomes a party to the contractual provisions
of the instrument.

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

Financial guarantee contracts

Financial guarantee contracts issued by the company
are those contracts that require a payment to be made
to reimburse the holder for a loss it incurs because the
specified debtor fails to make a payment when due
in accordance with the terms of a debt instrument.
Financial guarantee contracts are recognised initially as
a liability at fair value, adjusted for transaction costs that
are directly attributable to the issuance of the guarantee.
Subsequently, the liability is measured at the higher
of the amount of loss allowance determined and the
amount recognised less cumulative amortisation.

Derecognition

A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the
derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit or loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and
the net amount is reported in the consolidated balance
sheet if there is a currently enforceable legal right to
offset the recognised amounts and there is an intention
to settle on a net basis, to realise the assets and settle
the liabilities simultaneously.

Derivative financial instruments

Initial recognition and subsequent measurement

The Company uses derivative financial instruments,
such as forward currency contracts to hedge its foreign
currency risks. Such derivative financial instruments are
initially recognised at fair value on the date on which a

derivative contract is entered into and are subsequently
re-measured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as
financial liabilities when the fair value is negative.

2.24 Earnings per share (EPS)

Basic EPS is calculated by dividing the profit for the year
attributable to equity holders of the company by the
weighted average number of equity shares outstanding
during the financial year, adjusted for bonus elements
in equity shares issued during the year and excluding
treasury shares.

Diluted EPS adjust the figures used in the determination
of basic EPS to consider

• The after-income tax effect of interest and other
financing costs associated with dilutive potential
equity shares, and

• The weighted average number of additional equity
shares that would have been outstanding assuming
the conversion of all dilutive potential equity shares
(if any).

2.25 Segment reporting

Operating segments are reporting in a manner consistent
with the internal reporting to the chief operating decision
maker (CODM).

The board of directors of the company assesses the
financial performance and position of the company and
makes strategic decisions. The Board of Directors, which
are identified as a CODM, consists of Managing Director,
Chief Financial Officer and Independent Directors.

Company operates in single reporting segment of ‘Fluid
Machinery and Systems'

2.26 Recent accounting pronouncement

Ministry of Corporate Affairs (“MCA”) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. In May 2025, MCA notified
amendments to Ind AS 21-The Effects of Changes in
Foreign Exchange Rates, applicable w.e.f. 1 April 2025.
The Company has reviewed the amendment and based
on its evaluation has determined that it does not have
any significant impact in its financial statements. In
August 2025, MCA notified the following amendments
to:

- Ind AS 1, Presentation of Financial Statements,
applicable w.e.f. 1 April 2025 - The amendment
relates to classification of liabilities as current
or non-current and non-current liabilities with
covenants. In the context of classifying a liability as
current, it removes the requirement of existence of

a right to defer settlement for at least 12 months
after the reporting date and instead requires that
the said right should exist on the reporting date and
have substance. The amendment also introduces
guidance on classification of liabilities with
covenants. The Company has no impact of these
amendments in its classification criteria of current
and non-current liabilities.

Ind AS 7, Statement of Cash Flows and Ind AS
107, Financial Instruments: Disclosures, applicable
w.e.f. 1 April 2025 - The amendment in Ind AS 7
requires to inform users of financial statements of
the existence of supplier finance arrangements and

explain the nature of the arrangements, the carrying
amount of liabilities and the range of payment
due dates. Ind AS 107 has been amended to add
supplier finance arrangements as a factor that may
cause concentration of liquidity risk. The Company
has reviewed the amendment and based on its
evaluation has determined that it does not have any
significant impact on its financial statements.

- Ind AS 12, International Tax Reform - Pillar Two
Model Rules applicable immediately- The Company
has no impact of these amendments in its financial
statements.

Capital reserve:

The Company had recognised profit or loss on purchase, sale, issue or forfeiture/ cancellation of own equity instrument to
capital reserve.

Capital redemption reserve:

The Company had recognised capital redemption reserve on redemption of preference shares from its retained earnings as
per the then applicable provisions of Companies Act, 1956.

Securities premium:

The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve. In case of
equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share
is accounted as securities premium.

General reserve:

The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant
to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies
Act 2013.

Retained earnings:

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other
distributions paid to shareholders.

1. The quarterly returns or statements filed by the Company for working capital limits whenever availed with such banks and
financial institutions are in agreement with the books of account of the Company

2. The Company has utilised loans for the specific purpose for which same are availed.

3. The Company is not declared as wilful defaulter by any bank or financial institution (as defined under the Companies Act,
2013) or consortium thereof or other lender in accordance with the guidelines on wilful defaulters issued by the Reserve
Bank of India.

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

Compensated absences

The cost of the leave encashment and the present value of the leave encashment obligation are determined using actuarial
valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the
future. These include the determination of the discount rate; future salary increases and mortality rates.

Provision for warranty

Provision for warranty is made for estimated warranty claims in respect of products sold, which are under warranty at
the end of the reporting period. These claims are expected to be settled in the next 18 months. Management records the
provision based on the historical warranty claims information and any recent trends that may suggest future claims which
could differ from historical amount.

Provision for decommissioning and restoration cost

A provision has been recognised for decommissioning and restoration costs associated with windmills on lease hold land.
The Company is committed to restore the site at the end of useful life of windmills.

Provision for long term contract

A provision is made for the expected loss of the projects, where the estimated cost is more than the estimated revenue.
Changes in estimated cost and estimated revenue are assessed by the management at the end of reporting period
based on the price variation received/ given, change in the scope of project and revision of estimates regarding date of
completion, expected costs to be incurred, changes in external circumstances such as applicable tax rates etc.

Basis used to determine the overall expected return:

The net interest approach effectively assumes an expected rate of return on plan assets equal to the beginning of the

year Discount Rate. Expected return of 6.7% (PY 7.2%) has been used for the valuation purpose.

o) Principal actuarial assumptions at the balance sheet date (expressed as weighted averages)

1 Discount rate as at 31-03-2026 - 7.2% (PY- 6.7%)

2 Expected return on plan assets as at 31-03-2026- 6.7%(PY- 7.2%)

3 Salary growth rate: For Gratuity Scheme - 8% to 10% (PY - 8% to 10%). Impact for change in accounting
estimate along with other remeasuremnt impact is recognised in other comprehensive income.

4 Attrition rate: For gratuity scheme the attrition rate is taken at 8% to 10% (PY - 8% to 10%)

5 The estimates of future salary increase considered in actuarial valuation take into account inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.

6 Weighted average duration of the Gratuity plan (based on discounted cash flows using mortality, withdrawal rate
and interest rate) is 8.65 years and for Pension plan 6.09 years.

p) General descriptions of defined plans:

1 Gratuity Plan:

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen
days salary last drawn for each completed year of service. The same is payable on termination of service or
retirement whichever is earlier. The benefit vests after five years of continuous service.

2 Company’s Pension Plan:

The Company operates a Pension Scheme for specified ex-employees wherein the beneficiaries are entitled to
defined monthly pension.

q) The Company expects to fund ' 510.598 Mn (PY ' 71.620 Mn) towards its gratuity plan in the year 2026-27.

r) Sensitivity analysis

Sensitivity analysis indicates the influence of a reasonable change in certain significant assumptions on the outcome
of the Present value of obligation(PVO). Sensitivity analysis is done by varying (increasing/ decreasing) one parameter
at a time and studying its impact

One percentage point change in actuarial assumptions would have the following effects on the defined benefit
obligation

* As specified in the note given in the Board's Report in respect of legal proceedings pending against KPL, the Company has in the interim,
without prejudice to all its rights and contentions, including those in the pending proceedings, in compliance with the directions of the Order
dated 05.12.2023 of the Hon'ble Commercial Court, Pune, KBL has deposited the claimed royalty amount with the Court from the quarter
ended October 2018 onwards. Pending dispute, the Hon'ble Commercial Court, has directed its treasury to invest the said deposited royalty
amount in a Nationalised bank for a fixed term of three years.

A) Corporate social responsibility expenditures

(a) Amount required to be spent by the Company during the current year is ' 67.200 Mn (PY - ' 42.442 Mn)

(b) Amount spent by the Company during the current year is ' 47.500 Mn (PY - ' 23.798 Mn) and a provision for ' 19.700
Mn is accounted for in current year towards ongoing projects pursuant to provisions of Sec 135(5) of The Companies
Act, 2013.

There is no shortfall as per provision of Sec 135 of The Companies Act 2013 either at the beginning or end of year.

The Company as per its policy on Corporate Social Responsibility (CSR) and recommendation and approval of the CSR
committee and Board has contributed ' 37.300 Mn towards projects on Education and Health undertaken by implementing
agency, ' 8.200 Mn towards Animal Welfare Rescue and balance ' 2.000 Mn towards other miscellaneous eligible activities.
The Company has not spent any amount towards construction or acquisition of asset.

The provision of ' 19.700 Mn accounted towards ongoing projects which would be used for the purpose of Education and
health, Medical Support and Skill development

B Loans and advances in the nature of loans to firms/companies in which directors are interested: NIL

C Investment by the loanee (borrower) in the shares of the Company or subsidiary of the Company: NIL

Note:- Loans to employees under various schemes of the Company (such as housing loan, furniture loan, education loan
etc.) have been considered to be outside the purview of this disclosure requirements.

NOTE 36: FINANCIAL RISK MANAGEMENT POLICY AND OBJECTIVES

Company's principal financial liabilities, comprise loans and borrowings, trade and other payables, and financial guarantee
contracts. The main purpose of these financial liabilities is to finance company's operations and to provide guarantees to
support its operations. Company's principal financial assets include advances to subsidiaries, trade and other receivables,
security deposits and cash and cash equivalents, that derive directly from its operations.

In order to minimise any adverse effects on the financial performance of the Company, it has taken various measures. This
note explains the source of risk which the entity is exposed to and how the entity manages the risk and impact of the same in
the financial statements.

The Company's risk management is carried out by management, under policies approved by the board of directors. Company's
treasury identifies, evaluates and hedges financial risks in close cooperation with the company's operating units. The board
provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange
risk, credit risk, and investment of excess liquidity. No major change in assumptions and methods used for risk assessments
is made during the year.

(A) Credit Risk

Credit risk in case of the Company arises from cash and cash equivalents, deposits with banks and financial institutions,
as well as credit exposures to customers including outstanding receivables.

Credit risk management

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage
this, the Company periodically assesses the reliability of customers, taking into account the financial condition, current
economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set
accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant
increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant
increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with
the risk of default as at the date of initial recognition. It considers reasonable and supportive forward looking information
such as:

(i) Actual or expected significant adverse changes in business,

(ii) Actual or expected significant changes in the operating results of the counterparty,

(iii) Financial or economic conditions that are expected to cause a significant change to counterparty's ability to meet its
obligations,

(iv) Significant increases in credit risk on other financial instruments of the same counterparty,

(v) Significant changes in the value of collateral supporting the obligation or in the quality of third-party guarantees or
credit enhancements.

The Company provides for expected credit loss in case of trade receivables, claims receivable as and security deposits
when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or failing to engage in a
repayment plan with the Company etc.

For the security deposits and claims receivable, provision for expected loss is made considering 12 months expected
credit loss. Provision for lifetime credit loss is made if there is significant increase in credit risk for such financial assets.

In respect of trade receivable, Company uses the simplified approach for the provision for expected loss. The lifetime
expected loss provision is recognised based on the provision matrix as decided by the management, based on the
historical experience of recoverability. The Company categorises a receivable for provision for doubtful debts/write off
when a debtor fails to make contractual payments greater than 1 year past due in case product business and 4 years
past due in case of project business. In addition to this Company also provides the expected loss based on the overdue
number of days for receivables as per the provision matrix. Where loans or receivables have been written off, the Company
continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these
are recognised in profit or loss.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate
amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic
nature of the underlying businesses, Company maintains flexibility in funding by maintaining availability under committed
credit lines.

Management monitors rolling forecasts of the Company's liquidity position (comprising the undrawn borrowing facilities
below) and cash and cash equivalents on the basis of expected cash flows. This is carried out in accordance with practice
and limits set by the company. In addition, the company's liquidity management policy involves projecting cash flows and
considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal
and external regulatory requirements and maintaining debt financing plans.

C) Market risk - Interest rate risk

The Company's exposure to the risk of changes in market interest rates relates to borrowings with floating interest rates.
To manage the risk, Company has created balance portfolio of fixed and variable interest rate borrowings.

Change of 0.5%, in the base rates will have effect of ' 0.21 Mn on the Company's profitability.

(D) Foreign Currency Risk

The Company is exposed to foreign exchange risk mainly through its sales to overseas customers and purchases from
overseas suppliers in various foreign currencies.

The Company evaluates exchange rate exposure arising from foreign currency transactions and the company follows
established risk management policies, including use of natural hedge between receivables and payables, use of
derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk, where the economic
conditions match the Company's policy.

NOTE 37: CAPITAL MANAGEMENT

a) Risk management

The Company's objectives when managing capital are to

- safeguard it's ability to continue as a going concern, so that it can continue to provide returns for shareholders and
benefits for other stakeholders; and

- Maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares, change debt. Consistent with others in the industry, the Company
monitors capital on the basis of the following gearing ratio: Net debt (total borrowings net of cash and cash equivalents,
current investment and other bank balances) divided by Total ‘equity' plus net debt.

NOTE 41: AUDIT TRAIL

The Company, has used an accounting software, for maintaining its books of account which has a feature of recording audit
trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software
except that the audit trail feature was not enabled at the database level at the Enterprise Resource Planning System (SAP) to
log any direct data changes.

However, access to the database for accounting is restricted only to single Information technology basis admin user
(changes if any are allowed only with prior approval of committee of senior management) depending on Company's
operating and business needs after appropriately designing the internal controls and ensuring the operating effectiveness
of such controls.

The Company uses services of third-party service provider for payroll processing. Based on Service Organisation Control Type
2 report (‘SOC report'), the audit trail feature at application level was enabled at the Human Resource Management System
(HRMS). Further, outsourced vendor is ISO 9001:2015, ISO 27001:2013 and ISO 27001:2022 certified. Rule A.12.4, of ISO
27001:2013 requires, maintaining the audit trail of all events / logs including the changes in payroll products - user access
controls, change management, etc. Auditors of third-party service provider had verified these controls and issue certificate for
ISO standards.

Additionally, there is no direct integration between third party payroll system and KBL accounting system. Processed payroll
data received from third party service provider, is duly verified by KBL's internal team before accounting the same.

Above mentioned does not impact the internal control environment of the Company.

Further, the audit trail, wherever available, has been preserved by the Company in accordance with the applicable statutory
record retention requirements.

NOTE 42: EXCEPTIONAL ITEMS

An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of
the performance of the Company is treated as an exceptional item and the same is disclosed in standalone statement of profit
and loss and in the notes forming part of the standalone financial statements

The Government of India has consolidated multiple existing labour legislations into a unified framework comprising of four
Labour Codes, collectively referred to as the ‘New Labour Codes' and notified with effect from 21^st November 2025. Based on
the analysis of the information available so far and actuarial valuation for the year ended 31 March 2026, the Company has
recognised ' 413.636 Mn as past service cost on post-employment defined benefits for its employees. Considering that this
impact is driven by a regulatory change and is non-recurring in nature, it is classified under exceptional items in these financial
results. The Company continues to monitor the developments relating to the implementation of the New Labour Codes and
would review the estimates as further clarifications and Rules are notified.

*During the year ended 31 March 2025, the Company had sold its entire stake in its wholly owned subsidiary viz. ‘The Kolhapur Steel Limited'
(TKSL) to another wholly owned subsidiary viz. Karad Project and Motors Limited' (KPML) for ' 107.646 million at arm's length price based
on valuation carried out by an independent valuer. As the investment in shares of TKSL had been fully impaired over the years, the entire
consideration had resulted in a gain of' 107.646 Mn which was disclosed as an exceptional item.

NOTE 43: OTHERS

1. The Company does not have 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.)

2. The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources
or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding
(whether recorded in writing or otherwise) that the Intermediary (i) 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 (ii) provide any
guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

3. 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.

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

5. No proceedings have been initiated or are pending against the Company for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

6. Company has not entered any transactions with companies struck off under section 248 of the Companies Act, 2013 or
section 560 of the Companies Act, 1956

7. Company has not made any contribution to the political parties during FY 2025-26. (PY: NIL)

8. Previous year's figure have been regrouped, wherever required.