1.9 Provisions

Provisions for claims and service warranties are
recognised when the Company has a present legal or
constructive obligation as a result of past events, it is
probable that an outflow of resources will be required
to settle the obligation and the amount can be reliably
estimated. Provisions are not recognised for future
operating losses.

Where there are a number of similar obligations,
the likelihood that an outflow will be required in
settlement is determined by considering the class of
obligations as a whole. A provision is recognized even
if the likelihood of an outflow with respect to any one
item included in the same class of obligations may be
small.

Provisions are measured at the present value of
management's best estimate of the expenditure
required to settle the present obligation at the end of
the reporting period. Provisions are discounted only if
the impact of discounting is considered material. The
discount rate used to determine the present value is a
pre-tax rate that reflects current market assessments

of the time value of money and the risks specific to
the liability. The increase in the provision due to the
passage of time is recognised as interest expense.

1.10 Share based payments

Employees of the Company receive remuneration in
the form of Share-based Payments in consideration
of the services rendered. Under the equity settled
share-based payment, the fair value on the grant
date of the award given to employees is recognised
as 'employee benefit expense' with a corresponding
increase in equity over the vesting period. The fair
value of the options at the grant date is calculated by
an independent valuer basis 'Black Scholes model'.

The total amount to be expensed is determined by
reference to the fair value of the options granted:

(i) including any market performance conditions (for
example, the entity's share price)

(ii) excluding impact of any service and non-market
performance vesting conditions

(iii) including the impact of any non-vesting conditions
(e.g the requirement for employees to save or hold
shares for a specific period of time)

The total expense is recognised over the vesting
period, which is the period over which all of the
specified vesting conditions are to be satisfied.
At the end of each period, the Company revises its
estimates of the number of options that are expected
to vest based on the non-market vesting and service
conditions. The Company recognises the impact of
the revision to original estimates, if any, in profit or
loss, with a corresponding adjustment to equity.

When shares are forfeited due to a failure by the
employee to satisfy the service conditions, any
expenses previously recognised in related to such
shares are reversed effective from the date of
forfeiture.

1.11 Revenue Recognition

The Company manufactures and sells a range of
Pumps, Motors and related components.

Revenue from contracts with customers is recognised
when control of the goods or services are transferred
to the customer at an amount that reflects the
consideration to which the Company expects to be
entitled in exchange for those goods or services. The
Company has concluded that it is the principal in its

revenue arrangements, as it typically controls the
goods or services before transferring them to the
customer.

The Company considers the terms of the contract in
determining the transaction price. The transaction
price is based upon the amount the Company
expects to be entitled to in exchange for transferring
of promised goods and services to the customer
after deducting discounts, volume rebates etc. The
Company collects goods and services tax (GST) on
behalf of the government and, therefore, these are not
economic benefits flowing to the Company. Hence,
they are excluded from revenue. Revenue is only
recognised to the extent that it is highly probable that
a significant reversal will not occur.

Revenue from sale of goods is recognised at the point
in time when control of the product is transferred to
the customer, which is generally determined when
title, ownership, risk of obsolescence and loss pass
to the customer and the Company has the present
right to payment, all of which occurs at a point in time
upon shipment or delivery of the product or customer
acceptance, as per the respective terms agreed
with the customer. The Company considers freight
activities as costs to fulfil the promise to transfer the
related products and the payments by the customers
for freight costs are recorded as a component of
revenue.

The Company provides installation and maintenance
services on its certain products at the time of sale
in terms of the contract with customers. These
installation and maintenance services are sold
together with the sale of product. Each component
is treated as a separate performance obligation
because the promises to transfer the product and to
provide the installation and maintenance services
are capable of being distinct. The transaction price
is allocated based on stand-alone selling prices,
determined using observable prices or estimated
using the cost-plus margin method. Revenue from the
sale of product is recognized at the point in time when
control is transferred to the customer. Installation
revenue is recognized upon rendering of installation
service. Maintenance service revenue is recognized
on a straight line basis over the contracted period,
reflecting the continuous transfer of service to the
customer.

The Company typically provides warranties for general

repairs of defects that existed at the time of sale, as
required by law. These assurance-type warranties are
accounted for under Ind AS 37 Provisions, Contingent
Liabilities and Contingent Assets. Refer to the
accounting policy on warranty provisions in 1.9 above.

2. CRITICAL ESTIMATES AND JUDGEMENTS

The preparation of standalone financial statements
requires the use of accounting estimates which, by
definition, will likely differ from the actual results.
Management also needs to exercise judgement in applying
the Company's accounting policies.

This note provides an overview of the areas that involved
a higher degree of judgement or complexity, and of items
which are more likely to be materially adjusted due to final
outcomes deviating from estimates and assumptions
made. Detailed information about each of these estimates
and judgements is included below as well as in relevant
notes together with information about the basis of
calculation for each affected line item in the financial
statements.

Estimates and judgements are continually evaluated.
They are based on historical experience and other factors,
including expectations of future events that might have a
financial impact on the Company and that are believed to
be reasonable under the circumstances.

The following paragraphs explain areas that are considered
more critical, involving a higher degree of judgement and
complexity.

• Estimation of useful life of Property Plant & Equipment
(Refer note 1.2, 3)

The charge in respect of periodic depreciation is
derived after determining an estimate of an asset's
expected useful life and the expected residual value
at the end of its life. The useful lives and residual
values of the Company's assets are determined by
management at the time the asset is acquired and
reviewed periodically, including at each financial year
end and any change is considered on prospective
basis. The lives are based on historical experience
with similar assets as well as anticipation of future
events, which may impact their life, such as changes
in technology.

• Estimate of expected credit loss (ECL) on trade
receivables (Refer note 1.7, 11 and 46)

The impairment provisions for trade receivables
are based on a provision matrix which considers

assumptions about risk of default and expected
loss rates. The Company uses judgement in making
these assumptions and selecting the inputs to the
impairment calculation, based on Company's past
history, credit risk, existing market conditions as
well as forward looking estimates at the end of each
reporting period.

• Provision for warranty (Refer note 1.9, 20 and 25)

The Company gives warranties for its products,
undertaking to repair or replace the product that fail
to perform satisfactory during the warranty period.
Provision made at the year-end represents the
amount of expected cost of meeting such obligations
of rectification / replacement which is based on
the historical warranty claim information as well
as recent trends that might suggest that past cost
information may differ from future claims. Factors
that could impact the estimated claim information
include the success of the Company's productivity and
quality initiatives. The closing warranty provision is
bifurcated into current and non-current based on the
past settlement trend.

• Revenue recognition in respect of contracts with
multiple performance obligations (Refer note 1.11 and
28)

The Company's revenue recognition process for
contracts with multiple performance obligations
requires management to exercise significant
judgment in several areas. Management identifies
each distinct performance obligation within a
contract and allocates the transaction price to each
based on their relative standalone selling prices. When
standalone selling prices are not directly observable,
management estimates them using a combination
of market data, expected costs, and profit margins.
The assessment of when performance obligations
are satisfied, and thus when revenue is recognized,
involves further judgment, particularly for services
delivered over time. Changes in these estimates
and judgments could significantly affect the timing
and amount of revenue recognized in the financial
statements.

Notes:

1. Inventories are hypothecated with the bankers against term loans and working capital limits. [Refer note 18 and 22(b)]

2. Valued at lower of cost and net realisable value.

3. Write-downs of inventories to net realisable value amounted to Rs. Nil (Previous year: Rs. Nil). These were recognised as an
expense during the year and included in 'changes in inventories of finished goods and work-in-progress' in the Standalone
Statement of Profit and Loss.

4. Provision for slow moving and obsolete inventory amounted to Rs. 1.72 crores (Previous year: Rs. Nil crores), These were
recognised as an expense during the year and included in 'Cost of materials consumed' in the Standalone Statement of Profit
and Loss.

16.6 The Company is a public limited Company and does not have a holding Company.

16.7 On March 22, 2024, the Treasury Committee of the Board of Directors of the Company has approved an allotment of 16,54,944
equity shares having face value of Rs 10 each at a premium of Rs. 1198.50 per equity share aggregating to Rs. 200 crores to
eligible Qualified Institutional Buyers.

16.8 The bonus issue in the ratio of 5:1 i.e. 5 (five) bonus equity shares of Rs. 10 each for every 1 (one) fully paid-up equity share held
was approved by the shareholders of the Company on November 09, 2024. Subsequently, on November 26, 2024, the Company
allotted 100,175,500 equity shares to the shareholders who held equity shares as on the record date of November 25, 2024.
Consequently, Rs. 100.18 crores (representing par value of Rs. 10 per share) was transferred from securities premium to the
share capital.

16.9 There were no shares bought back nor allotted under any contract without receiving payment in cash during the five years
immediately preceding the year ended March 31, 2025.

16.10 Shares reserved for issue under options

The company has reserved equity shares for issue under Employee Stock Option Scheme, Refer note 42 Share Based Payments
for details of Employee Stock Option Scheme.

Closing balance 0.20 -

Brief descriptions of items of Other Equity are given below:

Securities premium:

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

General reserve:

The Company has created this reserve by appropriation of certain amount out of the profit in earlier years. The accumulated
amount in this reserve is a free reserve.

Retained earnings:

Amount of retained earnings represents accumulated profit and losses of the Company as on reporting date. Such profits
and losses are after adjustment of payment of dividend, transfer to any reserves as statutorily required, actuarial gain/ loss
arising out of remeasurement of defined benefit plans. The accumulated amount in this reserve is available for distribution of
dividends.

(a) Interest rate of the above loans are in the range between 5.62% to 9.85%

(b) These facilities are secured by way of :

(i) First pari passu charge on both present and/or future, current assets including inventories and receivables.

(ii) Second pari passu charge on both present and/or future, movable and immoveable property, plant and equipment.

(c) Borrowings are subsequently measured at amortised cost and therefore accrued interest is included in the carrying amount
of the respective borrowing.

(d) The facilities have terms of repayment ranging between 3-6 months. Certain WCDL facilities are repayable on demand.

(e) Working capital loans from banks includes loans denominated in foreign currency aggregating to Rs. 14.21 crores (March 31,
2024: Rs nil).

(f) Net debt reconciliation

The section sets out an analysis of net debt and movements in net debt for each of the periods presented.

36.1 Earnings per share for the prior year has been proportionately adjusted for the bonus issue in the ratio of 5:1 i.e. 5 (five) bonus
equity shares Rs. 10 each for every 1 (one) fully paid-up equity share held.

36.2 Stock options granted to the employees under Shakti Pumps (India) Limited Employee Stock Option Plan 2024 are considered
to be potential equity shares. They have been included in the determination of diluted earnings per share to the extent to
which they are dilutive.

37. Proposed Dividend

A final dividend of '1 per equity share is recommended by the Board of Directors at their meeting held on May 9, 2025 which
is subject to approval of the shareholders at the ensuing Annual General Meeting, and if approved will be payable within the
statutory time limit of 30 Days.

41. Employee benefit obligations

41.1 Defined Contribution Plan :

The Company has certain defined contribution plans. Contributions are made to provident fund, employee state insurance
commission (ESIC) in India and national pension fund for employees at the specified percentage of salary as per regulations.
The contributions are made to registered provident fund, ESIC fund and national pension fund administered by the government.
The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive
obligation. The expense recognised in the Statement of Profit and Loss during the year towards employer's contribution to the
fund is as below:

41.2 Compensated absences

The leave obligations cover the Company's liability for earned leave which are classified as other long-term benefits.

The entire amount of the provision of Rs. 0.67 crores is presented as current, since the Company does not have an unconditional
right to defer settlement for any of these obligations. However, based on past experience, the Company does not expect
all employees to avail the full amount of accrued leave or require payment for such leave within the next 12 months. Leave
obligations as at March 31, 2025 not expected to be settled within the next 12 months is Rs. 0.63 crores.

41.3 Gratuity

In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity
Scheme) covering certain categories of employees. The Gratuity Scheme provides a lump sum payment to vested employees,
at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of
employment with the Company. The Company provides the gratuity benefit through annual contributions to the fund managed
by the Life Insurance Corporation of India (LIC), under this plan the settlement obligation remains with the Company. The
Company funds the liability based on estimations of expected gratuity valuation provided by the Actuary.

(vii) Risk exposure:

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed
below:

(i) Interest Rate Risk: While calculating the defined benefit obligation a discount rate based on government bonds yields
of matching tenure is used to arrive at the present value of future obligations. If the bond yield falls, the defined benefit
obligation will tend to increase and plan assets will decrease.

(ii) Salary Risk: Higher than expected increases in salary will increase the defined benefit obligation.

(iii) Demographic Risk: This is the risk of variability of results due to unsystematic nature of decrements that include
mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligations is not
straight forward and depends on the combination of salary increase, discount rate and vesting criteria. It is important
not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically
costs less per year as compared to a long service employee.

42. Shared-based payments

(a) Employee option plan

The establishment of the Shakti Pumps (India) Limited Employee Stock Option Plan 2024 was approved by the shareholders
at the annual general meeting held in the financial year 2024-25. The Employee Stock Option Plan is designed to provide an
incentive for senior employees to deliver long-term shareholder returns. Under the plan, participants are granted options
which vest upon completion of specified years of service from the grant date. Participation in the plan is at the Board's
discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.

Once vested, the options remain exercisable for a period of three months from end of the vesting period.

Options are granted under the plan for no consideration and carry no dividend or voting rights. When exercisable, each option
is convertible into one equity share. The exercise price of the options is fixed at ' 83 per share.

Fair value of option granted:

The equivalent fair value in ' for the year ended March 31, 2025 was ' 813.30 per option. The fair value at grant date is independently
determined using the Black-Scholes Model which takes into account the exercise price, the term of the option, the share price at
grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the
term of the option.

The model inputs for options granted during the year ended March 31, 2025 included:

(a) Options are granted for no consideration and vest upon completion of service for a period of three years and one month. Vested
options are exercisable for a period of three months after vesting.

(b) Exercise price: '83

(c) Grant date: February 27, 2025

(d) Expiry date: March 31, 2028

(e) Share price at grant date: '880.20

(f) Expected price volatility of the company's shares: 45.72%

(g) Risk-free interest rate: 6.69%

The fair value of Cash and cash equivalents, other bank balances, trade receivables, trade payables, current borrowings and
other current financial assets and liabilities approximate their carrying amount largely due to the short-term maturities of these
instruments and hence not disclosed separately.

The fair value of other non-current financial assets approximates its carrying amount.

Fair value hierarchy

This section explains the judgements and estimates made in determining the fair value of the financial instruments. The fair
value of financial instruments as referred to in note above have been classified into three categories depending on the inputs
used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active market for identical assets or
liabilities (level 1 measurements) and lowest priority to unobservable inputs (level 3 measurements).

(a) recognised and measured at fair value and

(b) measured at amortised cost and for which fair values are disclosed in the financial statements
The categories used are as follows :

Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2 : The fair value of financial instruments that are not traded in an active market (for example, over-the counter derivatives)
is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on
entity-specific estimates. Considering that all significant inputs required to fair value such instruments are observable, these
are included in level 2.

Level 3 : If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

For all financial instruments referred above that have been measured at amortised cost, their carrying values are reasonable
approximations of their fair values. These are classified as level 3 financial instruments.

There were no transfers between Level 1, Level 2 and Level 3 during the year.

The Company's activities exposes it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the
Company is exposed to and how the Company manages the risk.

1. Credit risk :

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and deposits with banks
and other financial instruments. For banks and other financial institutions, only high rated banks/ financial institutions are
accepted. The balances with banks, security deposits are subject to low credit risk and the risk of default is negligible or
nil. Hence, no provision has been created for expected credit loss for credit risk arising from these financial assets. The
Company considers the probability of default upon initial recognition of asset and whether there has been a significant
increase in the 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 available reasonable and supportive forward-looking
information, for e.g., external credit rating (to the extent available), actual or expected significant adverse changes in
business, financial or economic conditions that are expected to cause a significant change to Counterparty's ability to
meet its obligations.

Trade receivables

Credit risk arises from the possibility that customer will not be able to settle their obligations as and when agreed. To
manage this, the Company analyses the credit limits and credit worthiness of the customers on an ongoing basis, taking
into account the financial condition, current economic trends, analysis of historical bad debts, ageing of accounts
receivable and forward looking information. Individual credit limits are set/updated accordingly.

Liquidity risk refers to the risk that the Company will not be able to meet its financial obligations as they become due. The
objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as
per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve
borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of
financial assets and liabilities.

3. Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency
exchange rates, interest rates, credit, liquidity and other market changes. The Company's exposure to market risk is
primarily on account of foreign currency exchange rate risk.

a) Foreign currency exchange rate risk :

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and
other comprehensive income and equity, where any transaction references more than one currency or where assets /
liabilities are denominated in a currency other than the functional currency of the Company. Considering the countries
and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations

(e) The Company provides installation and maintenance services on its certain products at the time of sale in terms of the
contract with customers. These installation and maintenance services are sold together with the sale of product. Under Ind
AS 115, these are considered as three separate performance obligations and accordingly the sale of the solar pumps is treated
as a sale of product and installation and maintenance is considered as sale of service. The sale of services during the year is
Rs. 86.59 crores based on the transaction price allocation under Ind AS 115.

50. The figures for the corresponding previous year have been regrouped/reclassified wherever necessary after considering
Company's contractual rights, historical trends and the said disclosure being more relevant to the users of the financial
statements and this being more consistent with peers. This change doesn't result in any material quantitative and qualitative
impact on the overall financial statements.

51. SUMMARY OF OTHER ACCOUNTING POLICIES

This note provides a list of other accounting policies
adopted in the preparation of these standalone financial
statements to the extent they have not already been
disclosed in the other notes above. These policies have
been consistently applied to all the years presented.

51.1 Intangible assets

Intangible assets are stated at acquisition cost
net of tax/ duty credits availed, if any, and net of
accumulated amortization. Gains or losses arising
from the retirement or disposal of an intangible
asset are determined as the difference between the
net disposal proceeds and the carrying amount of
the asset and recognized as income or expense in
the profit or loss. Intangible assets are amortized on
the straight-line method as follows:

Computer Software are amortised on straight line
basis over the estimated useful life of 3 years.

The amortisation period and the amortisation
method are reviewed at least at each financial
year end. If the expected useful life of the asset is
significantly different from previous estimates, the
amortisation period is changed accordingly.

51.2 Investment in subsidiaries

The investments in subsidiaries are carried in the
financial statements at historical cost.

Investments in subsidiaries carried at cost are
tested for impairment in accordance with Ind AS
36 Impairment of Assets. The carrying amount of
the investment is tested for impairment as a single
asset by comparing its recoverable amount with its
carrying amount, any impairment loss recognised
reduces the carrying amount of the investment.

51.3 Foreign currencies transactions

(i) Functional and presentation currency

Items included in the financial statements of the
Company are measured using the currency of the
primary economic environment in which the entity
operates ('the functional currency'). The financial
statements have been prepared and presented
in Indian Rupees (INR), which is the Company's
functional and presentation currency.

(ii) Transactions and Balances

Foreign currency transactions are translated into
the functional currency using the exchange rates

at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement
of such transactions and from the translation of
monetary assets and liabilities denominated in
foreign currencies at year end exchange rates are
recognized in profit or loss on a net basis.

Foreign exchange gains and losses ar.sing on

foreign currency borrowings are presented in the
statement of profit and loss, within finance costs.
All other foreign exchange gains and losses are
presented in the statement of profit and loss on a
net basis within other income/other expenses, as
appropriate.

Non-monetary items that are measured at fair
value in a foreign currency are translated using the
exchange rates at the date when the fair value was
determined. Translation differences on assets and
liabilities carried at fair value are reported as part
of the fair value gain or loss.

51.4 Employee benefits

(i) Short-term obligations

Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within 12 months after the end of the
period in which the employees render the related
service are recognized in respect of employees'
services up to the end of the reporting period
and are measured at the amounts expected to be
paid when the liabilities are settled. The liabilities
are presented as current employee benefits
obligations in the balance sheet.

(ii) Post-employment benefits obligations

The Company operates the following post¬
employment schemes:

Defined contribution plan

Defined contribution plans are provident fund scheme,
Employee State Insurance Commission (ESIC) scheme
and national pension fund scheme. The Company
pays provident fund, ESIC and national pension
fund scheme contribution to publicly administered
provident funds, ESIC funds and national pension fund
scheme as per local regulations. The Company has no
further payment obligations once the contributions
have been made. The contribution are accounted for
as defined contribution plans and contributions are
recognised as employee benefit expenses when they
are due.

Defined Benefit Plans for gratuity

The Company provides for gratuity, a defined benefit
plan (the "Gratuity Plan") covering eligible employees
in accordance with the Payment of Gratuity Act, 1972.
The Gratuity Plan provides a lump sum payment to
vested employees at retirement, death or termination
of employment, of an amount based on the respective
employee's salary and the tenure of employment.

The liability or asset recognized in the balance sheet in
respect of defined benefit gratuity plan is the present
value of the defined benefit obligation at the end of the
reporting period less the fair value of plan assets. The
defined benefit obligation is calculated annually by
actuaries using the projected unit credit method.

The present value of the defined benefit obligation
is determined by discounting the estimated future
cash outflows by reference to market yields at the
end of the reporting period on government bonds that
have terms approximating to the terms of the related
obligation.

The net interest cost is calculated by applying the
discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets.

Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognized in the period in which they
occur, directly in other comprehensive income. They
are included in retained earnings in the statement of
changes in equity and in the balance sheet.

Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognized immediately in profit or
loss as past service cost.

Other long-term employee benefit obligations

The Company has liabilities for earned leave which are
not expected to be settled wholly within 12 months
after the end of the year in which the employees
render the related service. These obligations are
therefore measured as the present value of expected
future payments to be made in respect of services
provided by employees up to the end of the reporting
period using the projected unit credit method. The
benefits are discounted using the appropriate market
yields at the end of the reporting period that have
terms approximating to the terms of the related
obligation. Re-measurements as a result of experience
adjustments and changes in actuarial assumptions
are recognised in profit or loss.

The obligations are presented as current liabilities in
the balance sheet if the Company does not have an
unconditional right, at the end of the reporting period,
to defer settlement for at least twelve months after
the reporting period, regardless of when the actual
settlement is expected to occur.

51.5 Leases

Where the Company is a lessee

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

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

• Variable lease payment that are based 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

• Payments of penalties for terminating the lease,
if the lease term reflects the Company exercising
that option.

• Lease payments to be made under reasonably
certain extension options are also included in the
measurement of the liability.

The lease payments are discounted using the lessee's
incremental borrowing rate, being the rate that the
lessee would have to pay to borrow the funds necessary
to obtain an asset of similar value to the right-of-use
asset in a similar economic environment with similar
terms, security and conditions.

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

Right-of-use assets are measured at cost comprising
the following:

• the amount of the initial measurement of lease
liability.

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

• any initial direct costs

• restoration costs

Right-of-use assets are depreciated over the shorter

of the asset's useful life and the lease term on a
straight-line basis. If the Company is reasonably
certain to exercise a purchase option, the right-of-use
asset is depreciated over the underlying asset's useful
life.

For short term leases of warehouses, the Company
recognises the lease payments as an operating
expense on a straight line basis over the lease term.
Short term leases are leases with a lease term of 12
months or less.

51.6 Contingent Liabilities

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.

51.7 Financial Instrument:

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 and liabilities are recognised when
the Company becomes a party to the contractual
provisions of the instrument.

Financial Assets

a) Classification

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

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

• those measured at amortised cost.

(i) Classification of financial assets at amortised cost
The Company classifies its financial assets at amortised
cost only if both of the following criteria are met:

• the asset is held within a business model whose
objective is to collect the contractual cash flows, and

• the contractual terms give rise to cash flows that are
solely payments of principal and interest.

(ii) Classification of financial assets at fair value through
other comprehensive income

Financial assets at fair value through other comprehensive
income (FVOCI) comprise:

• Equity securities (listed and unlisted) which are not held
for trading, and for which the Company has irrevocably
elected at initial recognition to present changes in fair
value through OCI rather than profit or loss. These are
strategic investments and the Company considers this
classification to be more relevant. There are currently
no equity securities which are carried at FVOCI.

• Debt securities where the contractual cash flows
are solely payments of principal and interest and
the objective of the Company's business model is
achieved both by collecting contractual cash flows and
by selling financial assets. There are currently no debt
securities which are carried at FVOCI.

(iii) Classification of financial assets at fair value through
profit or loss

The Company classifies the following financial assets
at fair value through profit or loss (FVTPL):

• debt instruments that do not qualify for measurement
at either amortised cost or FVOCI,

• equity investments that are held for trading, and

• equity investments for which the entity has not elected
to recognise fair value gains and losses through OCI.

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

• For assets measured at fair value, gains and losses will
either be recorded in the statement of profit and loss
or other comprehensive income;

• For investments in equity instruments that are not held
for trading, this will depend on whether the Company
has made an irrevocable election at the time of initial
recognition to account for the equity investment at
fair value through other comprehensive income.

The Company reclassifies debt instruments when and
only when its business model for managing those assets
changes.

b) Initial recognition and measurement

Financial assets are recognized when the Company
becomes a party to the contractual provisions of the
instrument. Financial assets are recognized initially at
fair value plus, in the case of financial assets not recorded
at fair value through Statement of Profit and Loss,
transaction costs that are attributable to the acquisition
of the financial asset. Transaction costs of financial

assets carried at fair value through Profit and Loss are
expensed in the Statement of Profit and Loss.

c) Subsequent measurement

Subsequent measurement of financial assets depends on
the Company's business model for managing the asset and
the cash flow characteristics of the asset.

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 amortised cost. Interest income from these financial
assets is included in other income using the effective
interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss.

Fair value through other comprehensive income (FVOCI):
Assets that are held for collection of contractual cash flows
and for selling the financial assets, where the assets' cash
flows represent solely payments of principal and interest,
are measured at FVOCI. Movements in the carrying
amount are taken through OCI, except for the recognition
of impairment gains or losses, interest income and foreign
exchange gains and losses which are recognised in profit
and loss. When the financial asset is derecognised, the
cumulative gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and recognised in
other gains/(losses). Interest income from these financial
assets is included in other income using the effective
interest rate method. Foreign exchange gains and losses
are presented in other income/ expenses.

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. A gain or loss on a financial
asset that is subsequently measured at fair value through
profit or loss is recognized in profit or loss and presented
within other income/ expenses in the period in which it
arises. Interest income from these financial assets is
included in other income.

Impairment of financial assets

The Company assesses on a forward looking basis the
expected credit losses associated with its assets carried
at amortised cost and FVOCI debt instruments. The
impairment methodology applied depends on whether
there has been a significant increase in credit risk. Note
46 details how the Company detennines whether there has
been a significant increase in credit risk

e) Derecognition of financial assets

A financial asset is derecognised only when the

(i) has transferred the rights to receive cash flows
from the financial asset; or

(ii) 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 entity has transferred an asset, the
Company evaluates whether it has transferred
substantially all risks and rewards of ownership of the
financial asset. In such cases, the financial asset is
derecognised. Where the entity has not transferred
substantially all risks and rewards of ownership of the
financial asset, the financial asset is not derecognised.
Where the entity has neither transferred a financial
asset nor retains substantially all risks and rewards of
ownership of the financial asset, the financial asset is
derecognised if the Company has not retained control
of the financial asset. Where the Company retains
control of the financial asset, the asset is continued to
be recognised to the extent of continuing involvement
in the financial asset.

51.8 Income recognition on financial assets

• Interest Income

Interest income on financial assets at amortised cost
is recognised in profit or loss as part of other income.

Interest income is calculated by applying the effective
interest rate to the gross carrying amount of a financial
asset except for financial assets that subsequently
become credit impaired. For credit-impaired financial
assets the effective interest rate is applied to the net
carrying amount of the financial asset (after deduction
of loss allowance).

• Dividends

Dividends are recognised as other income in the
statement of profit and loss only when the right to
receive payment is established, it is probable that the
economic benefits associated with the dividend will
flow to the Company, and the amount of the dividend
can be measured reliably.

51.9 Financial Liabilities

a) Initial Recognition and Measurement

Financial liabilities are initially recognised at fair
value, reduced by transaction costs (in case of
financial liability not at fair value through profit or
loss), that are directly attributable to the issue of
financial liability. After initial recognition, financial

liabilities are measured at amortised cost using
effective interest method. The effective interest
rate is the rate that exactly discounts estimated
future cash outflow (including all fees paid,
transaction cost, and other premiums or discounts)
through the expected life of the financial liability,
or, where appropriate, a shorter period, to the net
carrying amount on initial recognition. At the time
of initial recognition, there is no financial liability
irrevocably designated as measured at fair value
through profit or loss.

b) 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 de-recognition 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 and loss.

51.10 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 recognised
amounts and there is an intention to settle on a
net basis or realise 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 counterparty.

51.11 Cash and Cash Equivalents

For the purpose of presentation in the statement
of cash flows, cash and cash equivalents includes
cash on hand, deposits held at call with financial
institutions, other short term, highly liquid
investments with original maturities of three months
or less that are readily convertible to known amount
of cash and which are subject to an insignificant
risk of changes in value, and bank overdrafts. Bank
overdrafts are shown within borrowings in current
liabilities in the balance sheet.

51.12 Impairment of non-financial assets

Non-financial assets are tested for impairment

whenever events or changes in circumstances
indicate that the carrying amount may not be
recoverable. An impairment loss is recognized for
the amount by which the asset's carrying amount
exceeds its recoverable amount. The recoverable
amount is the higher of an asset's fair value less
costs of disposal and value in use. For the purposes
of assessing impairment, assets are grouped at
the lowest levels for which there are separately
identifiable cash inflows which are largely
independent of the cash inflows from other assets
or group of assets (cash-generating units). Non¬
financial assets that suffered an impairment are
reviewed for possible reversal of the impairment at
the end of each reporting period.

51.13 Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing
the profit attributable to owners 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.

(ii) Diluted earnings per share:

Diluted earnings per share adjusts the figures used
in the determination of basic earnings per share to
take into account: 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.

51.14 Segment Reporting

Operating segments are reported in a manner
consistent with the internal reporting provided
to the chief operating decision maker. The
chief operating decision maker comprise of the
Company's Chairman, Managing Director and Chief
Financial Officer.

51.15 Government grants

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

Government grants relating to income are deferred
and recognised in the profit or loss over the period
necessary to match them with the costs that they
are intended to compensate and presented within
other income.

Government grants relating to the purchase of
property, plant and equipment are included in
non-current liabilities as deferred income and are
credited to profit or loss on a straight-line basis over
the expected useful lives of the related assets and
presented within other income.

51.16 Contributed Equity

Equity shares are classified as equity.

Incremental costs directly attributable to the issue
of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.

51.17 Dividends

The Company recognises a liability to make
distributions to equity holders when the distribution
is authorised and the distribution is no longer at the
discretion of the Company. As per the Corporate
laws in India, a distribution is authorised when it
is approved by the shareholders in case of final
dividend.

Explanation:

1. Total Debt represents Current Borrowings Non Current Borrowings Lease liabilities.

2. Shareholders Equity represents Equity Share Capital Other equity

3. Earnings available for debt service represents Profit for the year Non-cash operating expenses like depreciation and other
amortisations Interest Loss on sale of Property, Plant and Equipment etc.

4. Debt Service represents Interest on Debt Scheduled Principal Repayment of Non Current Borrowings

5. Net Sales represents Domestic Sales Export Sales Scrap Sales

6. Capital Employed represents Total Equity Borrowings Lease liabilities

7. Cost of goods sold represents Cost of materials consumed Changes in inventories of finished goods and work-in-progress

8. EBIT represents Profit for the year Total tax expense Interest expense
Reason for variance :

1. The increase is driven by higher earnings available for debt service, despite higher interest payment.

2. The increase is driven by increase in COGS in line with increase in revenue during the year.

3. The increase is driven by overall business increase and revenue increase across business leading to higher EBIT/Profit during
the year.

53. Other regulatory information required by Schedule III:

(i) Relationship with struck off companies

The Company has no transactions with companies struck off under the Companies Act, 2013 or Companies Act, 1956.

(ii) Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or other lender.

(iii) Details of crypto currency or virtual currency

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

(iv) Compliance with approved scheme of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous
financial year.

(v) Details of benami property held

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

(vi) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory
period.

(vii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under
the Income Tax Act, 1961, that has not been recorded in the books of account.

(viii) Utilisation of borrowed funds and share premium

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 shall:

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

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

The Company has 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.

(ix) Borrowing secured against current assets

The Company has borrowings from banks on the basis of security of current assets. The quarterly returns or statements
of current assets filed by the Company with banks are in agreement with the books of account. The Company has filed
provisional statement with the bank for the quarter ended March 31, 2025, and the final statement will be submitted to
the bank upon finalization of the audited financial statements.

(x) 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
Companies (Restriction on number of Layers) Rules, 2017.

(xi) Valuation of property, plant and equipment, right-of-use assets and intangible assets

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or
both during the current or previous year.

(xii) Title deeds of immovable properties not held in name of the Company

The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease
agreements are duly executed in favour of the lessee), as disclosed in Note 3 to the standalone financial statements,
are held in the name of the Company.

(xiii) Utilisation of borrowings availed from banks and financial institutions

The borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for
which such loans were taken.

For Price Waterhouse For and on behalf of the Board of Directors of

Chartered Accountants LLP Shakti Pumps (India) Limited

Firm Registration No. 012754N / N500016 CIN: L29120MP1995PLC009327

Ali Akbar Dinesh Patidar Ramesh Patidar

Partner Chairman & Whole-Time Director Managing Director

Membership No. 117839 DIN:00549552 DIN:00931437

Dinesh Patel Ravi Patidar

Date: May 9, 2025 Chief Financial Officer Company Secretary

Place: Indore M. No. ACS 32328