1.3.14 Provisions and Contingencies

A provision is recognized when an enterprise
has a present obligation (legal or constructive)
as a result of past event; it is probable that an
outflow of resources will be required to settle the
obligation, in respect of which a reliable estimate
can be made. Provisions are determined based
on best estimate required to settle the obligation
at the balance sheet date, taking into account the
risks and uncertainties surrounding the obligation.
These are reviewed at each balance sheet date
and adjusted to reflect the current best estimates.
Where a provision is measured using the cash
flows estimated to settle the present obligation,
its carrying amount is the present value of those
cash flows (when the effect of the time value
of money is material). When some or all of the
economic benefits required to settle a provision
are expected to be recovered from a third party, a
receivable is recognised as an asset if it is virtually
certain that reimbursement will be received and
the amount receivable can be measured reliably.

A contingent liability is a possible obligation that
arises from past events whose existence will be
confirmed by the occurrence or non-occurrence
of one or more uncertain future events beyond the
control of the Company or a present obligation
that is not recognized because it is not probable
that an outflow of resources will be required
to settle the obligation or the amount of the
obligation cannot be measured with sufficient
reliability. The Company does not recognize a
contingent liability but discloses its existence in
the financial statements.

Provisions for warranty-related costs are
recognized when the products are sold.
Provision is estimated based on historical
experience and/or technical estimates.
The estimate of such warranty-related costs is
reviewed on a annual basis.

Present obligations arising under onerous
contracts are recognised and measured as
provisions. An onerous contract is considered
to exist where the Company has a contract
under which the unavoidable costs of meeting
the obligations under the contract exceed the
economic benefits expected to be received
from the contract.

Provisions for the costs to restore leased assets
to their original condition, as required by the
terms and conditions of the lease, are recognised
when the obligation is incurred, either at the
commencement date or as a consequence of
having used the underlying asset during a
particular period of the lease, at the Company’s
best estimate of the expenditure that would be
required to restore the assets. Estimates are
regularly reviewed and adjusted as appropriate for
new circumstances.

1.3.15 Borrowing Costs

Borrowing Costs include interest, amortisation of
ancillary costs incurred and exchange differences
arising from foreign currency borrowings to the
extent they are regarded as an adjustment to
the borrowing costs. Borrowing Costs, allocated
to and utilised for qualifying assets, pertaining
to the period from commencement of activities
relating to construction / development of the
qualifying asset up to the date the asset is ready
for its intended use is added to the cost of the
assets. Capitalisation of Borrowing Costs is
suspended and charged to the Statement of

Profit and Loss during extended periods when
active development activity on the qualifying
assets is interrupted. All other borrowing costs are
expensed in the period they occur.

1.3.16 Earnings Per Share

Basic Earnings Per Share is calculated by dividing
the net profit or loss for the period attributable to
equity shareholders the weighted average number
of equity shares (including equivalent number
of equity shares on conversion of compulsorily
convertible preference shares) outstanding
during the year.

The weighted average number of equity shares
outstanding during the period and for all
periods presented is adjusted for events, such
as bonus shares, other than the conversion of
potential equity shares, that have changed the
number of equity shares outstanding, without
a corresponding change in resources. For the
purpose of calculating diluted earnings per share,
the net profit or loss for the period attributable to
equity shareholders and the weighted average
number of shares outstanding during the
period is adjusted for the effects of all dilutive
potential equity shares.

1.3.17 Employees Stock Option

Employees of the Company receive remuneration
in the form of share-based payments, whereby
employees render services as consideration for
equity instruments (equity-settled transactions).

The cost of equity-settled transactions is
determined by the fair value at the date when the
grant is made using an appropriate valuation model.

That cost is recognised, together with a
corresponding increase in share-based payment
(SBP) reserves in equity, over the year in which
the performance and/or service conditions
are fulfilled in employee benefits expense.
The cumulative expense recognised for equity
settled transactions at each reporting date until
the vesting date reflects the extent to which the
vesting year has expired and the Company’s best
estimate of the number of equity instruments that
will ultimately vest. The expense or credit in the
statement of profit and loss for a year represents
the movement in cumulative expense recognised
as at the beginning and end of that period and is
recognised in employee benefits expense.

Service and non-market performance conditions
are not taken into account when determining the
grant date fair value of awards, but the likelihood
of the conditions being met is assessed as part
of the Company’s best estimate of the number
of equity instruments that will ultimately vest.
Market performance conditions are reflected
within the grant date fair value. Any other conditions
attached to an award, but without an associated
service requirement, are considered to be
non-vesting conditions. Non-vesting conditions
are reflected in the fair value of an award and lead to
an immediate expensing of an award unless there
are also service and/or performance conditions.

No expense is recognised for awards that do not
ultimately vest because non-market performance
and/or service conditions have not been met.
Where awards include a market or non-vesting
condition, the transactions are treated as
vested irrespective of whether the market or
non-vesting condition is satisfied, provided
that all other performance and/or service
conditions are satisfied.

1.3.18 Financial Instruments

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

A. Financial assets

i. Initial recognition and measurement

All financial assets are recognised initially at
fair value plus, in the case of financial assets
not recorded at fair value through profit or
loss, transaction costs that are attributable
to the acquisition of the financial asset.

Trade receivables that do not contain a
significant financing component or for which
the Company has applied the practical
expedient are measured at the transaction
price determined under Ind AS 115.
Refer accounting policy on ‘Revenue from
contracts with customers’.

ii. Subsequent measurement

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

a. Financial assets at amortised cost

b. Financial assets at fair value
through other comprehensive
income (OCI)

c. Financial assets at fair value
through profit or loss

d. Equity instruments measured
at Fair Value Through Other
Comprehensive Income

a. Financial assets at amortised cost

A financial asset is subsequently
measured at the amortised cost if both
the following conditions are met:

• The asset is held within a business
model whose objective is to hold
assets for collecting contractual
cash flows, and

• Contractual terms of the asset give
rise on specified dates to cash flows
that are solely payments of principal
and interest (SPPI) on the principal
amount outstanding.

After initial measurement, such financial
assets are subsequently measured at
amortised cost using the Effective Interest
Rate (EIR) method. Amortised cost is
calculated by taking into account any
discount or premium on acquisition and fees
or costs that are an integral part of the EIR.
The EIR amortisation is included in finance
income in the profit or loss. The losses arising
from impairment are recognised in the profit
or loss. This category generally applies to
trade and other receivables.

b. Financial assets at fair value through
other comprehensive income

A financial asset is subsequently
measured at fair value through other
comprehensive income if both the
following conditions are met:

• The asset is held within a business
where the objective is achieved by
both collecting contractual cash flows
and selling financial assets and

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

After the initial measurement, such financial
assets are subsequently measured at fair
value at each reporting date. Fair value

movement are recognised in the other
comprehensive income and impairment
are recognised in statement of profit &
loss. On derecognition, gains and losses
accumulated in OCI are reclassified to
profit or loss.

c. Financial assets at fair value
through profit or loss

A financial assets which is not classified
in any of the above categories are
subsequently fair valued through
profit or loss.

d. Equity instruments measured
at Fair Value Through Other
Comprehensive Income

All equity investments in scope of
Ind-AS 109 are measured at fair value.
Equity instruments which are held for
trading are classified as at fair value
through profit or loss. For all other equity
instruments, the Company decides to
classify the same either as at Fair value
through other comprehensive income
or fair value through profit or loss.
The Company makes such election
on an instrument-by-instrument basis.
The classification is made on initial
recognition and is irrevocable.

If the Company decides to classify an
equity instrument as at fairvalue through
other comprehensive income, then all
fair value changes on the instrument,
excluding dividends, are recognized
in the OCI. There is no recycling of the
amounts from OCI to P&L, even on sale
of investment. However, the Company
may transfer the cumulative gain or
loss within equity.

Equity instruments included within
the fair value through profit or loss
category are measured at fair value
with all changes recognized in the
Statement of Profit and Loss.

iii. De-recognition

A financial asset (or, where applicable,
a part of a financial asset or part of a
Company of similar financial assets) is
primarily de-recognised when:

• The rights to receive cash flows from
the asset have expired, or

• the Company has transferred

substantially all the risks and

rewards of the asset.

iv. Impairment of financial assets

In accordance with Ind-AS 109, the 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

The Company follows ‘simplified
approach’ for recognition of impairment
loss allowance on Trade receivables.

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.

Lifetime ECL are the expected credit
losses resulting from all possible
default events over the expected life
of a financial instrument. ECL is the
difference between all contractual
cash flows that are due to the Company
in accordance with the contract and all
the cash flows that the entity expects
to receive, discounted at the original
EIR. When estimating the cash flows,
an entity is required to consider:

• All contractual terms of the financial
instrument (including prepayment,
extension, call and similar options)
over the expected life of the financial
instrument. However, in rare cases
when the expected life of the financial
instrument cannot be estimated
reliably, then the entity is required to
use the remaining contractual term of
the financial instrument

• Cash flows from the sale of collateral
held or other credit enhancements that
are integral to the contractual terms

ECL impairment loss allowance (or
reversal) recognized during the period
is recognized as income/ expense
in the Statement of Profit and Loss.
This amount is reflected under the
head ‘other expenses’ in the Statement
of Profit and Loss. The presentation
for various financial instruments in the
Balance Sheet is described below:

• Financial assets measured as at
amortised cost: ECL is presented as an
allowance, i.e., as an integral part of the
measurement of those assets in the
balance sheet. The allowance reduces
the net carrying amount. Until the asset
meets write-off criteria, the Company
does not reduce impairment allowance
from the gross carrying amount.

For assessing increase in credit risk
and impairment loss, the Company
combines financial instruments
on the basis of shared credit risk
characteristics with the objective of
facilitating an analysis that is designed
to enable significant increases in credit
risk to be identified on a timely basis.

B. Financial liabilities

i. Initial recognition and measurement

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

The Company’s financial liabilities include
trade and other payables, loans and
borrowings including bank overdrafts and
derivative financial instruments.

ii. Subsequent measurement

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

Financial liabilities at fair value
through profit or loss

Financial liabilities at fair value through
profit or loss include derivatives, financial
liabilities held for trading and financial
liabilities designated upon initial recognition
as at fair value through profit or loss.
Financial liabilities are classified as held for
trading if they are incurred for the purpose of
repurchasing in the near term. This category

also includes derivative financial instruments
entered by the Company that are not
designated as hedging instruments in hedge
relationships as defined by Ind AS 109.
Separated embedded derivatives are also
classified as held for trading unless they are
designated as effective hedging instruments.

Right to subscribe

The Shareholder Agreement includes
an Anti-Dilution Price Protection clause
ie. in the event of a down round funding,
existing shareholders will have the right to
purchase a certain number of additional
shares at nominal value to compensate
them. This down-round protection has been
separated from the host preference shares
and has been recognized as a derivative
liability per Ind AS 32, Presentation of
financial instruments. This financial liability
is measured at FVTPL in the
financial statements per Ind AS 109,
Financial Instrument

Gains or losses on liabilities held for
trading are recognised in the profit or loss.

Financial liabilities designated upon initial
recognition at fair value through profit or loss
are designated as such at the initial date of
recognition, and only if the criteria in Ind AS
109 are satisfied. For liabilities designated as
FVTPL, fair value gains/ losses attributable to
changes in own credit risks are recognized in
the Statement of Profit and Loss. These gains/
losses are not subsequently transferred to
Statement of Profit and Loss. However, the
Company may transfer the cumulative gain
or loss within equity. All other changes in fair
value of such liability are recognised in the
Statement of Profit and Loss.

Loans and borrowings

After initial recognition, interest-bearing
loans and borrowings are subsequently
measured at amortised cost using the EIR
method. Gains and losses are recognised
in profit or loss when the liabilities are
derecognised as well as through the EIR
amortisation process.

Amortised cost is calculated by taking
into account any discount or premium on
acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation
is included as finance costs in the Statement
of Profit and Loss.

De-recognition

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.

Offsetting of financial instruments

Financial assets and financial liabilities are offset,
and the net amount is reported in the 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.

1.3.19 Statement of Cash Flow

Statement of Cash flows are reported using the
indirect method, whereby profit / (loss) before
tax is adjusted for the effects of transactions of
non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash
flows from operating, investing and financing
activities of the Company are segregated based
on the available information.

1.3.20 Cash and Cash Equivalents

Cash comprises cash on hand and demand
deposits with banks. Cash equivalents are
short-term (with an original maturity of three
months or less from the date of acquisition), highly
liquid investments that are readily convertible into
known amounts of cash and which are subject
to insignificant risk of change in value. Any cash
or bank balance held for any specific use is not
considered as cash & cash equivalent.

1.3.21 Recent accounting developments

Ministry of Corporate Affairs (“MCA”) notifies
new standard or amendments to the existing
standards under Companies (Indian Accounting
Standards) Rules as issued from time to time.
As of 31 March 2025, MCA has not notified any
new standards or amendments to the existing
standards applicable to the Company that has
not been applied.

Notes :

(a) The Board of Directors of the Company vide their resolution dated 4 July 2024 approved the allotment of
907,236 Equity shares of INR 1 each (adjusted for Bonus Issuance) to Tarun Sanjay Mehta and Swapnil Babanlal
Jain pursuant to exercise of stock options.

(b) The Board of Directors of our Company in its meeting held on 18 June 2024 and shareholders of our Company
in the Extraordinary General Meeting held on 21 June 2024 approved the issuance of bonus equity share of INR
1 each in the ratio of 260:1 and 224:1 for the equity shares of INR 1 each and for the equity shares of INR 37 each
respectively and also approved the sub-division of 3,530 equity shares of INR 37 each into 1,30,610 equity shares
of INR 1 each. The conversion ratio of the Compulsory Convertible Preference Shares into Equity Shares and the
employee stock options along with its price per option have been adjusted accordingly.

(c) The Board of Directors vide their resolution dated 25 February 2025 approved the conversion of 74,148 Series
F CCPS into 19,352,628 equity shares in the conversion ratio of 261:1 with the face value of INR 1 each ranking
pari-passu with the existing equity shares of the Company (refer note 12.2.12 (vii)). Further, the Board of Directors

vide their resolution dated 08 March, 2025 approved the conversion of Compulsory Convertible Preference
Shares (Series Seed One, Series Seed Two, Series Seed Three and Series Seed Four), Series A, Series B, Series
B1, Series C, Series C1, Series D, Series E, Series E1, Series E2, Series Bonus CCPS and Series G classes of
Compulsory Convertible Preference Shares (“CCPS”) issued and allotted by the Company from time to time
aggregating to 17,362,374 Outstanding CCPS of the Company into 240,483,445 fully paid up equity shares of
face value of INR 1/- each ranking pari-passu with the existing equity shares of the Company (refer note 12.2.12
(viii) and (ix)).

(d) Out of the above equity shares 5,025 Equity shares (1,311,525 equity shares post issue of bonus shares) were
issued on 21 February 2022 @ face value of INR 1 received in cash and INR 48,900/- as securities premium
on fair valuation of right to subscribe for consideration other than Cash.

(ii) Rights, preferences & restrictions attached to this class of share

Each holder of the equity shares is entitled to one vote per share and carries a right to dividends as and when
declared by the Company. In the event of liquidation, the equity shareholders are eligible to receive the remaining
assets of the Company after distribution of all preferential amount, in proportion to their shareholding.

Notes to the Financial Statements

for the year ended 31 March 2025

(ii) Rights, preferences & restrictions attached to this class of share

(a) Each preference share were to get converted into 261 equity share of INR1 each (refer note 12.1.1(i) (b)) subject to
adjustments for share splits, bonus etc. based on the subscription agreement not later than 20 years from date
of issue from financial year 2014-15.

(b) No dividend shall be payable.

(c) One vote per compulsorily convertible preference shares pari passu with the equity shares.

(d) Right over surplus assets on a pro-rata basis in the event of liquidation. “

12.2.2 Series A Compulsorily Convertible Preference Shares of INR 1 each (CCPS)

(i) Reconciliation of shares outstanding at the beginning and at the end of reporting year

12.2.3 Series B Compulsorily Convertible Preference Shares of INR 10 each (CCPS)

(i) Reconciliation of shares outstanding at the beginning and at the end of reporting year

12.2.4 Series B1 Compulsorily Convertible Preference Shares of INR 10 each (CCPS)

(i) Reconciliation of shares outstanding at the beginning and at the end of reporting year

12.2.5 Series C Compulsorily Convertible Preference Shares of INR 10 each (CCPS)

(i) Reconciliation of shares outstanding at the beginning and at the end of reporting year

*Pursuant to board and shareholder’s approval, the Company has issued 18,088 bonus share during the year
ended 31 March 2024 of INR 10 per share to certain class of shareholders in ratio of their respective holdings.

(ii) Rights, preferences & restrictions attached to the above 12.2.2 to 12.2.10 and 12.2.12 (except Series G)
classes of shares

(a) Preference shareholders were entitled to receive a dividend at the rate of 0.001% per annum on each
preference share held by such holder, if declared by the Board of Directors. In the event the Company
declares a dividend on the Equity Shares at a rate which is higher than the rate mentioned herein, the holders
of Preference Shares shall be entitled to receive, in priority to the holders of Equity Shares, a dividend at a
rate per preference share as would equal the product of (i) the higher dividend rate payable on each equity
share and (ii) the number of equity shares issuable upon conversion of such preference share. All dividends
to such shareholders shall be non-cumulative.

(b) On the occurrence of a liquidation event, the preference shareholders were entitled to receive out of the
proceeds or assets of the Company available for distribution to its shareholders, on a pari passu basis and
prior and in preference to any distribution of proceeds of such liquidation event to the holders of equity
shares by reason of their ownership thereof, an amount per share equal to the sum of the applicable original
issue price, plus declared but unpaid dividends thereon.

(c) Preference shares were to be converted to such number of equity shares (refer note 12.2.12 (ix)), at the
conversion ratio then in effect:

• In the event the preference shareholder requires Company to convert all or a part of such preference
shares held by such holder;

• upon the earlier of (i) the closing of an IPO, or (ii) the date, or the occurrence of an event, specified by
vote or written consent or agreement of the requisite number of investors.

• upon the date that is twenty (20) years after the date on which such series of Preference Shares were
first issued by the Company.

(d) Holders of preference shares enjoyed such voting rights available to the extent permissible under law, carry
voting rights as if the preference shares have been fully converted into equity shares. Each preference
share shall entitle the holder to the number of votes equal to the number of whole or fractional equity shares
into which such preference share could then be converted. If applicable law does not permit any holder of
preference shares to exercise voting rights on all or any matters submitted to the vote of the Shareholders
of the Company (including the holders of equity shares) (the “Non-Voting Preference Shares”), then until
the conversion of all such Non-Voting Preference Shares into equity shares, each shareholder shall vote in
accordance with the instructions of the holders of such Non-Voting Preference Shares at a general meeting
of the shareholders or provide proxies without instructions to the holders of the Non-Voting Preference
Shares for the purposes of a general meeting of the shareholders, in respect of such number of equity
shares held by each of them such that a relevant percentage of the equity shares of the Company are
voted in the manner required by the holders of the Non-Voting Preference Shares.

(iii) The Board of Directors of the Company in its meeting held on 16 May 2024 and shareholders of the Company in
the Extraordinary General Meeting held on 28 May 2024 approved the issuance of 74,148 Series F Compulsory
Convertible Preference Shares (“Series F CCPS”) with face value of INR 1 per share at a premium of INR 11,673
per share, aggregating to INR 11,674 per share for cash on preferential basis. The Board of Directors vide their
resolution dated 09 July 2024 allotted 74,148 Series F - CCPS of face value of INR 1 each with a premium of INR
11,673 per share to the Promoters, Tarun Sanjay Mehta and Swapnil Babanlal Jain, and considering the terms of
the conversion of Series F CCPS linked with achievement of internal rate of return, the same has been accounted
as share based payments in accordance “IND AS 102-Share-based Payment” under the head other equity (refer
note 12.2.12 (vii)).

(iv) Rights, preferences & restrictions attached to the Series F CCPS

(a) Preference shareholders were entitled to receive a dividend at the rate of 0.001% per annum on each
preference share held by such holder, if declared by the Board of Directors. In the event the Company
declares a dividend on the Equity Shares at a rate which is higher than the rate mentioned herein, the
holders of Preference Shares were entitled to receive, in priority to the holders of Equity Shares, a dividend
at a rate per preference share as would equal the product of (i) the higher dividend rate payable on each
equity share and (ii) the number of equity shares issuable upon conversion of such preference share.
All dividends to such shareholders shall be non-cumulative.

(b) On the occurrence of a liquidation event, the preference shareholders were entitled to receive out of the
proceeds or assets of the Company available for distribution to its shareholders, on a pari passu basis and
prior and in preference to any distribution of proceeds of such liquidation event to the holders of equity
shares by reason of their ownership thereof, an amount per share equal to the sum of the applicable original
issue price, plus declared but unpaid dividends thereon.

(c) Preference shares were to be converted up to a maximum of 19,352,628 equity shares (refer note 12.2.12.
(vii)) upon meeting the conversion criteria upon occurrence of either of the following, whichever is earlier -

(i) An IPO of the Company prior to agreed date; or

(ii) An Exit Event as specified in the terms of issue of CCPS prior to the agreed date

(iii) upon the date that is twenty (20) years after the date on which such series of Preference Shares were
first issued by the Company.

(d) Holders of preference shares enjoyed such voting rights available to the extent permissible under law, carry
voting rights as if the preference shares have been fully converted into equity shares. Each preference
share entitled the holder to the number of votes equal to the number of whole or fractional equity shares
into which such preference share would be converted. If applicable law did not permit any holder of
preference shares to exercise voting rights on all or any matters submitted to the vote of the Shareholders
of the Company (including the holders of equity shares) (the “Non-Voting Preference Shares”), then until
the conversion of all such Non-Voting Preference Shares into equity shares, each shareholder shall vote in
accordance with the instructions of the holders of such Non-Voting Preference Shares at a general meeting
of the shareholders or provide proxies without instructions to the holders of the Non-Voting Preference

Shares for the purposes of a general meeting of the shareholders, in respect of such number of equity
shares held by each of them such that a relevant percentage of the equity shares of the Company are
voted in the manner required by the holders of the Non-Voting Preference Shares.

(v) The Board of Directors vide their resolution dated 29 July 2024 approved the issue of 16,528,925 Series G CCPS
of face value of INR 10 each at a premium of INR 353 per share to India - Japan Fund (Represented by and
acting through its investment manager, National Investment and Infrastructure Fund Limited). Further, our Board
of Directors by the resolution dated 04 September 2024, allotted 16,528,925 to Series G CCPS at an issue price of
INR 363 for an aggregate consideration of INR 6,000 million. Considering the terms of the conversion of Series G
CCPS into variable number of equity shares, the same has been accounted as Financial liability under the head
“Borrowings” in accordance with IND AS 32 - Financial Instruments - Presentation” (refer note 12.2.12 (viii)).

(vi) Rights, preferences & restrictions attached to the Series G CCPS

(a) Preference shareholders were entitled to receive a dividend at the rate of 0.001% per annum on each
preference share held by such holder, if declared by the Board of Directors. In the event the Company
declared a dividend on the Equity Shares at a rate which is higher than the rate mentioned herein, the
holders of Preference Shares were to be entitled to receive, in priority to the holders of Equity Shares, a
dividend at a rate per preference share as would equal the product of (i) the higher dividend rate payable
on each equity share and (ii) the number of equity shares issuable upon conversion of such preference
share. All dividends to such shareholders shall be non-cumulative.

(b) On the occurrence of a liquidation event, the preference shareholders were entitled to receive out of the
proceeds or assets of the Company available for distribution to its shareholders, on a pari passu basis and
prior and in preference to any distribution of proceeds of such liquidation event to the holders of equity
shares by reason of their ownership thereof, an amount per share equal to the sum of the applicable original
issue price, plus declared but unpaid dividends thereon.

(c) Preference shares were to be converted up to a maximum of 31,826,050 equity shares (refer note 12.2.12
(viii)), at the conversion ratio then in effect:

• In the event the preference shareholder requires Company to convert all or a part of such preference
shares held by such holder;

• upon the earlier of (i) filing of UDRHP, or (b) a subsequent equity fund raise for a minimum amount of
USD 75 million or (iii) the date, or the occurrence of an event, specified by vote or written consent or
agreement of the requisite number of investors. “

(d) Holders of preference shares enjoyed such voting rights available to the extent permissible under law, carry
voting rights as if the preference shares have been fully converted into equity shares. Each preference
share entitled the holder to the number of votes equal to the number of whole or fractional equity shares
into which such preference share could then be converted. If applicable law does not permit any holder of
preference shares to exercise voting rights on all or any matters submitted to the vote of the Shareholders
of the Company (including the holders of equity shares) (the “Non-Voting Preference Shares”), then until
the conversion of all such Non-Voting Preference Shares into equity shares, each shareholder shall vote in
accordance with the instructions of the holders of such Non-Voting Preference Shares at a general meeting
of the shareholders or provide proxies without instructions to the holders of the Non-Voting Preference
Shares for the purposes of a general meeting of the shareholders, in respect of such number of equity
shares held by each of them such that a relevant percentage of the equity shares of the Company are
voted in the manner required by the holders of the Non-Voting Preference Shares.

(vii) The Board of Directors vide their resolution dated 25 February 2025 approved the conversion of 74,148 Series
F CCPS into 1,93,52,628 equity shares in the conversion ratio of 261:1 with the face value of INR 1 each ranking
pari-passu with the existing equity shares of the Company.

(viii) The Board of Directors vide their resolution dated 08 March, 2025 approved the conversion of 16,528,925 Series
G CCPS into 22,465,447 fully paid up equity shares of face value of INR 1/- each ranking pari-passu with the
existing equity shares of the Company.

(ix) Further, the Board of Directors vide their resolution dated 08 March, 2025 approved the conversion of Series
Seed One, Series Seed Two, Series Seed Three, Series Seed Four, Series A, Series B, Series B1, Series C, Series
C1, Series D, Series E, Series E1, Series E2 and Series Bonus CCPS (collectively referred as “Outstanding CCPS”)
issued and allotted by the Company from time to time aggregating to 833,449 Outstanding CCPS of the Company
into 218,017,998 fully paid up equity shares of face value of INR 1/- each ranking pari-passu with the existing equity
shares of the Company. The conversion ratio for each of the series of CCPS is as below:

(ii) Term of security:

(a) Term loans and Working capital loans from banks:

Pari passu charge on current assets both present and future, Cash margin of 25% by way of on fixed deposits,
Pari passu charge on brand and trademark/IPR/Intangibles of the technology stock/product suite if any.

(b) Term loans from Others

First pari passu charge on movable property, plant and equipment of the Company including intangibles,
Cash margin @20% of principal outstanding amount, Second charge over the present and future current
assets of the Company.

(c) Non-convertible debentures

First Pari-passu charge on existing and future property, plant and equipment, Cash and cash equivalents
& all intellectual property rights, Second pari-passu charge on existing and future Current assets
of the company.

(iii) Additional disclosures:

1. The Company has borrowings from banks or financial institutions on the basis of security of current
assets and the statements of current assets filed by the Company with banks or financial institutions are in
agreement with the books of accounts.

2. The Company has utilised the borrowings for the purpose for which it was taken.

3. Charges or satisfaction of charges are registered with ROC within the statutory period, there are no charges
or satisfaction yet to be registered with ROC beyond the statutory period as at 31 March 2025.

4. The Company has not been declared a wilful defaulter by any bank or financial institution or government or
any government authority.

Note:

(i) In terms of borrowing and shareholder’s agreements, certain lenders / shareholders have the ‘Right To
Subscribe’ (RTS) to the Company’s equity shares of face value of INR 1 each. During the year ended 31 March 2024,
certain shareholders having 18,088 RTS have shared their consent to the Company for exercising their rights.
Furthermore, shareholders have indicated their consent to the board for the issuance of bonus Compulsorily
Convertible Preference Shares (CCPS) in lieu of equity shares, subject to the decision of both the Board and
Shareholder. Pursuant to board and shareholder’s approval, the Company has issued 18,088 bonus CCPS to
certain class of shareholder’s in ratio of their respective holdings. Consequently, the settlement of full RTS
liability by issue of bonus shares has been adjusted with the Securities Premium account.

(ii) In terms of borrowing agreements, certain lenders have ‘Right To Subscribe’ (“RTS”) to the Company’s equity
shares of face value of INR 1 each. During the year ended 31 March 2025, lenders having 1,811 RTS have intimated
the Company to exercise their rights and opt for one time cash settlement in lieu of equity shares of the Company.
Pursuant to a resolution passed in the Board meeting held on 09 July 2024, the Company has entered into the
settlement agreement dated 15 July 2024 with the said lenders for cancellation and relinquishment of RTS by
cash settlement amounting to INR 8 million which has been paid and settled.

(iii) Stock option liability (cash settled): Eligible employees and consultants were entitled to receive cash on account
of appreciation in stock prices of the Company, subject to fulfilment of certain vesting conditions. The same
have been settled / adjusted during the year.

*Total other expenses are net of capitalisation of 2024-25 : INR 352 million (2023-24 : INR 94 million)

** Above fees does not include INR 24 million for the year ended 31 March 2025 (for the year ended 31 March 2024: Nil)
which are considered as share issue expenses under other current asset.

Notes:

(a) Legal, professional and consultancy charges (net) includes INR Nil (2023-24 : INR 59 million) towards the share
based payment arrangements entered into with advisors in earlier years.

(b) Fair valuation of right to subscribe outstanding for the year ended 31 March, 2024.

(c) Net of allowance for doubtful advance utilised of INR Nil (2023-24: INR 26 million)

Notes:

(a) In response to a show cause notice (“”SCN””) dated 29 March 2023 from IFCI Limited on behalf of the Ministry
of Heavy Industries (“MHI”) in relation to certain matters under the FAME II and Phased Manufacturing Program
(“PMP”) guidelines, the Company vide its undertaking dated 23 May 2023, without prejudice agreed to voluntarily
refund the price of the “Off board chargers” to all customers who purchased an off board charger as an
accessory prior to 12 April 2023. Further, the Company has also voluntarily agreed to pay differential incentive
amount claimed based on installed capacity against usable capacity.

During the year ended 31^st March 2024, the Company has recorded an expense of INR 1,578 Million towards
refund of “Off board chargers related liability” and INR 168 Million towards adjustment of incentive for differential
battery capacity (including interest). As at 31 March 2025, the Company has refunded an amount of INR 1,473
million (31 March 2024: INR 1,467 million) to the customers for liability towards “Off-board chargers”. Against the
outstanding liability of INR 105 million as at 31 March 2025, a deposit is maintained in a bank account managed
by IFCI Limited, which will be refunded back to the Company on actual payment of charger refund to customers
and on submission of relevant documents of such refund. Further, the Company has paid an amount of INR 168
Million to MHI towards adjustment of incentive for differential usable battery capacity.

Note - 30 IMPAIRMENT TESTING OF TANGIBLE AND INTANGIBLE ASSETS INCLUDING INTANGIBLES ASSETS
UNDER DEVELOPMENT

The Company does its impairment evaluation on an annual basis and based on such evaluation, the estimated
recoverable amount of the Cash Generating Unit (CGU) exceeded its carrying amount. For the purpose of impairment
testing, tangible assets, intangible assets (Product Design & Development) and intangible assets under development
are allocated to the CGU. For this, the Company as a whole is considered as CGU.

The recoverable amount of the above CGU has been determined based on ‘value in use’ model, where in the value of
cash generating unit is determined as a sum of the net present value of the projected post tax cash flows for a period
of 5 years and terminal value. The terminal value of cash generating unit is arrived at by extrapolating cash flows of
latest forecasted year to perpetuity using a constant long-term growth rate.

Determination of value in use involves significant estimates and assumptions that affect the reporting CGU’s expected
future cash flows. The Company has performed sensitivity analysis for all key assumptions and concluded that it is
unlikely to cause the carrying amount of the CGU exceed its estimated recoverable amount. The key assumptions
used for the calculations on an annual basis were as follows:

(b) The Company’s Basic and Diluted Earnings Per Share (EPS) have been adjusted retrospectively on issuance of
18,088 bonus CCPS in line with Ind AS 33 “Earnings Per Share”.

(c) The Board of Directors of the Company in its meeting held on 18 June 2024 and shareholders of the Company
in the Extraordinary General Meeting held on 21 June 2024 approved the issuance of bonus equity share of INR
1 each in the ratio of 260:1 and 224:1 for the Equity shares of INR 1 each and for the equity shares of INR 37 each
respectively and also approved the sub-division of 3,530 equity shares of INR 37 each into 1,30,610 equity shares
of INR 1 each. The number of shares used for the calculation of earnings per share, and the earnings per share
(including that in the comparative year), have been adjusted for pursuant to Paragraph 64 of Ind AS 33 - “Earnings
Per Share”, prescribed under Section 133 of the Companies Act, 2013.

Note - 33 OPERATING SEGMENTS

The Company primarily operates in the automotive segment. The automotive segment includes all activities
related to development, design, manufacture, assembly and sale of vehicles, as well as sale of related parts and
accessories. The board of directors of the Company, which has been identified as being the chief operating
decision maker (CODM), evaluates the Company’s performance, allocates resources based on the analysis of
the various performance indicators of the Company as a single unit.

Therefore, based on the guiding principles given in Ind AS 108 on ‘Operating Segments’, the Company’s business
activity fall within a single operating segment, namely automotive segment.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant.
In practice this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of
the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has
been applied for calculation of the defined benefit liability recognised in the Balance sheet.

The methods and types of assumptions used in preparing the sensitivity analyses did not change compared
to previous year.

Note : The Company received a preshow cause intimation notice dated 21 March 2024 and subsequently a show
cause notice dated 16 April 2024 (“SCN”) from the Office of the Assistant Commissioner, Chennai under section 73 of
the Central Goods and Services Tax Act, 2017 read with rules and regulations, made thereunder. The GST department
had taken up the scrutiny in accordance with the above section and observed discrepancies in the input tax credit
availed for the Fiscal year 2022-2023 and raised a demand of '598 million. Against this demand, the Company filed a
reply dated 14 May 2024 explaining the fact that input tax credit has been availed in accordance with law and which
was also reconciled with annual return and hence there was no discrepancy noticed. However, thereafter, an order
was issued against the Company dated 04 November 2024 confirming the above stated demand. The Company
has filed an application for rectification before the Assistant Commissioner, Nungambakkam, Tamil Nadu (the “AC”)
of the order issued, on the grounds that the order has been passed without consideration of the submissions made.
The Company does not foresee the demand materialising as the allegations made are merely on the manner of
disclosures made by the Company in the Annual return filed for the said fiscal period. The matter is currently pending
further adjudication.

#During the year ended 31 March 2025, the Company has converted CCPS into equity shares and as a result of which
9,676,314 equity shares, 9,676,314 equity shares and 113,745,626 equity shares have been alloted to Tarun Sanjay
Mehta, Swapnil Babanlal Jain and Hero Motocorp Limited respectively.

*Excludes INR 6 millions during year ended 31 March 2025 (31 March 2024 : INR 16 millions) charged to statement of
profit & loss on account of effective interest rate calculation as per Ind AS.

**The Actuarial Valuation Report of Gratuity and Compensated absence liabilities are taken for the entire Company
without any bifurcation to any specific employee, hence it is not included in related party transactions.

Note: All related party transactions were entered at an arm’s length basis and in the ordinary course of business.

iii) Fair value hierarchy

The section explains the judgement and estimates made in determining the fair value of the financial
instruments that are:

a) recognised and measured at fair value.

b) measured at amortised cost and for which fair values are disclosed in the financial statement.

To provide an indication about the reliability of the inputs used in determining fair value, the Company has
classified its financial instruments into three levels as mentioned under Indian accounting standards.

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of
quoted equity shares, quoted debt instruments and mutual fund investments. The fair values of investments in
units of mutual funds are based on the Net Asset Value (NAV) as per the fund statement.

Level 2 - This level includes financial assets and liabilities, measured using inputs other than quoted prices
included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e.,
derived from prices).

Level 3 - This level includes financial assets and liabilities measured using inputs that are not based on observable
market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based
on assumptions that are neither supported by prices from observable current market transactions in the same
instrument nor are they based on available market data.

There are certain financial assets and liabilities which are measured at fair value at the end of each reporting
period. Following table gives information about how the fair values of these financial assets and liabilities
are determined:

There were no transfers between level 1 and level 2 for recurring fair value measurements during the above year.
There were no significant inter-relationships between unobservable inputs that materially affect fair values.
Note - 38 FINANCIAL RISK MANAGEMENT FRAMEWORK

The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk. In order to
manage the aforementioned risks, the Company operates a risk management policy and a program that performs
close monitoring of and responding to each risk factor. The Company is constantly evaluating micro and macro
economic factors influencing the business including, economic, geo-political and other risks which may have a
bearing on the business or operations. The Company is of the view that the impact of these risks would not have a
material impact on the business in medium to long-term business plans. The Company continuously monitors these
risks and other developments to identify significant uncertainties.

A. CREDIT RISK

Credit risk arises when a counterparty defaults on its contractual obligations to pay resulting in financial loss to
the Company. The Company has adopted a policy of dealing with creditworthy counterparties, as a means of
mitigating the risk of financial loss from defaults. This information is supplied by independent rating agencies
wherever available and if not available, the Company uses other publicly available financial information and its
own trading records to rate its major customer. The Company’s exposure and credit ratings of its counterparties
are continuously monitored and the aggregate value of transactions concluded is spread amongst approved
counterparties. The Company usually collects advances from the customers and hence these risks would not
have a material impact on the business.

Financial instruments that are subject to concentrations of credit risk, principally consist of balance with banks,
investments in mutual funds, trade receivables and other financial assets. None of the financial instruments of
the Company result in material concentrations of credit risks.

B. LIQUIDITY RISK

(i) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established
an appropriate liquidity risk management framework for the management of the Company’s short, medium
and long-term funding and liquidity management 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.

(ii) Maturities of financial liabilities

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial
liabilities with agreed repayment periods. The amount disclosed in the tables has been drawn up based on
the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can
be required to pay. The contractual maturity is based on the earliest date on which the Company may be
required to pay.

C. 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. Market risk comprises three types of risk: interest rate risk, currency risk and other
price risk such as equity price risk. The objective of market risk management is to manage and control market
risk exposures within acceptable parameters while optimising the return. All such transactions are carried out
within the guidelines set by the Board of Directors and Risk Management Committee.

There has been no significant changes to the Company’s exposure to market risk or the methods in which they
are managed or measured.

i. Interest Rate Risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company’s main interest rate risk arises from long-term borrowings
and short-term borrowings with variable rates. The Company constantly monitors the credit markets and
rebalances its financing strategies to achieve an optimal maturity profile and financing costs.

iii. Other price risk

The Company’s exposure to price risk arises for investment in mutual funds held by the Company.
To manage its price risk arising from investments in mutual funds, the Company diversifies its portfolio.

Note - 39 CAPITAL MANAGEMENT

The Company’s capital management objectives are:

- to ensure the Company’s ability to continue as a going concern

- to provide an adequate return to shareholders by pricing products and services commensurately with
the level of risk

- to augment requisite resources for future infrastructure requirements

For the purpose of debt to total equity ratio, debt considered is long-term borrowings (including current maturities),
short-term borrowings and current and non-current lease liabilities. Total equity comprises of issued share capital,
instrument entirely equity in nature and all other equity reserves.

The Company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial
liabilities. The Company manages the capital structure and makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets.

(a) During the year ended 31 March 2024, the value of the share price is calculated as per Black Scholes method
and number of units that are expected to vest is calculated using Monte Carlo simulation.

(b) During the year ended 31 March 2024, the board, in its meeting dated 31 March 2024, has approved the
cancellation of MSOP 2022 including all options granted and also approved the payment of lump sum cash
consideration, based on the fair value of the said options cancelled, in lieu of cancellation of all options
under MSOP 2022. On cancellation of MSOP 2022, INR 596 million has been accounted immediately in the
statement of profit and loss for the year ended 31 March 2024 as an acceleration of vesting. On the date
of such cancellation, the fair value of the options of INR 745 million settled in cash and is accounted as a
deduction from other equity.

(c) In addition to ESOP, MSOP and FSOP, the Company has issued 2,403 options during the year ended 31
March 2024 to be settled in equity under the share based payment arrangement entered with advisors in
earlier years. The said options were cancelled during the year ended 31 March 2025.

(d) In addition to above, the Board of Directors vide their resolution dated 09 July 2024 allotted 74,148
Series F - CCPS of face value of INR 1 each with a premium of INR 11,673 per share and the said CCPS
accounted as share based payments considering the terms of the issue of Series F CCPS in accordance
“IND AS 102-Share-based Payment” under the head other equity. Further, the Board of Directors vide their
resolution dated 25 February 2025 approved the conversion of 74,148 Series F CCPS into 1,93,52,628 equity
shares in the conversion ratio of 261:1 with the face value of INR 1 each ranking pari-passu with the existing
equity shares of the Company. The conversion ratio of the CCPS into Equity Shares have been adjusted as
per Bonus issuance.

(a) The Board of Directors of our Company in its meeting held on 18 June 2024 and shareholders of our
Company in the Extraordinary General Meeting held on 21 June 2024 approved the issuance of bonus
equity share of INR 1 each in the ratio of 260:1 and 224:1 for the equity shares of INR 1 each and for the
equity shares of INR 37 each respectively and also approved the sub-division of 3,530 equity shares of
INR 37 each into 1,30,610 equity shares of INR 1 each. The conversion ratio of the Compulsory Convertible
Preference Shares into Equity Shares and the employee stock options along with its price per option have
been adjusted accordingly.

(b) In addition to above, the Company has 164 options during the year ended 31 March 2024 to be settled in
cash under the share based payment arrangement entered with advisors in earlier years. The said 164
options were cancelled during the year ended 31 March 2025.

Note 43

As of the balance sheet date, the Company has an aggregate sum of INR 1.69 million equivalent to USD 17,920.07 and
EURO 1,700 (31 March 2024: INR 1 million equivalent to USD 7,321 and EURO 450) payable to overseas Companies
towards import of goods and services which are outstanding beyond the prescribed time limit for payment as per the
extant Foreign Exchange Management Act (FEMA) regulations.

Note 44: Events after reporting period:

Subsequent to the year ended 31 March 2025, the Company has completed Initial Public Offer (“IPO”) of 92,867,945
equity shares of face value of INR 1 each at an issue price of INR 321 per share, comprising of fresh issue of 81,816,199
shares, out of which 81,716,199 equity shares were issued at an offer price of INR 321 per equity share to all the allottees
and 100,000 equity shares were issued at an offer price of INR 291 per equity share, after a discount of INR 30 per
equity share to employees aggregating to INR 26,260 million and offer for sale of 11,051,746 equity shares by the selling
shareholders aggregating to INR 3,548 million. Pursuant to the IPO, the equity shares of the Company were listed on
the National Stock Exchange (“NSE”) and Bombay Stock Exchange (“BSE”) on 6 May 2025.

According to the management’s evaluation at events subsequent to the balance sheet date there were no
significant adjusting events that occurred other than those disclosed/given effect to, in these financial statements
as of 31 March 2025.

Note 45

There were no amounts which were required to be transferred to the Investor Education and Protection Fund
by the Company.

Note 46 : Other statutory disclosures

A. The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any
other sources or kinds of funds) to any other persons or entities, including foreign entities (Intermediaries) with
the understanding (whether recorded in writing or otherwise) that the Intermediary shall;

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”

B. The Company has not received any funds from any persons or entities, including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall;

i. 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

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

Note 47

As at 31 March 2025, there are no proceedings initiated or pending against the Company for holding any benami
property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

Note 48

The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended 31 March 2025
and year ended 31 March 2024.

Note 49

The Company has not entered into any scheme of arrangement which has an accounting impact during the year
ended 31 March 2025 and the year ended 31 March 2024.

Note 50

The Code on Social Security, 2020 (the Code) has been enacted, which would impact the contributions by the
Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is
yet to be notified. The Ministry of Labour and Employment (the Ministry) has released draft rules for the Code on
13 November 2020. The Company will complete its evaluation and will give appropriate impact in its financial
statements in the period in which the Code becomes effective and the related rules are published.

Note 51

There is no income surrendered or disclosed as income during the year ended 31 March 2025 and year ended
31 March 2024 in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the
books of account.

For and on behalf of Board of Directors of

Ather Energy Limited (formerly known as Ather Energy Private Limited)

Tarun Sanjay Mehta Swapnil Babanlal Jain

Executive Director and Chief Executive Officer Executive Director and Chief Technical Officer

DIN: 06392463 DIN: 06682759

Sohil Dilipkumar Parekh Puja Aggarwal

Chief Financial Officer Company Secretary and Compliance Officer

Date: 12 May 2025
Place: Bengaluru