i. Provisions, contingent liabilities and contingent
assets

A provision is recognised if, as a result of a past event,
the Company has a present legal or constructive
obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are
determined by discounting the expected future
cash flows (representing the best estimate of the
expenditure required to settle the present obligation
at the balance sheet date) at a pre-tax rate that
reflects current market assessments of the time
value of money and the risks specific to the liability.
The unwinding of the discount is recognised as
finance cost. Expected future operating losses are
not provided for.

(i) Warranties

A provision for warranties is recognised when
the underlying products or services are sold. The
provision is based on technical evaluation, historical
warranty data and a weighting of all possible
outcomes by their associated probabilities.

(ii) Onerous contracts

A contract is considered to be onerous when the
expected economic benefits to be derived by the
Company from the contract are lower than the
unavoidable cost of meeting its obligations under
the contract. The provision for an onerous contract
is measured at the present value of the lower of the
expected cost of terminating the contract and the
expected net cost of continuing with the contract.

Before such a provision is made, the Company
recognises any impairment loss on the assets
associated with that contract.

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 the obligation or a reliable estimate of the
amount cannot be made. Contingent assets are
neither recognised nor disclosed in the financial
statements.

j. Earnings per share

Basic earnings per share is computed by dividing
net profit or loss for the year attributable to equity —
shareholders by the weighted average number
of shares outstanding during the year. Diluted
earnings per share amounts are computed after
adjusting the effects of all dilutive potential equity
shares. The number of shares used in computing
diluted earnings per share comprises the weighted
average number of shares considered for deriving
basic earnings per share, and also the weighted
average number of equity shares, which could
have been issued on the conversion of all dilutive
potential shares.

k. Revenue

The Company derives revenues primarily from sale
of transformers and related services (i.e. freight,
insurance and labour).

(a) Sale of goods

Revenue is recognised when a promise in a customer
contract (performance obligation) has been
satisfied by transferring control over the promised
goods to the customer. Control over a promised
good refers to the ability to direct the use of, and
obtain substantially all of the remaining benefits
from those goods. Control is usually transferred
upon shipment, delivery to, upon receipt of goods
by the customer, in accordance with the individual
delivery and acceptance terms agreed with the

customers. Revenue towards satisfaction of a
performance obligation is measured at the amount
of transaction price (net of variable consideration)
allocated to that performance obligation. The
transaction price is based on the consideration
expected to be received in exchange for goods,
excluding amounts collected on behalf of third
parties such as sales tax or other taxes directly
linked to sales. Revenue from sale of goods is
recorded net of allowances for estimated rebates,
cash discounts and estimates of return of goods, all
of which are established at the time of sale.

If a contract contains more than one performance
obligation, the transaction price is allocated to
each performance obligation based on their
relative standalone selling prices. In case of any
modification to the contract, the entity recognises
such modification as a separate contract if it
increases both the performance obligation and the
consideration due for such modification.

Arrangements with customers for sale of the goods
are either on a fixed firm price basis or variable on
a key material price change basis.

Amounts due in respect of price escalation
claims and / or variation in sale are recognised
as revenue only if the contract allows for such
claims or variations and / or there is evidence
that the customer has accepted it and it is highly
probable that a significant reversal in the amount of
cumulative revenue recognised will not occur.

Liquidated damages/penalties, warranties
and contingencies are provided for, based on
management's assessment of the estimated liability,
as per the contractual terms and / or acceptance.

Revenues in excess of invoicing are classified as
contract assets (i.e. unbilled revenue).

Consideration received before the transfer of
goods to the customers are presented as a contract
liability (i.e. advance from customers).

(b) Sale of services

Revenue from services is recognised as the
performance obligation is satisfied in accordance
with the terms of the relevant contract.

Disaggregation of revenue

The Company disaggregates revenue from
contracts with customers by the nature of sale
i.e. sale of transformers and sale of services and
type of contracts viz fixed price contract and
variable price contract. The Company believes that
this disaggregation best depicts how the nature,
amount, timing and uncertainty of revenues and
cash flows are affected by industry, market and
other economic factors. Refer Note 22.

l. Recognition of interest income or expense

Interest income or expense is recognised using the
effective interest method.

The 'effective interest rate' is the rate that exactly
discounts estimated future cash payments or
receipts through the expected life of the financial
instrument to:

- the gross carrying amount of the financial
asset; or

- the amortised cost of the financial liability.

In calculating interest income and expense, the
effective interest rate is applied to the gross
carrying amount of the asset (when the asset
is not credit-impaired) or to the amortised cost
of the liability. However, for financial assets that
have become credit-impaired subsequent to
initial recognition, interest income is calculated by
applying the effective interest rate to the amortised
cost of the financial asset. If the asset is no longer
credit-impaired, then the calculation of interest
income reverts to the gross basis.

m. Segment reporting

Operating segments are reported in a manner
consistent with the internal reporting provided to
the chief operating decision maker. The Company
is engaged into the business of manufacture and
sale of transformers and there are not more than
one reportable segment as envisaged by Indian
Accounting Standard 108 - Segment Reporting (Ind
AS-108).

n. Leases

The Company assesses whether a contract contains
a lease, at inception of a contract. A contract is,
or contains, a lease if the contract conveys the
right to control the use of an identified asset for
a period of time in exchange for consideration. To
assess whether a contract conveys the right to
control the use of an identified asset, the Company
assesses whether: (i) the contract involves the
use of an identified asset (ii) the Company has
substantially all of the economic benefits from use
of the asset through the period of the lease and (iii)
the Company has the right to direct the use of the
asset.

The Company recognises right-of-use asset (ROU)
representing its right to use the underlying asset
for the lease term at the lease commencement
date. The cost of the right-of-use asset measured
at inception shall comprise of the amount of the
initial measurement of the lease liability adjusted
for any lease payments made at or before the
commencement date less any lease incentives

received, plus any initial direct costs incurred and
an estimate of costs to be incurred by the lessee
in dismantling and removing the underlying asset
or restoring the underlying asset or site on which it
is located. The right-of-use assets is subsequently
measured at cost less any accumulated depreciation,
accumulated impairment losses, if any and adjusted
for any remeasurement of the lease liability. The
right-of-use assets is depreciated using the
straight-line method from the commencement date
over the shorter of lease term or useful life of right-
of-use asset. The estimated useful lives of right-
of-use assets are determined on the same basis
as those of property, plant and equipment. Right-
of-use assets are tested for impairment whenever
there is any indication that their carrying amounts
may not be recoverable. Impairment loss, if any, is
recognised in the statement of profit and loss.

The Company measures the lease liability at the
present value of the lease payments that are not
paid at the commencement date of the lease.
The lease payments are discounted using the
interest rate implicit in the lease, if that rate can
be readily determined. If that rate cannot be
readily determined, the Company uses incremental
borrowing rate. The lease payments shall include
fixed payments, variable lease payments, residual
value guarantees, exercise price of a purchase
option where the Company is reasonably certain to
exercise that option and payments of penalties for
terminating the lease, if the lease term reflects the
lessee exercising an option to terminate the lease.
The lease liability is subsequently remeasured by
increasing the carrying amount to reflect interest on
the lease liability, reducing the carrying amount to
reflect the lease payments made and remeasuring
the carrying amount to reflect any reassessment
or lease modifications or to reflect revised in¬
substance fixed lease payments. The company
recognises the amount of the re-measurement of
lease liability due to modification as an adjustment
to the right-of-use asset and statement of profit
and loss depending upon the nature of modification.
Where the carrying amount of the right-of-use
asset is reduced to zero and there is a further
reduction in the measurement of the lease liability,
the Company recognises any remaining amount of
the re-measurement in statement of profit and loss.

The Company has elected not to apply the
requirements of Ind AS 116 Leases to short-term
leases of all assets that have a lease term of 12
months or less and leases for which the underlying
asset is of low value. The lease payments associated
with these leases are recognized as an expense on
a straight-line basis over the lease term.

o. Income tax

Income tax comprises current and deferred tax. It is
recognised in profit or loss except to the extent that
it relates to an item recognised directly in equity or
in other comprehensive income.

(i) Current tax

Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable
in respect of previous years. The amount of current
tax reflects the best estimate of the tax amount
expected to be paid or received after considering
the uncertainty, if any, related to income taxes. It is
measured using tax rates (and tax laws) enacted or
substantively enacted by the reporting date.

Current tax assets and current tax liabilities are
offset only if there is a legally enforceable right to
set off the recognised amounts, and it is intended
to realise the asset and settle the liability on a net
basis or simultaneously.

(ii) Deferred tax

Deferred tax is recognised in respect of temporary
differences between the carrying amounts
of assets and liabilities for financial reporting
purposes and the corresponding amounts used for
taxation purposes. Deferred tax is also recognised ⁸⁵
in respect of carried forward tax losses and tax
credits.

Deferred tax is not recognised for temporary
differences arising on the initial recognition of
assets or liabilities in a transaction that is not a
business combination and that affects neither
accounting nor taxable profit or loss at the time of
the transaction.

Deferred tax assets are recognised to the extent
that it is probable that future taxable profits will
be available against which they can be used. The
existence of unused tax losses is strong evidence
that future taxable profit may not be available. The
Company recognises a deferred tax asset only to
the extent that it has sufficient taxable temporary
differences or there is convincing other evidence
that sufficient taxable profit will be available
against which such deferred tax asset can be
realised. Deferred tax assets - unrecognised or
recognised, are reviewed at each reporting date
and are recognised / reduced to the extent that it is
probable / no longer probable respectively that the
related tax benefit will be realised.

Deferred tax is measured at the tax rates that are
expected to apply to the period when the asset is
realised or the liability is settled, based on the laws

a net basis or their tax assets and liabilities will be
realised simultaneously.

p. Cash and cash equivalents

For the purpose of presentation in the statement
of cash flow, cash and cash equivalents includes
cash on hand, deposits held at call with the
financial institution, other short-term highly liquid
investments with original maturities of three
months or less that are readily convertible to
known amounts of cash and which are subject to
an insignificant risk of changes in value, and bank
overdrafts.

c Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to
dividends and share in the Company's residual assets. The equity shares are entitled to receive dividend as
declared from time to time. The voting rights of an equity shareholder in a poll (not on show of hands) are in
proportion to its share of the paid-up equity capital of the Company.

On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of
the company, remaining after distribution of all preferential amounts in proportion to the number of equity
shares held.

g Shares issued and bought back during the five years immediately preceding the date of Balance sheet
ie., March 31, 2025- Nil

B. Capital management

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. It sets the amount of capital required on
the basis of annual business and long-term operating plans which include capital and other strategic
investments.

16 Other Equity

a. Securities premium

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

b. Capital reserve

Capital reserve represents the subvention (voluntary, non-repayable financial grant) of US$ 25 million (Rs.
14,912.50 lakhs) received from the Prolec GE Internacional, S de R.L de C.V., Mexico, the erstwhile holding
company.

c. General reserve

General reserve is the accumulation of retained earnings of the Company, apart from the statement of profit
and loss balance, which is utilised for meeting future obligations.

d. Retained earnings

Retained earnings represents surplus i.e., balance of the relevant column in the Statement of Changes in
Equity

e. Other comprehensive income

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

(a) Provisions for employee benefits

For details about the related employee benefits expense, Refer note 26.

The Company operates the following post-employment defined benefit plans.

Gratuity: The Company has a defined benefit gratuity plan, governed by the Payment of Gratuity Act, 1972. It
entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen
days wages for every completed year of service or part thereof in excess of six months, based on the rate
of wages last drawn by the employee concerned. The gratuity plan is a funded plan and the Company makes
contributions to a fund managed by the LIC. The Company does not fully fund the liability and maintains a target
level of funding to be maintained over a period of time based on estimations of expected gratuity payments.

These defined benefit plans expose the Company to actuarial risks, such as longevity risk, interest rate risk and
market (investment) risk.

Note: The Company has not disclosed fair values of financial instruments such as trade receivables and related
unbilled revenue, cash and bank balances, deposits, bank deposits, interest accrued and trade payables (that
are short term in nature), because their carrying amounts are reasonable approximations of their fair values.
Such items have been classified under amortised costs in the above table.

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk (See B(ii))

- Liquidity risk (See B(iii)) and

- Market risk (See B(iv))

(i) Risk management framework

The Company's Board of Directors has overall responsibility for the establishment and oversight of the
Company's risk management framework. The Board of Directors along with the top management are
responsible for developing and monitoring the Company's risk management policies.

The Company's risk management policies are established to identify and analyse the risks faced by the
Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the
Company's activities. The Company, through its training and management standards and procedures, aims
to maintain a disciplined and constructive control environment in which all employees understand their roles
and obligations.

The Company's audit committee oversees how management monitors compliance with the Company's
risk management policies and procedures, and reviews the adequacy of the risk management framework
in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by
internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and
procedures, the results of which are reported to the audit committee.

(ii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Company's trade receivables,
deposits and other financial assets.

The carrying amount of financial assets represents the maximum credit exposure.

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the
creditworthiness of customers to which the Company grants credit terms in the normal course of business.
The Company establishes an allowance for doubtful debts and impairment that represents its estimate of
incurred losses in respect of the Company's trade receivables and other financial assets.

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base,
including the default risk associated with the industry and country in which customers operate. In monitoring
customer credit risk, customers are grouped according to their credit characteristics, including end-user
customers, industry, trading history with the Company and existence of previous financial difficulties.

Expected credit loss assessment for customers as at March 31, 2025 and March 31, 2024

The Company based on internal assessment which is driven by the historical experience / current facts
available in relation to default and delays in collection thereof uses an allowance matrix to measure the
expected credit loss of trade receivables. Exposures to customers outstanding at the end of each reporting
period are reviewed by the Company to determine incurred and expected credit losses.

The following table provides information about the exposure to credit risk and expected credit loss for trade
receivables;

(iii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach
to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities
when they are due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company's reputation.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts
are gross and undiscounted, including contractual interest but excluding impact of netting agreements.

(iv) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will
affect the Company's income or the value of its holdings of financial instruments. The Company is domiciled
in India and has its majority of revenues and other transactions in its functional currency i.e. Rs. Accordingly,
the Company is not exposed to any high currency risk.

Currency risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies
in which sales and purchases are denominated and the functional currency. The currencies in which these
transactions are primarily denominated is USD.

Exposure to currency risk

The summary quantitative data about the Company's exposure to currency risk at the rate of 1% are as
follows:

Notes:

Pursuant to the Supreme Court judgement dated February 28, 2019 on the inclusion of special allowances for
contribution to provident fund, the Company has been legally advised that there are interpretative challenges
on the application of the judgement retrospectively. Based on the legal advice and in the absence of the reliable
measurement of the provision for earlier periods, the Company has not recorded a provision for the prior years.

32 The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August
2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its
customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance
with the Micro, Small and Medium Enterprise Development Act, 2006 ('the Act'). Accordingly, the disclosure
in respect of the amounts payable to such enterprises as at March 31, 2025 has been made in the financial
statements based on information received and available with the Company.

37 Security details for Working Capital facilities and Term loans from Banks:

a) Name of the Bankers - State Bank of India, Bank of Baroda and IndusInd

b) Primary Security:

(i) For Working Capital facilities

Hypothecation of entire stocks, receivables and entire current assets (both present and future).

(ii) For Term Loan

Hypothecation of Machinery/Equipments to be purchased out of the term loan for setting up of second
transformer testing facility.

c) Collateral Security:

- Equitable mortgage of factory land and building at Illuppapattu village in Kancheepuram administering 30.04
acres

- Equitable mortgage of factory land and building at Thirumazhisai administering 2,65,062 sq ft

- Equitable mortgage of commercial plot at Pazhavoor village in Thirunelveli administering 3 acres

- Hypothecation of Windmill at Thirunelveli

- Lien on Fixed deposits Rs. 67 lakhs

- Hypothecation charge of entire plant & machinery of Indo Tech Transformers Limited except the machinery
to be purchased out of SBI's Term Loan belonging to M/s. Indo Tech Transformers Limited on pari passu first
charge with Bank of Baroda(BOB) & Indus Ind Bank(IBL).

- Pledge of 31,86,000 Equity shares of the Company held by the Holding Company.

⁽¹⁾ prepayment of term loan lead to the decrease in this ratio

⁽²⁾ higher net profit with no change in the capital employed has resulted in improvement of this ratio

⁽³⁾ increase in inventory owing to the expected increase in volumes lead to decrease in this ratio

⁽⁴⁾ better collections in terms of receivables lead to improvement in the ratio

⁽⁵⁾ better payables management lead to increase in the ratio

⁽⁶⁾ revenue growth with no drastic change in the fixed costs resulted in the improvement of net profit ratio

⁽⁷⁾ higher net profit with no change in the capital employed has resulted in improvement of this ratio

39 Transfer pricing

The Company has transactions with related parties. For the financial year 2022-23, the Company has obtained
the Accountant's Report from a Chartered Accountant as required by the relevant provisions of the Income-
tax Act, 1961 and has filed the same with the tax authorities. For the financial year 2024-25, the management
confirms that it maintains documents as prescribed by the Income-tax Act, 1961 to prove that these transactions
are at arm's length considering the economic scenario, prevailing market conditions etc. and the aforesaid
legislation will not have any impact on the financial statements, particularly on the amount of tax expense and
that of provision for taxation.

40 The Company is in the process of reconciling the monthly returns filed under the Central Goods and Services Tax
Act, 2017 ("CGST Act"), The Integrated Goods And Services Tax Act, 2017 and Tamil Nadu Goods And Services
Tax Act, 2017 [Tamil Nadu Act 19 Of 2017] with its books and records to file the annual return for FY 2023-24.
Adjustments, if any, consequent to the said reconciliation will be given effect to in the financial statements on
completion of reconciliation and filing of returns. However, in the opinion of the Management, the impact of the
same will not be material.

41 Code of Social Security, 2020

The date on which the Code of Social Security, 2020 ("the code") relating to employee benefits during the
employment and post-employment benefit will come into effect is yet to be notified and the related rules are
yet to be finalized. The company will evaluate the code and its rules, assess the impact, if any on account of the
same once they become effective.

42 Prior Year Comparatives

Previous year figures have been re-grouped/ re-classified, wherever necessary, to confirm to current year's
classification and presentation

As per our report of even date attached

for ASA & Associates LLP for and on behalf of the Board of Directors of

Chartered Accountants Indo Tech Transformers Limited

Firm's Registration No. - 009571N/N500006

G N Ramaswami Sharat Chandra Kolla Purushothaman M

Partner Director Chief Executive Officer &

Membership No.: 202363 DIN : 08851423 Whole-Time Director

DIN : 11074837

Saikrishnan C P Shiva Prasad Padhy

Chief Financial Officer Company Secretary

Place: Chennai Place: Chennai

Date: May 20, 2025 Date: May 20, 2025