MV Electrosystems Ltd Management Discussions

BUSINESS OVERVIEW

For information on our business, see "Our Business" on page 213.

PRESENTATION OF FINANCIAL INFORMATION

The restated financial information of our Company comprise the restated statement of assets and liabilities as at March 31, 2026, March 31, 2025 and March 31, 2024, the restated statement of profit and loss (including other comprehensive income), the restated statement of changes in equity and the restated statement of cash flows for the financial years ended March 31, 2026, March 31, 2025 and March 31, 2024, and the material accounting policies and other explanatory information (collectively, the "Restated Financial Information").

The Restated Financial Information have been compiled from the audited financial statements of our Company as at and for the financial year ended March 31, 2026 and March 31, 2025 prepared in accordance with the Indian Accounting Standards (referred to as "Ind AS") as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India and the Ind AS converged financial statements of our Company for the financial year ended March 31, 2024.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION

We are a technology-driven company engaged in the design and development of advanced power electronics solutions for the Indian Railway industry. Our Research, Design and Development (R&D) Centre has played a pivotal role in shaping our business and technological capabilities. At present, we are involved in the assembly and manufacturing of railway power electronics used in rolling stock, including IGBT-based 3-phase drive propulsion systems for electric locomotives. Our product portfolio further comprises switchgear & rail coach / EMU panels, cable protection and management systems, and a wide range of electrical components, systems, and sub-systems. With a strong emphasis on indigenous innovation and sustainable rail transportation, we continue to invest in strengthening our design and development capabilities. Our ongoing efforts are directed toward achieving cost efficiency and deeper localisation across both our manufacturing processes and products. For further details, see "Our Business - Our Strategies" on page 225.

Our ability to effectively execute our expansion strategy depends on our ability to open new stores successfully. We have made significant investments in research, design and development for power electronics in the past and will continue to undertake such efforts to improve our existing propulsion system, as per requirement of Indian Railways and newer markets & opportunities, hardware and software for controlling such power electronics and design and develop new power electronics equipment. Our R&D efforts have a crucial role in enabling us to cater to evolving market preferences in the Indian Railways and our investment in such activities will further increase as our product lines expand. Our in-house Research, Design & Development Centre based at Faridabad, Haryana, India is the technological backbone of our operations, dedicated to innovation, engineering and advancement of complex and high-performance power electronics and other railway systems. It plays a pivotal role in enabling in-house product development capabilities complying with international standards that align with the evolving needs of Indian Railways and international customers including End-to-end product engineering, Compliance- Driven Development, Indigenous Design Capability and Test and Validation Infrastructure.

Present products for which approvals received

The existing business operations of our Company has sustained the investments made by us in building and maintaining our team and other R&D related costs over the past five years. With our sustained efforts, we have successfully developed 3-Phase Propulsion Equipment for which we have received approval from CLW, Indian Railways on September 15, 2025. As on June 30, 2026, we have an executable outstanding order book for supply of 564 (five hundred sixty four) 3-Phase Propulsion Equipment to Chittranjan Locomotive Works, Banaras Locomotive Works and Patiala Locomotive Works, all three units of Indian Railways, having an aggregate order value of Rs. 9,216.40 million (excluding GST and AMC). Further, the said orders also contain an aggregate value of annual maintenance contract equivalent to a sum of Rs. 676.78 million (excluding GST) for the maintenance period of 3 years after completion of the warranty period.

New products under development

With the completion of design and development of 3-Phase Propulsion Equipment, our R&D team is now focussing on development of the following new products / opportunities available in the railway industry:

(a) We have received a Letter of Acceptance dated June 27, 2026 from Modern Coach Factory, Raebareli, Indian Railways to place order with our Company for Design, Development, Manufacture, Supply, Testing and Commissioning of Microprocessor Controlled IGBT based 3 Phase Propulsion Equipment for MEMU (On Board - 12 Car Rakes). The said order is for 6 (six) MEMU (On Board - 12 Car Rakes) for an aggregate value of Rs. 865.46 million and five years comprehensive annual maintenance contract for aggregate value of Rs. 46.86 million, both excluding GST.

(b) We have received a developmental order for IGBT based 3-Phase Drive Propulsion Equipment with Composite Converter for WAP-7 locomotives from CLW, Indian Railways on September 10, 2025 for one (1) such equipment for an aggregate value of Rs. 25.11 million (excluding GST) and three years comprehensive annual maintenance contract for an aggregate value of Rs. 1.48 million (excluding GST).

(c) We have received a developmental order dated December 01, 2025 for one (1) set of 2x500 KVA IGBT based Hotel Load Converter for 3-Phase Electric Locomotives WAP-7 locos for aggregate value of Rs. 8.00 million

and three years comprehensive annual maintenance charges for aggregate value of Rs. 0.30 million, both excluding GST.

(d) We have entered into a Business Cooperation Agreement with PNC Technologies Co. Ltd., South Korea on August 13, 2025 for a period of three years, to collaborate exclusively for the marketing, manufacturing, supply and distribution of Auto Fault Locator system for the Indian market, to fulfil the condition of minimum 51% Indian content under "Make in India" policy and to participate in the tenders and also provide after sales services with support of PNC Technologies.

(e) Recently, Ministry of Railways has approved for procurement of integrated propulsion kit for 50 nos each by BLW and CLW respectively, subject to design approval and prototype clearance including by RDSO / Indian Railways. Procurement of such integrated propulsion kit by locomotive works factories of Indian Railways creates an opportunity for us to further diversify into production of other products required in delivery of such integrated propulsion kit. Such integrated propulsion kit includes propulsion equipment, traction motors, traction transformer, complete bogies, suspension system, transmission system and any such product as may be included by BLW or CLW. Procurement of such integrated propulsion kit by locomotive works factories of Indian Railways creates an opportunity to further diversify into production of other products required in delivery of such integrated propulsion kit.

Customer

Our strategy is focused on significantly expanding our product development and market presence in Rolling Stock manufacturing, including focus on propulsion equipment required for various types of rolling stocks and focus on Power conversion Systems for other industries like Solar Power, Wind Power, Energy Storage, Industrial/Commercial Systems and Electric Mobility.

Maintain operational efficiencies

In order for us to grow our operations and become profitable with new products and orders, we have to maintain operational efficiencies which depends on various factors including our R&D cost, cost of production and efficient supply chain for raw material.

Cost of procuring raw materials and manufacturing our products

Insulated Gate Bipolar Transistors are key components in modern railway propulsion equipment because they efficiently convert electrical power, enabling high-speed, reliable, and energy-efficient control of traction motors, resulting in smoother acceleration and braking, lower maintenance, and reduced energy consumption. Their high power-handling capability, fast switching speeds, and ability to support regenerative braking make them crucial for electric and diesel-electric locomotives, metro trains, and high-speed trains. Similarly, DC link capacitors act as an energy buffer to stabilize the switch-mode inverters and filter out high-frequency noise generated by the inverters. Also, our Vehicle Control Unit is developed on high performance microprocessor based modular systems that provide complete traction and propulsion control of the entire locomotive hauled train with continuous monitoring and extensive fault diagnostics. Similarly, we will be required to create efficient supply chain for other products including semiconductors, micro processors, thyristor, etc used for production of propulsion system.

Majority of such key components are imported or sourced by us through local office of the importer or their supplier in India and we will be dependent on foreign suppliers for the supply of such key components. We do not have history of long term agreement / arrangement of trades to be undertaken with them including terms such as price and quantum, we face more pronounced risks relating to the availability and pricing of electric components. These risks include disruptions in the supply of electric components due to a demand surplus for such components or quality issues. Such suppliers may also undertake supplies to other customers which may limit the quantity of such components available for sale to us.

The prices and supply of these and other materials depend on factors beyond our control, including general economic conditions, competition, production levels and regulatory factors such as import duties. To the extent, we cannot pass on some or all of the increase in the cost of raw materials, any such increases could have an adverse effect on revenue and results of operations. Similarly, to the extent we are able to reduce costs of raw materials, such savings improve our overall results of operations.

Bids / Tenders

Our Company participates in these tenders and may not always qualify as lowest bidder or match the bid of the lowest bidder and hence, the conversion of participation in the tenders vis-a-vis successful award of order is low. The summary of the tenders participated by us and the orders awarded during the financial years ended March 31, 2026, March 31, 2025 and March 31, 2024 are as under:

* Includes two purchase orders aggregating to € 1,539.29 million for supply of 74 (seventy four) 3-Phase Propulsion Equipment, proto type approval for which was received by us on September 15, 2025.

NON-GAAP MEASURES

Gross Profit, Gross Margin, Return on Capital Employed, Net Debt, Net Debt / Equity, EBITDA, EBITDA Margin, Operating EBITDA and Operating EBITDA Margin (together, "Non-GAAP Measures"), presented in the Red Herring Prospectus is a supplemental measure of our performance and liquidity that is not required by, or presented in accordance with, Ind AS, Indian GAAP, IFRS, U.S. GAAP or any other GAAP. Further, these Non-GAAP Measures are not a measurement of our financial performance or liquidity under Ind AS, Indian GAAP, IFRS, U.S. GAAP or any other GAAP and should not be considered in isolation or construed as an alternative to cash flows, profit for the years or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS, Indian GAAP, IFRS, U.S. GAAP or any other GAAP. In addition, these Non-GAAP Measures are not standardized terms, hence a direct comparison of these Non-GAAP Measures between companies may not be possible. Other companies may calculate these Non-GAAP Measures differently from us, limiting its usefulness as a comparative measure. Although such Non-GAAP Measures are not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that they are useful to an investor in evaluating us as they are widely used measures to evaluate a companys operating performance.

Reconciliation of Non-GAAP measures

Reconciliation of Gross Profit and Gross Margin

The table below reconciles revenue from operations to Gross Profit and Gross Margin.

Reconciliation of Net Asset Value per Equity Share

The table below reconciles total equity to Net Asset Value per Equity Share.

* on fully diluted basis, after considering impact of conversion of CCPS into Equity Shares, issue of bonus equity shares and split offace value of equity shares from f 10 to f 5 for the paid up capital outstanding on the respective periods

Reconciliation of Return on Net Worth

The table below reconciles profit for the period / year to Net Worth

* Return on Net Worth is equal to profit after tax and after comprehensive income for the year divided by the average shareholders equity during that period and is expressed as a percentage.

Reconciliation of Debt / Equity

The table below reconciles the Debt Equity ratio of the Company for the period

Reconciliation of EBITDA, EBITDA Margin, Operating EBITDA and Operating EBITDA Margin to Profit Before Tax

The table below reconciles profit before tax to EBITDA. EBITDA is calculated as loss before tax plus depreciation and amortization expense plus finance cost while EBITDA Margin is calculated as EBITDA as a percentage of total income. Operating EBITDA is calculated as EBITDA less other income while Operating EBITDA Margin is calculated as Operating EBITDA as a percentage of revenue from operations.

* EBITDA Margin refers to EBITDA during a given period as a percentage of total income during that period. ** Operating EBITDA Margin refers to operating EBITDA during a given period as a percentage of revenue from operations during that period.

MATERIAL ACCOUNTING POLICIES

Significant Accounting Policies

a. Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) The financial statements of the company have been prepared on a historical cost basis, except for the following assets and liabilities:

(i) Investments are measured at fair value.

(ii) Defined benefit plan- plan assets measured at fair value.

The financial statements are presented in INR millions

These Statements have been prepared by the Management as required under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended from time to time, issued by the Securities and Exchange Board of India (SEBI) on 11September 2018, in pursuance of the Securities and Exchange Board of India Act, 1992 ("ICDR Regulations") for the purpose of inclusion in the Red Herring Prospectus (‘RHP) in connection with its proposed initial public offering of equity shares of face value of Rs. 5 each of the Company comprising a fresh issue of equity shares (the "Offer"), prepared by the Company in terms of the requirements of:

(a) Section 26 of Part I of Chapter III of the Companies Act, 2013(the "Act").

(b) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 as amended from time to time; and

(c) The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India (ICAI) (the "Guidance Note").

a) The Restated Financial Information of the Company comprise of the Restated Statement of Assets and Liabilities as at, 31 March 2026, 31st March 2025 and 31 March 2024, Restated Statement of Profit and Loss (including Other Comprehensive Income) for the year ended 31 March 2026 and 31 March 2025 and 31 March 2024 and Restated Statement of Cash Flow and Restated Statement of Changes in Equity for the year ended 31March2026 and 31March 2025 and31 March 2024, the Summary statement of Significant Accounting Policies and Notes to Restated Financial Information (collectively, the ‘Restated Financial Information or ‘Statements).

b) The Restated Financial Information have been compiled from:

a. Audited Special Purpose Financial Statements of the Company as at and for the year ended 31 March 2026, 31 March 2025 and 31 March 2024 prepared in accordance with the Indian Accounting Standards (IndAS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 as amended, to the extent applicable, and the presentation requirements of the Companies Act, 2013 which have been approved by the Board of Directors at their meeting held on July 23, 2026.

The financial statement for the period ended 31st March 2025 is the first set of Financial Statements prepared in accordance with the requirements of IND AS 101 - First time adoption of Indian Accounting Standards. Accordingly, the transition date to IND AS is 01 April 2023. Upto the Financial year ended March 31, 2024; the Company prepared its financial statements in accordance with accounting standards notified under the

Section 133 of the Act, read together with paragraph 7 of the Companies (Accounts) Rules, 2014("Indian GAAP" or "Previous GAAP") due to which the Special purpose Ind AS financial statements were prepared for the purpose of Initial Public Offer (IPO).

The Special purpose Ind AS Financial Statements as at and for the year ended March 31, 2026, March 31, 2025 and March 31, 2024 have been prepared after making suitable adjustments to the accounting heads from their Indian GAAP values following accounting policies and accounting policy choices (both mandatory exceptions and optional exemptions availed as per Ind AS 101)consistent with that used at the date of transition to Ind AS (April 01, 2023) and as per the presentation, accounting policies and grouping/classifications including revised Schedule III disclosures followed as at and for the year ended 31st March, 2025.

c) In pursuance to ICDR Regulations, the Company is required to provide Financial Statements (FS) prepared in accordance with Indian Accounting Standard (Ind AS) for all the three years audited and certified by the statutory auditor(s) who holds a valid certificate by the Peer Review Board of the Institute of Chartered Accountants of India(ICAI).To comply with such requirements, the company has prepared special purpose Ind AS financial statements for the financial years ending March 31, 2026, March 31, 2025 and March 31, 2024.The special purpose Ind AS financial statements with required restatement have been included in the restated financial information prepared for the purpose of filing the RHP.

d) The Restated Financial Information have been prepared to contain information/disclosures and incorporating adjustments set out below in accordance with the ICDR Regulations: -

(i) Adjustments to the profits or losses of the earlier periods for the changes in accounting policies if any to reflect what the profits or losses of those periods would have been if a uniform accounting policy was followed in each of these periods and of material errors, if any;

(ii) Adjustments for reclassification/regroupings of the corresponding items of income, expenses, assets and liabilities retrospectively in the years ended March 31, 2025, and March 31, 2024, in order to bring them in line with the groupings as per the Audited Financial statement of the Company for the period ended March 31st 2026 and the requirements of the SEBI Regulations, if any; and

e) Historical cost convention

The Restated Financial Information have been prepared on a historical cost basis

f) The Restated Financial Information are presented in Indian Rupees (INR) and all values are rounded to nearest millions (INR000,000) upto two decimal places, except when otherwise indicated.

b. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of income and expenses of the period, reported balances of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates. Difference between actual result and estimates are recognised in the period in which the results are known/materialise.

c. Current vs Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:

- Expected to be realised or intended to be sold or consumed in normal operating cycle

- Held primarily for the purpose of trading

- Expected to be realised within twelve months after the reporting period, or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in normal operating cycle

- It is held primarily for the purpose of trading

- It is due to be settled within twelve months after the reporting period, or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

d. Foreign currencies

The Companys financial statements are presented in Indian Rupees (INR), which is also the Companys functional currency.

Transaction and balances

Transactions in foreign currencies are initially recorded by the Company at their respective functional currency spot rates at the date the transaction first qualifies for recognition. However, for practical reasons, the Company uses an average rate if the average approximates the actual rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Exchange differences arising on settlement or translation of monetary items are recognised in statement of profit and loss.

e. Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements.

Based on the Educational Material on Ind AS 18 issued by the ICAI, sales tax/ value added tax (VAT) / Goods and Service Tax (GST) is not received by the Company on its own account. Rather, it is tax collected on value added to the commodity by the seller on behalf of the government. Accordingly, it is excluded from revenue.

The specific recognition criteria described below must also be met before revenue is recognised.

Sale of Goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.

Rendering of Services

Revenue from erection and services and revenue from job work is recognised as per the contractual terms and as and when services are rendered.

Interest Income

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other income" in the statement of profit and loss.

Rental Income

Rental income arising from operating leases on investment properties is accounted for on an actual basis and is included under the head "other income" in the statement of profit and loss

f. Contract balances Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

Trade receivables

A receivable represents the Companys right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section (q) Financial instruments - initial recognition and subsequent measurement.

Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract

g. Taxation Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that

taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss in other comprehensive income. Deferred tax items are recognised in correlation to the underlying transaction in OCI.

h. Property, Plant and Equipment

For transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as of April 1, 2023 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as at the transition date.

Capital work in progress is stated at cost, net of accumulated impairment loss, if any. All the property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

In case of other assets, depreciation has been provided on written down value method on the economic useful life prescribed by Schedule II to the Companies Act2013. Depreciation on addition to or on disposal of Fixed Asset is calculated on pro rata basis.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

i. Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.

Amortisation of the finite intangible assets is allocated on systematic basis over the best estimate of their useful life and accordingly softwares are amortised on straight line basis over the period of six years or license period whichever is lower.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised. The Company has no intangible assets with an indefinite life.

j. Investment Property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Upon initial recognition, an investment property is measured at cost, including related transaction costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any.

The Investment Property consists of Land and Building and as land in a non-depreciable asset so Based on technical evaluation and consequent advice, the management believe that only building will be depreciated over a period of 30 years on written down value basis.

Though the Company measures investment property using cost based measurement, the fair value of investment property is disclosed in the notes. Fair values are determined based on an annual evaluation performed by an accredited external independent valuer.

Investment property is derecognised either when it has been disposed of or when it is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on disposal of investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss.

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably.

The cost of investment property at 1 April 2023, the Companys date of transition to Ind AS, was determined with reference to its carrying value recognised as per the previous GAAP (deemed cost), as at the date of transition to Ind AS.

k. Borrowing Cost

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

l. Leases

The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

a. Company as a lessee

The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right- of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right- of-use assets are also subject to impairment.

b. Lease Liabilities

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.

c. Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases of land, building, machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

d. Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

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

m. Inventories

Inventories are valued as follows: -

Raw materials, Stores, Spares, Other Materials and Traded Goods including packing material: -

Lower of cost and net realizable value. However, materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated, are expected to be sold at or above cost. Cost is determined on FIFO basis.

Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.

Finished goods: -

Lower of cost and net realizable value. Cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost is determined on FIFO basis.

Work in Progress: -

Work in Progress is valued at the lower of actual cost incurred or net realizable value. Cost includes direct materials, labour and proportionate overheads.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

n. Impairment of non-financial assets

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash-generating units (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Companys of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

o. Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event and 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. If the effect of time value of money is material, provisions are discounted using a pretax rate that reflects when appropriate, the risks specific to the liability.

p. Retirement and other employee benefits

(i) Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.

(ii) Gratuity is a defined benefit plan and provision is being made on the basis of actuarial valuation carried out by an independent actuary at the year-end using projected unit credit method.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in profit or loss on the earlier of:

- The date of the plan amendment or curtailment, and

- The date that the Group recognises related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Group recognises the following changes in the net defined benefit obligation as an expense in the consolidated statement of profit and loss:

- Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and

- Net interest expense or income

Compensated Absences

Accumulated leave which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to statement of Profit and Loss in the period in which they occur.

q. Financial instruments

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

Financial assets

Initial recognition and measurement

All financial assets 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. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e. the date that the Company commits to purchase or sell the asset.

Subsequent measurement

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

- Debt instruments at amortised cost

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

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

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

Debt instruments at amortised cost

A ‘debt instrument is measured at the amortised cost if both the following conditions are met:

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

b) 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.

Debt instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch). The Company has not designated any debt instrument as at FVTPL.

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.

Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. 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 FVTOCI, 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 FVTPL category are measured at fair value with all changes recognized in the P&L.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Companys balance sheet) when:

- Rights to receive cash flows from the asset have expired, or

- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Companys continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

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 financial assets. 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.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.

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 (i.e., all cash shortfalls), 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 (P&L). This amount is reflected under the head ‘other expenses in the P&L.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, trade and other payables.

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 Companys financial liabilities include trade and other payables, loans and borrowings including cash credit and financial guarantee contracts.

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 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 into 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.

Gains or losses on liabilities held for trading are recognised in the statement of profit and 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 OCI. These gains/ loss are not subsequently transferred to P&L. 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 or loss. The Company has not designated any financial liability as at fair value through Statement of profit and loss.

Derecognition

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

r. Derivative financial instruments

The Company does not use derivative financial instruments, such as forward currency contracts to hedge its foreign currency risks respectively. Any gains or losses arising from changes in the foreign currency rates are taken directly to profit or loss in the year of realization /payment

s. Fair Value measurement

The Company measures financial instruments, such as, investment at fair value at each balance sheet date.

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

- In the principal market for the asset or liability, or

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

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

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

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

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

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

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

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Companys management determines the policies and procedures for recurring fair value measurement, such as derivative instruments and unquoted financial assets measured at fair value.

At each reporting date, the management analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Companys accounting policies. The management also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

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

t. Contingent liability

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 recognised because it is not probable that an outflow of resources

will be required to settle the obligation. A contingent liability also arises in extremely rare cases, where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements unless the probability of outflow of resources is remote.

Provisions and contingent liabilities are reviewed at each balance sheet date.

u. Cash and Cash Equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above as they are considered an integral part of the Companys cash management.

v. Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss (after tax) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share when applicable are calculated by dividing the net profit or loss (after tax) for the year attributable to equity shareholders by the weighted average number of equity shares which would be issued on the conversion of all the dilutive potential equity shares into equity shares. Dilutive potential equity shares when applicable are deemed converted as of the beginning of the period, unless they have been issued at a later date.

Significant accounting judgements, estimates and assumptions: -

The preparation of the Companys financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgements: - In the process of applying the companys accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements

Determining the lease term of contracts with renewal and termination options - Company as lessee The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company has a lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.

Estimates and assumptions: - The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Defined benefit plans: -

The cost of the defined benefit plans and other employment benefits and the present value of the obligation are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its longterm nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate, management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The underlying bonds are further reviewed for quality. Those having excessive credit spreads are excluded from the analysis of bonds on which the discount rate is based, on the basis that they do not represent high quality corporate bonds.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at intervals in response to demographic changes. Future salary increases are based on expected future inflation rates for the country

Further details about defined benefit obligations are provided in Note 37.

Taxes: -

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Recent Accounting Pronouncements:

The Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2026, MCA has amendments primarily focused on liability classification (Ind AS 1), new disclosure norms for supplier financing (Ind AS 7/107), and global tax rules (Ind AS 12). These amendments to the existing standards are not expected to have a material impact on the company during the current financial year.

PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE

Revenue from operations

Revenue from operations comprises sale of products which includes 3-Phase Propulsion Equipment (supplies for which commenced in March 2026) switchgear & rail coach / EMU panels, cable protection and management products, and a range of electrical components, systems, and sub-systems. The Company is also presently engaged in design and development of power electronics equipment for railways, including Microprocessor Controlled IGBT based 3 Phase Propulsion Equipment for MEMU, Hotel Load Converter and Composite Converter. Since the creation of design and development is being done in-house with proprietary know how, the creation of such power electronics and other components has a larger gestation period. Our Company supplied its first 3-Phase Propulsion Equipment to CLW for commencing trials to ensure that the same complies with the requirements of RDSO specifications in the Fiscal 2024, trial run for which completed on September 15, 2025 and commercial supplies commenced in March 2026. For details of order book, refer to "Our Business - Order book for 3-Phase Propulsion Equipment" on page 216.

Other Income

Other income includes (i) interest on fixed deposits and others; (ii) foreign exchange fluctuation; (iii) profit from sale of investments; (iv) rental income; and (v) one time income on account of maturity proceeds of unit linked insurance policy issued for the life coverage of two of the directors of the Company, namely Mohit Vohra and Sumit Dhawan.

Expenses

Our expenses comprise (i) cost of raw materials consumed; (ii) changes in inventories of finished goods and work-in-progress; (iii) employee benefits expense; (iv) finance costs; (v) depreciation and amortisation expense; and (vi) other expenses.

Cost of Raw Materials Consumed

Cost of raw materials consumed comprise raw material consumed at the end of the relevant Financial Year. Changes in Inventory of Finished Goods, and Work-in-Progress

Changes in inventories of finished goods, work-in-progress is calculated based on the inventories at the beginning of period / year for finished goods and work-in-progress less and inventories at the end of the period / year for finished goods and work-in-progress.

Employee Benefits Expense

Employee benefit expense comprises (i) salaries, and wages; (ii) contribution to provident and other funds; (iii) gratuity expenses; and (iv) staff welfare expenses.

Finance Costs

Finance costs include: (i) interest expense on (a) term loans from banks and financial institutions; and (b) lease liability.

Depreciation and Amortisation Expenses

Depreciation and amortisation expenses comprise (i) depreciation of property, plant and equipment; (ii) amortization of other intangible assets; and (iii) depreciation on right-of-use assets.

Other Expenses

Other expenses primarily comprises (i) power and fuel; (ii) freight and transportation; (iii) job work charges; (iv) installation charges; (v) repair and maintenance; (vi) legal professional and technical expenses; (vii) liquidated damage charges; (viii) rates, fees and taxes; (ix) rent; (x) insurance; (xi) testing and inspection charges; (xii) interest and penalties; (xiii) internet and telephone expenses; (xiv) conveyance and travelling expenses; (xv) commission expenses; (xvi) printing and stationary; (xvii) postage and courier expenses; (xviii) security charges; (xix) bad debt written off; (xx) business promotion; (xxi) bank charges; (xxii) auditors remuneration; and (xxiii) miscellaneous expenses.

RESULTS OF OPERATIONS

The following table sets forth certain selected financial information from our restated financial information of profit and loss with respect to our results of operations for the Financial Years ended March 31, 2026, March 31, 2025 and March 31, 2024, the components of which are also expressed as a percentage of our total income for such periods:

Comparison of Financial Year ended March 31, 2026 to Financial Year ended March 31, 2025 Revenue

Total Income

Our total income reduced by 22.97% to t 497.91 million in Fiscal 2026 as compared to t 646.37 million in Fiscal 2025.

Revenue from Operations

The revenue from operations of our Company reduced by 21.09% to t 494.28 million for the Fiscal 2026 compared to t 626.37 million in the Fiscal 2025. The fall in revenue was primarily on account of lower sale of goods to the Indian Railways. Such business is secured through a tendering process wherein the award of contracts is dependent upon various technical parameters and the competitiveness of bids received. Consequently, the outcome of such tenders remains subject to factors beyond the control of our Company. While participating in these tenders, our Company adopts a balanced and prudent approach towards bid participation and decisionmaking, taking into consideration several qualitative and quantitative factors, including the nature of the product, size of the order, input costs, and the overall business opportunity. Further, for the 3-Phase Propulsion Equipment, our Company has commenced deliveries in Fiscal 2026 and earned revenue from operation for t 46.98 million, which was Nil in the previous financial yer

Such revenue from operations also include realisation from sale of scrap, primarily metal, generated in our fabrication process at our assembling cum manufacturing facility, which aggregated to t 0.27 million for the Fiscal 2026 compared to t 0.02 million in the Fiscal 2025.

Other Income

In the Fiscal 2025, our Company received maturity proceeds of unit linked insurance policy issued for the life coverage of two of the directors of the Company, namely Mohit Vohra and Sumit Dhawan. Such maturity proceeds received by our Company aggregated to t 14.69 million and no benefit has been paid by our Company to abovementioned Directors. Excluding such proceeds of unit linked insurance policy, the other income for the Fiscal 2025 was t 5.30 million in the Fiscal 2025, which reduced to t 3.63 million in the Fiscal 2026 on account of reduced rental income earned by our Company on investment property. Since it is planned to use this investment property for proposed Unit 2, our Company has gradually taken possession for half of the property and possession for the remaining will be taken in future.

Expenditure

Cost of materials consumed & Changes in inventories of Work in progress and finished goods

The aggregate cost of raw materials consumed in the manufacturing process of our Company was t 383.62 million in the Fiscal 2026 as against t 384.83 million in the Fiscal 2025. Further, the Changes in inventories of Work in progress and finished goods was t (34.85) million in Fiscal 2026 as against t (12.27) million in Fiscal 2025.

The total cost of goods sold during this period was as under:

* As percentage of total income for the respective period from such business

a Since commercial supplies for 3-Phase Propulsion Equipment has comments, the line item disclosure is disclosed as a bifurcation in the above table and these figures are not required.

The cost of goods sold was higher due to change in product mix in which control panel margins dropped significantly as compared to previous financial year.

For 3-Phase Propulsion Equipment, the Company had purchased certain raw material in the past, which were bought under minimum order quantity or primary packaging quantity and did not had flexibility to take advantage of pricing under bulk ordering. Such quantity procured in the past at high cost resulted in higher cost of good sold in the Fiscal 2026 for 3-Phase Propulsion Equipment.