3.15 Provisions, contingent assets and contingent liabilities

Provisions for warranties, litigations or other claims are recognized when the Company has a present legal or constructive obligation as a result
of a past event, it is probable that an outflow of economic resources will be required from the Company and amounts can be estimated reliably
Timing or amount of the outflow may still be uncertain.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at
the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations,
the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are
discounted to their present values, where the time value of money is material.

Any reimbursement that the Company is virtually certain to collect from a third party with respect to the obligation is recognized as a separate
asset. However, this asset may not exceed the amount of the related provision.

No liability is recognized if an outflow of economic resources as a result of present obligations is not probable. Such situations are disclosed as
contingent liabilities if the outflow of resources is remote.

The Company does not recognize contingent assets unless the realization of the income is virtually certain, however these are assessed
continually to ensure that the developments are appropriately disclosed in the standalone financial statements.

3.16 Earnings per equity share

Basic earnings per equity share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period
is adjusted for events including a bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split
(consolidation of shares), if any. For the purpose of calculating diluted earnings per equity share, the net profit or loss for the period attributable
to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive
potential equity shares.

3.17 Cash flow statement

Cash flows are reported using the indirect method, whereby profit/(loss) before tax is adjusted for the effects of transactions of non-cash
nature and any deferrals or accruals of past or future receipts or payments. In the cash flow statement, cash and cash equivalents includes
cash in hand, cheques on hand, balances with banks in current accounts and other short- term highly liquid investments with original maturities
of 3 months or less, as applicable.

3.18 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time
that is necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period in which they
are incurred and reported in finance costs.

3.19 Significant management judgement in applying accounting policies and estimation uncertainty

When preparing the standalone financial statements, management makes a number of judgements, estimates and assumptions about the
recognition and measurement of assets, liabilities, income and expenses.

(i) Significant management judgement

The following are significant management judgements in applying the accounting policies of the Company that have the most significant
effect on the standalone financial statements.

Recognition of deferred tax assets

The extent to which deferred tax assets can be recognized is based on an assessment of the probability that future taxable income
will be available against which the deductible temporary differences and tax loss carry-forwards can be utilized. In addition, significant
judgment is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions.

ii) Estimation uncertainty

Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities,
income and expenses is provided below. Actual results may be substantially different.

Impairment of non-financial assets

In assessing impairment, management estimates the recoverable amount of each asset or cash- generating units based on expected
future cash flows and uses an interest rate to discount them.

Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate
Inventories

Management estimates the net realizable values of inventories, taking into account the most reliable evidence available at each reporting
date. The future realization of these inventories may be affected by future technology or other market-driven changes that may reduce
future selling prices.

Defined Benefit Obligation (DBO)

Management’s estimate of the DBO is based on a number of critical underlying assumptions such as attrition rate, mortality, discount
rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual
defined benefit expenses (Refer note 18).

Useful lives of depreciable assets

Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of
the assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of certain software
and IT equipment.

Fair value measurement

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

i. In the principal market for the asset or liability, or

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

Management uses valuation techniques to determine the fair value of financial instruments (where active market quotes are not
available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would
price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that
case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in
an arm’s length transaction at the reporting date (refer Note 38).

Current and non-current classification

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria
set out in the Schedule III to the Companies Act, 2013. Considering the nature of business activities of the Company, the time between
deploying of resources for projects/ contracts and their realization in cash and cash equivalents, the Company has ascertained its
operating cycle as twelve months for the purpose of current or non-current classification of assets and liabilities

5. Investments (Contd..)

* Pursuant to an exclusive contractual arrangement providing for a majority share in the economic interests and control of voting power in the Project-I
of VA Tech Wabag and Roots Contracting L.L.C, Qatar, the investment was classified as a subsidiary at inception. During the year ended 31 March
2016 and 31 March 2020 for Project-II and Project-III respectively, a similar arrangement providing for majority rights in the new projects to the other
investor was agreed and hence the investment in the legal entity has been accordingly reclassified as an associate based on economic interests in
the projects respectively as against the ownership in the entity.

^ss Pursuant to an exclusive contractual arrangement providing for a share of 100% of the economic interests in the entity Wabag Belhasa JV
WLL,(Bahrain) has been assessed and determined that it the Company has power over the entity, exposure, or rights, to variable returns and the
ability to use its power to affect the amount of returns of the Wabag Belhasa JV WLL,(Bahrain). Accordingly, the investment has been classified
as a subsidiary.

The Company had entered into a joint venture with Pratibha Industries Limited in Nepal to execute a project. Considering the fact that the Company
has control over the governing body and thereby has power over the entity, has rights to variable returns from its involvement with the entity and
has the ability to use its power over the entity to affect the amount of its returns, the same has been treated as a subsidiary in the consolidated
financial statements.

The term loans availed in the Special Purpose Vehicles ('SPVs'), namely Ganga STP Project Private Limited, DK Sewage Project Private Limited, and
Ghaziabad Water Solutions Private Limited, for projects being implemented under the Design, Build, Finance, Operate, and Transfer ('DBFOT') model
are secured by way of a charge over the assets, securities of the respective SPVs (investments in securities held by the Company in these SPVs), in
accordance with the provisions set out in the relevant financing agreements.

6. Trade receivables (Contd..)

There are no receivables due from directors or other officers of the Company.

All of the Company’s trade receivables and customer retention have been reviewed for indicators of impairment. Certain trade receivables were
found to be impaired and an allowance for credit losses of H 435 Millions (2024-25: H (457 Millions)) has been (utilised)/created respectively within
other expenses. The Company has provided for expected credit loss on its trade receivables using a provisioning matrix and specific provisioning,
where appropriate, representing expected credit losses based on a range of outcomes.

7. Other financial assets (Contd..)

Non-current bank balances represents interest bearing deposits with bank with more than 12 months maturity and held as margin money or security
against the borrowings, guarantees and other commitments.

There are no other financial assets due from directors or other officers of the Company. The carrying amount of the other financial assets are
considered as a reasonable approximation of fair value.

Refer note 39 for description of the Company's financial instrument risks, including risk management objectives and policies.

8. Deferred tax assets (net) (Contd..)

In assessing the recoverability of deferred tax assets, the management of the Company considers whether it is more likely than not that some portion
or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable
income during the periods in which the temporary differences become deductible. The amount of the deferred tax assets considered realizable,
however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.

14. Equity share capital (Contd..)

d) Terms/right attached to equity shares

The Company has issued only one class of equity shares having a face value of H 2 per share. Each holder of equity shares is entitled to one vote
per share. The Company declares and pays dividends in Indian Rupees. In the Board meeting held on 21 May 2026, the dividend proposed by
the Board of Directors at H 5 per equity share is subject to the approval of the shareholders in the ensuing Annual General Meeting. This amount
has not been recorded as a liability for the year ended 31 March 2026. In the event of liquidation, the holders of equity shares will be entitled to
receive remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number
of equity shares held by the shareholders. During the year ended 31 March 2026, the Company paid the final dividend of H 4 per equity share for
the year ended 31 March 2025 amounting to H 249 Millions.

f) Buy back of shares

There were no buy back of shares and no shares issued pursuant to contract without payment being received in cash during the last 5 years
immediately preceding 31 March 2026.

g) Capital management

The Company’s capital management objectives are:

- to safeguard the Company’s ability to continue as a going concern, and continue to provide optimum returns to the shareholders and all
other stakeholders by building a strong capital base.

- to maintain an optimum capital structure to reduce the cost of capital

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares, or sell assets to reduce debt.

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the
equity holders plus its borrowings, if any less cash and bank balances.

The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. The amounts managed as capital by the Company for the reporting periods under review are
summarized as follows:

d) Provision for employee benefits

i) Gratuity

In accordance with “Code on Social Security, 2020”, the Company provides for gratuity, a defined benefit retirement plan (“the Gratuity
Plan”) covering eligible employees. The Gratuity plan provides for a lump sum payment to vested employees on retirement (subject to
completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn
salary and tenure of employment. Liabilities with regard to the Gratuity plan are determined by actuarial valuation on the reporting date
and the Company makes annual contribution to the gratuity fund maintained with an insurance company.

18. Provisions (Contd..)

The Company assesses these assumptions with the projected long-term plans of growth and prevalent industry standards.

Based on historical data, the Company expects contributions of H 103 Millions to be paid for financial year 2025-26. The weighted
average duration of the defined benefit obligation as at 31 March 2026 is 4.34 years (31 March 2025: 4.72 years)

(ii) Compensated absences

The Company permits encashment of compensated absences accumulated by its employees on retirement, separation and during
the course of service. The liability in respect of the Company, for outstanding balance of privilege leave at the balance sheet date is
determined and provided on the basis of actuarial valuation performed by an independent actuary The Company does not maintain any
plan assets to fund its obligation towards compensated absences. The total Compensated absences recognized in the statement of
profit and loss for the year is H 12 Millions (2024-25 : H 36 Millions).

a) Terms, repayment and guarantee details of borrowings

i) The Company has availed packing credit facilities in US dollars (USD) and Euro (EUR) at an interest rates ranging from 2.86% p.a to
6.83% p.a (31 March 2025: 3.21% p.a to 6.99% p.a) . These packing credits are repayable within 180 days, as applicable, from the date of
availment and are secured against foreign currency receivables.

ii) The Company has availed cash credit facilities from banks during the previous year at an interest rate of 9.65% p.a to 10.05% p.a and are
secured against receivables of the Company.

iii) During the financial year 2023-24 the Company issued debentures to Asian Development Bank , which is secured by first pari-passu
charge on the entire current assets of the Company except MRPL Project and BUIDCO Bhagalpur Project and repayable over 18
quarterly instalments from August 2024. During the current year interest rate has been repriced to 6.61% p.a., (31 March 2025: 7.695% p.a).

38. Fair value measurement

Fair value measurement hierarchy

The Company records certain financial assets and financial liabilities at fair value on a recurring basis. The Company determines fair values based on
the price it would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date
and in the principal or most advantageous market for that asset or liability

The Company holds certain fixed income investments and other financial assets such as employee advances, deposits etc. which must be measured
using the fair value hierarchy and related valuation methodologies. The guidance specifies a hierarchy of valuation techniques based on whether
the inputs to each measurement are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while
unobservable inputs reflect the Company’s assumptions about current market conditions. The fair value hierarchy also requires an entity to maximize
the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Financial assets and financial liabilities measured at fair value in the balance sheet are grouped into three Levels of fair value hierarchy These levels
are based on the observability of significant inputs to the measurement, as follows:

> Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities

> Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e prices) or indirectly (i.e
derived from prices)

> Level 3: Inputs for assets or liabilities that are not based on observable market data (unobservable inputs)

The following table shows the Levels within the hierarchy of financial and non-financial assets and liabilities measured at fair value on a recurring basis
at 31 March 2026, 31 March 2025:

iii) Liabilities measured at amortised cost:
a) Interest-bearing loans and borrowings:

The Company ensures a balanced portfolio of fixed and floating rate loans and borrowings. The Company's borrowings as at 31
March 2026 of H 319 Millions (31 March 2025 H 1,519 Millions )and of H 601 Millions (31 March 2025 H 816 Millions) are on fixed rate
and floating rate basis of interest respectively .

The fair values of the Company’s interest-bearing borrowings and loans are determined under amortised cost method using
discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. These rates are considered to reflect the
market rate of interest and hence the carrying value are considered to be at fair value.

The Company’s principal financial liabilities comprise of borrowings, trade and other payables, and financial guarantee contracts. The main purpose
of these financial liabilities is to finance the Company’s operations and to provide guarantees to support its and group companies operations. The
Company’s principal financial assets include investments, trade and other receivables, cash and short-term deposits that are created directly from
its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s management oversees the management of these risks. The
Company’s management is supported by the Group Treasury Team that advises on financial risks and the appropriate financial risk governance
framework in accordance with the Company’s policies and risk objectives. It is the Company’s policy that no trading in derivatives for speculative
purposes may be undertaken. The Board of Directors review and agree on policies for managing each of these risks, which are summarised below.

a) Market risk

The Company is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and certain
other price risks, which result from both its operating and investing activities.

i. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company's debt obligations
with floating interest rates.

Interest rate sensitivity

The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of /- 1% for the year
ended 31 March 2026 (31 March 2025: /- 1%). These changes are considered to be reasonably possible based on observation of
current market conditions. Sensitivity calculations are based on a annualized interest cost on the borrowings at floating rate as of the
reporting dates 31 March 2026 and 31 March 2025 . All other variables are held constant.

ii. Foreign currency risk

Most of the Company’s transactions are carried out in Indian rupees. Exposures to currency exchange rates arise from the Company’s
overseas sales and purchases, which are primarily denominated in US dollars (USD) and Euro (EUR).

To mitigate the Company’s exposure to foreign currency risk, cash flows are monitored and forward exchange contracts are entered
into in accordance with the Company’s risk management policies. Where the amounts to be paid and received in a specific currency are
expected to largely offset one another, no further hedging activity is undertaken.

If the H had weakened against the USD by 1% during the year ended 31 March 2026 (31 March 2025: 1% ) and EUR by 1% during the year
ended 31 March 2026 (31 March 2025: 1% ) respectively, there would be an equal but opposite effect on the above currencies to the
amount shown above, on the basis that all other variables remain constant.

b) Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to the Company. The Company is exposed to this risk for various
financial instruments, for example trade receivables, deposits etc. The Company’s maximum exposure to credit risk is limited to the carrying
amount of financial assets recognised at 31 March, as summarised below:

The Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company,
and incorporates this information into its credit risk controls. The Company’s policy is to transact only with counterparties who are highly
creditworthy which are assessed based on internal due diligence parameters.

In respect of trade receivables, the Company is not exposed to any significant credit risk exposure to any single counterparty or any group of
counterparties . Customer credit risk is managed based on the Company’s established policy, procedures and control relating to customer credit risk
management, pursuant to which outstanding customer receivables are regularly monitored by the management, to ensure the risk of credit loss is
minimal. Credit quality of a customer is assessed based on historical information in relation to pattern of collections, defaults and credit worthiness of
the customer. As at 31 March 2026, the Company had 26 (Previous year 2024-25 : 22) customers that owed the Company more than H300 Millions
each and accounted for approximately 89% (Previous year 2024-25: 91%) of all the receivables outstanding. As at 31 March 2026, the Company has
certain trade receivables that have not been settled by the contractual due date but are not considered to be impaired .(Also refer note 6)

The credit risk for cash and cash equivalents, balance with banks are considered negligible, since the counterparties are reputable banks with
high quality external credit ratings.

Other financial assets mainly comprises of tender deposits and security deposits which are given to customers or other governmental
agencies in relation to contracts executed and are assessed by the Company for credit risk on a continuous basis. The credit risk on these
balances are estimated to be low as at 31 March 2026.

c) Liquidity risk

Liquidity risk is that the Company might be unable to meet its obligations. The Company manages its liquidity needs by monitoring scheduled
debt servicing payments for long-term financial liabilities as well as forecast cash inflows and outflows due in day-to-day business. The data
used for analysing these cash flows is consistent with that used in the contractual maturity analysis below. Liquidity needs are monitored in
various time bands, on a day-to-day and week-to-week basis, as well as on a monthly, quarterly and yearly basis depending on the business
needs. Net cash requirements are compared to available borrowing facilities in order to determine headroom or any shortfalls. This analysis
shows that available borrowing facilities are expected to be sufficient over the lookout period.

The Company's objective is to maintain cash and marketable securities to meet its liquidity requirements for 30-day periods at a minimum. This
objective was met for the reporting periods. Funding for long-term liquidity needs is additionally secured by an adequate amount of committed
credit facilities.

The Company considers expected cash flows from financial assets in assessing and managing liquidity risk, in particular its cash resources and
trade receivables. The Company’s existing cash resources and trade receivables significantly exceed the current cash outflow requirements.
Cash flows from trade receivables are all contractually due within six months except for retention and long term trade receivables which are
governed by the relevant contract conditions.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, and short¬
term borrowings. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The
Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders.

The table below analyses non-derivative financial liabilities of the Company into relevant maturity groupings based on the remaining period
from the reporting date to the contractual maturity date. The amounts disclosed in the table are contractual undiscounted cash flows including
interest as at 31 March 2026 and 31 March 2025.

42. Segment reporting

The Company publishes the standalone financial statements along with the consolidated financial statements in the annual report. In accordance
with Ind AS 108, Operating segments, the Company has disclosed the segment information in the consolidated financial statements.

All investments are non current in nature and invested in group companies, hence return on investment ratio is not computed.

44. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the
Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing
or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has
not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in
other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of
the Ultimate Beneficiaries.(Previous Year : Nil)

45. Additional disclosures under Schedule III Division II of the Companies Act

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

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

c. As per the information available with the Company, the Company has not entered into any transactions with the companies struck off
under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 (Previous Year Nil)

d. There has been no charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period as at the end of the year.

e. TheCompany has not traded or invested in Crypto currencyor Virtual currency during the financial yearended 31 March 2026. (Previous YearNil)

f. The Company is using IFS ERP (accounting software) for maintaining books of accounts. Audit trail was operational throughout the year and
audit trial backup has been preserved as required under Act .

g. “Effective November 21, 2025, the Government of India has consolidated multiple existing labour legislations into a unified framework
comprising four Labour Codes collectively referred to as the 'New Labour Codes’. Under Indian Accounting Standard 19 “Employee Benefits”,
changes to employee benefit plans arising from legislative amendments constitute a plan amendment, requiring recognition of past service
cost immediately in the statement of profit and loss. The New Labour Codes has resulted in estimated one time increase in provision for
employee benefits of H 47 Millions and the same has been recognized as an Exceptional Items in the statement of profit and loss account for
the year ended 31 March 2026 . The Government of India is in the process of notifying related rules to the New Labour Codes and impact of
these will be evaluated and accounted for in accordance with applicable accounting standards in the period in which they are notified”

46. Figures for the previous year have been regrouped / re-classified to conform to the figures of the current year. Values less than H 0.5 Million

disclosed as zero .