1.18 Provisions, Contingent Liabilities and Contingent Assets

a) A provision is recognised when:

i. the Company has present legal or constructive obligation as result of past event;

ii. it is probable that an outflow of economic benefits will be required to settle the
obligation; and

iii. a reliable estimate can be made of the amount of the obligation.

b) If the effect of the time value of money is material, provision are determined by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessments of
the time value of money and the risks specific to the liability. When discounting is used, the
increase in the provision due to the passage of time is recognized asfinance cost.

c) The amount recognised as provision is the best estimate of consideration required to settle
the present obligation at reporting date, taking into account the risks and uncertainties
surroundingthe obligation.

d) When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, the receivable is recognised as an asset if it is virtually certain
that reimbursement will be received and the amount of the receivable can be measured
reliably.

e) Contingent liabilities are possible obligations that arise from past events and whose
existence will only be confirmed by the occurrence or non-occurrence of one or more future
events not wholly within the control of the Company. Where it is not probable that an outflow
of economic benefits will be required, or the amount cannot be estimated reliably, the
obligation is disclosed as a contingent liability, unless the probability of outflow of economic
benefits is remote. Contingent liabilities are disclosed on the basis of judgment of the
management. These are reviewed at each balance sheet date and are adjusted to reflect the
current management estimate.

f) Liability for claims against the Company is recognized on acceptance by the Company/
receipt of award from the Arbitrator and the balance claim, if disputed/ contested by the
contractor is shown as contingent liability. The claims prior to arbitration award stage are

disclosed as contingent liability.

g) Contingent asset is a possible asset that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the company. Contingent assets are disclosed in the financial
statements when inflow of economic benefits is probable on the basis of judgement of
management. These are reviewed at each balance sheet date and are adjusted to reflect the
current management estimate.

1.19 Revenue Recognition and Other Income

Company’s revenues arise from sale of energy, consultancy services and other income. Other
income comprises interest from banks, employees, contractors etc., dividend from
investments in joint venture companies, surcharge received from beneficiaries for delayed
payments, sale of scrap, other miscellaneous income, etc.

1.19.1 Revenue from Sale of Energy

a) Revenue from operations of the company mainly consists from plants regulated under the
Electricity Act, 2003. Accordingly, the Central Electricity Regulatory Commission (CERC)
determines the tariff on the norms prescribed in the tariff regulations as applicable from
time to time. Revenue from sale of energy is accounted for as per tariff notified by CERC. In
case of power stations where the tariff rates are yet to be approved, provisional rates are
adopted considering the applicable CERC Tariff Regulations. Further, recovery/refund
towards foreign currency variation in respect of foreign currency loans is accounted for on
year to year basis. Revenue from sale of energy is recognized once the electricity has been
transmitted to customers and control over the product is transferred to the customers. As at
each reporting date, revenue from operations includes an accrual for energy sales
transmitted to customers but not yet billed (unbilled Revenue).

b) Part of revenue from energy sale where CERC tariff Regulations are not applicable is
recognized based on the rates, terms & conditions mutually agreed with the beneficiaries

c) Rebate to customers as early payment incentive is deducted from the amount of revenue from
energy sales.

d) Incentives/disincentives are accounted for based on the norms notified/approved by the
Central Electricity Regulatory Commission.

e) Recovery/ refund towards foreign currency variation in respect of foreign currency loans are
recognised on year to year basis based on regulatory norms.

f) Advance Against Depreciation (AAD) considered as deferred income in earlier years is
included in sales on straight line basis over the balance useful life after 31st March of the
year closing after a period of 12 years from the date of commercial operation of the Hydro
Power Station, considering the total useful life of the Hydro Power Station as 40 years.

g) Revenue from sale of energy through trading is recognized based on the rates, terms &
conditions mutually agreed with the beneficiaries.

1.19.2 Revenue from Consultancy Services

Revenue from consultancy services rendered is recognised in the statement of profit and
loss in proportion to the stage of completion of the transaction at the reporting date. The
stage of completion is assessed by reference to actual progress/ technical assessment of
work executed, in line with the terms of respective consultancy contracts. Claims for
reimbursement of expenditure are recognized as other income, as per the terms of
consultancy contracts.

1.19.3 Income arising from sale of CERs-carbon credit is recognized on transfer/ sale of carbon
credits i.e. when there is certainty regarding ultimate collection.

1.19.4 Other Income

a) Interest/Surcharge on late payment/ overdue sundry debtors for sale of energy are
recognised when no significant uncertainty as to measurability or collectability exists.

b) Dividend income is recognized when the company’s right to receive payment is established.

c) Interest/surcharge/liquidated damages recoverable from suppliers and contractors,
wherever there is uncertainty of realisation/acceptance are accounted for on
receipts/acceptance.

d) Interest income on financial assets as subsequently measured at amortized cost is
recognised on a time-proportion basis using the effective interest method. Interest income
on impaired loans/receivable is recognised using the original effective interest rate.

e) Compensation from third parties including from insurance are accounted for on certainty of
realization.

1.20 Employee Benefits

Employee benefits consist of wages, salaries, benefits in kind, provident fund, pension,
gratuity, post-retirement medicalfacilities, leave benefits and otherterminalbenefits etc.

a) Defined Contribution Plans

i) A defined contribution plan is a post-employment benefit plan under which an entity
pays fixed contributions into separate trust and will have no legal or constructive
obligation to pay further amounts. Obligations for contributions to defined contribution
plans are recognised as an employee benefit expense in the periods during which
services are rendered by employees.

ii) The company also has Defined Contribution Pension Scheme for providing pension
benefit. The obligation of the company is to contribute the extent of amount not
exceeding 30% of basic pay and dearness allowance less employer contribution/liability
towards provident fund, gratuity, post-retirement medical facility (PRMF). The liability
for the same is recognized on accrual basis. The scheme is funded by company and
managed by separate trust created for this purpose.

b) Defined Benefit Plans

i. A defined benefit plan is a post-employment plan otherthan a defined contribution plan.

ii. The Company pays fixed contribution to Provident Fund at predetermined rates to a
separate trust, which invests the fund in permitted securities. The obligation of the
company is limited to such fixed contribution and to ensure a minimum rate of return to
the members as specified by GDI.

iii. The gratuity scheme is funded by the company and is managed by a separate trust.
Company’s liability is determined by the qualified actuary using the projected unit credit
method at the year-end and any shortfall in the fund size maintained by the trust is
additionally provided for by the company.

iv. The company has a Post Retirement Medical Facility (PRMF), under which retired
employees, spouse and eligible parents of retired employee are provided medical
facilities in the company hospitals/ empanelled hospitals/ other hospitals. They can also
avail treatment as Out- patient subject to rules and regulations made by the Company.

v. The company also has other benefit plans allowance on retirement/ death and memento
on superannuation.

vi. The Company’s net obligation in respect of defined benefit plans is calculated separately
for each plan by estimating the amount of future benefit that employees have earned in
return for their service in the current and prior periods; that benefit is discounted to
determine its present value. The fair value of any plan assets is deducted. The discount
rate is based on the prevailing market yields of Indian government securities as at the
reporting date that have maturity dates approximating the terms of the Company’s
obligations and that are denominated in the same currency in which the benefits are
expected to be paid.

vii. Service cost & net interest on the net defined benefit liability (asset) are recognised in
the Statement of Profit and Loss or included in the carrying amount of an asset if another
standard permits such inclusion in the period in which they arise.

viii. Re-measurements 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 OCI in the period in which
they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

c) Other Long-term employee benefits

Benefits under the Company’s leave encashment scheme constitute other long term
employee benefits.

The Company’s net obligation in respect of long-term employee benefits is the amount of
future benefits that employees have earned in return for their service in the current and prior
periods. The scheme is unfunded and liability for the same is recognised on the basis of
actuarial valuation. Actuarial gains or losses are recognised in the Statement of Profit and
Loss or included in the carrying amount of an asset if another standard permits such
inclusion in the period in which they arise.

Benefits under the Company’s leave encashment, long-service award and economic
rehabilitation scheme constitute other long term employee benefits.

The Company’s net obligation in respect of these long-term employee benefits is calculated
separately for each plan by estimating the amount of future benefit that employees have
earned in return for their service in the current and prior periods; that benefit is discounted to
determine its present value and the fair value of any related assets is deducted. The discount
rate is based on the prevailing market yields of Indian government securities as at the
reporting date that have maturity dates approximating the terms of the Company’s
obligations and that are denominated in the same currency in which the benefits are
expected to be paid.

The actuarial calculation is performed annually by a qualified actuary using the projected
unit credit method. Any actuarial gains or losses are recognized in statement of profit and
loss account in the period in which they arise.

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

d) Short-term Benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed in the period in which the service is provided.

e) Terminal Benefits

Expenses incurred on terminal benefits in the form of ex-gratia payments and notice pay on
voluntary retirement schemes, if any, are charged to the profit and loss in the year of
incurrence of such expenses.

1.21 Depreciation and amortization

a) Depreciation on Property, Plant & Equipment of the Company’s Operating Units is charged to
the Statement of Profit & Loss on the straight-line method, using the rates and methodology
prescribed by the Central Electricity Regulatory Commission (CERC) for tariff determination,
except for assets specified in Policy No. 1.21(c) below. This is in compliance with the provisions
of Part B of Schedule II of the Companies Act, 2013.

b) Depreciation on Property, Plant & Equipment of other than Operating Units of the Company is
charged to the extent of 90% of the cost of the asset following the rates notified by CERC for
the fixation of tariff except for assets specified in policy no. 1.21(c) below.

c) Depreciation on the following items of Property, Plant and Equipment is charged on straight
line method on estimated useful life:

i. Computer & Peripherals depreciated fully (100%) in 3 years.

ii. Mobile Phones depreciated fully (100%) in 2 years.

iii. Furniture & Fixture, Office Equipment and Electrical Equipment are depreciated in 5-15
yearswith residual value of 10%.

iv. Solar and Wind Power plants which are not governed by CERC regulation are depreciated
in 25 yearswith residualvalue of 10%.

The useful life of these assets are reviewed from time to time and adjusted prospectively,
wherever required.

d) Depreciation on additions to /deductions from Property, Plant & Equipment during the year is
charged on pro-rata basis from / up to the month on which the asset is available for use /
disposed.

e) Temporary erections are depreciated fully (100%) in the year of acquisition /capitalization.

f) Assets costing upto ? 5000/- are fully depreciated in the year of acquisition.

g) Expenditure on software recognized as Intangible Asset’ and is amortized fully on straight
line method over a period of legal right to use or three years, whichever is less. Other
intangible assets with a finite useful life are amortized on a systematic basis over its useful
life. The amortisation period and the amortisation method of intangible assets with a finite
useful life is reviewed at each financialyear end.

h) Right-of-use land and buildings relating to generation of electricity business governed by
CERC Tariff Regulations are fully amortized over lease period or life of the related plant
whichever is lower following the rates and methodology notified by the CERC Tariff
Regulations.

Right-of-use land and buildings relating to generation of electricity business which are not
governed by CERC tariff Regulations are fully amortized over lease period or life of the related
plant whichever is lower.

Other Right of use assets are depreciated from the commencement date on a straight-line
basis over the shorter of the lease term and useful life of the underlying asset.

i) Tangible Assets created on leasehold land are depreciated to the extent of 90% of original
cost over the balance available lease period of respective land from the date such asset is
available for use or at the applicable depreciation rates & methodology notified by CERC tariff
regulationsfor such assets, whichever is higher.

j) Where the cost of depreciable assets has undergone a change during the year due to
increase/decrease in long term liabilities on account of exchange fluctuation, price
adjustment, settlement of arbitration/court cases, change in duties or similar factors, the
unamortized balance of such assets is depreciated prospectively over the residual life of
such asset determined following the applicable accounting policies relating to depreciation/
amortization.

k) Where the life and / or efficiency of an asset is increased due to renovation and
modernization, the expenditure thereon along with its unamortized depreciable amount is
charged prospectively over the revised / remaining useful life determined by technical
assessment.

l) Spares parts procured along with the Plant & Machinery or subsequently which are
capitalized and added in the carrying amount of such item are depreciated over the
residual useful life of the related plant and machinery at the rates and methodology
notified by the CERC.

m) Expenditure on Catchment Area T reatment (CAT) Plan during construction is capitalized along
with dam/civil works. Such expenditure during O&M stage is charged to revenue in the year of
incurrence of such expenditure.

1.22 Income Taxes

Income tax expense comprises current tax and deferred tax. Current Tax is recognised in the
Statement of Profit and Loss, except to the extent that it relates to items recognised directly
in equity or other comprehensive income, in which case the tax is also recognised directly in
equity or in other comprehensive income

a) Current income tax

Current tax is expected tax payable on taxable profit for the year, using tax rates enacted or
substantively enacted at the balance sheet date and any adjustments to tax payable in
respect of previous years.

b) Deferred tax

Deferred tax is recognised using the balance sheet method, providing for temporary
differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax
rates that are expected to be applied to temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted by the reporting date. Deferred tax
assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the
same taxable entity, or on different tax entities, but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
Deferred tax is recognised in the statement of profit and loss except to the extent that it
relates to items recognised directly in other comprehensive income or equity, in which case
it is recognised in other comprehensive income or equity.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits
will be available against which the temporary difference can be utilised. Deferred tax assets
are reviewed at each reporting date and are reduced to the extentthat it is no longer probable
that the related tax benefit will be realised.

Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax
laws in India, which is likely to give future economic benefits in the form of availability of set
off against future income tax liability. MAT credit is recognized as deferred tax asset in the
balance sheet when the asset can be measured reliably and it is probable that the future
taxable profit will be available against which MAT credit can be utilized.

1.23 Dividend Distribution:

Final Dividends and interim dividends payable to Company’s shareholders are recognized and
accounted for in the period in which they are approved by the shareholders and the Board of
Directors respectively.

1.24 Segment Reporting:

a) Segments have been identified taking into account nature of product and differential risk and
returns of the segment. These business segments are reviewed by the Management.

b) Electricity generation is the principal business activity of the company. Other operations viz.,
Consultancy works etc. do not form a reportable segment as per the Ind AS -108 - 'Operating
Segments’.

c) The company is having a single geographical segment as all its Power Stations are located
within the Country.

1.25 Statement of Cash Flows

a) Cash and cash equivalents includes cash/Drafts/Cheques on hand, deposits held at call with
financial institutions, other short-term highly liquid investments with original maturities of
three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value, and bank overdrafts. However for Balance
Sheet presentation, bank overdrafts are shown within "Borrowings” under current liabilities.

b) Statement of cash flows is prepared in accordance with the indirect method (whereby profit

or loss is adjusted for effects of non-cash transactions) prescribed in Ind AS-7 “Statement of
Cash Flows"

1.26 Material prior period errors

Material prior period errors are corrected retrospectively by restating the comparative
amounts for the prior periods presented in which error occurred. If the error occurred before
the earliest period presented, opening balances of assets, liabilities and equity for the
earliest period presented, are restated.

1.27 Earnings per share

a) Basic earnings per equity share is computed by dividing the net profit or loss attributable to
equity shareholders of the Company by the weighted average number of equity shares
outstanding during the financial year.

b) Diluted earnings per equity share is computed by dividing the net profit or loss attributable to
equity shareholders of the Company by the weighted average number of equity shares
considered for deriving basic earnings per equity share and also the weighted average
number of equity shares that could have been issued upon conversion of all dilutive potential
equity shares.

c) Basic and diluted earnings per equity share are also presented using the earnings amounts
excluding the movements in regulatory deferral account balances.

1.28 Current versus non-current classification

The Company presents assets and liabilities in the Balance Sheet based on current/non-
current classification.

An asset is currentwhen it is:

a) Expected to be realised or intended to be sold or consumed in the normal operating cycle

b) Held primarily for the purpose of trading

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

d) Cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least twelve months afterthe reporting period.

All other assets are classified as non-current.

Aliability is current when:

a) It is expected to be settled in the normal operating cycle

b) It is held primarily for the purpose of trading

c) It is due to be settled within twelve months afterthe reporting period, or

d) 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.

1.29 Miscellaneous

Minimum two percent of average profit (before tax) of three immediately preceding financial
years is transferred to CSR Trust for incurring expenditure towards Corporate Social
Responsibility (CSR).

2.42 Disclosure under the provisions of IND-AS 19 'Employee Benefits':-

a) Defined Contribution plans:

(I) Pension:

The company has Defined Contribution Pension Scheme and is contributing to the National Pension System(NPS).The liability for the same is recognized on accrual basis. An amount of 1249
Lakh (P.Y: T 1245 Lakh) for the year is recognized as expense towards contributions to NPS for the year and charged to the statement of profit and loss.

b) Defined benefit plans:

(i) Employers contribution to Provident Fund:

The Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the fund in permitted securities. The obligation of the company is limited to
such fixed contribution and to ensure a minimum rate of return to the members as specified by GDI. The liability for the same is recognized on the basis of actuarialvaluation. EPFO has not yet
notified the interest rate on the employees provident fund for the F.Y. 2024-25. Pending notification of the rate by the Government, actuarial valuation has been carried out considering the
provisional interest rate of 8.25% recommended by Ministry of Labour. However, actual obligation, if any shall be ascertained andpaidtothe trust after the notification of the rate by EPFO.
,j£ Further, contribution to employee pension scheme has been paid to the appropriate authorities.

(i) Capital works

Contractors have lodged claims aggregating to ? 28817 Lakh (PY: T 31934 Lakh) against the Company on account of rate & quantity deviation, cost relating to extension of time and idling charges
due to stoppage of work/delays in handing over the site etc. The company has created a provision of T Nil ( P.Y.: 1660 lakh) against these claims. These claims are being contested by the
company as being not admissible in terms of provisions of the respective contracts or are laying at arbitration tribunal/other forums/under examination with the Company.

(ii) Land Compensation cases

In respect of land acquired for the projects, some of the land oustees have filed claims for higher compensation amounting to ? 2506 Lakh (PY: ? 2506 Lakh) before various authorities/courts.
Company has shown the same as contingent liability as possibility of any outflow in settlement of these claims is considered as remote.

(iii) Disputed Tax Demand

The Income Tax Department had raised a demand of 8819 lakh (P.Y.: < 3094 lakh) for various assessment years. The company is contesting the cases & filed appeals with appropriate Income Tax
Appellate Authorities. Consequently, company has deposited T 937 lakh (PY.: ? 568 lakh) towards disputed income tax demands and an additional amount of ? 1493 lakh (P.Y.: Nil) has been
adjusted by the Income Tax Department from tax refunds of various assesment years. During the previous year, GST department had raised a demand of ? 16233 lakh towards GST on late
payments surcharge and 10299 lakh towards GST under RCM on compensatory afforestation. These matters have been adjudicated in favour of the company. There is also a contingent liability
amounting to ? 155 lakh (PY.: ?161lakh) towards TDS, GST and other tax matters.

(iv) Guarantees

The company has given a corporate guarantee for a loan drawn by SJVN Arun-3 Power Development Company Pvt. Ltd, a subsidiary company. Amount outstanding as on 31.03.2025 amounting to
T 342141lakh (P.Y.: T 240099 lakh) has been shown as contingent liability.

(v) Water cess

The Government of Himachal Pradesh, through its notification dated 16.02.2023, imposed water cess on the generation of electricity in Himachal Pradesh. The company operates two projects
totalling 1912 MWin the state. A water cess bill amounting to 28019 Lakh has been issued by the Government of Himachal Pradesh. However, the Government of India, Ministry of Power, through
letters dated 25.04.2023 and 25.10.2023, has declared this imposition as illegal and unconstitutional, advising states against levying any taxes/duties contrary to constitutional provisions and
recommending their withdrawal. Additionally, CPSEs have been advised not to make payments for such taxes and to challenge them in court. As a precautionary measure, the company filed a
writ petition against the said notification. Subsequently, the Hon'ble High Court of Himachal Pradesh has ruled in favour of the company, declaring the levy unconstitutional. However, the
Government of Himachal Pradesh hasfiled an appeal to the Supreme Court against the decision. The amount billed till date has been disclosed contingent liabilities.

(vi) Others

Other Contingent liability is in respect of bills discounted with banks against trade receivables amounting to ? Nil (PY: 24725 lakh) . In case of any claim on the Company from the banks in this
regard, entire amount shall be recoverable from the beneficiaries along with surcharge.

B) FAIR VALUATION MEASUREMENT

(i) Fair Value Hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised
cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the company has to classify its
financial instruments into the three levels prescribed under the accounting standards.

Level1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and traded bonds that have quoted price. The fair value of all equity
instruments including bonds which are traded in the recognised Stock Exchange and money markets are valued using the closing prices as at the reporting date.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as
possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. This includes security deposits/ retention
money and loans at below market rates of interest.

i) Credit risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its
operating activities (primarily trade receivables) and from itsfinancing activities including deposits with banks and financial institutions.

ii) Liquidity risk

Liquidity risk is the riskthat the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.

iii) Market risk

Market risk is the riskthat the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate
risk, interest rate risk and other price risks. Financial instruments affected by market risk include loans and borrowings, deposits, investments. Foreign currency risk is the risk that the fair value or
future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. 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. This is based on the financial assets and financial liabilities held as at 31st March, 2025 and 31st March, 2024.

The company operates mainly in regulated environment. T ariff hydro power stations of the company is fixed by the Central Electricity Regulatory Commission (CERC) through Annual Fixed Charges
(AFC) comprising the following five components: 1. Return on Equity (RoE), 2. Depreciation, 3. Interest on Loans, 4. Operation & Maintenance Expenses and 5. Interest on Working Capital Loans. In
addition to the above, Foreign Currency Exchange Variation and Taxes are also recoverable from Beneficiaries in terms of the Tariff Regulations. Hence variation in interest rate, currency exchange
rate variations and other price risk variations are recoverable from tariff and do not impact the profitability of the company.

The company's risk management is carried out as per policies approved by Board of Directors from time to time.

(A) Credit Risk

The Company is exposed to credit riskfrom its operating activities (primarily trade receivables) and from itsfinancing activities, including deposits with banks and other financial instruments.

a) Trade Receivables

The Company extends credit to customers in normal course of business. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored.
The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are mainly state government authorities and operate in largely independent markets.

CERC tariff regulations 2024-29 allows the Company to raise bills on beneficiaries for late-payment surcharge which adequately compensates the Company for time value of money arising due to
delay in payment. Further, the fact that beneficiaries are primarily State Governments/ State Discerns and considering the historical credit loss experience for trade receivables, the Company does
not envisage either impairment in the value of receivables from beneficiaries or loss due to time value of money due to delay in realization of trade receivables.

b) Financial assets at amortised cost

Employee Loans: The Company has given loans to employees at concessional rates as per the Company's policy which have been measured at amortised cost at Balance Sheet date. The recovery of the
loan is on fixed instalment basis from the monthly salary of the employees. Management has assessed the past data and does not envisage any probability of default on these loans.

c) Financial instruments and cash deposits

The Company considers factors such as track record, size/networth of the institution/bank, market reputation and service standards and limits and policies as approved by the board of directors to
select the banks with which balances and deposits are maintained. The Company invests surplus cash in short term deposits with scheduled Banks.

(B) Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet
obligations when due.

The Company’s objective is to maintain optimum levels of liquidity at all times to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess
operating cash flows to meet its need for funds. The current committed lines of credit and internal accruals are sufficient to meet its short to medium term expansion needs. The Company monitors
rolling forecasts of its liquidity requirements to ensure that it has sufficient cash to meet capital expenditure and operational needs while maintaining sufficient headroom on its undrawn committed
borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

The above foreign currency risk exposure isfor :

i) Loan taken in USD for construction of Rampur Hydro Power Station from World Bank.

ii) External Commercial Borrowing (ECB) in USD for financing capital expenditures.

iii) Loan in JPY for construction of Omkareshwar Floating SPP and Raghanesda Power Project of SGEL Cost of such loan is recoverable from SGEL.

Out of the above, exposure on loan taken in USD for construction of Rampur Hydro Power Station from the world bank on account of exchange rate variation is recoverable from beneficiaries as per CERC guidelines
applicable to the period 2024-29.

As per accounting policy of the company transactions in foreign currency are initially recorded at exchange rate prevailing on the date of transaction. At each Balance Sheet date, monetary items denominated in
foreign currency are translated at the exchange rates prevailing on that date. Non-monetary items denominated in foreign currency are reported at the exchange rate prevailing at the date of transaction.
Exchange differences arising on translation or settlement of monetary items are recognised in the statement of profit and loss in the year in which it arises with the exception that exchange differences on long
term monetary items related to acquisition of fixed assets entered up to March 31,2016 are adjusted to carrying cost of fixed assets.

(3) Capital Management

(a) Capital RiskManagement

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The primary objective of the Company’s capital
management is to maximize the shareholder value. The Company’s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard
the Company’s ability to continue as a going concern in order to support its business and provide maximum returnsfor shareholders. The Company also proposes to maintain an optimal capital structure to reduce
the cost of capital. No changes were made in the objectives, policies or processes during the year ended 31st March, 2025.

The Company monitors capital using Debt Equity ratio, which is total debt divided by total capital. The Debt Equity ratio are as follows:

2.62 Disclosure relating to creation of Regulatory Deferral Accounts as per Ind AS 114:

a) The company is mainly engaged in generation and sale of electricity. The price to be charged by the company for electricity sold to its customers is determined by the CERC which provides extensive
guidance on the principles and methodologies for determination of the tariff for the purpose of sale of electricity. The tariff is based on allowable costs like interest, depreciation, operation &
maintenance expenses, etc. with a stipulated return. This form of rate regulation is known as cost-of-service regulations which provide the Company to recover its costs of providing the goods or
services plus a fair return.

b) As per the CERC Tariff regulations any gain or loss on account of exchange rate variation during the construction period shall form part of the capital cost till the declaration of commercial operation
date. Exchange differences arising from settlement/translation of monetary item denominated in foreign currency to the extent recoverable from or payable to beneficiaries in subsequent periods
as per CERC Tariff Regulations are recognized on an undiscounted basis as regulatory deferral account debit/credit balance by credit/debit to movements in regulatory deferral account balances and
adjusted from the year in which the same becomes recoverable from or payable to the beneficiaries.

c) Interest charged to profit & loss account on account of arbitration awards in respect of hydro plants is included in regulatory deferral account debit balance as the same is recoverable from
beneficiaries through tariff in future.

d) Risks associated with future recovery/reversal of regulatory deferral account balances:

i) Demand risk due to changes in consumer attitudes, the availability of alternative sources of supply.

ii) Regulatory risk on account of changes in regulations and submission or approval of rate-setting application or the entity’s assessment of the expected future regulatory actions.

iii) Other market risks, if any.

(a) The increase in the trade receivables turnover ratio during the year is primarily on account of higher revenue from operations along with a decrease in average trade receivables.

(b) The increase in the Net Capital Turnover Ratio is on account of higher revenue from operations during the year as compared to the previous year, along with a decrease in net working capital.

2.64 Three hydro power projects-210 MW Luhri Hydro Electric Project Stage-1, 382 MW Sunni Dam Hydro Electric Project and 66 MW Dhaulasidh Hydro Electric Project were allotted to SJVN through
Memorandum of Understanding (MOU) by the Government of Himachal Pradesh (GoHP). As per clause 6 of the MoU, the detailed terms and conditions of Implementation Agreement shall be formulated
with the mutual consent of GoHP and SJVN. GoHP vide letter dated 06.08.2022 forwarded mutually agreed Implementation Agreement to be signed between GoHP and SJVN. However, Implementation
Agreement for these projects is yet to be signed. Pending signing of mutually Agreed implementation agreement between GoHP and SJVN for these projects, SJVN has commenced work on these
projects to avoid time and cost overruns. The Government of Himachal Pradesh has issued a notice with regard to commencement of work on these project in absence of implementation agreement.
GoHP seeks to re-negotiate the previously agreed terms & conditions and relaxations in respect of these projects before signing of Implementation Agreement. SJVN has submitted the replies to the
above notice and also filed a petition in the Hon’ble High Court of Himachal Pradesh to address the issue. The Hon’ble High Court has directed GoHP that no coercive action shall be taken against SJVN
with regard to the subject matter of dispute. The case is currently pending and the company is actively engaged in resolving the matter. Vide letter dated 22.04.2025, Government of Himachal Pradesh
has indicated the Government’s intention to consider taking back these projects, along with appointing an evaluator in this regard. Based on the current circumstances and pending final decisions,
the expenditure related to these projects upto 31.03.2025 amounting to T 73051 lakh and T 248368 lakh under Property, Plant and Equipment/ Intangible assets and Capital Work-in-Progress,
continues to be recognized in the financialstatements respectively.

2.65 Board of Directors have authorised Director (Finance) and Company Secretary to rectify the errors and carry out modifications, if any.

For and on behalf of the Board of Directors

X

(Soumendra Das) (Rajendra Prasad Goyal) (Bhupender Gupta)

Company Secretary Director (Finance) Chairman & Managing Director

FCS-4833 0IN:08645380 DIN:0694094l

These are the notes referred to in our report of even date

For Charanjit Singh & Associates

Chartered Accountants

FRN- 015328N

(Avneet Singh)

Partner

M.No:526217

Place: New Delhi

Date: May 29, 2025