Accounting Policies of EKI Energy Services Ltd. Company

Mar 31, 2025

1. Corporate Information

EKI Energy Services Limited (referred to as “EKI” or
“the Company”) is incorporated in the State of Madhya
Pradesh, India. The registered office of the Company is
Plot No. 48, Scheme No. 78, Part II, Vijay Nagar, Indore.
The corporate office of the company is situated at EKI
Embassy, A-35 Scheme 78 Part 1 Phase 2, Vijay Nagar,
Indore, Madhya Pradesh, India, 452010. The Company is
mainly in the following businesses:

a) Carbon credit offsetting and carbon advisory services

b) Implementation and Development of carbon credit
eligible projects

Note:2

2. Statement of Compliance

These financial statements have been prepared in
accordance with the Indian Accounting Standards
(hereinafter referred to as the ‘Ind AS'') as notified by
Ministry of Corporate Affairs pursuant to Section 133
of the Companies Act, 2013 (‘Act'') read with of the
Companies (Indian Accounting Standards) Rules, 2015
as amended from time to time.

These financial statements for the year ended 31 March
2025 are the financials with comparatives, prepared
under Ind AS.

These financial statements have been prepared and
presented under the historical cost convention, on the
accrual basis of accounting except for certain financial
assets and liabilities that are measured at fair values
at the end of each reporting period, as stated in the
accounting policies stated out below.

3. Basis of Preparation

These standalone financial statements have been
prepared on historical cost basis except for certain
financial instruments and defined benefit plans which
are measured at fair value or amortised cost at the end of
each reporting period. Historical cost is generally based
on the fair value of the consideration given in exchange
for goods and services. 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. All assets and liabilities have
been classified as current and non-current as per the
Company''s normal operating cycle. Based on the nature
of services rendered to customers and time elapsed
between deployment of resources and the realization
in cash and cash equivalents of the consideration for
such services rendered, the Company has considered an
operating cycle of 12 months.

The statement of cash flows has been prepared under
indirect method, whereby profit or loss is adjusted for
the effects of transactions of a non-cash nature, any
deferrals or accruals of past or future operating cash
receipts or payments and items of income or expense
associated with investing or financing cash flows. The
cash flows from operating, investing and financing
activities of the Company are segregated. The Company
considers all highly liquid investments that are readily
convertible to known amounts of cash and are subject
to an insignificant risk of changes in value to be cash
equivalents.

These standalone financial statements have been
prepared in Indian Rupee (?) which is the functional
currency of the Company. Foreign currency transactions
are recorded at exchange rates prevailing on the date
of the transaction. Foreign currency denominated
monetary assets and liabilities are retranslated at the
exchange rate prevailing on the balance sheet dates and
exchange gains and losses arising on settlement and
restatement are recognized in the statement of profit
and loss. Non-monetary assets and liabilities that are
measured in terms of historical cost in foreign currencies
are not retranslated.

The significant accounting policies used in preparation
of the standalone financial statements have been
discussed in the respective notes.

All the values are rounded to the nearest Lakhs
('' 00,000) except when otherwise indicated.

4. Use of estimates and judgements

The preparation of standalone financial statements
in conformity with the recognition and measurement
principles of Ind AS requires management of the
Company to make estimates and judgements that
affect the reported balances of assets and liabilities,
disclosures of contingent liabilities as at the date of
standalone financial statements and the reported
amounts of income and expenses for the periods
presented.

Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognized in the period in which the estimates are
revised and future periods are affected.

The Company uses the following critical accounting
estimates in preparation of its standalone financial
statements:

(a) Revenue recognition: Revenue for fixed-price contracts
is recognized when the performance obligation related
to the standalone transaction price is satisfied by the
company. The Company uses judgement to estimate
the performance obligation related to the standalone
transaction price.

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(b) Useful lives of property, plant and equipment: The

Company reviews the useful life of property, plant and
equipment at the end of each reporting period. This
reassessment may result in change in depreciation
expense in future periods. The useful life of the assets
is considered in accordance with Schedule II of the
Companies Act, 2013.

(c) Impairment of investments in subsidiaries: The

Company reviews its carrying value of investments
carried at cost (net of impairment, if any) annually, or
more frequently when there is indication for impairment.
If the recoverable amount is less than its carrying
amount, the impairment loss is accounted for in the
statement of profit and loss.

(d) Fair value measurement of financial instruments: When
the fair value of financial assets and financial liabilities
recorded in the balance sheet cannot be measured
based on quoted prices in active markets, their fair value
is measured using valuation techniques including the
Discounted Cash Flow model. The inputs to these models
are taken from observable markets where possible, but
where this is not feasible, a degree of judgement is
required in establishing fair values. Judgements include
considerations of inputs such as liquidity risk, credit
risk and volatility. Changes in assumptions about these
factors could affect the reported fair value of financial
instruments.

(e) Provision for income tax and deferred tax assets: The

Company uses estimates and judgements based on the
relevant rulings in the areas of allocation of revenue,
costs, allowances and disallowances which is exercised
while determining the provision for income tax. A deferred
tax asset is recogniged to the extent that it is probable
that future taxable profit will be available against which
the deductible temporary differences and tax losses
can be utilized. Accordingly, the Company exercises its
judgement to reassess the carrying amount of deferred
tax assets at the end of each reporting period.

(f) Provisions and contingent liabilities: The Company
estimates the provisions that have present obligations as
a result of past events and it is probable that outflow of
resources will be required to settle the obligations. These
provisions are reviewed at the end of each reporting
period and are adjusted to reflect the current best
estimates. The Company uses significant judgements
to assess contingent liabilities. Contingent liabilities
are recogniged when there is a possible obligation
arising from past events, the existence of which will be
confirmed only by the occurrence or non-occurrence of
one or more uncertain future events not wholly within
the control of the Company or a present obligation that
arises from past events where it is either not probable
that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount cannot
be made. Contingent assets are not recogniged in the
standalone financial statements.

(g) Employee benefits: The accounting of employee benefit

plans in the nature of defined benefit requires the
Company to use assumptions. These assumptions have
been explained under employee benefits note.

5. Financial assets, financial liabilities and equity
instruments

Financial assets and liabilities are recogniged when the
Company becomes a party to the contractual provisions
of the instrument. Financial assets and liabilities are
initially measured at fair value. Transaction costs that
are directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from
the fair value measured on initial recognition of financial
asset or financial liability.

The Company derecogniges a financial asset only when
the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership of
the asset to another entity. The Company derecogniges
financial liabilities when, and only when, the Company''s
obligations are discharged, cancelled or have expired.

Offsetting of financial assets and financial liabilities
- where there is a currently legally enforceable right
to set off the recognised amounts and an intention to
either settle on a net basis or to realise the asset and the
liability simultaneously, financial assets and financial
liabilities are offset and the net amount is presented on
the statement of financial position. In the absence of
such conditions, financial assets and financial liabilities
are presented on a gross basis.

Cash and cash equivalents

The Company considers all highly liquid investments,
which are readily convertible into known amounts of
cash that are subject to an insignificant risk of change in
value, to be cash equivalents. Cash and cash equivalents
consist of balances with banks which are unrestricted
for withdrawal and usage.

Financial assets at amortized cost

Financial assets are subsequently measured at
amortiged cost if these financial assets are held within a
business whose objective is to hold these assets in order
to collect contractual cash flows and the contractual
terms of the financial assets give rise on specified dates
to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

Financial assets at fair value through other
comprehensive income

Financial assets are measured at fair value through
other comprehensive income if these financial assets
are held within a business whose objective is achieved by
both collecting contractual cash flows on specified dates
that are solely payments of principal and interest on
the principal amount outstanding and selling financial
assets. The Company has made an irrevocable election

to present subsequent changes in the fair value of equity
investments not held for trading in other comprehensive
income.

Financial assets at fair value through profit or loss

Financial assets are measured at fair value through profit
or loss unless they are measured at amortiged cost or at
fair value through other comprehensive income on initial
recognition. The transaction costs directly attributable
to the acquisition of financial assets and liabilities at fair
value through profit or loss are immediately recogniged
in statement of profit and loss.

Investment in subsidiaries

Investments in subsidiaries are measured at cost less
impairment loss, if any.

Financial liabilities

Financial liabilities are measured at amortiged cost
using the effective interest method.

Equity instruments

An equity instrument is a contract that evidences
residual interest in the assets of the company after
deducting all of its liabilities. Equity instruments issued
by the Company are recogniged at the proceeds received
net of direct issue cost.

Impairment of financial assets (other than at fair
value)

The Company assesses at each date of balance sheet
whether a financial asset or a group of financial
assets is impaired. Ind AS 109 requires expected credit
losses to be measured through a loss allowance. The
Company recogniges lifetime expected losses for all
contract assets and / or all trade receivables that do
not constitute a financing transaction. In determining
the allowances for doubtful trade receivables, the
Company has used practical expedience by computing
the expected credit loss allowance for trade receivables
based on a provision matrix. The provision matrix takes
into account historical credit loss experience and is
adjusted for forward looking information. The expected
credit loss allowance is based on the ageing of the
receivables that are due and allowance rates used in the
provision matrix.

6. Leases

A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a
period of time in exchange for consideration.

Company as a Lessee

The Company accounts for each lease component
within the contract as a lease separately from non¬
lease components of the contract and allocates the
consideration in the contract to each lease component
on the basis of the relative standalone price of the lease
component and the aggregate standalone price of the
non-lease components.

The Company recognises right-of-use asset representing

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

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

The Company has elected not to apply the requirements
of Ind AS 116 Leases to short-term leases of all assets $

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that have a lease term of 12 months or less and leases
for which the underlying asset is of low value. The lease
payments associated with these leases are recognised
as an expense on a straight-line basis over the lease
term.

Company as a Lessor

At the inception of the lease the Company classifies
each of its leases as either an operating lease or a
finance lease. The Company recognises lease payments
received under operating leases as income on a straight¬
line basis over the lease term. In case of a finance lease,
finance income is recognised over the lease term based
on a pattern reflecting a constant periodic rate of return
on the lessor''s net investment in the lease. When the
Company is an intermediate lessor it accounts for its
interests in the head lease and the sub-lease separately.
It assesses the lease classification of a sub-lease with
reference to the right-of-use asset arising from the head
lease, not with reference to the underlying asset. If a
head lease is a short-term lease to which the Company
applies the exemption described above, then it classifies
the sub-lease as an operating lease.

If an arrangement contains lease and non-lease
components, the Company applies Ind AS 115 Revenue
from contracts with customers to allocate the
consideration in the contract.

7. Non-Financial Assets and Non-Financial Liabilities
a) Property, Plant and equipment

i) Property, plant and equipment are stated at cost,
less accumulated depreciation and impairment
loss, if any except for items covered by Ind-AS
116. The cost comprises purchase price, borrowing
costs if capitalization criteria are met and directly
attributable cost of bringing the asset to its working
conditions for the intended use.

Depreciation is provided for property, plant and
equipment on a written-down value basis so as
to expense the cost less residual value over their
estimated useful lives based on a technical evaluation.
The estimated useful lives and residual values are
reviewed at the end of each reporting period, with the
effect of any change in estimate accounted for on a
prospective basis.

ii) Capital work-in-progress comprises cost of property,
plant and equipment and related expenses that are
not yet ready for their intended use at the reporting
date.

Depreciation is not recorded on capital work-in¬
progress until construction and installation are
complete and the asset is ready for its intended use.

iii) Property, plant and equipment with finite life are
evaluated for recoverability whenever there is any
indication that their carrying amounts may not
be recoverable. If any such indication exists, the
recoverable amount (i.e. higher of the fair value less
cost to sell and the value-in-use) is determined on

an individual asset basis unless the asset does not
generate cash flows that are largely independent of
those from other assets. In such cases, the recoverable
amount is determined for the cash generating unit
(CGU) to which the asset belongs. If the recoverable
amount of an asset (or CGU) is estimated to be less
than it''s carrying amount, the carrying amount of the
asset (or CGU) is reduced to its recoverable amount.
An impairment loss is recognized in the statement of
profit and loss.

b) Intangible assets

Intangible assets acquired or developed are measured
on initial recognition at cost and stated at cost less
accumulated amortisation and impairment loss, if
any. Intangible assets with finite life are evaluated for
recoverability whenever there is any indication that
their carrying amounts may not be recoverable. If any
such indication exists, the recoverable amount (i.e.
higher of the fair value less cost to sell and the value-
in-use) is determined on an individual asset basis unless
the asset does not generate cash flows that are largely
independent of those from other assets. In such cases,
the recoverable amount is determined for the cash
generating unit (CGU) to which the asset belongs. If the
recoverable amount of an asset (or CGU) is estimated to
be less than its carrying amount, the carrying amount of
the asset (or CGU) is reduced to its recoverable amount.
An impairment loss is recognised in the statement of
profit and loss.

Intangible assets consist of cook stove project wherein
various household improved cook stoves are installed at
various locations across globe, replacing the traditional
mud-based cook stoves. These projects are eligible for
generation of carbon credits upon registration and
validation from prescribed authorities enabling the
company to register and trade carbon credits from
the said project. As the future economic benefits from
installation of the cook stoves and registration of carbon
credits will flow to the company after registration and
validation of the project, the amount of expenditure
incurred towards installation of such cook stoves is
reported as Intangible Assets under Development. Upon
successful registration, validation and verification of the
respective projects, the company has capitalized such
amount as Intangible Assets (Project Cook Stove). As on
date, the value of Intangible Assets under Development
is Rs. 209.37 Lakhs (Rs. 8612.04 as on 31st March 2024)
and value of Intangible Assets (Project Cook Stove) is Rs.
8203.62 Lakhs (Rs. 757.63 as on 31st March 2024).

c) Depreciation/ amortisation on property, plant and
equipment/ intangible assets

Depreciable amount for property, plant and equipment/
intangible fixed assets is the cost of an asset, or other
amount substituted for cost, less its estimated residual
value.

i) Depreciation on property, plant and equipment is
provided on written-down value method as per the

useful life prescribed in Schedule II to the Companies
Act, 2013 except in respect of the following categories
of assets, where the life of the assets has been
assessed lower than the life prescribed in Schedule
II, based on technical advice, taking into account the
nature of the asset, the estimated usage of the asset,
the operating conditions of the asset, past history of
replacement etc.

ii) Premium on Leasehold Land and Leasehold
Improvements are amortised over the period of
Lease.

iii) Intangible assets are amortised on straight line basis
over their respective individual useful lives estimated
by the management.

d) Impairment of Property, plant and equipment /
intangible assets

The carrying amounts of the Company''s property,
plant and equipment and intangible assets are
reviewed at each reporting date to determine whether
there is any indication of impairment. If there are
indicators of impairment, an assessment is made to
determine whether the asset''s carrying value exceeds
its recoverable amount. Where it is not possible to
estimate the recoverable amount of an individual asset,
the Company estimates the recoverable amount of the
cash generating unit to which the asset belongs.

Impairment is recognised in statement of profit and loss
whenever the carrying amount of an asset or its cash
generating unit exceeds its recoverable amount. The
recoverable amount is the higher of net selling price,
defined as the fair value less costs to sell, and value in
use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre¬
tax discount rate that reflects current market rates and
risks specific to the asset.

An impairment loss for an individual asset or cash
generating unit are reversed if there has been a change
in estimates used to determine the recoverable amount
since the last impairment loss was recognised and is only
reversed to the extent that the asset''s carrying amount
does not exceed the carrying amount that would have
been determined, net of depreciation or amortisation,
if no impairment loss had been recognised. Impairment
losses are recognised in the statement of profit and loss.

e) Investment property

Investment property are properties (land or a building—
or part of a building—or both) held to earn rentals and/
or for capital appreciation (including property under
construction for such purposes). Investment property
is measured initially at cost including purchase price,
borrowing costs. Subsequent to initial recognition,
investment property is measured at cost less
accumulated depreciation and impairment, if any.

Derecognition of property, plant and equipment /
Intangibles/ Investment property

The carrying amount of an item of property, plant and
equipment / intangibles/ investment property is de¬
recognised on disposal or when no future economic
benefits are expected from its use or disposal. The gain
or loss arising from the derecognition of an item of
property, plant and equipment / intangibles /investment
property is measured as the difference between the net
disposal in proceeds and the carrying amount of the
item and is recognised in the statement of profit and
loss when the item is de-recognised.

f) Cash and cash Equivalents

Cash and cash equivalents in the balance sheet comprise
cash in hand, balance at banks and bank deposits, 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.

g) Inventories

i) Carbon Credits:

Inventory of carbon credits are valued at cost or NRV,
whichever is lower. Cost of procured carbon credits
is measured at all direct and indirect cost incurred
for the purpose of bringing the carbon credits to its
present value and condition, except sunk cost incurred
before procurement or generation of credits. Cost of
generated carbon credits is measured considering all
costs incurred, including sunk costs like registration
expenses, designated operational entity (DOE) fees,
issuance expenses on any other expenses incurred
for the purpose of bringing the carbon credits to its
present value and condition, whether incurred during
the year of approval or not. NRV of carbon credits is
measured basis management''s estimate of future
realizable value of credits as the credits are traded
over the counter without any set parameter of
identification of market value.

The management''s estimate of NRV and future
realizable value of credits is adjusted considering
the anticipation of increase or decrease in prices,
company''s financial stability for holding such credits,
type of permanency in reduction or inflation of prices,
ongoing spot or forward deals in similar credits,
technology, vintage, location etc.

Inventory received as a percentage of share of
carbon credits in lieu of carbon advisory services
rendered are recognized as revenue as and when
the credits are received in the registry account of
the company, at the value of Right of First Refusal
(ROFR) price quoted to the vendor / market value of
the credits as identifiable through ongoing deals with
corresponding adjustment to the inventory of the
company. Alternatively, the share of carbon credits
received are directly accounted for as inventory
without corresponding impact on purchases and
revenue of the company, thereby the value of credits
received are credited to profit and loss account

through recordinginventory.
ii) Project Implementation and Development Material:

The company provides services of project
implementation and development to various
customers and deploys project implementation
and development material for execution of such
contracts. These materials are recorded as inventory
in the books of accounts of the company. The project
implementation and development material is valued
at cost.

h) Financial Instruments

Financial instruments are any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.

i) Initial Recognition

Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from
the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities
at fair value through profit or loss are recognised
immediately in the statement of profit and loss.

ii) Subsequent Measurement
Financial assets

Financial assets are classified into the following
specified categories: amortized cost, financial assets
‘at fair value through profit and loss'' (FVTPL), ‘Fair
value through other comprehensive income'' (FVTOCI).
The classification depends on the Company''s
business model for managing the financial assets
and the contractual terms of cash flows.

Debt Instrument

Amortised cost

A financial asset is subsequently measured at
amortised cost if it is held within a business model
whose objective is to hold the asset in order to collect
contractual cash flows and the contractual terms
of the financial asset give rise on specified dates
to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
This category generally applies to trade and other
receivables.

Fair value through other comprehensive income
(FVTOCI)

A ‘debt instrument'' is classified as at the FVTOCI if
both of the following criteria are met:

a. The objective of the business model is achieved both

by collecting contractual cash flows and selling the
financial assets.

b. The asset''s contractual cash flows represent solely
payments of principal and interest.

Debt instruments included with the FVTOCI
category are measured initially as well as at each
reporting date at fair value. Fair value movements
are recognized in the other comprehensive income
(OCI). However, the Company recognizes interest
income, impairment losses and reversals and foreign
exchange gain or loss in the statement of profit and
loss. On derecognition of the asset, cumulative gain or
loss previously recognised in OCI is reclassified from
the equity to statement of profit and loss. Interest
earned whilst holding FVTOCI debt instrument is
reported as interest income using the EIR method.

Fair value through Profit and Loss (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 amortised cost or FVTOCI
criteria, as at FVTPL. However, such election is
considered only if doing so reduces or eliminates a
measurement or recognition inconsistency (referred
to as ‘accounting mismatch'').

Debt instrument included within the FVTPL category
are measured at fair value with all changes recognised
in the statement of profit and loss.

Equity Investments

The Company subsequently measures all equity
investments at cost or fair value, as per its accounting
policies. Where the Company''s management has
elected to present fair value gains and losses on
equity investments in other comprehensive income,
there is no subsequent reclassification of fair value
gains and losses to statement of profit and loss.
Dividends from such investments are recognized in
statement of profit and loss as other income when the
Company''s right to receive payment is established.

Derivative financial instruments

Derivative financial instruments are classified and
measured at fair value through profit and loss.

Derecognition of financial assets

A financial asset is derecognized only when

i. The Company has transferred the rights to receive
cash flows from the asset or the rights have expired
or

ii. The Company retains the contractual rights to
receive the cash flows of the financial asset, but
assumes a contractual obligation to pay the cash
flows to one or more recipients in an arrangement.

Where the entity has transferred an asset, the

Company evaluates whether it has transferred
substantially all risks and rewards of ownership of
the financial asset. In such cases, the financial asset
is derecognized. Where the entity has not transferred
substantially all risks and rewards of ownership
of the financial asset, the financial asset is not
derecognized.

Impairment of financial assets

The Company measures the expected credit loss
associated with its assets based on historical trend,
industry practices and the business environment in
which the entity operates or any other appropriate
basis. The impairment methodology applied depends
on whether there has been a significant increase in
credit risk.

Financial liabilities and equity instruments

Debt or equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial
liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments
issued by the Company are recognised at the
proceeds received, net of direct issue costs.

Repurchase of the Company''s own equity
instruments is recognised and deducted directly in
equity. No gain or loss is recognised on the purchase,
sale, issue or cancellation of the Company''s own
equity instruments.

Financial liabilities
Subsequent Measurement

Financial liabilities measured at amortised cost

Financial liabilities are subsequently measured at
amortized cost using the EIR method. Gains and
losses are recognized in statement of profit and
loss when the liabilities are derecognized as well as
through the EIR amortization process. Amortized
cost is calculated by taking into account any discount
or premium on acquisition and fee or costs that are
an integral part of the EIR. The EIR amortization is
included in finance costs in the statement of profit
and loss.

Financial liabilities measured at fair value through
profit or loss (FVTPL) Financial liabilities at FVTPL
include financial liabilities held for trading and
financial liabilities designated upon initial recognition
as FVTPL. Financial liabilities are classified as held
for trading if they are incurred for the purpose of
repurchasing in the near term. Derivatives, including
separated embedded derivatives are classified
as held for trading unless they are designated as
effective hedging instruments. Financial liabilities

at fair value through profit or loss are carried in the
financial statements at fair value with changes in
fair value recognized in other income or finance costs
in the statement of profit and loss.

Derecognition of financial liabilities

A financial liability is derecognized 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
recognized in the statement of profit and loss.

Determination of fair value

Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an ordinary
transaction between market participants at the
measurement date.

In determining the fair value of its financial
instruments, the Company uses a variety of
methods and assumptions that are based on market
conditions and risks existing at each reporting date.
The methods used to determine fair value include
discounted cash flow analysis and available quoted
market prices. All methods of assessing fair value
result in general approximation of value, and such
value may never actually be realized.

i) Borrowings and Borrowing cost

Borrowings are initially recognised at net of transaction
costs incurred and measured at amortised cost. Any
difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in the
Statement of Profit and Loss over the period of the
borrowings using the EIR.

Preference shares, which are mandatorily redeemable on
a specific date are classified as liabilities. The dividend
on these preference shares is recognised as finance
costs in the Statement of Profit and Loss.

Borrowing costs attributable to the acquisition or
construction of qualifying assets till the time such
assets are ready for intended use are capitalised as
part of cost of the assets. All other borrowing costs are
expensed in the period they occur.

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Mar 31, 2024

3. BASIS OF PREPARATION

These standalone financial statements have been prepared on historical cost basis except for certain financial instruments and defined benefit plans which are measured at fair value or amortised cost at the end of each reporting period. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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. All assets and liabilities have been classified as current and non-current as per the Company''s normal operating cycle. Based on the nature of services rendered to customers and time elapsed between deployment of resources and the realization in cash and cash equivalents of the consideration for such services rendered, the Company has considered an operating cycle of 12 months.

The statement of cash flows has been prepared under indirect method, whereby profit or loss is adjusted

for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of income or expense associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated. The Company considers all highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value to be cash equivalents.

These standalone financial statements have been prepared in Indian Rupee (.) which is the functional currency of the Company. Foreign currency transactions are recorded at exchange rates prevailing on the date of the transaction. Foreign currency denominated monetary assets and liabilities are retranslated at the exchange rate prevailing on the balance sheet dates and exchange gains and losses arising on settlement and restatement are recognized in the statement of profit and loss. Nonmonetary assets and liabilities that are measured in terms of historical cost in foreign currencies are not retranslated.

The significant accounting policies used in preparation of the standalone financial statements have been discussed in the respective notes.

All the values are rounded to the nearest Lakhs (. 00,000) except when otherwise indicated.

4. USE OF ESTIMATES AND JUDGEMENTS

The preparation of standalone financial statements in conformity with the recognition and measurement principles of Ind AS requires management of the Company to make estimates and judgements that affect the reported balances of assets and liabilities, disclosures of contingent liabilities as at the date of standalone financial statements and the reported amounts of income and expenses for the periods presented.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods are affected.

The Company uses the following critical accounting estimates in preparation of its standalone financial statements:

(a) Revenue recognition: Revenue for fixed-price contracts is recognized when the performance obligation related to the standalone transaction price is satisfied by the company. The Company uses judgement to estimate the performance obligation related to the standalone transaction price.

(b) Useful lives of property, plant and equipment: The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.

(c) Impairment of investments in subsidiaries: The Company reviews its carrying value of investments carried at cost (net of impairment, if any) annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for in the statement of profit and loss.

(d) Fair value measurement of financial instruments: When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

(e) Provision for income tax and deferred tax assets: The Company uses estimates and judgements based on the relevant rulings in the areas of allocation of revenue, costs, allowances and disallowances which is exercised while determining the provision for income tax. A deferred tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Accordingly, the Company exercises its judgement to reassess the carrying amount of deferred tax assets at the end of each reporting period.

(f) Provisions and contingent liabilities: The Company estimates the provisions that have present obligations as a result of past events and it is probable that outflow of resources will be required to settle the obligations. These provisions are reviewed at the end of each reporting period and are adjusted to reflect the current best estimates. The Company uses significant judgements to assess contingent liabilities. Contingent liabilities are recognized when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. Contingent assets are not recognized in the

standalone financial statements.

(g) Employee benefits: The accounting of employee benefit plans in the nature of defined benefit requires the Company to use assumptions. These assumptions have been explained under employee benefits note.

5. FINANCIAL ASSETS, FINANCIAL LIABILITIES AND EQUITY INSTRUMENTS

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability.

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired.

Cash and cash equivalents

The Company considers all highly liquid investments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.

Financial assets at amortized cost

Financial assets are subsequently measured at amortized cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets. The Company has made an irrevocable election to present subsequent changes in the fair value of equity investments not held for trading in other comprehensive income.

Financial assets at fair value through profit or loss

Financial assets are measured at fair value through profit or loss unless they are measured at amortized cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in statement of profit and loss.

Investment in subsidiaries

Investments in subsidiaries are measured at cost less impairment loss, if any.

Financial liabilities

Financial liabilities are measured at amortized cost using the effective interest method.

Equity instruments

An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received net of direct issue cost.

Impairment of financial assets (other than at fair value)

The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. In determining the allowances for doubtful trade receivables, the Company has used practical expedience by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and allowance rates used in the provision matrix.

6. LEASES

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Company as a Lessee

The Company accounts for each lease component within the contract as a lease separately from nonlease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component and the aggregate standalone price of the non-lease components.

The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial

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

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

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

the lease term.

Company as a Lessor

At the inception of the lease the Company classifies each of its leases as either an operating lease or a finance lease. The Company recognises lease payments received under operating leases as income on a straight-line basis over the lease term. In case of a finance lease, finance income is recognised over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor''s net investment in the lease. When the Company is an intermediate lessor it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sublease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies Ind AS 115 Revenue from contracts with customers to allocate the consideration in the contract.

7 . NON-FINANCIAL ASSETS AND NON-FINANCIAL LIABILITIES

a) Property, Plant and equipment

i) Property, plant and equipment are stated at cost, less accumulated depreciation and impairment loss, if any except for items covered by Ind-AS 116. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working conditions for the intended use.

Depreciation is provided for property, plant and equipment on a straight-line basis so as to expense the cost less residual value over their estimated useful lives based on a technical evaluation. The estimated useful lives and residual values are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis.

ii) Capital work-in-progress comprises cost of property, plant and equipment and related expenses that are not yet ready for their intended use at the reporting date.

Depreciation is not recorded on capital work-inprogress until construction and installation are complete and the asset is ready for its intended use.

iii) Property, plant and equipment with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not

generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than it''s carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognized in the statement of profit and loss.

b) Intangible assets

Intangible assets acquired or developed are measured on initial recognition at cost and stated at cost less accumulated amortisation and impairment loss, if any. Intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss.

Intangible assets consist of cook stove project wherein various household improved cook stoves are installed at various locations across globe, replacing the traditional mud-based cook stoves. These projects are eligible for generation of carbon credits upon registration and validation from prescribed authorities enabling the company to register and trade carbon credits from the said project. As the future economic benefits from installation of the cook stoves and registration of carbon credits will flow to the company after registration and validation of the project, the amount of expenditure incurred towards installation of such cook stoves is reported as Intangible Assets under Development. Upon successful registration, validation and verification of the respective projects, the company has capitalized such amount as Intangible Assets (Project Cook Stove). As on date, the value of Intangible Assets under Development is Rs. 8612.04 Lakhs (Rs. 8494.62 as on 31st March 2023) and value of Intangible Assets (Project Cook Stove) is Rs. 757.63 Lakhs (Rs. 314.58 as on 31st March 2023).

c) Depreciation/ amortisation on property, plant and equipment/ intangible assets

Depreciable amount for property, plant and equipment/ intangible fixed assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

i) Depreciation on property, plant and equipment is provided on straight-line method as per the useful

life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, where the life of the assets has been assessed lower than the life prescribed in Schedule II, based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement etc.

ii) Premium on Leasehold Land and Leasehold Improvements are amortised over the period of Lease.

iii) Intangible assets are amortised on straight line basis over their respective individual useful lives estimated by the management.

d) Impairment of Property, plant and equipment / intangible assets

The carrying amounts of the Company''s property, plant and equipment and intangible assets are reviewed at each reporting date to determine whether there is any indication of impairment. If there are indicators of impairment, an assessment is made to determine whether the asset''s carrying value exceeds its recoverable amount. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.

I mpairment is recognised in statement of profit and loss whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. The recoverable amount is the higher of net selling price, defined as the fair value less costs to sell, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market rates and risks specific to the asset.

An impairment loss for an individual asset or cash generating unit are reversed if there has been a change in estimates used to determine the recoverable amount since the last impairment loss was recognised and is only reversed to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Impairment losses are recognised in the statement of profit and loss.

e) Investment property

Investment property are properties (land or a building— or part of a building—or both) held to earn rentals and/ or for capital appreciation (including property under construction for such purposes). Investment property is measured initially at cost including purchase price, borrowing costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and impairment, if any.

Derecognition of property, plant and equipment / Intangibles/ Investment property

The carrying amount of an item of property, plant and equipment / intangibles/ investment property is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment / intangibles / investment property is measured as the difference between the net disposal in proceeds and the carrying amount of the item and is recognised in the statement of profit and loss when the item is de-recognised.

f) Cash and cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash in hand, balance at banks and bank deposits, 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.

g) Inventories

i) Carbon Credits:

Inventory of carbon credits are valued at cost or NRV, whichever is lower. Cost of carbon credits is measured at all direct and indirect cost incurred for the purpose of bringing the carbon credits to its present value and condition, except sunk cost incurred before procurement or generation of credits. NRV of carbon credits is measured basis management''s estimate of future realizable value of credits as the credits are traded over the counter without any set parameter of identification of market value.

The management''s estimate of NRV and future realizable value of credits is adjusted considering the anticipation of increase or decrease in prices, company''s financial stability for holding such credits, type of permanency in reduction or inflation of prices, ongoing spot or forward deals in similar credits, technology, vintage, location etc.

Inventory received as a percentage of share of carbon credits in lieu of carbon advisory services rendered are recognized as revenue as and when the credits are received in the registry account of the company, at the value of Right of First Refusal (ROFR) price quoted to the vendor / market value of the credits as identifiable through ongoing deals with corresponding adjustment to the inventory of the company. Alternatively, the share of carbon credits received are directly accounted for as inventory without corresponding impact on purchases and revenue of the company, thereby the value of credits received are credited to profit and loss account through recording inventory.

ii) Project Implementation and Development Material:

The company provides services of project implementation and development to various

customers and deploys project implementation and development material for execution of such contracts. These materials are recorded as inventory in the books of accounts of the company. The project implementation and development material is valued at cost.

h) Financial Instruments

Financial instruments are any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

i) Initial Recognition

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the statement of profit and loss.

ii) Subsequent Measurement Financial assets

Financial assets are classified into the following specified categories: amortized cost, financial assets ''at fair value through profit and loss'' (FVTPL), ''Fair value through other comprehensive income'' (FVTOCI). The classification depends on the Company''s business model for managing the financial assets and the contractual terms of cash flows.

Debt Instrument

Amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. This category generally applies to trade and other receivables.

Fair value through other comprehensive income (FVTOCI)

A ''debt instrument'' is classified as at the FVTOCI if both of the following criteria are met:

a. The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets.

b. The asset''s contractual cash flows represent solely payments of principal and interest.

Debt instruments included with the FVTOCI category

are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses and reversals and foreign exchange gain or loss in the statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Fair value through Profit and Loss (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 amortised cost or FVTOCI criteria, as at FVTPL. However, such election is considered only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch'').

Debt instrument included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss.

Equity Investments

The Company subsequently measures all equity investments at cost or fair value, as per its accounting policies. Where the Company''s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to statement of profit and loss. Dividends from such investments are recognized in statement of profit and loss as other income when the Company''s right to receive payment is established.

Derivative financial instruments

Derivative financial instruments are classified and measured at fair value through profit and loss.

Derecognition of financial assets

A financial asset is derecognized only when

i. The Company has transferred the rights to receive cash flows from the asset or the rights have expired or

ii. The Company retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients in an arrangement.

Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognized. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.

Impairment of financial assets

The Company measures the expected credit loss

associated with its assets based on historical trend, industry practices and the business environment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

Financial liabilities and equity instruments

Debt or equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company''s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised on the purchase, sale, issue or cancellation of the Company''s own equity instruments.

Financial liabilities

Subsequent Measurement

Financial liabilities measured at amortised cost

Financial liabilities are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in statement of profit and loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the statement of profit and loss.

Financial liabilities measured at fair value through profit or loss (FVTPL) Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Derivatives, including separated embedded derivatives are classified as held for trading unless they are designated as effective hedging instruments. Financial liabilities at fair value through profit or loss are carried in the financial statements at fair value with changes in fair value recognized in other income or finance costs in the statement of profit and loss.

Derecognition of financial liabilities

A financial liability is derecognized 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 recognized in the statement of profit and loss.

Determination of fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between market participants at the measurement date.

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis and available quoted market prices. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

i) Borrowings and Borrowing cost

Borrowings are initially recognised at net of transaction costs incurred and measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Profit and Loss over the period of the borrowings using the EIR.

Preference shares, which are mandatorily redeemable on a specific date are classified as liabilities. The dividend on these preference shares is recognised as finance costs in the Statement of Profit and Loss.

Borrowing costs attributable to the acquisition or construction of qualifying assets till the time such assets are ready for intended use are capitalised as part of cost of the assets. All other borrowing costs are expensed in the period they occur.

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Mar 31, 2023

Forming part of the Financial Statements1. CORPORATE INFORMATION

EKI Energy Services Limited (referred to as "EKI" or "the Company") is incorporated in the State of Madhya Pradesh, India. The registered office of the Company is Plot No. 48, Scheme No. 78, Part II, Vijay Nagar, Indore. The corporate office of the company is situated at 902, 9th Floor, NRK Business Park, Scheme No. 54, Vijay Nagar, Indore. The Company is mainly in the following businesses:

a) Carbon credit offsetting and carbon advisory services

b) Implementation and Development of carbon credit eligible projects

2. STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (''Act'') read with of the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.

These financial statements for the year ended 31 March 2023 are the first financials with comparatives, prepared under Ind AS. For all previous periods including the year ended 31 March 2022, the Company had prepared its financial statements in accordance with the accounting standards notified under Companies (Accounting Standards) Rule, 2015 (as amended) and other relevant provisions of the Act (hereinafter referred to as ''Previous GAAP'') used for its statutory reporting requirement in India.

The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1st April, 2021 being the date of transition to Ind AS.

These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies stated out below.

Reconciliations and descriptions of the effect of the transition has been summarized in note 48 of the financial statements.

3. BASIS OF PREPARATION

These standalone financial statements have been prepared on historical cost basis except for certain financial instruments and defined benefit plans which are measured at fair value or amortised cost

at the end of each reporting period. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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. All assets and liabilities have been classified as current and non-current as per the Company''s normal operating cycle. Based on the nature of services rendered to customers and time elapsed between deployment of resources and the realization in cash and cash equivalents of the consideration for such services rendered, the Company has considered an operating cycle of 12 months.

The statement of cash flows has been prepared under indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of income or expense associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated. The Company considers all highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value to be cash equivalents.

These standalone financial statements have been prepared in Indian Rupee (.) which is the functional currency of the Company. Foreign currency transactions are recorded at exchange rates prevailing on the date of the transaction. Foreign currency denominated monetary assets and liabilities are retranslated at the exchange rate prevailing on the balance sheet dates and exchange gains and losses arising on settlement and restatement are recognized in the statement of profit and loss. Nonmonetary assets and liabilities that are measured in terms of historical cost in foreign currencies are not retranslated.

The significant accounting policies used in preparation of the standalone financial statements have been discussed in the respective notes.

All the values are rounded to the nearest Lakhs (. 00,000) except when otherwise indicated.

4. USE OF ESTIMATES AND JUDGEMENTS

The preparation of standalone financial statements in conformity with the recognition and measurement principles of Ind AS requires management of the Company to make estimates and judgements that affect the reported balances of assets and liabilities, disclosures of contingent liabilities as at the date of standalone financial statements and the reported amounts of income and expenses for the periods

presented.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods are affected.

The Company uses the following critical accounting estimates in preparation of its standalone financial statements:

(a) Revenue recognition: Revenue for fixed-price contracts is recognized when the performance obligation related to the standalone transaction price is satisfied by the company. The Company uses judgement to estimate the performance obligation related to the standalone transaction price.

(b) Useful lives of property, plant and equipment: The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.

(c) Impairment of investments in subsidiaries: The Company reviews its carrying value of investments carried at cost (net of impairment, if any) annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for in the statement of profit and loss.

(d) Fair value measurement of financial instruments: When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

(e) Provision for income tax and deferred tax assets: The Company uses estimates and judgements based on the relevant rulings in the areas of allocation of revenue, costs, allowances and disallowances which is exercised while determining the provision for income tax. A deferred tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Accordingly, the Company exercises its judgement to reassess the carrying amount of deferred tax assets at the end of each reporting period.

(f) Provisions and contingent liabilities: The Company estimates the provisions that have present obligations as a result of past events and it is probable that outflow of resources will be required

to settle the obligations. These provisions are reviewed at the end of each reporting period and are adjusted to reflect the current best estimates. The Company uses significant judgements to assess contingent liabilities. Contingent liabilities are recognized when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. Contingent assets are not recognized in the standalone financial statements.

(g) Employee benefits: The accounting of employee benefit plans in the nature of defined benefit requires the Company to use assumptions. These assumptions have been explained under employee benefits note.

5. FINANCIAL ASSETS, FINANCIAL LIABILITIES AND EQUITY INSTRUMENTS

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability.

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired.

Cash and cash equivalents

The Company considers all highly liquid investments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.

Financial assets at amortized cost

Financial assets are subsequently measured at amortized cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets. The Company has made an irrevocable election to present subsequent changes in the fair value of equity investments not held for trading in other comprehensive income.

Financial assets at fair value through profit or loss

Financial assets are measured at fair value through profit or loss unless they are measured at amortized cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in statement of profit and loss.

Investment in subsidiaries

Investments in subsidiaries are measured at cost less impairment loss, if any.

Financial liabilities

Financial liabilities are measured at amortized cost using the effective interest method.

Equity instruments

An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received net of direct issue cost.

Impairment of financial assets (other than at fair value)

The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. In determining the allowances for doubtful trade receivables, the Company has used practical expedience by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and allowance rates used in the provision matrix.

6. LEASES

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Company as a Lessee

The Company accounts for each lease component within the contract as a lease separately from nonlease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component and the aggregate standalone price of the non-lease components.

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

The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease-by-lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The Company recognises the amount of the remeasurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of

modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the remeasurement in statement of profit and loss.

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

Company as a Lessor

At the inception of the lease the Company classifies each of its leases as either an operating lease or a finance lease. The Company recognises lease payments received under operating leases as income on a straight-line basis over the lease term. In case of a finance lease, finance income is recognised over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor''s net investment in the lease. When the Company is an intermediate lessor it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sublease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies Ind AS 115 Revenue from contracts with customers to allocate the consideration in the contract.

7. NON-FINANCIAL ASSETS AND NON-FINANCIAL LIABILITIES

a) Property, Plant and equipment

i) Property, plant and equipment are stated at cost, less accumulated depreciation and impairment loss, if any except for items covered by Ind-AS 116. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working conditions for the intended use.

Depreciation is provided for property, plant and equipment on a straight-line basis so as to expense the cost less residual value over their estimated useful lives based on a technical evaluation. The estimated useful lives and residual values are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis.

ii) Capital work-in-progress comprises cost of property, plant and equipment and related expenses that are not yet ready for their intended use at the reporting date.

Depreciation is not recorded on capital work-inprogress until construction and installation are complete and the asset is ready for its intended use.

iii) Property, plant and equipment with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than it''s carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognized in the statement of profit and loss.

b) Intangible assets

Intangible assets acquired or developed are measured on initial recognition at cost and stated at cost less accumulated amortisation and impairment loss, if any. Intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss.

Intangible assets consist of cook stove project wherein various household improved cook stoves are installed at various locations across globe, replacing the traditional mud-based cook stoves. These projects are eligible for generation of carbon credits upon registration and validation from prescribed authorities enabling the company to register and trade carbon credits from the said project. As the future economic benefits from installation of the cook stoves and registration of carbon credits will flow to the company after registration and validation of the project, the amount of expenditure incurred towards installation of such cook stoves is reported as Intangible Assets under Development. Upon successful registration and validation of the respective projects, the company has capitalized such amount as Intangible Assets (Project Cook Stove). As on date, the value of Intangible Assets under Development is Rs. 8494.62 Lakhs (Rs. 393.22 as on 31st March 2022) and value of Intangible Assets (Project Cook Stove) is Rs. 314.58 Lakhs (Rs. Nil as on 31st March 2022).

c) Depreciation/ amortisation on property, plant and equipment/ intangible assets

Depreciable amount for property, plant and equipment/ intangible fixed assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

i) Depreciation on property, plant and equipment is provided on straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, where the life of the assets has been assessed lower than the life prescribed in Schedule II, based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement etc.

ii) Premium on Leasehold Land and Leasehold Improvements are amortised over the period of Lease.

iii) Intangible assets are amortised on straight line basis over their respective individual useful lives estimated by the management.

d) Impairment of Property, plant and equipment / intangible assets

The carrying amounts of the Company''s property, plant and equipment and intangible assets are reviewed at each reporting date to determine whether there is any indication of impairment. If there are indicators of impairment, an assessment is made to determine whether the asset''s carrying value exceeds its recoverable amount. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.

Impairment is recognised in statement of profit and loss whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. The recoverable amount is the higher of net selling price, defined as the fair value less costs to sell, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market rates and risks specific to the asset.

An impairment loss for an individual asset or cash generating unit are reversed if there has been a change in estimates used to determine the recoverable amount since the last impairment loss was recognised and is only reversed to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Impairment losses are recognised in the statement of profit and loss.

e) Investment property

Investment property are properties (land or a building— or part of a building—or both) held to earn rentals and/ or for capital appreciation (including property under

construction for such purposes). Investment property is measured initially at cost including purchase price, borrowing costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and impairment, if any.

Derecognition of property, plant and equipment / Intangibles/ Investment property

The carrying amount of an item of property, plant and equipment / intangibles/ investment property is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment / intangibles / investment property is measured as the difference between the net disposal in proceeds and the carrying amount of the item and is recognised in the statement of profit and loss when the item is de-recognised.

f) Cash and cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash in hand, balance at banks and bank deposits, 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.

g) Inventories

i) Carbon Credits:

Inventory of carbon credits are valued at cost or NRV, whichever is lower. Cost of carbon credits is measured at all direct and indirect cost incurred for the purpose of bringing the carbon credits to its present value and condition, except sunk cost incurred before procurement or generation of credits. NRV of carbon credits is measured basis management''s estimate of future realizable value of credits as the credits are traded over the counter without any set parameter of identification of market value.

The management''s estimate of NRV and future realizable value of credits is adjusted considering the anticipation of increase or decrease in prices, company''s financial stability for holding such credits, type of permanency in reduction or inflation of prices, ongoing spot or forward deals in similar credits, technology, vintage, location etc.

Inventory received as a percentage of share of carbon credits in lieu of carbon advisory services rendered are recognized as revenue as and when the credits are received in the registry account of the company, at the value of Right of First Refusal (ROFR) price quoted to the vendor / market value of the credits as identifiable through ongoing deals with corresponding adjustment to the inventory of the company.

ii) Project Implementation and Development Material:

The company provides services of project implementation and development to various customers and deploys project implementation and development material for execution of such contracts. These materials are recorded as inventory in the books of accounts of the company. The project implementation and development material is valued at cost.

h) Financial Instruments

Financial instruments are any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

i) Initial Recognition

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the statement of profit and loss.

ii) Subsequent Measurement Financial assets

Financial assets are classified into the following specified categories: amortized cost, financial assets ''at fair value through profit and loss'' (FVTPL), ''Fair value through other comprehensive income'' (FVTOCI). The classification depends on the Company''s business model for managing the financial assets and the contractual terms of cash flows.

Debt Instrument

Amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. This category generally applies to trade and other receivables.

Fair value through other comprehensive income (FVTOCI)

A ''debt instrument'' is classified as at the FVTOCI if both of the following criteria are met:

a. The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets.

b. The asset''s contractual cash flows represent solely payments of principal and interest.

Debt instruments included with the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses and reversals and foreign exchange gain or loss in the statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Fair value through Profit and Loss (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 amortised cost or FVTOCI criteria, as at FVTPL. However, such election is considered only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch'').

Debt instrument included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss.

Equity Investments

The Company subsequently measures all equity investments at cost or fair value, as per its accounting policies. Where the Company''s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to statement of profit and loss. Dividends from such investments are recognized in statement of profit and loss as other income when the Company''s right to receive payment is established.

Derivative financial instruments

Derivative financial instruments are classified and measured at fair value through profit and loss.

Derecognition of financial assets

A financial asset is derecognized only when

i. The Company has transferred the rights to receive cash flows from the asset or the rights have expired or

ii. The Company retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients in an arrangement.

Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognized. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.

Impairment of financial assets

The Company measures the expected credit loss

associated with its assets based on historical trend, industry practices and the business environment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

Financial liabilities and equity instruments

Debt or equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company''s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised on the purchase, sale, issue or cancellation of the Company''s own equity instruments.

Financial liabilities Subsequent Measurement

Financial liabilities measured at amortised cost

Financial liabilities are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in statement of profit and loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the statement of profit and loss.

Financial liabilities measured at fair value through profit or loss (FVTPL) Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Derivatives, including separated embedded derivatives are classified as held for trading unless they are designated as effective hedging instruments. Financial liabilities at fair value through profit or loss are carried in the financial statements at fair value with changes in fair value recognized in other income or finance costs in the statement of profit and loss.

Derecognition of financial liabilities

A financial liability is derecognized 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 recognized in the statement of profit and loss.

Determination of fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between market participants at the measurement date.

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis and available quoted market prices. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

i) Borrowings and Borrowing cost

Borrowings are initially recognised at net of transaction costs incurred and measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Profit and Loss over the period of the borrowings using the EIR.

Preference shares, which are mandatorily redeemable on a specific date are classified as liabilities. The dividend on these preference shares is recognised as finance costs in the Statement of Profit and Loss.

Borrowing costs attributable to the acquisition or construction of qualifying assets till the time such assets are ready for intended use are capitalised as part of cost of the assets. All other borrowing costs are expensed in the period they occur.

j) Provisions, contingent liabilities and contingent assets

The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated.

If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made.

Contingent assets are not recognised in the financial

statements, however they are disclosed where the inflow of economic benefits is probable. When the realization of income is virtually certain, then the related asset is no longer a contingent asset and is recognised as an asset.

k) Revenue recognition

Revenue is recognised to the extent it is probable that economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those products or services.

Revenue is measured based on the transaction price, which is the consideration for the respective performance obligation, adjusted for volume discounts, service level credits, performance

bonuses, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers. The Company''s contracts with customers could include promises to transfer multiple products and services to a customer. The Company assesses the products / services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgement to determine the deliverables and the ability of the customer to benefit independently from such deliverables.

Judgement is also required to determine the transaction price for the contract and to ascribe the transaction price to each distinct performance obligation. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume discounts, service level credits, performance bonuses, price concessions and incentives. The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting period. The Company allocates the elements of variable considerations to all the performance obligations of the contract unless there is observable evidence that they pertain to one or more distinct performance obligations.

The Company exercises judgement in determining whether the performance obligation is satisfied at a point in time or over a period of time. The Company considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created or existence of enforceable right to payment for performance to date and alternate use of such product or service, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer, etc.

Revenue from subsidiaries is recognised based on transaction price which is at arm''s length.

Contract assets are recognised when there are excess of revenues earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms.

The amount spent by the company towards fulfilling its performance obligation (or part thereof) in accordance with contracts entered with counter party before the invoicing from such contract is due as per the Ind AS - 115 is regognized as Contract Assets in these financials. A contract asset is an entity''s right to the assets for performance obligation that the entity has executed in accordance with the contract.

Correspondingly, the amount received from counter party of the contract is recognized as Contract Liability and the same is accordingly classified as revenue from operations in accordance with the satisfactory performance obligation of the company in due course of the contract from time to time, when such performance obligation is executed as per the contract.

While disclosing the aggregate amount of transaction price yet to be recognised as revenue towards unsatisfied (or partially) satisfied performance obligations, along with the broad time band for the expected time to recognise those revenues, the Company has applied the practical expediency in Ind AS 115. Accordingly, the Company has not disclosed the aggregate transaction price allocated to unsatisfied (or partially satisfied) performance obligations which pertain to contracts where revenue recognised corresponds to the value transferred to customer typically involving time and material, outcome based and event based contracts.

Unsatisfied (or partially satisfied) performance obligations are subject to variability due to several factors such as delivery timelines, changes in scope of delivery, periodic revalidations of the estimates, economic factors (changes in currency rates, tax laws, methodology of the registry bodies, DOE audit of the project, other governmental regulations etc.). The aggregate value of transaction price allocated to unsatisfied (or partially satisfied) performance obligations is reported in the schedules of the financial statements and the price allocated to unsatisfied (or partially satisfied) performance obligations is expected to be recognised as revenue in the next five years.

All revenues are accounted on accrual basis except to the extent stated otherwise.

i) Revenue from Carbon Offsetting: The revenue from Carbon Offsetting is recognized when the substantial risk and rewards are transferred by the company to the customer, and there is reasonable certainty that the consideration is either receivable or received.

Upon executing a composite contract with any project proponent for providing services and monetization of carbon offsets, the project is usually registered in the registry account of the company and the credits are traded based on the contractual terms with the project proponent, even if the invoice for purchase of such credits is not received from the project proponent. In such scenario, pursuant to matching concept, the cost of such credits based on the contractual terms or understanding with the project proponent is recorded as expense in the statement of profit and loss with corresponding adjustment to the provision account of the project proponent.

ii) Revenue from Services: Revenue from services provided is recognized when it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured taking into account, contractually defined terms of payment and satisfaction of substantial performance obligation.

Revenue earned as a percentage of share of carbon credits in lieu of carbon advisory services rendered are recognized as revenue as and when the credits are received in the registry account of the company, at the value of Right of First Refusal (ROFR) price quoted to the vendor / market value of the credits as identifiable through ongoing deals with corresponding adjustment to the inventory of the company.

iii) Other Revenues Other revenues are recognized on accrual basis as per the terms of the respective contract/arrangements and in accordance with the provisions of AS 9: Revenue Recognition.

iv) Interest income from debt instruments is recognised using the effective interest rate (EIR) method.

v) Dividend income is recognised when the Company''s right to receive dividend is established.

vi) Rent income is recognised on accural basis as per the agreed terms on straight line basis.

l) Employee Benefits Defined benefit plans

For defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling and the return on plan assets (excluding interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Past service cost, both vested and unvested, is recognised as an expense at the earlier of (a) when the plan amendment or curtailment occurs; and (b) when the entity recognises related restructuring costs or termination benefits.

The retirement benefit obligations recognised in the balance sheet represents the present value of the defined benefit obligations reduced by the fair

value of scheme assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme.

The Company provides benefits such as gratuity, pension and provident fund (Company managed fund) to its employees which are treated as defined benefit plans.

Defined contribution plans

Contributions to defined contribution plans are recognised as expense when employees have rendered services entitling them to such benefits. The Company provides benefits such as superannuation and foreign defined contribution plans to its employees which are treated as defined contribution plans.

Short-term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages etc. and the expected cost of ex-gratia are recognised in the period in which the employee renders the related service. A liability is recognised for the amount expected to be paid when there is a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Compensated absences

Compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as undiscounted liability at the balance sheet date. Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as an actuarially determined liability at the present value of the defined benefit obligation at the balance sheet date.

Gratuity and pension

In accordance with Indian law, the Company operates a scheme of gratuity which is a defined benefit plan. The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 days'' salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service.

Provident fund

The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. The Company also offers to contribute to New Pension Scheme at the option of employees. The Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable to these plans by the Company are at rates specified in the rules of the scheme.

The Company offers its employees defined

contribution plans in the form of Provident Fund (PF) and Employees'' Pension Scheme (EPS) with the government, and certain state plans such as Employees'' State Insurance (ESI). PF and EPS cover substantially all regular employees and the ESI covers certain employees. The contributions are normally based on a certain proportion of the employee''s salary.

m) Transactions in foreign currencies

i) The functional currency of the Company is Indian Rupees ("Rs.”).

Foreign currency transactions are accounted at the exchange rate prevailing on the date of such transactions.

ii) Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Exchange differences arising on settlement of monetary items or on reporting such monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements are recognised as income or as expenses in the period in which they arise.

iii) Non-monetary foreign currency items are carried at historical cost and translated at the exchange rate prevalent at the date of the transaction.

n) Accounting for taxes on income

Tax expense comprises of current and deferred tax.

i) Current tax

Current tax is the amount of income taxes payable in respect of taxable profit for a period. Current tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. 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.

Current tax is recognized in the statement of profit and loss except to the extent that the tax relates to items recognized directly in other comprehensive income or directly in equity.

ii) Deferred tax

Deferred tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred tax arises from the initial recognition of an asset or liability that effects neither accounting nor taxable profit or loss at the time of transition.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or

substantively enacted at the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Presentation of current and deferred tax

Current and deferred tax are recognized as income or an expense in the statement of profit and loss, except to the extent they relate to items are recognized in other comprehensive income, in which case, the current and deferred tax income / expense are recognised in other comprehensive income.

o) Earnings per share

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the period. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period, except when the results would be anti-dilutive.

p) Share based payments

The Company recognizes compensation expense relating to share-based payments in net profit using fair-value in accordance with Ind AS 102, Share-Based Payment. The estimated fair value of awards is charged to statement of profit and loss on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was insubstance, multiple awards with a corresponding increase to share based payment reserves.

q) Dividend

Provision is made for the amount of any dividend declared on or before the end of the reporting period but remaining undistributed at the end of the reporting period, where the same has been appropriately authorized and is no longer at the discretion of the entity

r) Contributed equity

Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

s) Exceptional items

Certain occasions, the size, type, or incidences of the item of income or expenses pertaining to the ordinary activities of the Company is such that its disclosure improves the understanding of the performance of the Company, such income or expenses is classified as an exceptional item and accordingly, disclosed in the financial statements.

8. CRITICAL ACCOUNTING JUDGMENT AND ESTIMATES

The preparation of financial statements requires management to exercise judgment in applying the Company''s accounting policies. It also requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures including

environmental standards and regulations is paramount. Any discrepancies or non-compliance issues could have a material impact on the valuation of carbon credits and require periodic reassessment.

ii. Market Pricing Volatility: The market for carbon credits can be subject to significant price volatility due to changing regulations and market demand. Assumptions and estimates about market pricing may impact the reported value of carbon credits and the recognition of related revenue.

iii. Significant Estimation Uncertainty: The valuation of inventory is subject to significant estimation uncertainty, given the reliance on future market conditions, obsolescence, and other factors.

disclosure of contingent liabilities. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis, with revisions recognised in the period in which the estimates are revised and in any future periods affected.

a. Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Potential liabilities that have a low probability of crystallizing or are very difficult to quantify reliably, are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements. There can be no assurance regarding the final outcome of these legal proceedings.

b. Useful lives and residual values

The Company reviews the useful lives and residual values of property, plant and equipment, investment property and intangible assets at each financial year end.

c. Impairment testing

i) Judgment is also required in evaluating the likelihood of collection of customer debt after revenue has been recognised. This evaluation requires estimates to be made, including the level of provision to be made for amounts with uncertain recovery profiles. Provisions are based on historical trends in the percentage of debts which are not recovered, or on more detailed reviews of individually significant balances.

ii) Determining whether the carrying amount of these assets has any indication of impairment also requires judgment. If an indication of impairment is identified, further judgment is required to assess whether the carrying amount can be supported by the net present value of future cash flows forecast to be derived from the asset. This forecast involves cash flow projections and selecting the appropriate discount rate.

d. Tax

i) The Company''s tax charge is the sum of the total current and deferred tax charges. The calculation of the Company''s total tax charge necessarily involves a degree of estimation and judgment in respect of certain items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority or, as appropriate, through a formal legal process.

ii) Accruals for tax contingencies require management