Accounting Policies of Servotech Renewable Power System Ltd. Company

Mar 31, 2025

2 Significant Accounting Policies

The significant accounting policies applied by
the Company in the preparation of its standalone
Ind AS financial statements are listed below. Such
accounting policies have been applied consistently
to all the periods presented in these financial
statements, unless otherwise stated.

2.1 Basis of preparation of financial statements

The financial statements of the Company have been
prepared in accordance with Indian Accounting
Standards (Ind AS) notified under Companies (Indian
Accounting Standards) Rules, 2015 (as amended
from time to time) and presentation requirements
of, unless otherwise stated.

a) Statement of compliance

These financial statements of the Company are
prepared and presented in accordance with
Indian Accounting Standards ("Ind AS”) notified
under the Companies (Indian Accounting
Standards) Rules, 2015, as amended and other
relevant provision of the Act as amended from
time to time and presentation requirements
of Division II of Schedule III to the Companies
Act, 2013, (Ind AS compliant Schedule III), as
applicable to the financial statements.

b) Functional and presentation currency

The financial statements are presented in
Indian Rupees (''INR'') and all values are rounded
to nearest lakhs upto two decimal places
(INR 00,000), except when otherwise indicated.

C) Basis of measurement

The financial statements have been prepared
on a historical cost basis, except for the following
assets and liabilities:

(i) Derivative Instruments

(ii) Certain financial assets and liabilities that
are measured at fair value

Historical cost is generally based on the fair
value of the consideration given in exchange
for goods and services as at the date of
respective transactions.

2.2 Use of estimates

The preparation of the financial statements in
conformity with Ind AS requires management to
make estimates, judgments and assumptions.
These estimates, judgments and assumptions
affect the application of accounting policies and
the reported amounts of assets and liabilities, the
disclosures of contingent assets and liabilities at
the date of the financial statements and reported
amounts of revenues and expenses during the
year. Application of accounting policies that require
critical accounting estimates involving complex and
subjective judgments and the use of assumptions
in these financial statements have been disclosed
in Note 2.3. Accounting estimates could change
from period to period. Actual results could differ
from those estimates. Appropriate changes in
estimates are made as management becomes
aware of changes in circumstances surrounding the
estimates. Changes in estimates are reflected in the
financial statements in the period in which changes
are made and, if material, their effects are disclosed
in the notes to the financial statements.

2.3 Critical accounting estimates, assumptions
and judgements

The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period
in which the estimate is re vised and future periods
affected. The Company based its assumptions
and estimates on parameters available when
the financial statements were prepared. Existing
circumstances and assumptions about future
developments, however, may change due to market
changes or circumstances arising that are beyond
the control of the Company. Such changes are
reflected in the assumptions when they occur.

Significant judgements and estimates relating to
the carrying values of assets and liabilities include,
determination of estimated projected cost and
revenue in long term contracts, determination of
term of lease contracts, fair value measurement,
impairment of goodwill, provision for employee
benefits and other provisions, recoverability
of deferred tax assets and commitments
and contingencies.

2.3.1 Estimates and assumptions

a) . Property, plant and equipment

Property, Plant and Equipment represent
a significant proportion of the asset base
of the Company. The charge in respect
of periodic depreciation is derived after
determining an estimate of an asset''s
expected useful life and the expected
residual value at the end of its life. The useful
lives and residual values of Company''s
assets are determined by management
at the time the asset is acquired and
reviewed periodically, including at each
financial year end. The lives are based on
historical experience with similar assets
as well as anticipation of future events,
which may impact their life, such as
changes in technology.

b) . Provision for employee benefits

The cost of the defined benefit gratuity &
leave encashment plan and the present
value of the gratuity & leave encashment
obligation are determined using actuarial
valuations. An actuarial valuation involves
making various assumptions that may
differ from actual developments in the
future. These include the determination of
the discount rate, future salary increases
and mortality rates. Due to the complexities
involved in the valuation and its long¬
term nature, a defined benefit obligation
is highly sensitive to changes in these
assumptions. All assumptions are reviewed
at each reporting date. The parameter
most subject to change is the discount
rate. In determining the appropriate
discount rate for plans operated in
India, the management considers the
interest rates of government bonds in
currencies consistent with the currencies
of the postemployment benefit obligation.
The mortality rate is based on publicly
available mortality tables. Those mortality
tables tend to change only at interval in
response to demographic changes. Future

salary increases and gratuity increases
are based on expected future inflation rate
and past trends.

c) . Provision for litigations and contingencies

The provision for litigations and
contingencies are determined based on
evaluation made by the management of
the present obligation arising from past
events the settlement of which is expected
to result in outflow of resources embodying
economic benefits, which involves
judgements around estimating the
ultimate outcome of such past events and
measurement of the obligation amount.
Due to the judgements involved in such
estimations the provisions are sensitive to
the actual outcome in future periods.

d) . Provision

Significant estimates are involved in the
determination of provisions related to
liquidated damages, onerous contracts
and warranty provision. The Company
records a provision for onerous sales
contracts when current estimates of total
contract costs exceed expected contract
revenue. Warranty provision is determined
based on the historical trend of warranty
expense for the same types of goods
for which the warranty is currently being
determined, after adjusting for unusual
factors related to the goods that were sold
or based on specific warranty clause in an
agreement. Such estimates are reviewed
annually for any material changes in
assumptions and likelihood of occurrence.
The provision for warranty, liquidated
damages and onerous contracts is
based on the best estimate required to
settle the present obligation at the end of
reporting period.

e) . Impairment of non-financial assets

Impairment exists when the carrying value
of an asset or cash generating unit (cgu)
exceeds its recoverable amount, which
is the higher of its fair value less costs of
disposal and its value in use. The fair value
less costs of disposal calculation is based
on available data from binding sales
transactions, conducted at arm''s length, for
similar assets or observable market prices
less incremental costs for disposing of the
asset. The value in use calculation is based
on a Discounted Cash Flow (DCF) model.

The cash flows are derived from the budget
and do not include restructuring activities
that the Company is not yet committed to
or significant future investments that will
enhance the asset''s performance of the
CGU being tested. The recoverable amount
is sensitive to the discount rate used for the
DCF model as well as the expected future
cash-inflows and the growth rate used for
extrapolation purposes.

f) . Taxes

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. Uncertainties exist with respect to
the interpretation of tax regulations, changes
in tax laws, and the amount and timing
of future taxable income. Given the wide
range of business relationships differences
arising between the actual results and the
assumptions made, or future changes to
such assumptions, could necessitate future
adjustments to tax income and expense
already recorded. The Company establishes
provisions, based on reasonable estimates.
The amount of such provisions is based
on various factors, such as experience of
previous assessments and interpretations
of tax regulations by the Company.

g) . Leases: whether an arrangement contains

a lease

The Company determines the lease term
as the agreed tenure of the lease, together
with any periods covered by an option to
extend the lease if it is reasonably certain
to be exercised, or any periods covered
by an option to terminate the lease, if it is
reasonably certain not to be exercised. After
the commencement date, the Company
reassesses the lease term if there is a
significant event or change in circumstances
that is within its control and affects its ability
to exercise or not to exercise the option to
renew or to terminate (e.g., construction
of significant leasehold improvements or
significant customisation to the leased asset)

.4 Current and non-current classification

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

An asset is treated as current when it is:

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

• Held primarily for the purpose of trading;

• Expected to be realised within twelve months
after the reporting period; or

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

All assets and liabilities have been classified as current
or non- current as per the Company''s operating cycle
and other criteria set out in Schedule III to the Companies
Act, 2013. Based on the nature of products and the
time between the acquisition of assets for processing
and their realization in cash and cash equivalents, the
Company has ascertained its operating cycle as 12
months for the purpose of current and non- current
classification of assets and liabilities, except for long¬
term contracts. The projects business comprises
long-term contracts which have an operating cycle
exceeding one year. For classification of current
assets and liabilities related to projects business, the
Company uses the duration of the individual life cycle
of the contract as its operating cycle.

A liability is current when:

• It is expected to be settled in normal
operating cycle;

• It is held primarily for the purpose of trading;

• It is due to be settled within twelve months after
the reporting period; or

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

Advance tax paid is classified as current assets

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

2.5 Foreign Currency

Functional currency

The functional currency of the Company is
the Indian Rupee.

Transactions and translations Initial recognition
transactions in foreign currencies are recorded by
the Company at their respective functional currency
spot rates at the date the transaction first qualifies
for recognition.

Monetary assets and liabilities denominated in
foreign currencies are translated at the functional
currency spot rates of exchange at the reporting
date. The gains or losses resulting from such
translations are recognised in the statement of
profit and loss.

Non-monetary assets and non-monetary liabilities
denominated in a foreign currency and measured
at fair value are translated at the exchange
rate prevalent at the date when the fair value
was measured. Non-monetary assets and non¬
monetary liabilities denominated in a foreign
currency and measured at historical cost are
translated at the exchange rate prevalent at the
date of the transaction.

Transaction gains or losses realized upon settlement
of foreign currency transactions are included in
determining net profit for the period in which the
transaction is settled. Revenue, expense and cash flow
items denominated in foreign currencies are translated
into the relevant functional currencies using the
exchange rate in effect on the date of the transaction.

2.6 Revenue Recognition

Revenue from contracts with customers is
recognised when control of the goods or services
are transferred to the customer at an amount that
reflects the consideration to which the Company
expects to be entitled in exchange for those goods
or services. Revenue is recognised to the extent that
it is probable that the economic benefits will flow
to the Company and the revenue can be reliably
measured, regardless of when the payment is being
made. Revenue is measured at the fair value of the
consideration received or receivable, taking into
account contractually defined terms of payment
and excluding taxes or duties collected on behalf of
the government. The Company has concluded that
it is the principal in all of its revenue arrangements
since it is the primary obligor in all the revenue
arrangements as it has pricing latitude and is also
exposed to inventory and credit risks.

The Company considers whether there are
other promises in the contract that are separate
performance obligations to which a portion of
the transaction price needs to be allocated if any.
In determining the transaction price for the sale
of goods, the Company considers the effects of
variable consideration, the existence of significant
financing components, non-cash consideration,
and consideration payable to the customer (if any).

Revenue is stated exclusive of goods and service tax
and net of trade and quantity discount.

Liquidated damages / penalties are provided for as
per the contract terms wherever there is a delayed
delivery attributable to the Company.

a) Revenue from the sale of goods

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

b) Revenue from sale of services

Revenue from services rendered over a period
of time, such as annual maintenance contracts,
are recognised on straight line basis over the
period of the performance obligation.

c) Income from development services

Revenue from the development services is
recognised as per the contract terms and when
accrued. When the contract outcome cannot
be measured reliably, revenue is recognised
only to the extent that the expenses incurred
are eligible to be recovered.

d) Export benefits

Export incentives receivable are accrued for,
when the right to receive the credit is established
and there is no significant uncertainty regarding
the realisability of the incentive.

e) Other income

Interest income is recognised on time
proportion basis.

Fair value gain on financial instruments is
recognized using the effective interest method.

2.7 Income tax

Income tax expense comprises current and deferred
income tax. Income tax expense is recognized in net
profit in the statement of profit and loss.

a) Current tax

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

Management periodically evaluates positions
taken in the tax returns with respect to situations
in which applicable tax regulations are subject
to interpretation and considers whether it is
probable that a taxation authority will accept
an uncertain tax treatment. The Company
shall reflect the effect of uncertainty for each
uncertain tax treatment by using either most
likely method or expected value method,
depending on which method predicts better
resolution of the treatment.

The Company offsets tax assets and tax
liabilities, where it has a legally enforceable
right to set off the recognized amounts and
where it intends either to settle on a net basis,
or to realize the asset and settle the liability
simultaneously.

b) Deferred tax

Deferred tax assets and liabilities are measured
using tax rates and tax laws that have been
enacted or substantively enacted by 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. The effect of changes in
tax rates on deferred tax assets and liabilities is
recognized as income or expense in the period
that includes the enactment or the substantive
enactment date.

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.

Deferred tax relating to items recognised
outside profit or loss is recognised outside
profit or loss (either in other comprehensive
income or in equity). Deferred tax items are
recognised in correlation to the underlying
transaction either in OCI or directly in equity.
The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are
re-assessed at each reporting date and are
recognised to the extent that it has become
probable that future taxable profits will allow
the deferred tax asset to be recovered.

2.8 Property, plant and equipment
Recognition and measurement

Freehold Land is carried at historical cost, all other
item of property, plant and equipment is measured
at cost, net of accumulated depreciation and
accumulated impairment losses, if any. Cost includes
expenditures that are directly attributable to the
acquisition of the asset. Such cost includes the cost
of replacing part of the plant and equipment and
borrowing costs for long-term construction projects
if the recognition criteria are met. When significant
parts of property, plant and equipment are required
to be replaced at intervals, the Company depreciates
them separately based on their specific useful lives.
Likewise, when a major inspection is performed, its
cost is recognised in the carrying amount of the
property, plant and equipment as a replacement if
the recognition criteria are satisfied.

All other repair and maintenance costs are
recognised in statement of profit or loss as incurred.
The Company identifies and determines cost of each
component/ part of property, plant and equipment
separately, if the component/ part has a cost which
is significant to the total cost of the property, plant
and equipment and has useful life that is materially
different from that of the remaining asset. These
components are depreciated over their useful lives;
the remaining asset is depreciated over the life of
the principal asset.

Advances paid towards the acquisition of property,
plant and equipment outstanding at each balance
sheet date is classified as capital advances and
cost of assets not ready for use at the balance sheet
date are disclosed under capital work- in- progress
is stated at cost less accumulated impairment loss.

Subsequent costs are included in the asset''s carrying
amount or recognised as a separate asset, as
appropriate, only when it is probable that future
economic benefits associated with the item will flow to
the Company and the cost of the item can be measured
reliably. The carrying amount of any component
accounted for as a separate asset are derecognised
when replaced. All other repairs and maintenance are
charged to statement of profit and loss during the
reporting period in which they are incurred.

a) Depreciation

The Company depreciates property, plant and
equipment over their estimated useful lives
using the Written Down method. Depreciation

on additions (disposals) is provided on a pro¬
rata basis i.e. from (up to) the date on which
asset is ready for use (disposed of).

Lease hold property are depreciated on straight
line basis over shorter of the asset''s useful life
and their lease term unless the entity expects to
use the asset beyond the lease term.

The estimated useful lives of assets are as follows:

The useful lives have been determined based on
technical evaluation done by the management''s
expert which are in line those specified by Schedule
II to the Companies Act 2013. The residual values
are not more than 5% of the original cost of the
asset. The depreciation methods, assets'' residual
values and useful lives are reviewed, and adjusted
if appropriate, at the end of each reporting period.

Advances paid towards the acquisition of
property, plant and equipment outstanding at
each Balance Sheet date is classified as capital
advances under Other Non-Current Assets and
the cost of assets not put to use before such date
is disclosed under ''Capital work-in-progress''.

The cost and related accumulated depreciation
are eliminated from the financial statements
upon sale or retirement of the asset and the
resultant gains or losses are recognized in the
Statement of Profit and Loss.

2.9 Intangible Assets

Intangible assets are stated at cost less accumulated
amortization and impairment. Intangible assets
are amortized over their respective individual
estimated useful lives on a written down basis,
from the date that they are available for use. The
estimated useful life of an identifiable intangible
asset is based on a number of factors including the
effects of obsolescence, demand, competition, and
other economic factors (such as the stability of the
industry, and known technological advances), and
the level of maintenance expenditures required to
obtain the expected future cash flows from the asset.

Amortization methods and useful lives are reviewed
periodically including at each financial year end. The
estimated useful lives for intangible assets are 3 years.

2.10 Inventories

Inventories consist of raw materials, work-in¬
progress, finished goods, stock-in-trade and stores
an spares. Inventories are measured at the lower
of cost and net realisable value. However, materials
and other items held for use in the production of
inventories are not written down below cost if the
finished goods in which they will be incorporated are
expected to be sold at or above cost.

The cost of various categories of inventories is
arrived at as follows:

Stores, spares, raw materials, components and
stock-in-trade - at rates determined on the moving
weighted average method.

Goods in Transit - at actual cost. Work-in-progress
and finished goods - at full absorption cost method
which includes direct materials, direct labour and
manufacturing overheads. Cost is determined on
weighted average method.

Cost includes expenditures incurred in acquiring
the inventories, production or conversion costs and
other costs incurred in bringing them to their existing
location and condition.

Provision for obsolescence is made wherever
necessary. Net realisable value is the estimated
selling price in the ordinary course of business, less
estimated costs of completion and the estimated
costs necessary to make the sale.

The factors that the Company considers in
determining the provision for slow moving, obsolete
and other non-saleable inventory include estimated
shelf life, planned product discontinuances, price
changes, ageing of inventory and introduction of
competitive new products, to the extent each of
these factors impact the Company''s business and
markets. The Company considers all these factors
and adjusts the inventory provision to reflect its
actual experience on a periodic basis.

2.11 Financial instruments

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

2.11.1Initial recognition

The Company recognizes financial assets and
financial liabilities when it becomes a party to
the contractual provisions of the instrument. All

financial assets and liabilities are recognized
at fair value on initial recognition, except for
trade receivables which are initially measured
at transaction price. Transaction costs that are
directly attributable to the acquisition or issue
of financial assets and financial liabilities, that
are not at fair value through profit or loss, are
added to the fair value on initial recognition.

2.11.2 Subsequent measurement

a). Non-derivative financial instruments

(i) Financial assets carried at amortised
cost

A financial asset is subsequently
measured at amortised cost if it is
held within a business where the
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

(ii) Financial assets at fair value through
other comprehensive income

A financial asset is subsequently
measured at fair value through
other comprehensive income if
it is held within a business where
the objective is achieved by both
collecting contractual cash flows
and selling financial assets 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. The
Company has made an irrevocable
election for its investments which
are classified as equity instruments
to present the subsequent changes
in fair value in other comprehensive
income based on its business model.
Further, in cases where the Company
has made an irrevocable election
based on its business model, for its
investments which are classified as
equity instruments, the subsequent
changes in fair value are recognized
in other comprehensive income.

(iii) Financial assets at fair value through
profit or loss

A financial asset which is not classified
in any of the above categories are

subsequently fair valued through
profit or loss.

(iv) Financial liabilities

Financial liabilities are initially measured
at fair value, net of transaction costs,
and are subsequently measured at
amortised cost, using the effective
interest rate method where the time
value of money is significant. Interest
bearing bank loans, overdrafts are
initially measured at fair value and are
subsequently measured at amortised
cost using the effective interest rate
method. Any difference between the
proceeds (net of transaction costs)
and the settlement or redemption of
borrowings is recognised over the term
of the borrowings in the statement of
profit and loss.

For trade and other payables maturing
within one year from the balance
sheet date, the carrying amounts
approximate fair value due to the
short maturity of these instruments.

Financial liabilities are subsequently
carried at amortized cost using the
effective interest method, For trade
and other payables maturing within
one year from the balance sheet date,
the carrying amounts approximate
fair value due to the short maturity of
these instruments.

Effective interest method

The effective interest method is a
method of calculating the amortised
cost of a financial instrument and of
allocating interest income or expense
over the relevant period. The effective
interest rate is the rate that exactly
discounts future cash receipts or
payments through the expected life
of the financial instrument, or where
appropriate, a shorter period.

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

Off-setting of financial instruments

Financial assets and financial
liabilities are offset and the net
amount is reported in the standalone

balance sheet if there is a currently
enforceable legal right to offset the
recognised amounts and there is
an intention to settle on a net basis,
to realise the assets and settle the
liabilities simultaneously.

b). Derivative financial instruments

This category has derivative financial
assets or liabilities which are not
designated as hedges.

Derivatives not designated as hedges
are recognized initially at fair value
and attributable transaction costs are
recognized in the statement of profit
and loss when incurred. Subsequent to
initial recognition, these derivatives are
measured at fair value through profit or
loss and the resulting exchange gains
or losses are included in other income /
expenses. Assets/ liabilities in this category
are presented as current assets/current
liabilities if they are either held for trading
or are expected to be realized within 12
months after the balance sheet date.

2.11.3 Impairment of Financial Assets

For trade receivables only, the Company
applies the simplified approach permitted by
Ind AS 109 Financial Instruments, which requires
expected lifetime losses to be recognized from
initial recognition of the receivables.

2.11.4 Derecognition of Financial Assets

A financial asset is derecognised only when

- The Company has transferred the
rights to receive cash flows from the
financial asset ; or

- 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.

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 derecognised. Where the entity has not
transferred substantially all risks and rewards of
ownership of the financial asset, the financial
asset is not derecognised.

Where the entity has neither transferred a
financial asset nor retains substantially all

risks and rewards of ownership of the financial
asset, the financial asset is derecognised if
the Company has not retained control of the
financial asset. Where the Company retains
control of the financial asset, the asset is
continued to be recognised to the extent of
continuing involvement in the financial asset

2.12 Fair value measurement

The Company measures financial instruments at fair
value at each Balance Sheet date.

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

- In the principal market for asset or liability, or

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

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

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

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

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

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

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

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

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

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

The Company has a team comprising of members
of senior management that determines the policies
and procedures for both recurring fair value
measurement, such as derivative instruments and
unquoted financial assets measured at fair value,
and for nonrecurring measurement, such as assets
held for distribution in discontinued operations.

External valuers are involved for valuation of
significant assets, such as properties and unquoted
investments and financial assets, and significant
liabilities, such as contingent consideration. Selection
criteria include market knowledge, reputation,
independence and whether professional standards
are maintained.

2.13 Investment Properties

Property that is held for long term rental yields or
for capital appreciation or for both, and that is not
occupied by the Company, is classified as investment
property. Investment property is measured initially at
its cost, including related transaction cost and where
applicable, borrowing costs. Subsequent to initial
recognition, investment properties are stated at cost
less accumulated depreciation and accumulated
impairment loss, if any

Investment properties are de-recognised either
when they have been disposed off or when they
are permanently withdrawn from use and no future
economic benefit is expected from their disposal.
The difference between the net disposal proceeds
and the carrying amount of the asset is recognised
in Statement of Profit and Loss in the period of
de-recognition.

2.14 Borrowing Costs

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

of funds. Borrowing cost also includes exchange
differences to the extent regarded as an adjustment
to the borrowing costs.

2.15 Leases

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

2.15.1 Company as a lessee

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

i) Right-of- use assets

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

If ownership of the leased asset transfers
to the Company at the end of the lease
term or the cost reflects the exercise of a
purchase option, depreciation is calculated
using the estimated useful life of the asset.

The right-of-use assets are also
subject to impairment.

ii) Lease Liabilities

At the commencement date of the lease,
the Company recognises lease liabilities
measured at the present value of lease
payments to be made over the lease
term. The lease payments include fixed
payments (including in substance fixed
payments) less any lease incentives
receivable, variable lease payments that
depend on an index or a rate, and amounts
expected to be paid under residual value
guarantees. The lease payments also
include the exercise price of a purchase
option reasonably certain to be exercised
by the Company and payments of penalties
for terminating the lease, if the lease term
reflects the Company exercising the option
to terminate. Variable lease payments that
do not depend on an index or a rate are
recognised as expenses (unless they are
incurred to produce inventories) in the
period in which the event or condition that
triggers the payment occurs.

In calculating the present value of
lease payments, the Company uses
its incremental borrowing rate at the
lease commencement date because
the interest rate implicit in the lease
is not readily determinable. After the
commencement date, the amount of
lease liabilities is increased to reflect the
accretion of interest and reduced for
the lease payments made. In addition,
the carrying amount of lease liabilities
is remeasured if there is a modification,
a change in the lease term, a change
in the lease payments (e.g., changes to
future payments resulting from a change
in an index or rate used to determine
such lease payments) or a change in the
assessment of an option to purchase the
underlying assetIn calculating the present
value of lease payments, the Company
uses its incremental borrowing rate at
the lease commencement date because
the interest rate implicit in the lease is not
readily determinable.

2.15.2 Company as a Lessor

Leases in which the Company does not transfer
substantially all the risks and rewards incidental
to ownership of an asset are classified as
operating leases. Rental income arising is
accounted for on a straight-line basis over
the lease terms. Initial direct costs incurred in

negotiating and arranging an operating lease
are added to the carrying amount of the leased
asset and recognised over the lease term on
the same basis as rental income. Contingent
rents are recognised as revenue in the period in
which they are earned.

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Mar 31, 2024

1 Corporate Information

The standalone financial statements were authorized by the Board of Directors for issue in accordance with resolution passed on 9th May 2024.

The significant accounting policies applied by the Company in the preparation of its standalone Ind AS financial statements are listed below. Such accounting policies have been applied consistently to all the periods presented in these financial statements, unless otherwise stated.

2.1 Basis of preparation of financial statements

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of, unless otherwise stated.

A) Statement of compliance

These financial statements of the Company are prepared and presented in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provision of the Act as amended from time to time and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the financial statements.

B) Functional and presentation currency

The financial statements are presented in Indian Rupees (‘INR’) and all values are rounded to nearest lakhs upto two decimal places (INR 00,000), except when otherwise indicated.

C) Basis of measurement

The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities:

(i) Derivative Instruments

(ii) Certain financial assets and liabilities that are measured at fair value

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services as at the date of respective transactions.

2.2 Use of estimates

The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the year. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed in Note 2.3. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

2.3 Critical accounting estimates, assumptions and judgements

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Significant judgements and estimates relating to the carrying values of assets and liabilities include, determination of estimated projected cost and revenue in long term contracts, determination of term of lease contracts, fair value measurement, impairment of goodwill, provision for employee benefits and other provisions, recoverability of deferred tax assets and commitments and contingencies.

2.3.1 Estimates and assumptions

A) Property, Plant and Equipment

Property, Plant and Equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company''s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

B) . Provision for employee benefits

The cost of the defined benefit gratuity & leave encashment plan and the present value of the gratuity & leave encashment obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post employment benefit obligation. The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rate and past trends.

C) . Provision for litigations and contingencies

The provision for litigations and contingencies are determined based on evaluation made by the management of the present obligation arising from past events the settlement of which is expected to result in outflow of resources embodying economic benefits, which involves judgements around estimating the ultimate outcome of such past events and measurement of the obligation amount. Due to the judgements involved in such estimations the provisions are sensitive to the actual outcome in future periods.

D) . Provision

Significant estimates are involved in the determination of provisions related to liquidated damages, onerous contracts and warranty provision. The Company records a provision for onerous sales contracts when current estimates of total contract costs exceed expected contract revenue. Warranty provision is determined based on the historical trend of warranty expense for the same types of goods for which the warranty is currently being determined, after adjusting for unusual factors related to the goods that were sold or based on specific warranty clause in an agreement. Such estimates are reviewed annually for any material changes in assumptions and likelihood of occurrence. The provision for warranty, liquidated damages and onerous contracts is based on the best estimate required to settle the present obligation at the end of reporting period.

E) . Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit (CGU) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a Discounted Cash Flow (DCF) model. The cash flows are derived from the budget and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

F) . Taxes

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. Uncertainties exist with respect to the interpretation of tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous assessments and interpretations of tax regulations by the Company.

G) . Leases: whether an arrangement contains a lease

The Company determines the lease term as the agreed tenure of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset)

2.4 Current and non-current classification

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

An asset is treated as current when it is:

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

• Held primarily for the purpose of trading;

• Expected to be realised within twelve months after the reporting period; or

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

All assets and liabilities have been classified as current or non- current as per the Company''s operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non- current classification of assets and liabilities, except for long-term contracts. The projects business comprises long-term contracts which have an operating cycle exceeding one year. For classification of current assets and liabilities related to projects business, the Company uses the duration of the individual life cycle of the contract as its operating cycle.

The accompanying notes are an integral part of standalone financial statements Advance tax paid is classified as current assets

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

2.5 Foreign Currency Functional currency

The functional currency of the Company is the Indian Rupee.

Transactions and translations Initial recognition transactions in foreign currencies are recorded by the Company at their respective functional currency spot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. The gains or losses resulting from such translations are recognised in the statement of profit and loss.

Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was measured. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of the transaction.

Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

2.6 Revenue Recognition

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.

The Company considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated if any. In determining the transaction price for the sale of goods, the Company considers the effects of variable consideration, the existence of significant financing components, non-cash consideration, and consideration payable to the customer (if any).

Revenue is stated exclusive of goods and service tax and net of trade and quantity discount.

Liquidated damages / penalties are provided for as per the contract terms wherever there is a delayed delivery attributable to the Company.

A) Revenue from the sale of goods

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

B) Revenue from sale of services

Revenue from services rendered over a period of time, such as annual maintenance contracts, are recognised on straight line basis over the period of the performance obligation.

C) Income from development services

Revenue from the development services is recognised as per the contract terms and when accrued. When the contract outcome cannot be measured reliably, revenue is recognised only to the extent that the expenses incurred are eligible to be recovered.

D) Export benefits

Export incentives receivable are accrued for, when the right to receive the credit is established and there is no significant uncertainty regarding the realisability of the incentive.

E) Other income

Interest income is recognised on time proportion basis.

Fair value gain on financial instruments is recognized using the effective interest method.

2.7 Income tax

Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the statement of profit and loss.

A) Current tax

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

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company shall reflect the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment.

The Company offsets tax assets and tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

B) Deferred tax

Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by 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. The effect of changes in tax rates on deferred tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date.

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.

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

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

2.8 Property, plant and equipment

Recognition and measurement

All other repair and maintenance costs are recognised in statement of profit or loss as incurred. The Company identifies and determines cost of each component/ part of property, plant and equipment separately, if the component/ part has a cost which is significant to the total cost of the property, plant and equipment and has useful life that is materially different from that of the remaining asset. These components are depreciated over their useful lives; the remaining asset is depreciated over the life of the principal asset.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances and cost of assets not ready for use at the balance sheet date are disclosed under capital work- in- progress is stated at cost less accumulated impairment loss.

Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset are derecognised when replaced. All other repairs and maintenance are charged to statement of profit and loss during the reporting period in which they are incurred.

A) Depreciation

The Company depreciates property, plant and equipment over their estimated useful lives using the Written Down method. Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (up to) the date on which asset is ready for use (disposed of).

The useful lives have been determined based on technical evaluation done by the management''s expert which are in line those specified by Schedule II to the Companies Act 2013. The residual values are not more than 5% of the original cost of the asset. The depreciation methods, assets'' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance Sheet date is classified as capital advances under Other Non-Current Assets and the cost of assets not put to use before such date is disclosed under ‘Capital work-in-progress''.

The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.

2.9 Intangible Assets

Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized over their respective individual estimated useful lives on a written down basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry, and known technological advances), and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.

Amortization methods and useful lives are reviewed periodically including at each financial year end. The estimated useful lives for intangible assets are 3 years.

2.10 Inventories

Inventories consist of raw materials, work-in-progress, finished goods, stock-in-trade and stores an spares. Inventories are measured at the lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished goods in which they will be incorporated are expected to be sold at or above cost.

The cost of various categories of inventories is arrived at as follows:

Stores, spares, raw materials, components and stock-in-trade - at rates determined on the moving weighted average method.

Goods in Transit - at actual cost. Work-in-progress and finished goods - at full absorption cost method which includes direct materials, direct labour and manufacturing overheads. Cost is determined on weighted average method.

Cost includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition.

Provision for obsolescence is made wherever necessary. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

The factors that the Company considers in determining the provision for slow moving, obsolete and other non-saleable inventory include estimated shelf life, planned product discontinuances, price changes, ageing of inventory and introduction of competitive new products, to the extent each of these factors impact the Company''s business and markets. The Company considers all these factors and adjusts the inventory provision to reflect its actual experience on a periodic basis.

2.11 Financial instruments

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

2.11.1 Initial recognition

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, that are not at fair value through profit or loss, are added to the fair value on initial recognition.

2.11.2 Subsequent measurement

A). Non-derivative financial instruments

(i) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business where the 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

(ii) Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business where the objective is achieved by both collecting contractual cash flows and selling financial assets 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. The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model. Further, in cases where the Company has made an irrevocable election based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.

(iii) Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.

(iv) Financial liabilities

Financial liabilities are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method where the time value of money is significant. Interest bearing bank loans, overdrafts are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the statement of profit and loss.

For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Financial liabilities are subsequently carried at amortized cost using the effective interest method, For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.

Equity Instruments

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

Off-setting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the standalone balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

B). Derivative financial instruments

This category has derivative financial assets or liabilities which are not designated as hedges.

Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in the statement of profit and loss when incurred. Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income / expenses. Assets/ liabilities in this category are presented as current assets/current liabilities if they are either held for trading or are expected to be realized within 12 months after the balance sheet date.

2.11.3 Impairment of Financial Assets

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables.

2.11.4 Derecognition of Financial Assets

A financial asset is derecognised only when

- The Company has transferred the rights to receive cash flows from the financial asset ; or

- 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.

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 derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.

Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset

2.12 Fair value measurement

The Company measures financial instruments at fair value at each Balance Sheet date.

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

- In the principal market for asset or liability, or

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

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

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

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

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

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

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

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

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

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

The Company has a team comprising of members of senior management that determines the policies and procedures for both recurring fair value measurement, such as derivative instruments and unquoted financial assets measured at fair value, and for nonrecurring measurement, such as assets held for distribution in discontinued operations.

External valuers are involved for valuation of significant assets, such as properties and unquoted investments and financial assets, and significant liabilities, such as contingent consideration. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.

2.13 Investment Properties

Property that is held for long term rental yields or for capital appreciation or for both, and that is not occupied by the Company, is classified as investment property. Investment property is measured initially at its cost, including related transaction cost and where applicable, borrowing costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any

Investment properties are de-recognised either when they have been disposed off or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in Statement of Profit and Loss in the period of de-recognition.

2.14 Borrowing Costs

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

2.15 Leases

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

2.15.1 Company as a lessee

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

i) Right-of- use assets

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

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.

The right-of-use assets are also subject to impairment.

ii) Lease Liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying assetIn calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable.

2.15.2 Company as a Lessor

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

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Mar 31, 2023

Significant Accounting Policies

The significant accounting policies applied by the Company in the preparation of its standalone Ind AS financial statements are
listed below. Such accounting policies have been applied consistently to all the periods presented in these financial statements,
unless otherwise stated.

2.1 Basis of preparation of financial statements

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified
under Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements
of, unless otherwise stated.

A) Statement of compliance

These financial statements of the Company are prepared and presented in accordance with Indian Accounting Standards
(“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant
provision of the Act as amended from time to time and presentation requirements of Division II of Schedule III to the
Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the financial statements.

B) Functional and presentation currency

The financial statements are presented in Indian Rupees (‘INR’) and all values are rounded to nearest lakhs upto two
decimal places (INR 00,000), except when otherwise indicated.

C) Basis of measurement

The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities:

(i) Derivative Instruments

(ii) Certain financial assets and liabilities that are measured at fair value

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services as at the
date of respective transactions.

2.2 Use of estimates

The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments
and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported
amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the year. Application of accounting policies that require critical accounting
estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been
disclosed in Note 2.3. Accounting estimates could change from period to period. Actual results could differ from those estimates.
Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the
estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if
material, their effects are disclosed in the notes to the financial statements.

2.3 Critical accounting estimates, assumptions and judgements

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and future periods affected. The Company based its assumptions and estimates
on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances arising that are beyond the control of the
Company. Such changes are reflected in the assumptions when they occur.

Significant judgements and estimates relating to the carrying values of assets and liabilities include, determination of estimated
projected cost and revenue in long term contracts, determination of term of lease contracts, fair value measurement, impairment
of goodwill, provision for employee benefits and other provisions, recoverability of deferred tax assets and commitments and
contingencies.

2.3.1 Estimates and assumptionsA) Property, Plant and Equipment

Property, Plant and Equipment represent a significant proportion of the asset base of the Company. The charge in respect of
periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual
value at the end of its life. The useful lives and residual values of Company''s assets are determined by management at the
time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical
experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in
technology.

B) . Provision for employee benefits

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial
valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in
the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the
complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes
in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the
discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the
interest rates of government bonds in currencies consistent with the currencies of the postemployment benefit obligation.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in
response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation
rate and past trends.

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Mar 31, 2018

Note No. 24 ACOUNTING POLICIES, CONTINGENT LIABILITIES AND NOTES A. SIGNIFICANT ACCOUNTING POLICIES 1.CORPORATE INFORMATION

Servotech Power Systems Limited ("the Company") was incorporated on 24/09/2004 as a private Limited company and converted in Public Limited company domiciled in India on 24/05/2017. Its shares are listed on NSE SME platform. The company is primarily engaged in manufacturing of LED lights and Solar products.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (i)Basis of preparation of Financial Statements

The financial statements are prepared in accordance with the Generally Accepted Accounting Principles in India (''Indian GAAP'') to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared under the historical cost convention on accrual basis. All amounts included in the financial statements are reported in absolute figures of Indian Rupees.

(ii)Presentation and disclosure of financial statements

During the year end 31st March 2018, the Company has presented the financial statements as per the Schedule III notified under the Companies Act, 2013. The Company has also reclassified the previous figures in accordance with the requirements applicable in the current year.

(iii)Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, if any at the end of the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

(iv)Tangible Fixed Assets (AS 10)

Tangible Fixed assets are carried at cost of acquisition and other applicable costs less accumulated depreciation and accumulated impairment loss, if any. The cost of fixed assets includes cost of acquisition plus, any freight, taxes, duties and other incidental expenses that are directly attributable to bring the assets to their working conditions for their intended use.

When parts of the items of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Subsequent expenditure relating to the property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the company and the cost of the item can be measured reliably. Gain / loss arising from de-recognition / sale / disposal of fixed assets are measured as the difference between the net disposal / sale proceeds and the carrying amount of the assets and are recognized in the statement of profit or loss when the asset is derecognized / disposed off. No assets have been revalued during the year.

(v)Borrowing Costs (AS 16)

Loan processing charges paid to bank for bank cash credit facilities and Mortgage Loan have been charged to revenue account since the same are not attributable to the acquisition of qualifying assets as per the requirements of AS 16. Borrowing cost primarily includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings.

As per the estimates made by the management and as per the various assessments made by the management, there were no indicators whether internal or external (as provided in para 8 of AS 28) which has led to the impairment loss to any assets. Since there are no such indicators which suggest that the net value of the assets would fall significantly by passage of time and normal use, the company has not provided for any impairment loss for any assets during the current financial period. The company has chosen the "value in use" technic and as per the measurement of future cash flow, the management is of the opinion that the future cash flow and the terminal value of the assets would not be significantly less than the carrying value and hence no impairment for any assets has been provided for in the financial statements. In the opinion of the Board of Directors and to the best of their knowledge and belief the aggregate value of the current assets, loans and advances on realization in the ordinary course of business, will not be less than the amount at which they are stated in the Balance Sheet.

(vii)Investments (AS 13)

Investments which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. On disposal of an investment, if any, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

(viii)Government grants and subsidies (AS 12)

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant / subsidy will be received. When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset.

During the year, the Company has not applied for any Grants / subsidies related to the Revenue or specific Fixed Assets nor the Company has received any such Grants / subsidies during the year.

(ix)Inventories (AS 2)

Inventories of materials including stores and spares and consumables, packing materials, components, work-in-progress, project work-in-progress are valued at the lower of cost and estimated net realizable value. Cost in case of work in progress is determined on the basis of the actual expenditure attributable to the said work till the end of the reporting period.

(x)Revenue recognition (AS 9)

Revenue comprises sale of materials, service income, repair income and interest. Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and that the revenue can be reliably measured. The Company collects goods and service tax, sales taxes, service tax, value added taxes (VAT) as applicable on behalf of the government and therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue. The company has made proper provision of warranty given to the customers on its products after being assessed and reported by certified actuary.

Sales:

Revenue from sale of goods is recognized in the statement of profit and loss when the significant risks and rewards in respect of ownership of goods has been transferred to the buyer as per the terms of the respective sales order, and the income can be measured reliably and is expected to be received.

Revenue from development projects:

Contracts to deliver electrification projects are recognized in revenue based on the delivery of materials related to the project and accordingly the customers are billed to the extent of value of materials supplied at the site. The revenue from installation of project has been booked only after receipt of confirmation from concerned customers. I

smart power solutions

Interest income:

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(xi) Retirement and other Employee benefits (AS 15)

Defined contributions to Provident Fund are charged to the statement of Profit & Loss of the year, when the employee renders the related service. There are no other obligations other than the contribution payable to the respective statutory authorities.

No retirement benefits have been paid to any employee during the year by the Company. Retirement benefits in the form of Gratuity and other long term / short term employee benefits have not been provided in the financial statements.

(xii) Foreign Exchange Transactions (AS 11)

The Company had entered amount spent on cost of foreign currencies incurred on travelling at the cost prize of purchase of those currencies and booked foreign exchange transaction relating to import of raw materials and fixed assets on assessable rate provided by custom authorities in its books of accounts.

(xiii) Taxation (AS 22)

Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT credit entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period in future. Separate and detailed calculation of Deferred tax is appended in Annexure A to these notes. During the F.Y. 2017-2018, the provisions of ICDS under the Income Tax Act, 1961 have been applicable to the Company and hence the provisions of Current tax have been made after considering the effects of ICDS wherever applicable. ICDS are not to be considered for maintaining the books of accounts and preparation of Financial statements.

(xiv) Provisions and contingent liabilities, Contingent assets (AS 29)

A provision is recognized when the Company has a present obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made of the amount of obligation. Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Provisions of various expenses are recognized in the financial statements since there exists present obligations as a result of event and the expenses are accrued and incurred during the year.

The opening balance of provisions is used during the year against the payments during the year. The closing balances of provisions are the expenses accrued during the year and provided.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably.

The Company does not recognize a contingent liability but discloses its existence in the financial statements unless the possibility of an outflow is remote. A contingent asset is not recognized in the Financial statements and hence not disclosed.

(xv) Earning / (loss) per share (AS 20)

Basic earnings / (loss) per share are calculated by dividing the net profit / (loss) for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

The weighted average number of equity shares outstanding during the period are adjusted for any bonus shares issued during the year and also after the balance sheet date but before the date the financial statements are approved by the board of directors for the purpose of calculating diluted earnings / (loss) per share. The net profit / (loss) for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

The number of equity shares and potentially dilutive equity shares are adjusted for bonus shares as appropriate. The dilutive potential equity shares are adjusted for the proceeds receivable, had the shares been issued at fair value. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date.

(xvi)Cash and Cash Equivalents

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand, cheques on hand and short-term investments with an original maturity of three months or less.

(xvii) Operating leases

Where the Company is a lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on the basis of the lease (rent agreements).Initial direct costs such as legal costs, brokerage costs, etc. if any, are recognized immediately in the statement of profit and loss.

Where the Company is a lessor Rental income from operating lease is recognized on a straight-line basis over the term of the relevant lease except where another systematic basis is more representative of the time pattern of the benefit derived from the asset given on lease.; or the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases.