Accounting Policies of Siemens Energy India Ltd. Company

Sep 30, 2025

2A. Material accounting policies

2.1 Property, plant and equipment

Property, plant and equipment are stated at cost of acquisition less accumulated depreciation and impairment
losses, if any. The cost includes taxes, duties, freight and other incidental expenses related to the acquisition and
installation of the respective assets. Subsequent expenditure related to an item of property, plant and equipment
is added to its book value only if it increases the future economic benefits from the existing assets beyond its
previously assessed standard of performance.

Depreciation on property, plant and equipment is provided on a straight-line basis over the useful lives of assets
estimated by the management, taking into account the nature of the asset on technical evaluation of the useful
life, which may not necessarily be in alignment with the indicative useful lives prescribed by Schedule II to the
Companies Act, 2013. The following useful lives are considered:

If significant parts of property, plant and equipment have different useful lives, then they are accounted as
separate items (major components) of property, plant and equipment.

Items of property, plant and equipment that have been retired from active use and are held for disposal are
stated at the lower of their carrying value and estimated net realizable value and are disclosed separately in the
Financial Statements. Any gain or loss on disposal of an item of property, plant and equipment is recognised in
the Statement of Profit and Loss.

Capital work-in-progress includes the cost of property, plant and equipment that are not ready for intended use
at Balance Sheet date.

Advances paid towards the acquisition of property, plant and equipment outstanding at end of each reporting
period is classified as capital advances under "Other non-current assets".

2.2 Intangible assets

Intangible assets comprise of software and technical know-how. Intangible assets are stated at cost of acquisition
less accumulated amortisation and impairment losses, if any. These intangible assets are amortised on straight¬
line basis based on the following useful lives, which in management''s estimate represents the period during
which economic benefits will be derived from their use:

Research and development

Research and development expenditure that do not meet the criteria for capitalization are recognized as an
expense as incurred. Development costs previously recognized as an expense are not recognized as an asset in a
subsequent period.

2.3 Revenue recognition

Revenue at point in time

Revenue from sale of products is recognised when control of the goods is transferred to the customer, which
is usually on dispatch or delivery of goods to the customer and there are no unfulfilled obligations that could
affect the customer''s acceptance of the goods, at an amount (transaction price) that reflects the consideration
to which the Company expects to be entitled in exchange for those goods.

Revenue from services includes sale of spares in relation to the customer service business of the Company.
Revenue from spares including certain services such as retrofit services, is recognized on satisfaction of
performance obligation to the customer at a point in time and is measured based on the consideration specified
in a contract with the customer.

Revenue over time

Revenue from contracts with customers is recognized over the period of time if any of the below mentioned
criteria is met:

a. The Customer simultaneously receives and consumes the benefits as the Company performs. The same
includes plant operations and maintenance, customer services, etc.

b. The Company''s performance creates or enhances an asset that the customer controls as the asset is created
or enhanced.

c. The Company''s performance does not create an asset with an alternative use to the Company and the
Company has an enforceable right to payment for performance completed to date.

When the outcome of a project contract can be estimated reliably, revenue from projects is recognized using
input method based on the percentage of costs incurred to date compared to the total estimated contract costs.
The Company uses input method because it best depicts the transfer of control to the customer which occurs
as it incurs costs on contracts. Further, revenue from services such as annual maintenance contracts, integrated
plant operations and upgradation services are recognized over time using straight line or input method, which
best depicts the transfer of control to the customer, as applicable.

Transaction price for projects is the amount which entity expects to receive from customer in exchange for
transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
The Company includes certain variable considerations as part of transaction price such as price escalations,
performance related incentives and penalties including liquidated damages. The amount of variable consideration
is estimated considering the expected value method or most likely amount method as appropriate in a given
circumstance to the extent it is highly probable that the significant reversal of revenue will not occur.

An expected loss on the project contract is recognised as an expense immediately. Contract revenue earned in
excess of billing has been reflected as "Contract assets" and billing in excess of contract revenue has been reflected
under "Contract liabilities" in the Balance Sheet. Contract assets and liabilities are netted off at contract level.
The amount of retention money held by the customers pending completion of performance is disclosed as part
of contract asset and is reclassified as trade receivables when it has unconditional right to consideration. A right
to consideration is unconditional if only the passage of time is required before payment of that consideration is
due.

Multiple performance obligations

If a contract contains more than one distinct product or service, the transaction price is allocated to each
performance obligation based on relative stand-alone selling prices. If stand-alone selling prices are not
observable, the Company reasonably estimates those. Revenue is recognized for each performance obligation
either at a point in time or over time, as appropriate. In the Company''s case, typically such multiple performance
obligations include supply of products, projects and services.

Refund liabilities

Refund liabilities are the obligation to refund part or all of the consideration received (or receivable) from the
customer. The liability is measured at the amount the Company ultimately expects it will have to return to
the customer. The Company updates its estimate of refund liabilities (and the corresponding change in the
transaction price) at the end of each reporting period.

Refund liabilities include:

a. Trade and quantity discounts which are based on the terms and conditions agreed with the customer.

b. Liquidated damages which are provided based on contractual terms when the delivery / commissioning
dates of an individual project have exceeded or are likely to exceed the delivery / commissioning dates as
per the respective contracts.

Revenue is stated exclusive of goods and services tax and net of consideration payable to customers including
refund liabilities.

For the significant judgements used in determining revenue, refer Critical estimates and judgments (Project
revenue and costs) paragraph above.

Commission income

Commission income is recognised as and when the terms of the contract are fulfilled along with the proof of
shipment being received from the supplier.

Export incentives

Export incentives are recognized, when the right to receive credit is established on export of goods in accordance
with the underlying scheme and there is no significant uncertainty regarding the realisability of the incentive.

2.4 Leases

The Company''s lease asset class primarily consists of leases for land and buildings and vehicles. Vehicles taken
on lease have been provided to the employees of the Company. The Company assesses whether a contract is (or
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 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.

Where the Company is the lessee:

At the date of commencement of the lease, the Company recognises a Right-of-Use asset ("ROU") and a
corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of
twelve months or less (short term leases) and leases of low value assets. For these short term and leases of low
value assets, the Company recognises the lease payments as an operating expense on a straight-line basis over
the term of the lease.

The ROU assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for
any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any
lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses,
if any. Contracts may contain both lease and non-lease components. The Company allocates the consideration
in the contract to the lease and non-lease components based on their stand-alone prices. However, for leases of
real estate for which the Company is a lessee, it has elected not to separate lease and non-lease components and
instead accounts for these as a single lease component.

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

The lease liability is initially measured at the present value of the future lease payments. The lease payments
are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental
borrowing rates. The lease liability is subsequently remeasured by increasing the carrying amount to reflect
interest on the lease liability, reducing the carrying amount to reflect the lease payments made.

A lease liability is remeasured upon the occurrence of certain events such as re-assessment of the lease term or
a change in an index rate used to determine lease payments. The remeasurement normally also adjusts the ROU
assets and impact of gain/loss on modification is given in the Statement of Profit and Loss.

Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have
been classified as financing cash flows.

2.5 Business combinations
Entities under common control

Business combinations involving entities or businesses under common control are accounted for using the
pooling of interests method as follows:

1. The assets and liabilities of the combining entities are reflected at their carrying amounts.

2. No adjustments are made to reflect fair values, or recognize any new assets or liabilities. Adjustments are
only made to harmonize accounting policies.

3. The financial information in the Financial Statements in respect of prior periods is restated as if the business
combination had occurred from the beginning of the preceding period in the Financial Statements,
irrespective of the actual date of the combination. However, where the business combination had occurred
after that date, the prior period information is restated only from that date.

4. The identity of the reserves are preserved and the reserves of the transferor become the reserves of the
transferee.

2B. Critical estimates and judgments

The preparation of Financial Statements in conformity with Ind AS requires management to make estimates and
assumptions that affect the reported amounts of revenue, expenses, assets and liabilities. Actual results could differ
from those estimates. Any revision to accounting estimates is recognised prospectively.

a. Project revenue and costs

The input method places considerable importance on accurate estimates to the extent of progress towards
completion and may involve estimates on the scope of deliveries and services required for fulfilling the
contractually defined obligations. These significant estimates include total contract costs, total contract revenues,
contract risks, including technical, political and regulatory risks, and other judgments viz. variable considerations
such as claims, liquidated damages, etc. The Company re-assesses these estimates on periodic basis and makes
appropriate revisions accordingly.

b. Property, plant and equipment and intangible assets

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 the
Company''s assets are determined by management at the time the asset is acquired and reviewed periodically,
including at Balance Sheet date. 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.

c. Leases

The Company use estimates and judgements in identification of leases, identification of non-lease component
of lease, lease term assessment considering termination and renewal option and the discounting rate used.

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116.
Identification of a lease requires significant judgement. The Company uses significant judgement in assessing
the lease term (including anticipated renewals) and the applicable discount rate. The Company determines the
lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend
the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to
terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the
Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate
a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to
exercise the option to extend the lease, or not to exercise the option to terminate the lease. The discount rate
is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of
leases with similar characteristics.

d. Employee benefits

The Company''s obligation for employee benefits is determined based on 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, attrition, mortality rates and medical
inflation rate. Due to the complexities involved in the valuation and its long-term nature, these liabilities are
highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most sensitive to change is the discount rate. In determining the appropriate discount rate for
plans operated in India, the Actuary 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 for India. Those mortality tables tend to change
only at interval in response to demographic changes. Future salary increases are based on expected future
inflation rates.

e. Impairment of financial assets

The Company assesses impairment on financial assets based on Expected Credit Loss (ECL) model. The provision
matrix is based on its historically observed default rates over the expected life of the financial assets and is
adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated
and changes in forward looking estimates are analysed.

f. Provisions

Significant estimates are involved in the determination of provisions related to onerous contracts, warranty
costs, legal and regulatory proceedings (legal proceedings).

The Company recognises the estimated liability for warranty cost when the products are sold. These estimates
are established using historical information on the nature, frequency and average cost of warranty claims and
management estimates regarding possible future incidence based on corrective actions or product failures.
Management estimates the provision based on historical warranty claim information and any recent trends that
may suggest future claim could differ from the historical amount.

The Company records a provision for onerous sales contracts when current estimates of total contract costs
exceed expected contract revenue.

The provision for warranty and onerous contracts is based on the best estimate required to settle the present
obligation at the Balance Sheet date.

Further, warranties relate to completed projects and products sold, and are determined on the basis of repair and
replacement costs resulting from component defects or functional errors, which may cover both warranty and
post warranty period. Additionally, non-recurring provisions are recorded due to various factors, such as portfolio
changes and customer application that, in general, relate to situations in which the expected failure rates are
above normal levels. The measurement of warranty provisions reflects whether the underlying contractual or
underlying obligation results from a single obligation or a larger population of items. The amount provided
are based on the management judgement and use of assumptions basis best available information, some of
which may be for matter that are inherently uncertain and susceptible to change as more relevant data becomes
available. Considering these obligations could be concluded over a longer period exceeding 1 year, these have
been appropriately discounted to reflect the time value of money.

Legal proceedings often involve complex legal issues and are subject to substantial uncertainties. Accordingly,
considerable judgment is part of determining whether it is probable that there is a present obligation as a result
of a past event at the Balance Sheet date, whether it is probable that such a legal proceeding including direct
and indirect tax matters will result in an outflow of resources and whether the amount of the obligation can
be reliably estimated. Internal and external counsels are generally part of the determination process. All the
estimates are revised periodically.

e) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of '' 2 per share. Each holder of equity shares is
entitled to one vote per share.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets
of the Company, after distribution of all preferential amounts (if any). The distribution will be in proportion to the
number of equity shares held by the shareholders.

f) There are no shares reserved for issue under options or contracts/commitments for the sale of shares/disin vestment as at
30 September 2025.

g) The Company does not have any securities convertible into equity or preference shares as at 30 September 2025.

* denotes figures less than a million

19 Other equity

Movement of each item of other equity is presented in Statement of Changes in Equity.

Nature and purpose of reserves

a) Capital reserve is created pursuant to scheme of arrangement (refer note 52).

b) General reserve is acquired pursuant to the scheme of arrangement.

c) Cash flow hedge reserve represents changes in the effective portion of fair value of derivative contracts that are
designated as cash flow hedges.

d) Stock awards reserve represents the grant date fair value of equity-settled share-based payments provided to
employees.

e) Retained earnings are the profit that the Company has earned till date, less any transfers to general reserve and
payment of dividend.

35 Corporate social responsibility (CSR)

The Company was incorporated on 07 February 2024 and incurred a loss of '' 3 during the preceding financial year.
Accordingly, the provisions of Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility are not
applicable to the Company for the current year, as the Company does not meet the criteria specified under the Companies
Act, 2013. Consequently, no CSR expenditure has been incurred during the year.

38 Disclosure relating to Provisions
Provision for warranty

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement,
material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred
over the contractual warranty and post warranty period.