Notes to Accounts of Techno Electric & Engineering Company Ltd.

Mar 31, 2023

(a) The Company has lease agreement usually for a period of 30 years with Government of Karnataka for forest land. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability. The Company classifies its right-of-use assets in a consistent manner to its property, plant and equipment.

Leasehold land held under finance lease: The Company has been allotted lands under lease for a term of 30 years with an initial payment equivalent to the fair value of the land. The Company further does not pay any amount during the lease tenure. The Company as per Ind AS 116, has reclassified the asset from tangible asset to Right of Use Asset (ROU Asset) with its carrying value.

(b) There are no leases which are yet to commence as on 31 March 2023.

(c) Lease payments, not included in measurement of liability

(i) Renewable Energy Certificates (RECs) are a mechanism for incentivicing producers of

electricity from renewable energy sources. The relevant regulations have been put in place by the Central Electricity Regulatory Commission (CERC). Since the Company is in the business of generating renewable energy it is eligible to receive REC''s which can be sold in CERC approved power exchanges. The Company had 354,400 unsold REC''s as at 31 March 2017. Effective April 2017, as per the order of CERC, the floor price of REC was reduced from ? 1,500 per unit to ? 1,000 per unit which was referred to the Hon''ble Supreme Court and based on the directions, the differential floor rate of ? 500 per unit was deposited by the buyer with CERC until further notice. Total receivable outstanding as on 31 March 2023 is ? 1,772.00 lakhs towards differential rate of renewal energy certificates. The Company is closely monitoring the status of the same and believe that since the amount has already been deposited with CERC by the buyers there is no risk of default from the customers and thus based on the above fact as well as legal opinion obtained, management believes that the Company has reasonable chances of succeeding on the matter and anticipates there is no uncertainty with respect to the recovery of such receivables.

a) Receivables of EPC division are hypothecated with Banks against non-fund based facilities availed by the Company.

b) No trade receivable are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

c) Trade receivables are mainly due from PSU and State Electricity Boards, which are not exposed to default risk. As per management assessment, no provision is made for expected credit loss due to very low credit risk of receivables. Further management has also considered past experience of losses on receivables. The Company has not recognised provision for doubtful receivables in any of the previous periods.

(e) Till previous year, the Company was executing a project in Afghanistan which is presently on hold due to Force Majeure event (around August 2021). As on 31 March 2023, total receivables from the project is K 5,052.70 lakhs (including retention). The project is approved by the government of Afghanistan for Da Afghanistan Brishna Sherkat (DABS) ”100% State owned corporation supplying electricity to the residents of Afghanistan" and facilitated by multilateral agency (Asian Development Bank). The Company is closely monitoring the status and expects to resume work once the geopolitical environment in Afghanistan is stable. Also the Company has received communications from the DABS to resume the project stating that the amount will be funded from DABS own budget. Further, the bank guarantee issued for the aforesaid ongoing project cannot be enforced as per the terms and conditions of the underlying contract. The management based on the facts of the matter and communications received from DABS is hopeful of recovering the entire receivables in the due course.

(f) During the previous years, the Company has executed and completed a project for Bengal Energy Limited (BEL) for a contract value of K 15,500 lakhs. This project was completed in the year 2012 and was handed over to BEL as per the terms of the contract and is presently being used by them in their normal course of business. Total receivable outstanding as on 31 March 2023 pertaining to this project is K 1,182.64 lakhs which is under arbitration proceedings currently and a new arbitrator has been appointed by the Hon''ble High Court in October 2022 post which the proceedings has been resumed. The matter was listed for hearing on 17 May 2023 on which date the arbitrator has directed the Company to submit multiple responses and documents, wherein an adjournment was sought by the Company. The matter is proposed to be listed on 4 June 2023 for next hearing. The management based on the legal opinion obtained, believes that the Company has reasonable chances of succeeding on the matter and anticipates there is no uncertainty with respect to the recover of such receivables.

(g) The Company is into generation of renewable power which is sold to various DISCOM''s including Tamil Nadu Generation & Distribution Corporation Limited (TANGEDCO). As at 31 March 2023, total receivables from wind division includes receivable amounting to K 5,640.59 lakhs pertaining towards differential tariff revision from financial year 2018-19 to till date and receivables amounting to K 2,514.73 lakhs towards Late Payment Surcharge on receivables from sale of energy. The differential tariff matter is supported by the order from APTEL which is in favor of the Company and Late Payment Surcharge on receivables from sale of energy is agreed as per the terms of the Power Purchase Agreement between the Company and TANGEDCO. The management believes that the Company has reasonable chances of recovering the receivables based on such favorable orders, legal opinion obtained and the power purchase agreement.

(b) Terms and rights attached to shares

Rights, preferences and restrictions 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 share is entitled to one vote per share. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings.

(c) In the period of five years immediately preceding 31 March 2023

(i) No additional shares were allotted as fully paid-up by way of bonus shares or pursuant to contract without payment being received in cash during the last five years.

(ii) The Company has allotted 112,682,400 number of equity shares of ? 2 each as fully paid up pursuant to the scheme of amalgamation sanctioned by the Hon''ble National Company Law Tribunal, bench at Allahabad (''NCLT'') vide its order dated 20 July 2018 without payment being received in cash.

(iii) The Company has bought back 2,682,400 equity shares during the preceding five financial years.

(d) Buy back of equity shares in the current year

The Board of Directors at its meeting held on 11 July 2022 approved a proposal to buyback fully paid up equity shares of the Company having a face value of ? 2 each from the existing shareholders (except promoters, promoter group and person in control of the Company) from open market through stock market mechanism (i.e., through National Stock Exchange of India

Limited and BSE Limited) at a maximum buyback price not exceeding ? 325.00 per equity share and maximum buyback size up to ? 13,000.00 lakhs, to be completed by 19 January 2023. The buyback of equity shares through the stock exchange commenced on 20 July 2022 and was completed on 19 January 2023. During this buyback period, the Company had purchased and extinguished a total of 2,380,981 equity shares from the stock exchange at a volume weighted average buyback price of ? 291.69 per equity share comprising 2.16% of the pre buyback paid up equity share capital of the Company. The buyback resulted in a cash outflow of ? 6,945.03 lakhs (excluding transaction costs and tax on buyback). The Company funded the buyback from its free reserves as explained in Section 68 of the Companies Act, 2013. In accordance with Section 69 of the Companies Act,

2013, as at 31 March 2023, the Company has created Capital Redemption Reserve of ? 47.62 lakhs equal to the face value of the above shares bought back as an appropriation from the general reserve.

(e) Dividend

The final dividend on shares is recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.

The Company declares and pays dividends in Indian rupees. Companies are required to pay / distribute dividend after deducting applicable withholding income taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

B The description, nature and purpose of each reserve within other equity are as follows:

(a) Capital redemption reserve: In accordance with Section 69 of the Indian Companies Act,

2013, the Company creates capital redemption reserve equal to the nominal value of the shares bought back as an appropriation from the general reserve.

(b) General reserve: Under the erstwhile Indian Companies Act 1956, a general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable reserves for that year.

Consequent to introduction of the Act, the requirement of mandatory transfer of a specified percentage of the net profit to general reserve has been withdrawn and the Company can optionally transfer any amount from the surplus of profit and loss to the General reserves. This reserve is utilised in accordance with the specific provisions of the Act.

(c) Capital reserve: Capital reserve is utilised in accordance with provision of the Act.

(d) Retained earnings: Retained earnings represents the profits earned by the Company till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

(e) Equity instruments through OCI: The Company has elected to recognise changes in the fair value of certain investments in equity securities through other comprehensive income. These changes are accumulated within the head ''equity instruments through OCI'' shown under the head other equity.

(f) Debt instruments through OCI: This represents the cumulative gains and losses arising on the revaluation of debt instruments measured at fair value through other comprehensive income that have been recognized in other comprehensive income, net of amounts reclassified to profit or loss when such assets are disposed off or when such instruments are impaired.

Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund, which is a defined contribution plan.

The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss on an accrual basis. The amount recognised as an expense towards contribution to provident and pension fund for the year aggregated to ? 232.72 lakhs (31 March 2022: ? 205.21 lakhs). The balance amount charged to the Statement of Profit and Loss on an accrual basis pertains towards gratuity and esi.

Defined benefit plans

(a) The Company operates one post-employment defined benefit plan for gratuity. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive 15 days basic salary for each year of completed service at the time of retirement/exit.

(b) These defined benefit plans expose the Company to actuarial risks, such as currency risk, interest risk and market (investment) risk.

Inherent risk

The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risk pertaining to the plan. In particular, this exposes the Company, to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature, the plan is not subject to longevity risk.

The following tables analyse present value of defined benefit obligations, expense recognised in Statement of Profit and Loss, actuarial assumptions and other information.

(a) Assumptions regarding future mortality experience are set in accordance with the published rates under Indian Assured Lives Mortality (2012-14) Ultimate.

(b) The estimates of future salary increases considered in actuarial valuation takes into account of inflation, seniority, promotion and other relevant factors such as supply and demand in

the employment market.

(c) Discount rate is based on the prevailing market yield of Indian Government securities as at the year end for the estimated term of the obligation.

(X) Risk exposure:

Valuation are based on certain assumptions, which are dynamic in nature and may vary over

time. As such valuations of the Company is exposed to follow risks -

a) Salary increase: Higher than expected increases in salary will increase the defined benefit obligation.

b) Investment risk: Since the plan is funded then asset liabilities mismatch and actual investment return on assets lower than the discount rate assumed at the last valuation date can Effect the defined benefit obligation.

c) Discount rate: The defined benefit obligation calculated use a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

d) Mortality and disability: If the actual deaths and disability cases are lower or higher than assumed in the valuation, it can Effect the defined benefit obligation.

e) Withdrawals: If the actual withdrawals are higher or lower than the assumed withdrawals or there is a change in withdrawal rates at subsequent valuations, it can effect defined benefit obligation.

36 DISCONTINUED OPERATIONS

The Company, consequent to the approvals received from the Board of Directors on

30 May 2022 and from the shareholders on 19 July 2022, has decided to dispose its 111.9 MW of wind assets situated in the state of Tamil Nadu to further focus on their core EPC business and to explore other opportunities for diversification. During the current year ended

31 March 2023, the Company has entered into memorandum of understanding ("the MoUs") for partial sale of its 108.9 MW of wind assets situated in the state of Tamil Nadu with multiple buyers. Accordingly, in line with the requirements of Ind AS 105 "Non-current assets Held for Sale", effective 01 October 2022, depreciation on such assets have been discontinued and respective wind assets have been designated as assets held for sale.

On completion of partial sale transaction of 105.3 MW of wind assets, the company has recognised net profit of ? 6,785.61 lakhs as an exceptional item in the standalone financial statements during the year ended 31 March 2023. Further, the operating profit of such 108.9 MW wind assets has been shown under "Discontinued Operations" in the standalone financial statements. The prior period disclosures and figures relating to the discontinued operations has been represented separately, in line with the requirements of Ind AS 105.

H. Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured . The settlement for these balances occurs through payment. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2023, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2022: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

38 SEGMENT REPORTING A Operating Segment

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components, and for which discrete financial information is available. All operating segments'' operating results are reviewed regularly by the Company''s Chief Operating Decision Maker (''CODM'') to make decisions about resources to be allocated to the segments and assess their performance.

The Company''s primary business segment is EPC (Construction). Based on the dominant source and nature of risk and returns of the Company, its internal organisation and management structure and its system of internal financial reporting, EPC business segment has been identified as the primary segment and the financial information are presented in the table below:

39 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) A Contingent liabilities:
	As at 31 March 2023	As at 31 March 2022
Claims against the company not acknowledged as debts:
- Indirect tax demands (VAT/CST/Entry tax)	87.80	93.47
Amount paid under protest ? 17.70 lakhs (31 March 2022: ^ 18.27 lakhs)
- Income tax demands	780.48	721.56
Amount paid under protest ? 375.46 lakhs (31 March 2022: ^ 375.46 lakhs)
	868.28	815.03

Note:

(a) In the opinion of the management, no provision is considered necessary for the disputes mentioned above on the ground that there are fair chances of successful outcome of appeals.

(b) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect to the above pending resolution of the respective proceedings.

B Commitments:

The Company does not have any capital commitments in the current and previous year.

40 CORPORATE SOCIAL RESPONSIBILITY EXPENSES (''CSR''):

As per Section 135 of the Act, a CSR committee has been formed by the Company.

The funds are utilised on the activities which are specified in Schedule VII of the Act.

(a) Gross amount required to be spent as per the limits of Section 135 of the Act:

^ 525.21 lakhs (Year ended 31 March 2022: ^ 479.07 lakhs)

41 CAPITAL MANAGEMENT

The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investors, creditors and market confidence and to sustain future development and growth of its business. In order to maintain the capital structure the Company monitors the return on capital. The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to all its shareholders. For the purpose of the Company''s capital management, capital includes issued equity share capital and all other equity reserves attributable to the equity holders, whereas debt includes borrowings which primarily includes the payables pertaining to the purchase of goods, less cash and cash equivalents.

B. Measurement of fair values

Valuation process and technique used to determine fair value of financial assets and liabilities classified under fair value hierarchy other than Level 1:

(a) The fair value of cash and cash equivalents, other bank balances, trade receivables, loans, trade payables and other financial assets and liabilities approximate their carrying amount largely due to the short-term nature of these instruments. Further, management also assessed the carrying amount of certain non-current loans and non-current other financial assets which are reasonable approximation of their fair values and the difference between the carrying amount and the fair values is not expected to be significant.

(b) Investments in equity instruments are classified as FVTOCI. Fair value of unquoted investments is determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

This Level includes investment in unquoted equity shares. Fair value of quoted equity instruments are determined using quoted prices available in the market.

(c) In case of derivatives, the fair value is determined using quoted forward exchange rates at the reporting dates in the respective commodities and currencies. There are no such significant unobservable inputs used for the valuation technique.

(d) The fair values of investments in mutual fund units is based on the net asset value (''NAV'') as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date.

(e) In case of investments in debt instruments, the fair values in an active market is determined using market approach and valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates.

(f) The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statement are a reasonable approximation of their fair values, since the Company does not anticipate that the carrying amount would be significantly different from the values that would eventually be received or settled.

FAIR VALUE HIERARCHY

Level 1- Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

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

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

There were no transfers between Level 1 and Level 2 during the year

The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in provision matrix. Trade receivables are typically unsecured and are derived from revenue earned from two main classes of trade receivables i.e. receivables from government promoted agencies and receivables from private third parties. A substantial portion of the Company''s trade receivables are from government promoted agencies having strong credit worthiness. Further the Company does not have a history of credit losses from such government promoted agencies, accordingly, provision for expected credit loss is not made in respect of trade receivables.

The credit risk for cash and cash equivalents, bank deposits, loans and financial instruments is considered negligible, since the counterparties are reputable organisations with high quality external credit ratings.

D. Risk management

The Company''s financial liabilities comprise mainly trade payables. The Company''s financial assets comprise mainly investments, loans, trade receivables, cash and cash equivalents and other balances with banks. The Company''s financial risk management is an integral part of how to plan and execute its business strategies.

The Company''s activities expose it to market risk, interest rate risk and foreign currency risk. The Board of Directors (''Board'') oversee the management of these financial risks. The risk management policies of the Company guides the management to address uncertainties in its endeavour to achieve its stated and implicit objectives. It prescribes the roles and responsibilities of the Company''s Management, the structure for managing risks and the framework for risk management. The framework seeks to identify, assess and mitigate financial risks in order to minimize potential adverse effects on the Company''s financial performance.

The following disclosures summarize the Company''s exposure to financial risks and information regarding use of derivatives employed to manage exposures to such risks. Quantitative sensitivity analysis have been provided to reflect the impact

of reasonably possible changes in market rates on the financial results, cash flows and financial position of the Company.

(i) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and loans given. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to customers, including outstanding accounts receivables. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

In respect of trade and other receivables, the Company recognises lifetime expected credit losses on trade receivables using a simplified approach by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information.

(ii) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company''s finance team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s liquidity position through rolling forecasts on the basis of expected cash flows.

The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

(iii) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates relates primarily to the Company''s long term and short term borrowing with floating interest rates. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

Note 1:

(a) Debt = Non-current borrowings current borrowings

(b) Net worth = Paid-up share capital reserves created out of profit - accumulated losses

Equity component of other financial instruments (net of taxes)

(c) EBITDA = Net Profit after taxes Non-cash operating expenses like depreciation and other amortizations Interest other adjustments like loss on sale of Fixed assets etc.

(d) Debt service = Interest and lease payments principal repayments

(e) Cost of goods sold = Cost of fuel consumed

(f) Purchase = cost of materials consumed closing inventory of raw materials - opening inventory of raw materials

(g) Working Capital = current assets - current liabilities

(h) EBIT = Earnings before interest and tax and exceptional items

(i) Capital employed = tangible net worth (total assets - total liabilities - intangible assets) total debt

Note 2:

(a) Decreased on account of increase in interest expense on mobilisation advance from parties

(b) Decreased on account of increase in closing inventory of the Company due to purchases made in the month of March 2023

(c) Decreased on account of increase in the net working capital due to increase in closing inventory and current investment of the Company

(d) Since the change in ratio is less than 25%, no explanation is required to be disclosed.

45 OTHER STATUTORY INFORMATION

(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company do not have any transactions with struck off companies.

(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(iv) The Company have not traded or invested in crypto currency or any form of virtual currency during the financial year.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a. directly or indirectly lend or invest in other persons or entities identified

in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or

b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(viii) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(ix) The Company has not entered into any scheme of arrangement which has an accounting impact on the current or previous financial year.

(x) There are no events or transactions after the reporting period which is required to be disclosed under Ind AS 10.

(xi) The Company have complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

46 CODE OF SOCIAL SECURITY, 2020

The Code of Social Security, 2020 (''Code'') relating to employee benefits during employment and post employment received Presidential assent in September 2020. Subsequently, the Ministry of Labour and Employment had released the draft rules on the aforementioned Code on 13 November 2020. However, the same is yet to be notified. The Company will evaluate the impact and make necessary adjustments to the financial statements in the period when the Code will come into effect.

47 Previous year figures have been re-grouped / re-classified wherever necessary, to conform to current year''s classification. The impact of such reclassification/regrouping is not material to the financial statements.

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Mar 31, 2018

1. Company Overview

Techno Electric & Engineering Company Limited (Formerly Simran Wind Project Limited) (The Company) is a recognized company in the power sector. It provides engineering, procurement and construction services to the three segments of power sector including generation, transmission and distribution. The Company is also engaged in generation of wind power through Wind Turbine Generators in the states of Tamil Nadu & Karnataka. The Company is recognized for its expertise in the domains of light construction and heavy engineering segments across the country’s power sector. The Company is a public limited company incorporated and domiciled in India and has its registered office at C-218 Ground Floor (GR-2) Sector-63, Noida Gautam Buddha Nagar Uttar Pradesh- 201307, India.

Pursuant to the scheme of amalgamation Techno Electric & Engineering Company Limited is merged with Simran Wind Project Limited as per the order dated 20th July 2018 of Allahabad Bench of National Company Law Tribunal with the appointed date being 1st April, 2017. Further as per the approved scheme the name of Simran Wind Project Limited has been changed to Techno Electric & Engineering Company Limited. The shares are under process of listing with the Bombay Stock Exchange and National Stock Exchange.

The financial statements are approved for issue by the Company’s Board of Directors on 10th Aug, 2018.

2. Basis of Preparation

The standalone financial statements of Techno Electric & Engineering Company Limited (The Company) comply in all material respect with Indian Accounting Standards (IND-AS) as prescribed under Section 133 of the Companies Act, 2013(The Act) as notified under the Companies (Indian Accounting Standards) Rule 2015, Companies (Indian Accounting Standards) Amendment Rule 2016 and Other Accounting and the accounting principles generally accepted in India.

The financial statements have been prepared on a historical cost convention, on accrual basis, except for following assets and liabilities which have been measured at fair value:

- Financial Instruments

- Defined Benefit Obligations

Historical cost is generally based on fair value of consideration given in exchange of goods and services.

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

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

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

3. Functional & Presentation Currency

These Financial statements are presented in Indian Rupees (INR) which is also the company’s functional currency and all amounts are rounded to the nearest lakhs and two decimals thereof, except as stated otherwise.

4. 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 contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. 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 5. 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.

a) Trade Receivable are hypothecated with Banks to secure short term borrowings

b) No trade receivables are due from directors or other officers of the Company either severally or jointly with any other person. Further, no trade receivable are due from Firms or Private Companies in which any Director is a Partner or Director or Member

a) Fixed deposit receipts of Rs.1189.72 lakhs (Previous Year ‘ NIL) are lodged with the Bankers of the Company as Margin against Bank Guarantees issued /to be issued in favour of the company.

b) Fixed deposit receipts of Rs.1.54 lakhs (Previous Year ‘ NIL) are lodged with Client/Statutory Authorities as Security/Registration Deposits.

i) 11,26,82,400 equity shares of Rs.2 each, fully paid up and ranking pari passu, are to be issued and allotted to the shareholders of the Transferor Company pursuant to Scheme of Amalgamation approved by the Hon’ble National Company Law Tribunal Bench at Allahabad vide its Order dated 20th July 2018. (Refer Note no. 47c)

iv) Rights, Preferences and Restrictions attached to the Shares

The equity shares of the Company of nominal value of Rs.2 per share rank pari passu in all respects including voting rights and entitlement to dividend and repayment of share capital.

v) The Company does not have any Holding Company

vi) The Company has not reserved Equity Shares for issue under the Employee Stock Option Scheme.

vii) None of the securities are convertible into shares at the end of the reporting period

viii) The Company during the preceding five years

- has allotted 22,53,64,800 number of equity shares of Rs.2/- each as fully paid up pursuant to the scheme of amalgamation without payment being received in cash.(Refer Note -47c)

- has not allotted any bonus shares

- has not bought back any shares

ix) There are no calls unpaid by Directors / Officers

x) The Company has not forfeited any shares

Description of Other Equity

Capital reserve represent reserve created pursuant to past mergers and acquisitions.

Capital Redemption Reserve represent reserve created on redemption of capital as per the requirement of the Companies Act.

Debenture Redemption Reserve represent reserve created out of its profits which is available for payment of dividend, for the purpose of redemption of debentures as per the requirement of the Companies Act.

Securities Premium Account is used to record the premium on issue of shares. The reserve will be utilised in accordance with the provisions of the Act.

General Reserve has created by transferring certain amount out of profit.

Other Comprehensive Income

Acturial Gain (Loss) on Defined Benefit Obligations represent acturial gain (loss) arising at the time of valuation of defined benefit obligations and credited to Acturial Gain (loss) component of Other Comprehensive Income (OCI).

Gain (Loss) on Equity Instruments accounted at FVTOCI represent change in fair value of certain investments recognised in Other Comprehensive Income. These changes are accumulated within the FVTOCI equity Investment reserve within equity.

a) Loans from Banks in foreign currency are secured against hypothecation of Components, Raw-Materials, Work-in-Progress, Plant & Machinery, Book Debts of EPC division, ranking pari-passu.

b) The Company also enjoys financing facilities with certain other Banks against hypothecation of Components, Raw-Materials, Work-in-Progress, Plant & Machinery, Book Debts of EPC division, equitable mortgage of Land at Rajpur, West Bengal. Outstanding Balance as on 31st March 2018- Nil (Previous Year- Nil)

c) The above referred External Commercial Borrowing are secured by first ranking pari passu charge / mortgage inter-se all lenders and hedge counterparties on the 111.90 MW of wind assets of the company, located in the State of Tamil Nadu, India and spread across three locations in Mutthianpatti, Amudhapuram and Rasta.

d) Disclosure in respect of security created on assets of the Company against borrowings

b) Fair value hierarchy

This section explains the estimates and judgements made in determining the fair values of Financial Instruments that are measured at fair value and amortised cost and for which fair values are disclosed in financial statements. To provide an indication about reliability of the inputs used in determining the fair values, the company has classified its financial instruments into the three levels prescribed under accounting standards. An explanation of each level follows underneath the table:

Level 1 : includes financial Instrument measured using quoted prices (unadjusted) in active markets for identical assets and liabilities that the entity can access at the measurement date.

Level 2 : Includes financial Instruments which are not traded in active market but for which all significant inputs required to fair value the instrument are observable. The fair value is calculated using the valuation technique which maximises the use of observable market data.

Level 3: Includes those instruments for which one or more significant input are not based on observable market data.

c. Fair Value disclosure of Financial assets and Financial Liabilities measured at amortised cost

The carrying amount of cash and cash equivalents, bank balances, trade receivables, loans, other financial assets, trade payables and other financial liabilities are considered to be the same as their fair value due to their short term nature and are in close approximation of fair value.

d. Investment in the Equity Shares of its Subsidiaries, Associates & Joint Venture

The Company’s investment in the equity shares of its subsidiaries, associates & joint venture is recognised at cost. The company has elected to apply previous GAAP carrying amount of its equity investment in subsidiaries, associates & joint venture as deemed cost as on the date of transition to Ind AS.

e. Finance Income and Finance Cost Instrument Category wise classification

Finance Income and Finance Cost Instrument Category wise classification for the year ended 31st March 2018

The above amount of interest expenses does not include interest pertaining to taxation and other finance costs of Rs.196.16 lakhs and Rs.10.29 lakhs for the year ended 31/03/2018 and 31/03/2017 respectively.

5. FINANCIAL RISK MANAGEMENT Financial risk factors

The Company’s activities expose it to a variety of financial risks : market risk, liquidity risk and credit risk.

a) Market risk

i) Foreign Currency Risk

The primary market risk to the Company is foreign exchange risk. The Company is exposed to foreign exchange risk through its foreign currency loan, purchases from overseas suppliers and short term foreign currency loan. The Company pays off its foreign exchange exposure within a short period of time.

The following table analyses foreign currency risk from financial instruments for its non current borrowings as of 31st March 2018 and 31st March 2017

For the year ended 31st March 2018 and 31st March 2017, the effect of every percentage point depreciation /appreciation in the exchange rate between the Indian Rupee and US Dollar is as under

ii) Other Price Risk

The Company’s exposure to equity securities price risk from movement in market price of related securities classified either as fair value through OCI or as fair value through Statement of Profit and Loss.

Assets:

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations associated with its financial liabilities. The Company determines its liquidity requirement in the short, medium and long term. This is done by drawing up cash forecast for short and medium term requirements and strategic financing plan for long term.

The Company’s principle source of liquidity are cash and cash equivalent, bank balances, cash flows from operations and investment in mutual funds. The Company has no outstanding bank borrowings as on 31st March 2018. The Company believes that working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

i) Maturity analysis

The table below provides details regarding the contractual maturities of financial liabilities as of March 31, 2018

Undrawn limit has been calculated based on available drawing power

Credit Risk

Credit risk is the risk that counter party will not meet its obligation under a financial instrument leading to a financial loss. The company is exposed to credit risk from investments, trade receivables, cash and cash equivalents, bank balances, loans and other financial assets.

Credit risk on cash and cash equivalent and bank balances is limited as the Company generally invest in deposits with recognised banks. Investments primarily include investments in liquid mutual fund units, quoted bonds and investment in subsidiaries, associates & joint venture. Loan is provided to joint venture company which is repayable on demand. Trade receivables are unsecured and are derived from revenue from customers who are primarily Public Sector Undertakings and hence the risk is limited. Other financial assests primarily includes the deposit made for tender participation, rent & electricity deposit and interest accrued but not due.

6. CAPITAL MANAGEMENT

For the purpose of managing capital, Capital includes issued equity share capital and reserves attributable to the equity share holders.

The objective of the company’s capital management are to:

- Safeguard their ability to continue as going concern so that they can continue to provide benefits to their shareholders.

- Maximise the wealth of the shareholder.

- Maintain optimum capital structure to reduce the cost of the capital.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and requirement of financial covenants. In order to maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, loans and borrowings, less cash and cash equivalents.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March 2018 and 31st March 2017.

7. DISCLOSURES IN ACCORDANCE WITH INDAS 19 (2015) ON “EMPLOYEES BENEFITS”

a) Defined Contribution Plans

The Company made contributions towards Provident Fund, a defined contribution retirement benefit plan for qualifying employees. The Provident Fund Plan is operated by the Regional Provident Fund Commissioner. The contribution payable to these plans by the company are at rates specified in the rules of the scheme.

b) Defined Benefit Plans

The Company offers the following employee benefits to its employees

i) Gratuity

ii) Compensated Absensce Defined Benefit Obligations

The below tables set forth the changes in the projected benefit obligation and plan assets and amounts recognised in the standalone financial statements as at 31st March 2018 and 31st March 2017, being the respective measurement dates.

Details of propotionate share in Assets, Liabilities, Income and Expenditure of the Company in its Joint Ventures are given below

Transactions with the related parties are at arm’s length prices. The amount outstanding are unsecured and will be settled in cash. No guarantees have been given or received during the year from any of the related parties. No expenses have been recognised in the current year or previous year for bad or doubtful debts in respect of the amount owed by related parties.

8. LEASES

The Company’s significant leasing/ licensing arrangements are mainly in respect of residential / office premises and equipments, which are operating leases. The aggregate lease payable on these leasing arrangements are charged as rent and equipment hire charges in the Statement of Profit & Loss.

9. AMALGAMATION OF HOLDING COMPANY

a) Merger of the Authorised Share Capital

As an integral part of the scheme, upon this scheme becoming effective and with effect from the Appointed Date, the Authorised Share Capital of the Transferor Company i.e Techno Electric & Engineering Company Limited stand transferred and merged with the Authorised Share Capital of the Company,without any further act, instrument or deed or payment of filing fees payable to the Registrar of Companies or stamp duty. Thus, the increased authorised stands as below:

8.00.20.000 Preference Shares of Rs.10/each amounting to Rs.8,002 lakhs.

1.39.99.00.000 Equity Shares of Rs.2/- each amounting to Rs.27,998 lakhs.

b) Pursuant to the Scheme of Amalgamation of Techno Electic & Engineering Company Limited (“ the Transferor Company “), its erstwhile holding Company, with Simran Wind Project Limited (the name of which has subsequently being changed to Techno Electric & Engineering Company Limited (herein after referred to as “ the Company” or “ the Transferee Company “), filed under section 230-232 and other applicable provisions of the Companies Act 2013 (“ the Sanctioned scheme”) sactioned by the Hon’ble National Company Law Tribunal, bench at Allahabad (“NCLT”) vide its order dated 20th July 2018, the whole of the undertaking of the transferor Company, including its assets, properties and liabilities stands transferred to and vested in the Company with effect from 1st April 2017 (“ the Appointed Date”). Certified copy of the said order has been filed by both the transferor Company and the transferee Company with the Registrar of Companies, Uttar Pradesh on 24th July 2018.

The Transferor Company is engaged in the business of providing engineering, procurement and construction services to the three segments of power sector including generation transmission and distribution.

c) Upon the Scheme coming into effect, from appointed date, the entire paid up share capital of the Company held by the transferor company stands cancelled and adjusted against the investments so made by the transferor Company in the transferee Company. Subsequent to year end and pursuant to the Scheme, the Company has issued and allotted 11,26,82,400 (eleven crores twenty six lakhs eighty two thousand four hundred) equity shares of face value of Rs.2 each amounting to Rs.2253.64 lakhs to the shareholders of the erstwhile transferor Company. in lieu of their shares held in the transferor Company before amalgamation.

d) The amalgamation has been accounted for in accordance with the Scheme sanctioned by NCLT wherein the assets and liabilities of the transferor Company have been recorded at their carrying value after cancellation of the investments of the transferor Company in the Company. This accounting tratment is in line with the pooling of interest method specified under Ind AS 103 -” Business Combinations “ with respect to accounting for Business Combinations of entities under common control. The share swap ratio was fixed at 1:1.

e) The accounting effect of the Scheme has been given in the financial year 2017-18.

g) The transferor Company had subsequent to the appointed date bought back 15,00,000 equity shares of Rs.2 each from the shareholders in the month of April 2017. Consequently 15,00,000 shares were cancelled and the net consideration paid amounting to Rs.6000 lakhs was adjusted with share premium account (Rs.5970 lakhs) and by way of reduction in share capital (Rs.30 lakhs)

h) As part of the scheme of amalgamation the equity shares of the transferee Company held by the transferor company were cancelled.The net accounting effect as a result of such cancellation is mentioned below.

i) Pursuant to the Sanctioned Scheme, all the profits or income accruing or arising to the Transferor Company or expenditure or losses arising or incurred or suffered by the Transferor Company post the Appointed Date, shall for all purposes be treated and be deemed to be accrued as the income or profits or losses or expenditure as the case may be of the Transferee Company.

j) The Scheme as referred in (b) above, was pending sanction of the NCLT as on 25th May 2018, the date on which Company’s financial statements were approved by the Board of Directors and audited by the Statutory Auditors. However, consequent upon the Scheme coming into effect, and the vesting of whole of the undertaking of transferor Company in the Company with effect from the Appointed Date, as indicated in (b) above, these financial statements have now been revised to give effect to the Scheme and are issued to Shareholders for adoption.

k) Pursuant to the sanctioned Scheme of Amalgamation, the name of the Company was changed to “Techno Electric & Engineering Company Limited”.

10. The previous year figures have been regrouped and/or rearranged wherever considered necessary.