Powerica Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

4. Material Accounting Policies

4.1 Property, plant and equipment

(a) Recognition and measurement:

Freehold land is carried at historical cost. All other
items of property, plant and equipment are measured
at cost, which includes capitalised borrowing costs,
less accumulated depreciation and accumulated
impairment losses, if any.

Cost of an item of property, plant and equipment
comprises its purchase price, including import duties
and non-refundable purchase taxes, after deducting
trade discounts and rebates, any directly attributable
cost of bringing the item to its working condition for
its intended use and estimated costs of dismantling
and removing the item and restoring the site on
which it is located. The cost of a self- constructed
item of property, plant and equipment comprises the
cost of materials and direct labour, and other cost
directly attributable to bringing the item to working
condition for its intended use, and estimated costs of
dismantling and removing the item and restoring the
site on which it is located.

Capital work-in-progress in respect of assets which
are not ready for their intended use are carried at
cost, comprising of direct costs, related incidental
expenses and attributable interest. Advances given
towards acquisition of fixed assets outstanding at
each Balance Sheet date are disclosed as Other
Non-Current Assets.

All identifiable Revenue expenses including interest
incurred in respect of various projects/ expansion,
net of income earned during the project development
stage prior to its intended use, are considered as pre
- operative expenses and disclosed under Capital
Work-in-Progress.

Any gain or loss on disposal of an item of property,
plant and equipment is recognised in profit or loss.

(b) Subsequent expenditure

Subsequent expenditure is capitalised only if it is
probable that the future economic benefits associated
with the expenditure will flow to the group.

(c) Depreciation

Depreciation is calculated on cost of items of property,
plant and equipment less their estimated residual
values over their estimated useful lives prescribed
under Schedule II to the Companies Act, 2013 using
the diminishing balance method except in respect of
the following category of assets, and is recognised
in the statement of profit or loss. Freehold land is
not depreciated.

Depreciation method, useful lives and residual values
are reviewed at each financial year-end and adjusted
if appropriate.

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

4.2 Intangible Assets

(a) Recognition and measurement

Intangible assets are recognised when it is probable
that the future economic benefits that are attributable
to the assets will flow to the company and the cost of
the assets can be measured reliably.

Intangible assets are stated at cost or acquisition less
accumulated amortisation and impairment loss, if any.

Internally generated intangibles, excluding capitalised
development costs, are not capitalised and the related
expenditure is reflected in profit or loss in the period in
which the expenditure is incurred.

(b) Amortisation

Software is amortised over a period of 3 years on
straight line basis from the date they are available
for intended use, subject to impairment test. Rights
of way are amortised over the period of agreement of
right to use which ranges from 25 years to 99 years.

The amortisation period and the amortisation method
for an intangible asset with a finite useful life are

reviewed at least at the end of each reporting period.
Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and
are treated as changes in accounting estimates.

(c) De-recognition

Gains or losses arising from de-recognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the
carrying amount of the asset and are recognised
in the statement of profit and loss when the assets
is de-recognised.

4.3 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.

Financial Assets:

Classification:

The Company classifies a financial asset in accordance
with the below criteria: i) the Company''s business model
for managing financial assets; and ii) the contractual cash
flow characteristics of the financial asset.

Based on the above criteria, the Company classifies its
financial assets into the following categories:

i) Debt instruments at amortised cost.

ii) Debt instruments at fair value through other
comprehensive income (FVTOCI).

iii) Derivatives and Equity instruments at fair value
through profit or loss (FVTPL).

iv) Equity instruments measured at fair value through
other comprehensive income (FVTOCI).

Initial recognition and measurement:

All financial assets are recognised initially at fair value plus,
in the case of financial assets not recorded at fair value
through profit or loss, transaction costs that are attributable
to the acquisition of the financial asset.

Subsequent measurement:

For the purpose of subsequent measurement, financial
assets are classified in two broad categories:

• Financial assets at fair value (FVTPL /FVTOCI)

• Financial assets at amortised cost

When assets are measured at fair value, gains and losses
are either recognised in the statement of profit and loss (i.e.

fair value through profit or loss (FVTPL)), or recognised in
other comprehensive income (i.e. fair value through other
comprehensive income (FVTOCI)).

Financial Assets measured at amortised cost (net of
any write down for impairment, if any):

Financial assets are measured at amortised cost when
asset is held within a business model, whose objective
is to hold assets for collecting contractual cash flows
and contractual terms of the asset give rise on specified
dates to cash flows that are solely payments of principal
and interest. Such financial assets are subsequently
measured at amortised cost using the effective interest
rate (EIR) method less impairment, if any. The losses
arising from impairment are recognised in the Statement of
profit and loss.

Financial Assets measured at Fair Value through Profit or
Loss ("FVTPL"): Financial assets under this category are
measured initially as well as at each reporting date at fair
value with all changes recognised in profit or loss.

Financial Assets measured at Fair Value through Other
Comprehensive Income ("FVTOCI"):

Financial assets under this category are measured initially
as well as at each reporting date at fair value, when asset
is held within a business model, whose objective is to hold
assets for both collecting contractual cash flows and selling
financial assets. Fair value movements are recognized in
the other comprehensive income.

Investment in Subsidiary:

Investment in equity instruments of Subsidiaries are
measured at cost as per Ind AS 27. In the financial
statements, investment in subsidiary companies is carried
at cost. The carrying amount is reduced to recognise any
impairment in the value of investment.

Investment in Equity Instruments:

Equity instruments which are held for trading are classified
as at FVTPL. All other equity instruments are classified as
FVTOCI. Fair value changes on the instrument, excluding
dividends, are recognised in the other comprehensive
income. There is no recycling of the amounts from other
comprehensive income to profit or loss.

Investment in Debt Instruments:

A debt instrument is measured at amortised cost or at
FVTOCI. Any debt instrument, which does not meet the
criteria for categorization as at amortized cost or as FVOCI,
is classified as at FVTPL. Debt instruments included within
the FVTPL category are measured at fair value with all
changes recognised in the Statement of profit and loss.

A financial asset is primarily derecognised when the rights
to receive cash flows from the asset have expired or
Company has transferred its rights to receive cash flows
from the asset.

Impairment of Financial Assets:

In accordance with Ind - AS 109, Company applies
expected credit loss (ECL) model for measurement and
recognition of impairment loss on the financial assets that
are debt instruments and trade receivables.

Financial Liabilities:

Classification:

Company classifies all financial liabilities as subsequently
measured at amortised cost or FVTPL.

Initial recognition and measurement:

All financial liabilities are recognised initially at fair value
and, in the case of loans, borrowings and payables, net of
directly attributable transaction costs.

Financial liabilities include trade and other payables, loans
and borrowings including bank overdrafts and derivative
financial instruments.

Subsequent measurement:

Financial liabilities at fair value through profit or loss include
financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through
profit or loss. Interest-bearing loans and borrowings are
subsequently measured at amortised cost using the
Effective Interest Rate (EIR) method. Gains and losses
are recognised in profit or loss when the liabilities are
derecognised as well as through EIR amortisation process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortisation is
included as finance costs in the statement of profit and loss.

De-recognition of Financial Liabilities:

A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the de¬
recognition of the original liability and the recognition of
a new liability. The difference in the respective carrying
amounts is recognised in the Statement of Profit and Loss.

Derivative Financial Instrument:

Company uses derivative financial instruments, such as
forward currency contracts to mitigate its foreign currency

risks. Such derivative financial instruments are initially
recognised at fair value on the date on which a derivative
contract is entered into and are subsequently re-measured
at fair value. Derivatives are carried as financial assets
when the fair value is positive and as financial liabilities
when the fair value is negative.

Capital Acceptances

The Company enters into deferred payment arrangements
(acceptances) whereby lenders, such as banks and other
financial institutions for capital assets, whereby such
institutions make payments to the suppliers on behalf of
the Company. The Company subsequently repays these
amounts at a later date in accordance with the agreed
terms. These arrangements are in the nature of credit
facilities availed for acquisition of capital assets and are
recognized as capital acceptances.

Interest borne by the Company on such arrangements
is accounted as finance cost. Other financial liabilities
are subsequently measured at amortized cost using the
effective interest method. Payments made by banks and
financial institutions directly to capital vendors are treated
as non-cash transactions, while repayments made by the
Company towards such capital acceptances are disclosed
as cash flows from investing activities, reflecting the
underlying substance of the transaction.

Hedge Accounting

The Company uses foreign currency forward contracts to
hedge its risks associated with foreign currency fluctuations
relating to highly probable forecast transactions. The
Company designates such forward contracts in a cash flow
hedging relationships by applying the hedge accounting
principles. These forward contracts are stated at fair value
at each reporting date. Changes in fair value of these
forward contracts that are designated and effective as
hedges of future cash flows are recognized directly in (OCI)
and accumulated in ''Cash Flow Hedge Reserve Account''
under Other Equity, net of applicable deferred income
taxes and the ineffective portion is recognized immediately
in the Statement of Profit & Loss. Amounts accumulated in
the ''Cash Flow Hedge Reserve Account'' are reclassified to
the Statement of Profit & Loss in the same period during
which the forecasted transaction affects Statement of
Profit & Loss. Hedge accounting is discontinued when the
hedging instrument expires or is terminated, or exercised
or no longer qualifies for hedge accounting. For forecasted
transactions, any cumulative gain or loss on the hedging
instrument recognised in ''Cash Flow Hedge Reserve
Account'' is retained until the forecasted transaction occurs.
If the forecasted transaction is no longer expected to occur,
the net cumulative gain or loss recognised in ''Cash Flow
Hedge Reserve Account'' is immediately transferred to the
Statement of Profit and Loss.

Intangible assets and property, plant and equipment are
evaluated for recoverability whenever events or changes
in circumstances indicate that their carrying amounts may
not be recoverable. For the purpose of impairment testing,
the recoverable amount (i.e. the higher of the fair value less
cost to sell and value-in-use) is determined on an individual
asset basis unless the asset does not generate cash flows
that are largely independent of those from other assets. In
such cases, the recoverable amount is determined for the
Cash Generating Unit to which the asset belongs.

If such assets are considered to be impaired, the
impairment to be recognised in the Statement of Profit and
Loss is measured by the amount by which the carrying
value of the assets exceeds the estimated recoverable
amount of the asset. An impairment loss is reversed
in the Statement of Profit and Loss if there has been a
change in the estimates used to determine the recoverable
amount. The carrying amount of the asset is increased to
its revised recoverable amount, provided that this amount
does not exceed the carrying amount that would have
been determined (net of accumulated amortisation or
depreciation) has no impairment loss been recognised for
the asset in prior years.

4.5 Inventories:

Raw materials are valued at lower of cost (on weighted
average basis) or estimated net realisable value. Cost
for this purpose includes basic cost of materials and all
identifiable direct cost and includes taxes and duties and is
net of eligible credits under GST schemes.

Finished goods are valued at lower of cost or estimated
realisable value. Cost for this purpose comprises of Raw
Material cost and proportionate overheads allocated on the
assumption of normal operating capacity.

Traded goods are valued at lower of cost or estimated
realisable value.

Work-in-progress are valued at estimated cost.

Goods and materials in transit are valued at actual cost
incurred up to the date of balance sheet. Materials and
other items held for use in production of inventories are not
written down, if the finished products in which they will be
used are expected to be sold at or above cost.

4.6. Cash and Cash Equivalent:

Cash and Cash Equivalents comprise of cash on hand
and cash at bank including fixed deposit/highly liquid
investments with original maturity period of three months
or less that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of
changes in value.

4.7. Cash Flow Statements:

Cash flows are reported using the indirect method, whereby
net profit before tax is adjusted for the effects of transactions
of a non-cash nature, any deferrals or accruals of past or
future operating cash receipts or payments and item of
income or expenses associated with investing or financing
cash flows. The cash flow from operating, investing and
financing activities of Company are segregated.

4.8. Foreign Currency Transactions:

Transactions in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction.
Date of transaction for determining the exchange rate for
translation would be earlier of:

• The date of initial recognition of the non-monetary
asset or non-monetary liability arising from the
payment or receipt of advance consideration, and

• The date that the related item is recognised in the
financial statements.

Monetary items denominated in foreign currencies at the
year-end are re-measured at the exchange rate prevailing
on the balance sheet date. Non-monetary foreign currency
items are carried at cost.

Any income or expense on account of exchange difference
either on settlement or on restatement is recognised in the
Statement of Profit and Loss except for:

Exchange differences on translation or settlement of long
term foreign currency monetary items in respect of loans
borrowed before 1st April 2016 at rates different from
those at which they were initially recorded or reported in
the previous financial statements, insofar as it relates to
acquisition of depreciable assets, are adjusted to the cost
of the assets and depreciated over remaining useful life
of such assets.

4.9. Revenue Recognition:

Revenue from contracts with customers for sale of goods
and provision of services. Revenue from contracts with
customers is recognized when control of the goods and
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 and services.

The Company satisfies a performance obligation and
recognizes revenue over time, if one of the following
criteria is met:

a) The Company''s performance does not create an
asset with an alternate use to the Company and the
Company has as an enforceable right to payment for
performance completed to date.

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

c) The customer simultaneously receives and consumes
the benefits provided by the Company''s performance
as the Company performs.

For performance obligations where one of the above
conditions are not met, revenue is recognized at the point
in time at which the performance obligation is satisfied.

Revenue is measured at the fair value of the consideration
received or receivable, taking into account contractually
defined terms of payment and excluding taxes and duty.

The Company assesses its revenue arrangements against
specific criteria to determine if it is acting as principal or
agent. Taxes collected on behalf of the government are
excluded from revenue. Revenue is recognized to the
extent it is probable that the economic benefits will flow to
the Company and the revenue and costs, if applicable, can
be measured reliably.

Variable consideration includes volume discounts, price
concessions, liquidity damages, incentives, etc. The
Company estimates the variable consideration with
respect to above based on an analysis of accumulated
historical experience. The Company adjust estimate of
revenue at the earlier of when the most likely amount of
consideration we expect to receive changes or when the
consideration becomes fixed.

Sale of Products:

Performance obligation in case of Revenue from sale
of goods is satisfied at a point in time and is recognized
when the performance obligation is satisfied and control
as per Ind AS 115 is transferred to the customer. The
Company collects GST on behalf of the Government
and, therefore, these are not economic benefits flowing
to the Company. Hence, they are excluded from revenue.
Revenue is disclosed net of discounts, incentives and
returns, as applicable.

Rendering of Services:

Performance obligation in case of erection contracts
is satisfied over the period of time. Since the company
creates an asset that the customer controls as the asset
is created and the company has an enforceable right to
payment for performance completed to date if it is meets
the agreed specifications. Revenue from such contracts,
where the outcome can be estimated reliably and 10%
of the project cost is incurred, is recognized under the
percentage of completion method by reference to the
stage of completion of the contract activity. The stage of
completion is measured by input method i.e. the proportion

that costs incurred to date bear to the estimated total costs
of a contract. The total costs of contracts are estimated
based on technical and other estimates. In the event that
a loss is anticipated on a particular contract, provision is
made for the estimated loss. Contract revenue earned in
excess of billing is reflected under as "Unbilled Revenues"
and billing in excess of contract revenue is reflected under
"Contract Liabilities".

Dividend income is recognised when right to receive
dividend is established. Interest income is recognised
on effective interest method. Insurance and other claims
are recognised as a revenue on certainty of receipt
on prudent basis.

Sale of Certified Emission Reductions (CER''s) is recognised
as income on the delivery of the CER''s to the customer''s
account as evidenced by the receipt of confirmation of
execution of delivery instructions.

4.10 Employee Benefits:

All employee benefits payable wholly within twelve months
rendering service are classified as short term employee
benefits. Benefits such as salaries, wages, short-term
compensated absences, performance incentives etc., and
the expected cost of bonus, ex gratia are recognised during
the period in which the employee renders related service.

(i) Defined benefit plans

Company provides for gratuity, a defined benefit
retirement plan (the Gratuity Plan'') covering eligible
employees. The Gratuity Plan provides a lump-sum
payment to vested employees at retirement, death,
incapacitation or termination of employment, of an
amount based on the respective employee''s salary
and the tenure of employment with Company.

Liabilities with regard to Gratuity Plan are determined
by actuarial valuation, performed by an independent
actuary, at each balance sheet date using the
Projected Unit Credit Method.

Company fully contributes all ascertained liabilities
to the Powerica Limited Employees Group Gratuity
Assurance Scheme (the Trust). Trustees administer
contributions made to the Trust and contributions are
invested in a scheme with Life Insurance Corporation
of India as permitted by laws of India.

The retirement benefit obligations recognised in the
balance sheet represents the present value of the
defined benefit obligations reduced by the fair value
of scheme assets. Any asset resulting from this
calculation is limited to the present value of available
refunds and reductions in future contributions to the
scheme. The company recognizes the net obligation
of a defined benefit plan in its balance sheet as an
asset or liability. Actuarial gains and losses are
recognised in full in the other comprehensive income
for the period in which they occur. The effect of any
plan amendments are recognized in the statement of
profit and loss.

(ii) Defined contribution plans:

Obligations for contributions to defined contribution
plans are expensed as the related service is
provided and the Company will have no legal or
constructive obligation to pay further amounts.
Prepaid contributions are recognised as an asset to
the extent that a cash refund or a reduction in future
payments is available.

If the contribution payable to the scheme for service
received before the reporting date exceeds the
contribution already paid, the deficit payable to the
scheme is recognised as a liability after deducting the
contribution already paid.

(iii) Compensated absences:

Company has a policy on compensated absences
which are both accumulating and non-accumulating
in nature. The expected cost of accumulating
compensated absences is determined by actuarial
valuation performed by an independent actuary at
each balance sheet date using projected unit credit
method on the additional amount expected to be paid/
availed as a result of the unused entitlement that has
accumulated at the balance sheet date.

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

Expense on non-accumulating compensated
absences is recognized in the period in which the
absences occur.

4.11 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.

4.12 Lease:

At inception of a contract, the Company assesses whether
a contract is, or contains, a lease. 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
uses the definition of a lease in Ind AS 116.

Company as a lessee

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

i) Right-of-Use Assets

The Company recognizes right-of-use as set
representing its right to use the underlying asset for
the lease term at the lease commencement date. The
cost of the right-of-use asset measured at inception
shall comprise of the amount of the initial measurement
of the lease liability adjusted for any lease payments
made at or before the commencement date less any
lease incentives received, plus any initial direct costs
incurred and an estimate of costs to be incurred by
the lessee in dismantling and removing the underlying
asset or restoring the underlying asset or site on which
it is located. The right-of-use assets is subsequently
measured at cost less any accumulated depreciation,
accumulated impairment losses, if any and adjusted
for any remeasurement of the lease liability.

The right-of-use assets is depreciated using the
straight-line method from the commencement date
over the shorter of lease term or useful life of right-
of-use asset. The estimated useful lives of right-of-
use assets are determined on the same basis as
those of property, plant and equipment. Right-of-use
assets are tested for impairment whenever there is
any indication that their carrying amounts may not
be recoverable.

Impairment loss, if any, is recognised in the statement
of profit and loss.

ii) Lease Liabilities

The Company measures the lease liability at the
present value of the lease payments that are not
paid at the commencement date of the lease. The
lease payments are discounted using the interest
rate implicit in the lease, if that rate cannot be
readily determined, the Company uses incremental
borrowing rate. The lease payments shall include
fixed payments, variable lease payments, residual
value guarantees, exercise price of a purchase
option where the Company is reasonably certain to
exercise that option and payments of penalties for
terminating the lease, if the lease term reflects the

lessee exercising an option to terminate the lease.
The lease liability is subsequently remeasured by
increasing the carrying amount to reflect interest on
the lease liability, reducing the carrying amount to
reflect the lease payments made and remeasuring
the carrying amount to reflect any reassessment or
lease modifications or to reflect revised in-substance
fixed lease payments. The company recognises the
amount of the re-measurement of lease liability due
to modification as an adjustment to the right-of-use
asset and statement of profit and loss depending
upon the nature of modification. Where the carrying
amount of the right-of-use asset is reduced to zero
and there is a further reduction in the measurement
of the lease liability, the Company recognises
any remaining amount of the re-measurement in
statement of profit and loss.

iii) Short-term leases and leases of low-value assets

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

The Company as a lessor

Leases for which the Company is a lessor is classified
as a finance or operating lease. Whenever the terms
of the lease transfer substantially all the risks and
rewards of ownership to the lessee, the contract is
classified as a finance lease. All other leases are
classified as operating leases. For operating leases,
rental income is recognized on a straight line basis
over the term of the relevant lease.

4.13 Earnings Per Equity Share:

Basic earnings per equity share is computed by dividing
the net profit attributable to the equity holders of the
company by the weighted average number of equity shares
outstanding during the period. Diluted earnings per equity
share is computed by dividing the net profit attributable to
the equity holders of the company by the weighted average
number of equity shares considered for deriving basic
earnings per equity share and also the weighted average
number of equity shares that could have been issued
upon conversion of all dilutive potential equity shares. The
number of equity shares and potentially dilutive equity
shares are adjusted for share splits / reverse share splits
and bonus shares, as appropriate.

4.14 Income Taxes:

Income tax expense comprises current and
deferred income tax.

Income tax expense is recognized in net profit in the
statement of profit and loss except to the extent that it
relates to items recognized directly in equity, in which case
it is recognized in other comprehensive income. Current
income tax for current and prior periods is recognized at
the amount expected to be paid to or recovered from the
tax authorities, using the tax rates and tax laws that have
been enacted or substantively enacted by the balance
sheet date. Deferred income tax assets and liabilities are
recognized for all temporary differences arising between
the tax bases of assets and liabilities and their carrying
amounts in the financial statements. Deferred tax assets
are reviewed at each reporting date and are reduced to
the extent that it is no longer probable that the related tax
benefit will be realised.

Deferred income 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
income tax assets and liabilities is recognized as income
or expense in the period that includes the enactment or the
substantive enactment date. A deferred income 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.
The company offsets current tax assets and current 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.

4.15 Dividends to Shareholders:

Annual dividend distribution to the shareholders is
recognised as a liability in the period in which the dividends
are approved by the shareholders. Any interim dividend
paid is recognised on approval by Board of Directors.
Dividend payable and corresponding tax on dividend
distribution is recognised directly in equity.

1.    Corporate Information

Powerica Limited is a closely held public limited company incorporated and domiciled in India. The registered office of the company is located at 9^th Floor, Bakhtawar, Nariman Point, Mumbai.

Company is engaged in business of manufacturing, trading and other services related to generator sets and generation of electricity from wind power.

The financial statements for Company for the year ended 31^st March, 2025 are approved for issue by the Company's Board of Directors on 21^st June, 2025.

2.    Basis of preparation

These financial statements of Company have been prepared in accordance with Indian Accounting Standards (Ind-AS) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016.

The accounting policies are applied consistently to all the periods presented in the financial statements. The financial statements have been prepared on an accrual basis and going concern basis and under the historical cost basis unless otherwise indicated.

The financial statements are presented in Indian Rupees ('INR or 'Rupees' or 'Rs.' or '?') which is the functional currency for Company.

All amounts disclosed in the financial statements and notes have been rounded off to the nearest crore. Amount less than ? 50,000/- are shown as actual.

3. Current versus non-current classification

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

An asset is current when it is:

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

•    Held primarily for the purpose of trading, or

•    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 other assets are classified as non-current.

A liability is current when it is:

•    Expected to be settled in normal operating cycle, or

•    Held primarily for the purpose of trading, or

•    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.

All other liabilities are treated as non-current.

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

4. Material Accounting Policies

4.1 Property, plant and equipment

(a) Recognition and measurement:    --- ^N * A 'A W

Freehold land is carried at historical cost. All other items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and accumulated impairment losses, if any.

Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located. The cost of a self- constructed item of property, plant and equipment comprises the cost of materials and direct labour, and other cost directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.

Capital work-in-progress in respect of assets which are not ready for their intended use are carried at cost, comprising of direct costs, related incidental expenses and attributable interest. Advances given towards acquisition of fixed assets outstanding at each Balance Sheet date are disclosed as Other Non-Current Assets.

All identifiable Revenue expenses including interest incurred in respect of various projects/ expansion, net of income earned during the project development stage prior to its intended use, are considered as pre -operative expenses and disclosed under Capital Work-in-Progress.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.

(b)    Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the group.

(c)    Depreciation

Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives prescribed under Schedule II to the Companies Act, 2013 using the diminishing balance method except in respect of the following category of assets, and is recognised in the statement of profit or loss. Freehold land is not depreciated.

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

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

4.2 Intangible Assets

(a)    Recognition and measurement

Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the assets will flow to the company and the cost of the assets can be measured reliably.

Intangible assets are stated at cost or acquisition less accumulated amortisation and impairment loss, if any.

Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.

(b)    Amortisation

Software is amortised over a period of 3 years on straight line basis from the date they are available for intended use, subject to impairment test. Rights of way are amortised over the period of agreement of right to use which ranges from 25 years to 99 years.

—The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected ^attern of consumption of future economic benefits embodied in the asset are considered to modify the )HU>^r'^s)mjJmortisation period or method, as appropriate, and are treated as chanees in accountine estimates. D

(c) De-recognition

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the assets is de-recognised.

4.3 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.

Financial Assets:

Classification:

Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss, on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

Initial recognition and measurement:

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

Subsequent measurement:

For the purpose of subsequent measurement, financial assets are classified in two broad categories:

•    Financial assets at fair value (FVTPL /FVTOCI)

•    Financial assets at amortised cost

When assets are measured at fair value, gains and losses are either recognised in the statement of profit and loss (i.e. fair value through profit or loss (FVTPL)), or recognised in other comprehensive income (i.e. fair value through other comprehensive income (FVTOCI)).

Financial Assets measured at amortised cost (net of any write down for impairment, if any):

Financial assets are measured at amortised cost when asset is held within a business model, whose objective is to hold assets for collecting contractual cash flows and contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest. Such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method less impairment, if any. The losses arising from impairment are recognised in the Statement of profit and loss.

Financial Assets measured at Fair Value through Profit or Loss ("FVTPL"): Financial assets under this category are measured initially as well as at each reporting date at fair value with all changes recognised in profit or loss.

Financial Assets measured at Fair Value through Other Comprehensive Income ("FVTOCI"):

Financial assets under this category are measured initially as well as at each reporting date at fair value, when asset is held within a business model, whose objective is to hold assets for both collecting contractual cash flows and selling financial assets. Fair value movements are recognized in the other comprehensive income.

Investment in Subsidiary:

Investment in equity instruments of Subsidiaries are measured at cost as per Ind AS 27. In the financial statements, investment in subsidiary companies is carried at cost. The carrying amount is reduced to recognise any impairment in the value of investment.

Investment in Equity Instruments:

Equity instruments which are held for trading are classified as at FVTPL. All other equity instruments are classified as FVTOCI. Fair value changes on the instrument, excluding dividends, are recognised in the other comprehensive income. There is no recycling of the amounts from other comprehensive income to profit or loss.

Investment in Debt Instruments:

A debt instrument is measured at amortised cost or at FVTOCI. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the Statement of profit and loss.

De-recognition of Financial Assets:

A financial asset is primarily derecognised when the rights to receive cash flows from the asset have expired or Company has transferred its rights to receive cash flows from the asset.

Impairment of Financial Assets:

In accordance with Ind - AS 109, Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the financial assets that are debt instruments and trade receivables.

Financial Liabilities:

Classification:

Company classifies all financial liabilities as subsequently measured at amortised cost or FVTPL.

Initial recognition and measurement:

All financial liabilities are recognised initially at fair value and, in the case of loans, borrowings and payables, net of directly attributable transaction costs.

Financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and derivative financial instruments.

Subsequent measurement:

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

De-recognition of Financial Liabilities:

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.

Derivative Financial Instrument:

Company uses derivative financial instruments, such as forward currency contracts to mitigate its foreign s currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which £fta derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are rgciiioti^js mjlfinancial assets when the fair value is positive and as financial liabilities when the fair value is nega,

Hedge Accounting

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to highly probable forecast transactions. The Company designates such forward contracts in a cash flow hedging relationships by applying the hedge accounting principles. These forward contracts are stated at fair value at each reporting date. Changes in fair value of these forward contracts that are designated and effective as hedges of future cash flows are recognized directly in (OCI) and accumulated in 'Cash Flow Hedge Reserve Account' under Other Equity, net of applicable deferred income taxes and the ineffective portion is recognized immediately in the Statement of Profit & Loss. Amounts accumulated in the 'Cash Flow^r Hedge Reserve Account' are reclassified to the Statement of Profit & Loss in the same period during which the forecasted transaction affects Statement of Profit & Loss. Hedge accounting is discontinued when the hedging instrument expires or is terminated, or exercised or no longer qualifies for hedge accounting. For forecasted transactions, any cumulative gain or loss on the hedging instrument recognised in 'Cash Flow Hedge Reserve Account' is retained until the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, the net cumulative gain or loss recognised in 'Cash Flow Hedge Reserve Account' is immediately transferred to the Statement of Profit and Loss.

4.4. Impairment of Non-Financial Assets:

Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognised in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the Statement of Profit and Loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of accumulated amortisation or depreciation) has no impairment loss been recognised for the asset in prior years.

4.5 Inventories:

Raw materials are valued at lower of cost (on weighted average basis) or estimated net realisable value. Cost for this purpose includes basic cost of materials and all identifiable direct cost and includes taxes and duties and is net of eligible credits under GST schemes.

Finished goods are valued at lower of cost or estimated realisable value. Cost for this purpose comprises of Raw Material cost and proportionate overheads allocated on the assumption of normal operating capacity.

Traded goods are valued at lower of cost or estimated realisable value.

Work-in-progress are valued at estimated cost.

Goods and materials in transit are valued at actual cost incurred up to the date of balance sheet. Materials and other items held for use in production of inventories are not written down, if the finished products in which they will be used are expected to be sold at or above cost.

4.6. Cash and Cash Equivalent:

Cash and Cash Equivalents comprise of cash on hand and cash at bank including fixed deposit/highly liquid investments with original maturity period of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value,

_______    /Zc> O—

4.7.    Cash Flow Statements:

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flow from operating, investing and financing activities of Company are segregated.

4.8.    Foreign Currency Transactions:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. Date of transaction for determining the exchange rate for translation would be earlier of:

•    The date of initial recognition of the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration, and

•    The date that the related item is recognised in the financial statements.

Monetary items denominated in foreign currencies at the year-end are re-measured at the exchange rate prevailing on the balance sheet date. Non-monetary foreign currency items are carried at cost.

Any income or expense on account of exchange difference either on settlement or on restatement is recognised in the Statement of Profit and Loss except for:

Exchange differences on translation or settlement of long term foreign currency monetary items in respect of loans borrowed before 1^st April 2016 at rates different from those at which they were initially recorded or reported in the previous financial statements, insofar as it relates to acquisition of depreciable assets, are adjusted to the cost of the assets and depreciated over remaining useful life of such assets.

4.9.    Revenue Recognition:

Revenue from contracts with customers for sale of goods and provision of services. Revenue from contracts with customers is recognized when control of the goods and 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 and services.

The Company satisfies a performance obligation and recognizes revenue over time, if one of the following criteria is met:

a)    The Company's performance does not create an asset with an alternate use to the Company and the Company has as an enforceable right to payment for performance completed to date.

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

c)    The customer simultaneously receives and consumes the benefits provided by the Company's performance as the Company performs.

For performance obligations where one of the above conditions are not met, revenue is recognized at the point in time at which the performance obligation is satisfied.

Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes and duty.

The Company assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. Taxes collected on behalf of the government are excluded from revenue. Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue and costs, if applicable, can be measured reliably.

Variable consideration includes volume discounts, price concessions, liquidity damages, incentives, etc. The Company estimates the variable consideration with respect to above based on an analysis of accumulated historical experience. The Company adjust estimate of revenue at the earlier of when the most likej^t^aagmit consideration we expect to receive changes or when the consideration becomes fixed.

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Sale of Products:

Performance obligation in case of Revenue from sale of goods is satisfied at a point in time and is recognized when the performance obligation is satisfied and control as per Ind AS 115 is transferred to the customer. The Company collects GST on behalf of the Government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue. Revenue is disclosed net of discounts, incentives and returns, as applicable.

Rendering of Services:

Performance obligation in case of erection contracts is satisfied over the period of time. Since the company creates an asset that the customer controls as the asset is created and the company has an enforceable right to payment for performance completed to date if it is meets the agreed specifications. Revenue from such contracts, where the outcome can be estimated reliably and 10% of the project cost is incurred, is recognized under the percentage of completion method by reference to the stage of completion of the contract activity. The stage of completion is measured by input method i.e. the proportion that costs incurred to date bear to the estimated total costs of a contract. The total costs of contracts are estimated based on technical and other estimates. In the event that a loss is anticipated on a particular contract, provision is made for the estimated loss. Contract revenue earned in excess of billing is reflected under as "Unbilled Revenues" and billing in excess of contract revenue is reflected under "Contract Liabilities".

Dividend income is recognised when right to receive dividend is established. Interest income is recognised on effective interest method. Insurance and other claims are recognised as a revenue on certainty of receipt on prudent basis.

Sale of Certified Emission Reductions (CER's) is recognised as income on the delivery of the CER's to the customer's account as evidenced by the receipt of confirmation of execution of delivery instructions.

4.10. Employee Benefits:

All employee benefits payable wholly within twelve months rendering service are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., and the expected cost of bonus, ex gratia are recognised during the period in which the employee renders related service.

(i) Defined benefit plans

Company provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan¹) covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with Company.

Liabilities with regard to Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the Projected Unit Credit Method.

Company fully contributes all ascertained liabilities to the Powerica Limited Employees Group Gratuity Assurance Scheme (the Trust). Trustees administer contributions made to the Trust and contributions are invested in a scheme with Life Insurance Corporation of India as permitted by laws of India.

The retirement benefit obligations recognised in the balance sheet represents the present value of the defined benefit obligations reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme. The company recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Actuarial gains and losses are recognised in full in the other comprehensive income for the period in which they occur. The effect of any plan amendments are recognized in the statement of profit and loss ._

(ii)    Defined contribution plans:

Contributions to defined contribution plans are recognised as expense when employees have rendered services entitling them to such benefits. Company pays provident fund contributions to publicly administered provident funds as per local regulations. Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.

(iii)    Compensated absences:

Company has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date.

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

Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

4.11.    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.

4.12.    Lease:

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. 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 uses the definition of a lease in Ind AS 116.

Company as a lessee

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

i) Right-of-Use Assets

The Company recognizes right-of-use as set representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability.

The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of- use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may notbe recoverable^^yQ Impairment loss, if any, is recognised in the statement of profit and loss.    ff r"

ii)    Lease Liabilities

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

iii)    Short-term leases and leases of low-value assets

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

The Company as a lessor

Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.

4.13.    Earnings Per Equity Share:

Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

4.14.    Income Taxes:

Income tax expense comprises current and deferred income tax.

Income tax expense is recognized in net profit in the statement of profit and loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Deferred income 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 income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income 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. The company offsets current tax assets and current 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.

4.15.    Dividends to Shareholders:

Annual dividend distribution to the shareholders is recognised as a liability in the period in which the dividends are approved by the shareholders. Any interim dividend paid is recognised on approval by Board of Directors. Dividend payable and corresponding tax on dividend distribution is recognised directly in equity.

4.16.    Provisions, Contingent Liabilities, Contingent Assets and Commitments:

Provisions are recognised when Company has a present obligation (legal or constructive) as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits and compensated absences) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. If there is any expectation that some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any virtually certain reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risk specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liability is disclosed in the case of:

•    possible obligation which will be confirmed only by future events not wholly within the control of the Company, or

•    present obligations arising from past events where it is probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent liabilities are not recognised in the financial statements. Contingent assets are neither recognised nor disclosed in the financial statements.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

4.17.    Fair Value:

The Company measures financial instruments at fair value in accordance with the accounting policies mentioned above. 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

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy that categorizes into three levels, described as follows, the inputs to valuation techniques used to measure value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).

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

Level 2 — inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 — inputs that are unobservable for the asset or liability

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

4.18. Business Combinations:

Common control business combinations includes transactions, such as transfer of subsidiaries or businesses, between entities within a group.

Business combinations involving entities or businesses under common control shall be accounted for using the pooling of interests method.

The pooling of interest method is considered to involve the following:

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

ii)    No adjustments are made to reflect fair values, or recognise any new assets or liabilities. The only adjustments that are made are to harmonise accounting policies.

iii)    The financial information in the financial statements in respect of prior periods should be 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, if business combination had occurred after that date, the prior period information shall be restated only from that date.

iv)    The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee.

5 Use of Estimates and Judgements:

The preparation of the Financial Statements in conformity with Ind AS requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the Financial Statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known/ materialize. Estimates and underlying assumptions are reviewed on an ongoing basis.

Information about critical judgments in applying accounting policies, as well as estimates and assumptions that have the most significant effect to the carrying amounts of assets and liabilities within the next financial year, are included in the accounting policies.

-    Measurement of defined benefit obligations (Refer note 4.10)

-    Measurement and likelihood of occurrence of provisions and contingencies (Refer note 4.16)

-    Recognition of deferred tax assets (Refer note 4.14)

-    Useful lives of property, plant, equipment and intangibles (Refer note 4.1 & 4.2)

-    Impairment of Intangibles (Refer note 4.2)

-    Impairment of financial assets (Refer note 4.3)

-    Determination of stage of completion for services rendered (Refer note 4.9)  

6 Recent Pronouncements

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31^st March, 2025, MCA has notified Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 -Leases, relating to sale and leaseback transactions, applicable to the Company w.e.f. 1^st April, 2024. The Company has reviewed the new pronouncements and based on its evaluation has determined that it does not have any significant impact in its financial statements.

Ministry of Corporate Affairs ("MCA") has not notified any new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time which are applicable effective 1^st April 2025.