II. Material Accounting Policies

Below is list of material accounting policies applied by the Company in the preparation of its financial statements.

(a) Basis of Preparation

(i) Statement of Compliance:

These standalone financial statements have been prepared in accordance with the Indian Accounting
Standards (‘Ind AS’) as per the Companies (Indian Accounting Standards) Rules, 2015, as amended from
time to time, notified under section 133 of the Companies Act, 2013 (‘Act’) and other relevant provisions
of the Act.

The standalone financial statements are approved for issue by the Company’s Board of Directors on April

29, 2026.

(ii) Basis of measurment

The financial statements for the year ended 31 March 2026 have been prepared on an accrual basis and
a historical cost convention, except for items which are measured on an alternative basis on each reporting
date:

(a) Derivative Financial instruments measured at FVTPL.

(b) Non derivative financial instruments at FVTPL.

(c) Fair Value of plan assets less the present value of the defined benefit obligation, (Refer note 1(II)n for
accounting policy).

Fair value is the price that would be received on sale of asset or paid on transfer of liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is
directly observable or estimated using another valuation technique. In estimating the fair value of an asset or
a liability, the Company takes into account the characteristics of the asset or liability if market participants
would take those characteristics into account when pricing the asset or liability at the measurement date.
Accounting policies and methods of computation followed in the financial statements are same as
compared with the annual financial statements for the year ended 31 March 2025, except for adoption of
new standard or any pronouncements effective from 1 April 2025

The Company has prepared the financial statements on the basis that it will continue to operate as a going
concern.

Current and non-current classification

Based on the time involved between the acquisition of assets for processing and their realization in cash and
cash equivalents, the Company has identified twelve months as its operating cycle for determining current
and non-current classification of assets and liabilities in the balance sheet.

(b) Use ofjudgements and estimates

The preparation of financial statements in conformity with Ind AS, which requires management to make
estimates, assumptions and exercise judgment in applying the accounting policies that affect the reported
amount of assets, liabilities and disclosure of contingent liabilities at the date of financial statements and the
reported amounts of income and expenses during the year.

(i) Critical estimates

The Management believes that these estimates are prudent and reasonable and are based upon the
Management’s best knowledge of current events and actions. Actual results could differ from these
estimates and differences between actual results and estimates are recognised in the periods in which the
results are known or materialised.

Information about assumptions and estimation uncertainties at the reporting date that have a significant
risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next
financial year is included in the following notes:

Useful lives of Property plant and equipment (PPE), investment property and Intangible assets

Property, plant and equipment represent a significant proportion of the asset base of the Company.
Depreciation is provided as per the Straight Line Method over the estimated useful lives of assets. The
Company depreciates its property, plant and equipment over the useful life in the manner prescribed in
Schedule II to the Act. Management believes that useful life of assets are same (except for vehicles as
disclosed in note 1(II)d)) as those prescribed in Schedule II to the Act. - Refer note 1(II)(c)(d),(e) and (f).

Defined benefit obligation

The cost of post-employment benefits is determined using actuarial valuations. The actuarial valuation
involves making assumptions about discount rates, expected rate of return on assets, future salary increases
and mortality rates. Due to the long term nature of these plans such estimates are subject to significant
uncertainty. The assumptions used are disclosed in Note 46.

Fair value measurements of financial instruments

When the fair value of financial assets and financial liabilities recorded in the standalone balance sheet
cannot be measured based on quoted prices in active markets, their fair value is measured using valuation
techniques including Discounted Cash Flow Model. The inputs to these models are taken from observable
markets wherever possible, but where this is not feasible, a degree ofjudgment is required in establishing fair
values. Judgments include considerations of inputs such as liquidity risks, credit risks and volatility. Changes
in assumptions about these factors could affect the reported fair value of financial instruments. - Refer
note 1(II)(h).

Revenue from fixed price long term contracts (Flares & Process Equipment)

The Company’s management estimate the cost to complete for each project and recognition of anticipated
losses of the projects, if any. In the process of calculating the cost to complete, Management conducts
regular and systematic reviews of actual results and future projections with comparison against budget. The
process requires monitoring controls including financial and operational controls and identifying major risks
faced by the Company and developing and implementing initiative to manage those risks. The Company’s
management is confident that the costs to complete the project are fairly estimated.

Impairment of investments in subsidiaries

Determining whether the investments in subsidiaries are impaired requires an estimate in the value in use
of investments. The Company reviews its carrying value of investments carried at cost (net of impairment,

if any) annually, or more frequently when there is indication for impairment. If the recoverable amount is
less than its carrying amount, the impairment loss is accounted for in the statement of profit and loss. In
considering the value in use, the management have anticipated the future market conditions and other
parameters that affect the operations of these entities.

(ii) Judgements

In the process of applying the Company’s accounting policies, management has made the following
judgements, which have the most significant effect on the amounts recognised in the financial statements:
This note provides an overview of the areas that involved a higher degree ofjudgment or complexity, and
of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be
different than those originally assessed.

Provision for income tax and deferred tax assets

The Company uses estimates and judgements based on the relevant rulings in the areas of allocation of
revenue, costs, allowances and disallowances which is exercised while determining the provision for income
tax. A deferred tax asset is recognised 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 utilised. Deferred tax assets are
recognised for unused tax losses to the extent that it is probable that taxable profit will be available against
which the losses can be utilised. Significant management judgement is required to determine the amount
of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable
profits together with future tax planning strategies. Accordingly, the Company exercises its judgement to
reassess the carrying amount of deferred tax assets at the end of each reporting period.

Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims against
the Company. Potential liabilities that are possible but not probable of crystallising or are very difficult to
quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not
recognised. Contingent assets are neither recognised nor disclosed in the financial statements.

Valuation of deferred tax assets / liabilities

The Company reviews the carrying amount of deferred tax assets at the end of each reporting period.
Signifi cant judgment is involved in arriving at the deferred tax assets and liabilities, which is based on the
Company’s current operations and projections for the future. - Refer note 1(II)(o).

Assessment of Lease term

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

(c) Property plant and equipment

The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if it is probable
that future economic benefits associated with the item will flow to the Company and the cost of the item can
be measured reliably.

Property, plant and equipment are stated at cost, net of accumulated depreciation (other than freehold land)
and impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalisation criteria are met
and directly attributable cost of bringing the asset to its working condition for the intended use. Capitalisation
of costs in the carrying amount of property, plant and equipment ceases when the item is in the location and
condition necessary for it to be capable of operating in the manner intended by the Company. Any trade
discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of property, plant and equipment is added to its book value only if
it increases the future benefits from the existing asset beyond its previously assessed standard of performance.
Incomes and expenses related to the incidental operations not necessary to bring the item to the location and
the condition necessary for it to be capable of operating in the manner intended by the Company are recognized
in the Statement of profit and loss. All other expenses on existing property, plant and equipment, including
day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the Standalone
Statement of Profit & Loss for the period in which such expenses are incurred.

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

Items of property, plant and equipment that have been retired from active use and are held for disposal are stated
at the lower of their carrying value or fair value less cost of sales and are shown separately in the standalone
financial statements. Any expected loss is recognised immediately in the Standalone Statement of Profit and
Loss. Losses arising from the retirement of, and gains or losses arising from disposal of property, plant and
equipment, which are carried at cost, are recognised in the Standalone Statement of Profit and Loss.
Depreciation is provided on a pro-rata basis on the straight-line method based on useful life as estimated by the
management and aligned to Schedule II to the Companies Act, 2013 in order to reflect the actual usage of assets.
Depreciation on assets acquired under finance lease is spread over the lease period or useful life, whichever is shorter.
Estimated useful lives of assets are as follows:

Capital work-in-progress comprises of property, plant and equipment that are not ready for their intended use
at the end of reporting period and are carried at cost comprising direct costs, related incidental expenses, other
directly attributable costs and borrowing costs.

Gains or losses arising from derecognition of property, plant and equipments are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement
of Profit & Loss under ‘Other expenses’ or ‘Other income’ when the asset is derecognized.

The residual values are not more than 5% of the original cost of the assets. The asset’s residual values and useful
lives are reviewed, and adjusted if appropriate. Depreciation is not recorded on capital work-in-progress until
construction and installation is complete and the asset is ready for its intended use.

Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance Sheet
date is classified as capital advances under other non-current assets.

Transition to Ind AS

The cost property, plant and equipment at 1 April 2016, the Company’s date of transition to Ind AS, was
determined with reference to its carrying value recognised as per the previous GAAP (deemed cost), as at the
date of transition to Ind AS.

(d) Non-current assets classified as assets held for sale:

Non-current assets, or disposal Companys comprising assets and liabilities, are classified as held for sale if it is
highly probable that they will be recovered primarily through sale rather than through continuing use. Such assets,
or disposal Companys, are generally measured at the lower of their carrying amount and fair value less costs to sell.
Any impairment loss on a disposal Company is allocated first to goodwill, and then to the remaining
assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets,
deferred tax assets and employee benefit assets which continue to be measured in accordance with the
company’s other accounting policies. Impairment losses on initial classification as held for sale or held for
distribution and subsequent gains and losses on remeasurement are recognised in profit or loss. Once
classified as held for sale, intangible assets, property, plant and equipment and investment properties
are no longer amortised or depreciated, and equity- accounted investee is no longer equity accounted.
Non-current assets classified as held-for-sale and the assets of a disposal Company classified as held for
sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal Company
classified as held for sale are presented separately from other liabilities in the balance sheet.

(e) Intangible Assets (including intangible assets under development)

Initial recognition and measurement

Intangible assets acquired separately are measured on initial recognition at cost. An intangible asset is recognised
only if it is probable that future economic benefits attributable to the asset will flow to the Company and the
cost of the asset can be measured reliably. The cost comprises purchase price and directly attributable cost of
bringing the asset to its working condition for the intended use.

Following initial recognition, other intangible assets and have finite useful lives are measured at cost less
accumulated amortisation and any accumulated impairment losses.

Subsequent measurement (amortisation and useful lives)

Intangible assets are amortised on a straight-line basis over their estimated useful lives. The amortisation period
and the amortisation method are reviewed at least at each financial year end. If the expected useful life of the
asset is significantly different from previous estimates, the amortisation period is changed accordingly.
Computer Software, E learning module and website are amortised over a period of three years. The amortisation
expense on intangible assets with finite life is recognised in the Standalone statement of profit and loss under
the head Depreciation and amortization expense.

Derecognition

An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no
future economic benefits are expected from its use or disposal. Gains or losses arising from the retirement

or disposal of an intangible asset are determined as the difference between the net disposal proceeds and the
carrying amount of the asset and recognised as income or expense in the Standalone Statement of Profit and
Loss.

Transition to Ind AS

The cost of intangible assets at 1 April 2016, the Company’s date of transition to Ind AS, was determined with
reference to its carrying value recognised as per the previous GAAP (deemed cost), as at the date of transition
to Ind AS.

(f) Investment properties

Initial recognition and measurement

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by
the entity, is classified as Investment Property. Investment property is measured initially at its cost, including
related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalised to the
asset’s carrying amount only when it is probable that future economic benefits associated with the expenditure
will flow to the entity and the cost of the item can be measured reliably. All other repairs and maintenance costs
are expensed, when incurred. When part of an Investment property is replaced, the carrying amount of the
replaced part is derecognised.

Derecognition

Investment property is derecognised either when it has been disposed of or when it is permanently withdrawn
from use and no future economic benefit is expected from its disposal. Any gain or loss on disposal of investment
property (calculated as the difference between the net proceeds from disposal and the carrying amount of the
item) is recognised in profit or loss.

Transfers are made to (or from) investment property only when there is a change in use. Transfers between
investment property, owner-occupied property and inventories do not change the carrying amount of the
property transferred and they do not change the cost of that property for measurement or disclosure purposes.

Depreciation

Depreciation is provided on a pro-rata basis on the straight-line method, based on useful life as estimated by
the management and aligned to Schedule II to the Companies Act, 2013 in order to reflect the actual usage of
assets.Estimated useful lives of assets are as follows:

Transition to Ind AS

The cost of investment properties at 1 April 2016, the Company’s date of transition to Ind AS, was determined
with reference to its carrying value recognised as per the previous GAAP (deemed cost), as at the date of
transition to Ind AS.

(g) Impairment of non-financial assets

The carrying amount of the non-financial assets are reviewed at each Standalone Balance Sheet date if there
is any indication of impairment based on internal /external factors. An impairment loss is recognised, whenever
the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. The recoverable
amount of the assets (or where applicable, that of the cash generating unit to which the asset belongs) is
estimated as the higher of its fair value less disposal cost and its value in use. Impairment loss is recognised in
the statement of profit and loss.

After impairment, depreciation / amortisation is provided on the revised carrying amount of the asset over its
remaining useful life.

A previously recognised impairment loss is reversed depending on changes in circumstances. However, the
carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging
usual depreciation / amortisation, if there were no impairment.

(h) Investments and oxther financial assets

Classification:

The Company classifies its financial assets in the following measurement categories:

(i) those to be measured subsequently at fair value (either through other comprehensive income, or through
profit or loss), and

(ii) those measured at amortised cost.

The classification depends on the entity’s business model for managing the financial assets and the contractual
terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in standalone statement of profit and
loss or other comprehensive income. For investments in debt instruments, this will depend on the business
model, in which the investment is held. For investments in equity instruments, this will depend on whether
the Company has made an irrevocable election at the time of initial recognition to account for the equity
investment at fair value through other comprehensive income.

The Company reclassifies debt investments when and only when its business model for managing those assets
changes.

Initial recognition and measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset
not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in
profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their
cash flows are solely payment of principal and interest.

However, trade receivables that do not contain a significant financing component are measured at transaction
price.

Subsequent measurements

Subsequent measurement of debt instruments depends on the Company’s business model for managing the
asset and the cash flow characteristics of the asset.

There are three measurement categories into which the Company classifies its debt instruments:

(i) Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a
debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is
recognised in standalone statement of profit and loss, when the asset is derecognised or impaired. Interest
income from these financial assets is included in finance income using the effective interest rate method.

( ii) Fair value through other comprehensive income (FVTOCI): Assets that are held for collection of
contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely
payments of principal and interest, are measured at fair value through other comprehensive income

(FVTOCI). Movements in the carrying amount are taken through OCI, except for the recognition of
impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in
standalone statement of profit and loss. When the financial asset is derecognised, the cumulative gain or
loss previously recognised in OCI is reclassified from equity to standalone statement of profit or loss and
recognised in other gains/ (losses). Interest income from these financial assets is included in other income
using the effective interest rate method.

(iii) Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortised cost or
FVTOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is
subsequently measured at fair value through profit or loss and is not part of a hedging relationship is
recognised in standalone statement of profit and loss and presented net in the standalone statement
of profit and loss within other gains/(losses) in the period in which it arises. Interest income from these
financial assets is included in other income.

Impairment of financial assets

Impairment of financial assets

In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets and credit risk exposure:

i) Trade receivables;

ii) Financial assets measured at amortised cost (other than trade receivables).

In case of trade receivables, the Company follows a simplified approach wherein an amount equal to
lifetime ECL is measured and recognised as loss allowance. Further, individual credit risk assessment is also
undertaken by the Company to identify significant increase in credit risk or is credit impaired. Basis such
individual credit risk assessment, a Company may provide for a loss allowance.

Financial assets classified as amortised cost (refer (ii) above), subsequent to initial recognition, are assessed
for evidence of impairment at end of each reporting period basis monitoring of whether there has been a
significant increase in credit risk. To assess whether there is a significant increase in credit risk, the Company
compares the risk of a default occurring on the asset as at the reporting date with the risk of default
as at the date of initial recognition. It considers available reasonable and supportive forwarding looking
information. If the credit risk of such assets has not increased significantly, an amount equal to 12-month
ECL is measured and recognised as loss allowance. However, if credit risk has increased significantly, an
amount equal to lifetime ECL is measured and recognised as loss allowance. Subsequently, if the credit
quality of the financial asset improves such that there is no longer a significant increase in credit risk since
initial recognition, the Company reverts to recognising impairment loss allowance based on 12-month
ECL. ECL allowance recognised (or reversed) during the period is recognised as expense (or income) in
the Standalone Statement of Profit and Loss under the head ‘Other expenses’.

Evidence that a financial asset is credit-impaired includes the following observable data:

- significant financial difficulty of the debtor;

- a breach of contract such as a default;

- it is probable that the debtor will enter bankruptcy or other financial reorganisation; or

- the disappearance of an active market for a security because of financial difficulties.

Write - off

The gross carrying amount of a financial asset is written off when the Company has no reasonable
expectations of recovering the financial asset in its entirety or a portion thereof. A write-off constitutes a
derecognition event.

De-recognition of financial assets:

The Company derecognises a financial asset when:

- the contractual rights to the cash flows from the financial asset expire; or

- it transfers the rights to receive the contractual cash flows in a transaction in which either

- substantially all of the risks and rewards of ownership of the financial asset are transferred;or

- the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it
does not retain control of the financial asset.

(i) Cash and cash equivalents

Cash and cash equivalents comprise of the cash on hand and at bank and current investments with an original
maturity of three months or less. Cash and cash equivalents consist of cash in hand, balances with bank which
are unrestricted for withdrawal and usage and short-term deposits as defined above, net of outstanding
bank overdrafts as they are considered an integral part of the Company’s cash management. Cash and cash
equivalents consist of cash on hand, demand deposits and short-term, highly liquid investments that are readily
convertible into known amounts of cash and which are subject to insignificant risk of changes in value. For this
purpose, “short-term” means investments having original maturities of three months or less from the date of
investment.

(j) Borrowings and other financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL or at amortised cost
(Borrowings and payables), as appropriate. All financial liabilities are recognised initially at fair value and, in
the case of borrowings and payables, net of directly attributable transaction costs. The Company’s financial
liabilities include trade and other payables and borrowings including bank overdrafts.

For purposes of subsequent measurement, financial liabilities are classified in two categories:

i) Financial liabilities at fair value through profit or loss;

ii) Financial liabilities at amortised cost

Financial liabilities at fair value through profit or loss

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon
initial recognition as at FVTPL. Financial liabilities are classified as held for trading if they are incurred for the
purpose of repurchasing in the near term. This category also includes derivative financial instruments entered
into by the company that are not designated as hedging instruments in hedge relationships as defined by Ind AS

109.

Gains or losses on liabilities held for trading are recognised in the Standalone Statement of Profit and Loss
Financial liabilities designated upon initial recognition at FVTPL are designated at the initial date of recognition,
and only if the criteria in Ind AS 109 are satisfied.

Financial Liabilities at amortised cost

After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using the
EIR method. Gains and losses are recognised in the Standalone Statement of Profit and Loss when the liabilities
are derecognised. 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
Standalone Statement of Profit and Loss. This category generally applies to interest bearing borrowings.

Derecognition

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled or
expire. The Company also derecognises a financial liability when its terms are modified and the cash flows of the
modified liability are substantially different, in which case a new financial liability based on the modified terms is
recognised at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the
consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or
loss.

Offsetting of financial instrument

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

Derivative financial instruments

The Company uses derivative financial instruments, such as foreign exchange forward contracts to manage its
exposure to foreign exchange 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.

(k) Inventories

Inventories are stated at lower of cost and net realisable value. Cost is determined using the ‘average cost’
method. The cost of finished goods and work in progress comprises raw material, packing materials, direct
labour, other direct costs and related production overheads. Net realisable value is the estimated selling price in
the ordinary course of business, less the estimated costs of completion and selling expenses

(l) Revenue recognition

(A) Revenue from contracts with customers is recognised when the entity satisfies a performance obligation by
transferring a promised good or service to customer at an amount that reflects the consideration to which
the company expects to be entitled in exchange for those goods or services. Amounts disclosed as revenue
are net of returns, trade allowances, rebates and discounts, goods and service tax and applicable taxes,
which are collected on behalf of the government or on behalf of third parties.

i) Sale of welding product

Revenue from contracts with customers involving sale of goods is recognized at a point in time when
control of the goods has been transferred at an amount that reflects the consideration to which the
Company expects to be entitled in exchange for those goods, and there are no unfulfilled obligation that
could affect the customer’s acceptance of the products and the Company retains neither continuing
managerial involvement to the degree usually associated with ownership nor effective control over the
goods sold. The point of time of transfer of control to customers depends on the terms of the trade
such as:

Free on Board (FoB) - At the time of loading on carriage. Transfer of control happens when the goods
are loaded onboard the vessel at the port of shipment.

Cost, Insurance & Freight (CIF) - Transfer of control happens when goods arrive at port of destination.

Delivery Duty Paid (DDP) - Transfer of control happens at named place when the goods are ready for
unloading.

ii) Revenue from fixed price long term contracts (Flares & Process Equipment)

Performance obligation in case of revenue from long - term contracts is satisfied over the period of
time and the revenue recognition is done by measuring the progress towards complete satisfaction of
performance obligation. The progress is measured in terms of output method as mentioned in IND
AS 115. Incremental costs of obtaining a contract, if any, and costs incurred to fulfil a contract are
amortised over the period of execution of the contract. In the event that a loss is anticipated on a
particular contract, provision is made for the estimated loss. The Company monitors estimates of total
contract revenue and costs on a regular basis throughout the contract period. The cumulative impact
of any change in estimates of the contract value or cost is reflected in the period in which the changes
become known.

iii) Sale of services

Revenue from services is recognised when the services are rendered in accordance with the specific
terms of contract and when collectability of the resulting receivable is reasonably assured.

iv) Right to recover the product

When a contract provides a customer with a right to recover the products within a specified period, the
Company estimates the expected returns using a historical experience similar to the expected value
method under Ind AS 115.

At the point of sale, a refund liability and a corresponding adjustment to revenue is recognised for
those products expected to be returned. At the same time, the Company has a right to recover the
product when customers exercise their right of return. Consequently, the Company recognises a
right to recover the products as asset under inventories as (Right to recover returned good) and a
corresponding adjustment to cost of materials consumed. The Company uses its accumulated historical
experience to estimate the percentage of returns at plant level using the expected value method. It
is considered highly probable that a significant reversal in the cumulative revenue recognised will not
occur given the consistent level of returns over previous years. The Company updates its estimates of
provision for sales return (and the corresponding change in the transaction price) at the start of each
reporting period. For goods expected to be returned, the Company presented a refund liability (under
Provisions) and an asset for the right to recover returned good (under inventories) from a customer
separately in the balance sheet.

v) Contract Assets and Liability

Contract asset is the entity’s right to consideration in exchange for goods or services that the entity
has transferred to the customer. A contract asset becomes a receivable when the entity’s right to
consideration is unconditional, which is the case when only the passage of time is required before
payment of the consideration is due.

Contract liability is the obligation to transfer goods or services to a customer for which the Company
has received consideration (or an amount of consideration is due) from the customer. If a customer
pays consideration before the Company transfers goods or services to the customer, a contract liability
is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities
are recognised as revenue when the Company performs under the contract. The timing of the transfer
of control varies depending on individual terms of the sales agreements.

(B) Other operating revenue
Export Incentive

Duty drawback and Remission of Duties and Taxes on Export Products (RoDTEP) is accounted when
reasonable assurance to receive such revenue is established and the Company has complied with the
conditions associated with the incentive scheme.

(m) Other income

Interest income for all debt instruments is recognised using the effective interest rate method. The effective
interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of
the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest
rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial
instrument (for example, prepayment, extension, call and similar options) but does not consider the expected
credit losses.

(n) Employee Benefits

Provident fund: Contribution towards provident fund for employees is made to the regulatory authorities,
where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes,
as the Company does not carry any further obligations, apart from the contributions made on a monthly basis.

Gratuity fund: The Company provides for gratuity, a defined benefit plan (the “Gratuity Plan”) covering eligible
employees in accordance with the Payment of Gratuity Act, 1972. 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.

The Company’s liability is actuarially determined (using the Projected Unit Credit method) at the end of each
year. Actuarial gains / losses arising on the measurement of defined benefit obligation are credited / charged to
other comprehensive income.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to
past service (‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognised immediately
in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the
settlement occurs.

Superannuation fund: Contribution towards superannuation fund for certain employees is made to Ador Welding
Employees Superannuation Fund Trust administered by the Company. The benefit is classified as a “Defined
Contribution Schemes” as the Company does not carry any further obligation, apart from the contribution
made on a monthly basis.

Employees state insurance scheme: The Company makes contribution to state plans namely Employees State
Insurance Scheme and has no further obligation beyond making the payment to them.

Compensated absences: Accumulated absences expected to be carried forward beyond twelve months is
treated as long-term employee benefit for measurement purposes. The Company’s net obligation in respect of
other long-term employee benefit of accumulating compensated absences is the amount of future benefit that
employees have accumulated at the end of the year. That benefit is discounted to determine its present value The
obligation is measured annually by a qualified actuary using the projected unit credit method. Remeasurements
are recognised in profit or loss in the period in which they arise.

The obligations are presented as current liabilities in the balance sheet if the Company does not have the right
at the end of the reporting period to defer the settlement for at least twelve months after the reporting date

Termination benefits: Termination benefits are expensed at the earlier of when the Company can no longer
withdraw the offer of those benefits and when the Company recognises costs for a restructuring. If benefits are
not expected to be settled wholly within 12 months of the reporting date, then they are discounted.

(o) Income taxes

Income tax expense comprises current tax expenses and net change in the deferred tax assets or liabilities
during the year. Current and deferred taxes are recognised in the Standalone Statement of profit and loss,
except when they relate to item that are recognised in Other comprehensive income or directly in Equity, in
which case, the current and deferred tax are also recognised in Other comprehensive income or directly in
Equity respectively.

(i) Current tax

The current income tax includes income tax payable by the Company, computed in accordance with the
tax laws applicable in the jurisdiction in which the Company operates. Advance tax and provision for current
income tax are presented in the Balance sheet after offsetting the advance tax paid and income tax provision
arising in the same jurisdiction and where the relevant tax paying units intends to settle the asset and liability
on a net basis.

(ii) Deferred tax

Deferred tax assets and liabilities are recognised for deductible and taxable temporary differences arising
between the tax base of assets and liabilities and their carrying amount, except when the deferred tax arises
from the initial recognition of an asset or liability in a transaction that is not a business combination and
affects neither accounting nor taxable profit or loss at the time of recognition and does not give rise to equal
taxable and deductible temporary differences.

Deferred tax assets are recognised to the extent that taxable profit will be available against which the
deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be
utilised.

The carrying amount of deferred tax assets are reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow or part of deferred income
tax assets to be utilised. At each reporting date, the Company re-assesses unrecognized deferred tax
assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain,
as the case may be, that sufficient future taxable income will be available against which such deferred tax
assets can be realized.

Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to
taxable income in the years in which the temporary differences are expected to be received or settled.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or
on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax
assets and liabilities will be realised simultaneously.

(p) Leases (as a Lessee):

The Company’s lease asset classes primarily consist of leases for leashold land, ownership premises and
computers. The Company assesses whether a contract is or contains a lease, at inception of a contract. A

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

(i) the contract involves the use of an identified asset;

(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the
lease and

(iii) the Company has the right to direct the use of the asset.

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

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and
impairment losses, if any. Right-of-use assets are depreciated from the commencement date on a straight-line
basis over the shorter of the lease term and useful life of the underlying asset.

The lease liability is initially measured at the present value of the future lease payments. The lease payments
are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental
borrowing rates. The lease liability is subsequently remeasured by increasing the carrying amount to reflect
interest on the lease liability, reducing the carrying amount to reflect the lease payments made. A lease liability
is remeasured upon the occurrence of certain events such as a change in the lease term or a change in an index
or rate used to determine lease payments. The remeasurement normally also adjusts the leased assets.

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

(q) Foreign currency transactions

The functional and presentation currency of the Company is Indian rupee.

Transactions in foreign currency are recorded at exchange rate prevailing on the date of transaction. Foreign
currency denominated monetary assets and liabilities are translated at the exchange rate prevailing on the
Balance sheet date and exchange gain or loss arising on settlement and restatement are recognised in the
Standalone Statement of Profit and Loss.

Non-monetary assets and liabilities that are measured in terms of historical cost in foreign currencies are not
retranslated.