2. MATERIAL ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements have been prepared in
accordance with the provisions of Indian Accounting
Standards (Ind-AS) notified under the Companies Act,
2013 (“the Act”) (to the extent notified and as amended
from time to time) and guidelines issued by the Securities
and Exchange Board of India (SEBI). The Ind AS have
been prescribed under Section 133 of the Act read with
Rule 3 of the Companies (Indian Accounting Standards)
Rules, 2015.

In addition, the guidance notes/announcements issued
by the Institute of Chartered Accountants of India (ICAI)
are also applied except where compliance with other
statutory promulgations require a different treatment.

Company maintains it's accounts on accrual basis
following historical cost convention except for certain
financial instruments which are measured at fair values.
The financial statements have been prepared on accrual
and going concern basis.

The financial statements have been approved for
issue by the Board of Directors at it's meeting held on
13 May 2026.

2.2 Basis of measurement

The financial statements have been prepared on a
historical cost basis, except for the following items, which
are measured on an alternative basis in accordance with
Ind AS on each reporting date.

2.3 Current or non-current classification

All assets and liabilities have been classified as current
or non-current as per the Company's normal operating
cycle and other criteria as set out in the Division II of
Schedule III to the Companies Act, 2013.

Based on the nature of products and the time between
acquisition of assets for processing and their realisation
in cash and cash equivalents, the Company has
ascertained its operating cycle as 12 months for the
purpose of current or non-current classification of assets
and liabilities for product business. In case of project
business, operating cycle is dependent on life of specific
project/ contract/ service, hence current non-current
bifurcation relating to project is based on expected
completion date of project which generally exceeds 12
months.

2.4 Functional and presentation currency

These financial statements are presented in Indian
Rupees ('), which is the Company's functional currency.
All financial information is presented in ' Mn rounded
off to three decimal places, except share and per share
data, unless otherwise stated.

2.5 Use of judgements, estimates and assumptions

The preparation of financial statements in conformity with
Ind AS requires the management to make judgments,
estimates and assumptions that affect the reported
amounts of revenue, expenses, current assets, non¬
current assets, current liabilities, non-current liabilities
and disclosure of the contingent liabilities at the end
of each reporting period. The estimates are based
on management's best knowledge of current events
and actions, however, due to uncertainty about these
assumptions and estimates, actual results may differ
from these estimates.

This note provides an overview of the areas that involved
a higher degree of judgement 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.

Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognised prospectively.

Critical estimates and judgements

The areas involving critical estimates or judgements are:

• Estimation of defined benefit obligation - The
cost of the defined benefit gratuity and pension

plan, and the present value of the gratuity/
pension obligation are determined using actuarial
valuations. An actuarial valuation involves making
various assumptions that may differ from actual
developments in the future. (Refer note - 23)

• Estimation of leave encashment provision-The cost
of the leave encashment and the present value of
the leave encashment obligation are determined
using actuarial valuations. (Refer note 17)

• Estimation for provision of variable pay - Provision
for variable pay is determined based on performance
indicator as per annual operating plan.

• Estimation for provision of slow and non-moving
inventory - Provision for slow and non-moving
inventory is determined based on age-wise analysis
of inventory.

• Impairment of receivables-The impairment
provisions for financial receivables disclosed are
based on assumptions about risk of default and
expected credit loss. (Refer note 36)

• Decommissioning liability - Initial estimate of
dismantling and restoration liability requires
significant judgement about cost inflation index and
other factors. (Refer note 17)

• Provision for warranty claims - Provision is
recognised based on the key assumptions
about likelihood and magnitude of an outflow of
resources. (Refer note 17)

• Estimation of provision for loss on long term
contract - The provision is recognised when the
estimated cost exceeds the estimated revenue for
constructions contracts as per Ind AS 115. (Refer
note 17)

• Recognition of deferred tax asset - Availability
of future taxable profit against which deductible
temporary differences can be utilised

• Revenue recognition - Variable consideration such
as discounts, rebates is recognised considering
historical trend of payout as adjusted for any
amendment in rebate scheme.

2.6 Inventories

Inventories are valued at the lower of cost and net
realisable value. The cost is calculated on moving
weighted average method. Costs incurred in bringing
each product to its present location and conditions are
accounted for as follows:

• Raw materials: cost includes cost of purchase
excluding taxes subsequently recoverable from
tax authorities and other costs incurred in bringing
the inventories to their present location and
condition. However, these items are considered
to be realisable at cost if the finished products in
which they will be used, are expected to be sold at
or above cost.

• Finished goods and work in progress: cost
includes cost of direct materials, labour and
a systematic allocation of fixed and variable
production overhead that are incurred in converting
raw material into work in progress / finished goods
based on the normal operating capacity and actual
capacity respectively.

• Traded goods: Cost includes cost of purchase and
other costs incurred in bringing the inventories to
their present location and condition.

• Stores and spares-Inventories of consumable
stores and spare parts are carried at the lower of
cost and net realisable value.

Based on ageing of inventory and it's future potential to
generate economic benefit, company provides for slow
and non-moving inventory using provision matrix. This
provision is reversed once such inventory is consumed
or expected to be consumed.

Net realisable value is the estimated selling price in the
ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make
the sale. Assessment of net-realisable value is made at
regular intervals (each reporting period) and at change
of events.

2.7 Cash and cash equivalents

Cash and cash equivalents in the balance sheet
comprise cash at banks, cash on hand and highly liquid
short-term deposits with an original maturity of three
months or less, which are subject to an insignificant risk
of changes in value.

The deposits maintained by the Company with banks
and financial institutions comprise time deposits, which
can be withdrawn by the Company at any point without
prior notice or penalty on the principal.

While other bank balances include, margin money,
deposits, earmarked balances with bank, unclaimed
dividend balances and other bank balances with bank
which have restrictions on repatriation.

2.8 Statement of Cash Flows

Statement of Cash Flows is prepared segregating the
cash flows into operating, investing and financing
activities. Cash flow from operating activities is reported

using indirect method, adjusting the profit before tax for
the effects of:

• changes during the period in inventories and
operating receivables and payables transactions of
a non-cash nature;

• non-cash items such as depreciation, provisions,
unrealised foreign currency gains and losses; and

• all other items for which the cash effects are
investing or financing cash flows.

Cash and cash equivalents (including bank balances)
shown in the Statement of Cash Flows exclude items
which are not available for general use as at the date of
Balance Sheet.

2.9 Property, plant and equipment (PPE)
Measurement

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

Freehold land is carried at historical cost. All other
items of PPE are measured at cost of acquisition
or construction less accumulated depreciation and
accumulated impairment loss, if any.

The cost of an item of PPE comprises its purchase price,
including import duties net of credits and other non¬
refundable taxes or levies and any directly attributable
cost of bringing the asset to its working condition for its
intended use, after deducting any discounts, rebates
and estimated costs of dismantling and removing the
item and restoring the site on which it is located and
borrowing costs directly attributable to the construction
or acquisition of a qualifying asset upto completion or
acquisition are capitalised as part of the cost.

Own manufactured PPE is capitalised at cost including
an appropriate share of overheads. Administrative and
other general overhead expenses that are specifically
attributable to construction or acquisition of PPE or
bringing the PPE to working condition are allocated and
capitalised as a part of the cost of the PPE.

When parts of an item of PPE have different useful
lives, they are accounted for as separate items (major
components) of PPE.

PPE under construction are disclosed as capital work-
in-progress.

Advances paid towards the acquisition of PPE
outstanding at each reporting date are disclosed under
“Other non-current assets”.

The cost of replacing a part of an item of PPE is
recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied
within the part will flow to the Company and its cost
can be measured reliably. The carrying amount of the
replaced part is derecognised. The costs of the day-to¬
day servicing of PPE are recognised in the statement of
profit and loss as incurred.

Disposal

An item of PPE is derecognised upon disposal or when
no future benefits are expected from its use or disposal.
Gains and losses on disposal of an item of PPE are
determined by comparing the proceeds from disposal
with the carrying amount of PPE, and are recognised
within other income/expenses in the statement of profit
and loss.

Depreciation

Depreciation is calculated over the depreciable amount,
which is the cost of an asset, or other amount substituted
for cost, less its residual value.

The residual values, useful lives and method of
depreciation of PPE is reviewed at each financial
year end and adjusted prospectively, if appropriate.
Depreciation on additions to/deductions from owned
assets is calculated pro rata to the period of use. Further,
extra shift depreciation is provided wherever applicable.
Depreciation charge for impaired assets if any is
adjusted in future periods in such a manner that the
revised carrying amount of the asset is allocated over its
remaining useful life.

Depreciation is recognised in the statement of profit and
loss on a straight-line basis over the estimated useful
lives of each part of an item of PPE as prescribed in
Schedule II of the Companies Act 2013 except in the case
of patterns as mentioned below where the management
based on the technical evaluation have estimated the life
to be lower than the life prescribed in schedule II.

2.10 Investment property

Investment property is a property, being land or building
or part of it, (including those under construction) that is
held to earn rental income or for capital appreciation or
both but not held for sale in ordinary course of business,
use in manufacturing or rendering services or for
administrative purposes.

Upon initial recognition, investment property is measured
and reported at cost, including transaction costs. The
cost of investment property includes its purchase price
and directly attributable expenditure, if any. Subsequent
expenditure is capitalised to the asset's carrying amount
only when it is probable that future economic benefits
associated with expenditure will flow to the company
and the cost of the item can be measured reliably. All
other repairs and maintenance costs are expensed
when incurred.

Subsequent to initial recognition, investment property
is stated at cost less accumulated depreciation and
accumulated impairment loss, if any. The estimated
useful life and residual values are reviewed at each
financial year end and the effect of any change in the
estimates of useful life/ residual value is accounted on
prospective basis. Investment property in the form of
land is not depreciated.

Investment properties are derecognised either when they
have been disposed of or when they are permanently
withdrawn from use and no future economic benefit is
expected from their disposal. The difference between
the net disposal proceeds and the carrying amount of
the asset is recognised in the statement of profit and
loss in the period of derecognition.

The fair value of investment property is disclosed in the
note no. 5. Fair value is determined by an independent
valuer.

2.11 Intangible assets
Recognition and measurement

Intangible assets are recognised when the asset is
identifiable, is within the control of the Company and it
is probable that the future economic benefits that are
attributable to the asset will flow to the Company and
cost of the asset can be reliably measured.

Intangible assets acquired by the Company that have
finite useful lives are measured at cost less accumulated
amortisation and accumulated impairment losses (if
any).

Intangible assets with indefinite useful lives (Goodwill)
are not amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level.

Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in the
specific asset to which it relates.

Amortisation

Amortisation is calculated over the cost of the asset, or
other amount substituted for cost, less its residual value.
Amortisation is recognised in statement of profit and loss
on a straight-line basis over the estimated useful lives of
intangible assets from the date that they are available
for use, since this most closely reflects the expected
pattern of consumption of the future economic benefits
embodied in the asset. The method of amortisation and
useful life is reviewed at the end of each accounting
year with the effect of any changes in the estimate being
accounted for on a prospective basis.

The estimated useful life of an identifiable intangible
asset is based on a number of factors including the
effects of obsolescence, demand, competition, and
other economic factors (such as the stability of the
industry, and known technological advances), and the
level of maintenance expenditures required to obtain the
expected future cash flows from the asset.

Computer software is amortised over the period of three
years.

Amortisation on impaired assets is provided by adjusting
the amortisation charge in the remaining periods so as
to allocate the asset's revised carrying amount over its
remaining useful life.

Research and development costs -

Research costs are expensed as incurred. Development
expenditures on an individual project are recognised as
an intangible asset when the Company can demonstrate:

• The technical feasibility of completing the intangible
asset so that the asset will be available for use or
sale

• Its intention to complete and its ability and intention
to use or sell the asset

• How the asset will generate future economic
benefits

• The availability of resources to complete the asset

• The ability to measure reliably the expenditure
during development

Following initial recognition of the development
expenditure as an asset, the asset is carried at cost
less any accumulated amortisation and accumulated
impairment losses. Amortisation of the asset begins
when development is complete and the asset is available

for use. It is amortised over the period of expected future
benefit. Amortisation expense is recognised in the
statement of profit and loss.

During the period of development, the asset is tested for
impairment annually.

2.12 Interest in joint operations

The company as joint operator recognises in relation to
its interest in a joint operation, it's share in the assets/
liabilities held / incurred jointly with the other parties of
the joint arrangements. Revenue is recognised for it's
share of revenue from the sale of output by the joint
operator. Expenses are recognised for it's share of
expenses incurred jointly with the other parties of the
joint arrangements.

2.13 Borrowing costs

Borrowing costs are interest and other costs that an
entity incurs in connection with the borrowing of funds.

Borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset are
capitalised in the cost of that asset. Qualifying assets
are those assets which necessarily takes a substantial
period of time to get ready for its intended use or sale.

All other borrowing costs are expensed in the period in
which they are incurred.

2.14 Revenue recognition

Company recognises revenue from contracts with
customers when it satisfies a performance obligation.

Revenue is measured at transaction price i.e.
Consideration to which Company expects to be entitled
in exchange for transferring promised goods or services
to a customer, excluding amounts collected on behalf
of third parties and after considering effect of variable
consideration, significant financing component, if any.

For contracts with multiple performance obligations,
transaction price is allocated to different performance
obligations based on their standalone selling price.
In such case, revenue recognition criteria is applied
separately to different performance obligations, in order
to reflect the substance of the transaction and revenue is
recognised separately for each obligation as and when
the recognition criteria for the component is fulfilled.

Sale of goods

Revenue from the sale of goods is recognised when
control of the goods is transferred to the buyer. For
contracts that permit the customer to return an item,
revenue is recognised to the extent that it is highly
probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. Amounts

included in revenue are net of returns, trade allowances,
rebates, goods and service tax, value added taxes.

Customer loyalty programs

The Company allocates a portion of the consideration
received to loyalty points. This allocation is based on the
relative stand-alone selling prices. The amount allocated
to the loyalty programs is deferred, and is recognised
as revenue when loyalty points are redeemed or the
likelihood of the customer redeeming the loyalty points
becomes remote. The deferred revenue is included in
contract liabilities.

Rendering of services

Revenue is recognised over the time as and when
customer receives the benefit of company's performance
and the company has an enforceable right to payment
for services transferred.

Construction Contracts

Contract revenue includes initial amount agreed in the
contract plus any variations in contract work, claims and
incentive payments, to the extent that it is probable that
they will result in revenue and can be measured reliably.

Contract revenue and contract cost arising from fixed
price contract are recognised in accordance with the
percentage completion method (POC).

The stage of completion is measured with reference to
cost incurred to date as a percentage of total estimated
cost of each contract. Until such time (50% of project cost
in case of civil projects outside India and 25% of project
cost in case of other projects) where the outcome of the
contract cannot be ascertained reliably, the Company
recognises revenue equal to actual cost.

Full provision is made for any loss estimated on a
contract in the year in which it is first foreseen.

Where the Company is involved in providing operation
and maintenance services under a single construction
contract, then the consideration is allocated on a relative
stand-alone price basis between various obligations of
a contract.

For contracts where progress billing exceeds the
aggregate of contract costs incurred to-date and
recognised profits (or recognised losses, as the case
may be), the surplus is shown as the unearned revenue.

For contracts where the aggregate of contract costs
incurred to-date and recognised profits (or recognised
losses, as the case may be) exceed progress billing,
the deficit is shown as the unbilled revenue. Unbilled
revenue is shown as part of other non-financial assets
as the contractual right for consideration is dependant
on completion of contractual milestones.

Amounts received before the related work is performed
are disclosed in the Balance Sheet as a liability towards
advance received. Amounts billed for work performed
but yet to be paid by the customer are disclosed in the
Balance Sheet as trade receivables.

The amount of retention money held by the customers
pending completion of performance milestone is
disclosed as part of other asset and is reclassified as
trade receivables when it becomes due for payment

2.15 Other operating / Non- operating income

Interest is recognised on a time proportion basis
determined by the amount outstanding and the rate
applicable using the effective interest rate (EIR) method.
Dividend income and export benefits are recognised
in the statement of profit and loss on the date that the
Company's right to receive payment is established.

Interest receivable on customer dues is recognised as
income in the Statement of Profit and Loss on accrual
basis provided there is no uncertainty towards its
realisation.

Other items of income are accounted as and when the
right to receive such income arises and it is probable
that the economic benefits will flow to the Company and
the amount of income can be measured reliably.

Grants that compensate the company for expenses
incurred are recognised in profit and loss account as
other income on systematic basis, in the periods in which
the expenses are recognised unless the conditions for
receiving the grants are met after the related expenses
have been recognised. In this case, the grant is
recognised when it becomes receivable.

2.16 Foreign currencies transactions
Transactions and balances

Transactions in foreign currency are recorded at
exchange rates prevailing at the date of transactions.
Exchange differences arising on foreign exchange
transactions settled during the year are recognised in
the statement of profit and loss of the year.

Monetary assets and liabilities denominated in foreign
currencies which are outstanding, as at the reporting
period are translated at the closing exchange rates and
the resultant exchange differences are recognised in the
statement of profit and loss.

Non-monetary assets and liabilities denominated
in foreign currencies that are measured in terms of
historical cost are translated using the exchange rate at
the date of the transaction.

2.17 Employee benefits

Short-term employee benefits

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

Post-employment benefits
Defined contribution plans

The company's superannuation scheme, state governed
provident fund scheme related to Dewas, Kaniyur,
Sanand factories and employee state insurance scheme
are defined contribution plans. The company has no
further payment obligations once the contributions
have been paid. The contributions are recognised as
employee benefit expenses when they are due.

Defined Benefit Plans

The employees' gratuity fund schemes and provident
fund scheme managed by a trust and pension scheme
are the Company's defined benefit plans. The present
value of the obligation under such defined benefit plans
is determined based on actuarial valuation using the
Projected Unit Credit Method, which recognises each
period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit
separately to build up the final obligation.

The obligation is measured at the present value of the
estimated future cash flows. The discount rates used for
determining the present value of the obligation under
defined benefit plans, is based on the market yields on
government securities of a maturity period equivalent
to the weighted average maturity profile of the defined
benefit obligations as at the balance sheet date, having
maturity periods approximating to the terms of related
obligations.

Re-measurements, comprising of actuarial gains and
losses, the effect of the asset ceiling, excluding amounts
included in net interest on the net defined benefit liability
and the return on plan assets (excluding amounts
included in net interest on the net defined benefit
liability), are recognised immediately in the balance
sheet with a corresponding debit or credit to retained
earnings through other comprehensive income (OCI)
in the period in which they occur. Remeasurements are
not reclassified to the statement of profit and loss in
subsequent periods.

In case of funded plans, the fair value of the plan's
assets is reduced from the gross obligation under the
defined benefit plans, to recognise the obligation on
net basis.

When the benefits of the plan are changed or when a
plan is curtailed, the resulting change in benefits that
relates to past service or the gain or loss on curtailment
is recognised immediately in the statement of profit and
loss. Net interest is calculated by applying the discount
rate to the net defined benefit liability or asset. The
company recognises gains/ losses on settlement of a
defined plan when the settlement occurs.

The Company pays contribution to a recognised
provident fund trust in respect of above-mentioned PF
schemes.

Other long-term employee benefit

Compensated absences liabilities mean, the liabilities
for earned leave that are not expected to be settled
wholly within twelve months after the end of the reporting
period in which the employee render the related service.
They are therefore measured as the present value of
expected future payments to be made in respect of
services provided by employees up to the end of the
reporting period using the projected unit credit method.
The benefits are discounted using the market yields
at the end of the reporting period that have terms
approximating the terms of the related obligation. Re¬
measurements as a result of experience adjustments
and change in actuarial assumptions are recognised in
the statement of profit and loss.

2.18 Income taxes

Income tax expense comprises current and deferred
tax. It is recognised in the statement of profit and
loss except to the extent that it relates to a business
combination or items recognised directly in equity or
in OCI.

Current tax

Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable in
respect of previous years.

Current tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to
compute the amount are those that were enacted at
the reporting date in the country where the company
operates and generates taxable income. Current tax
assets and liabilities are offset only if certain criteria are
met and such offsetting is legally enforceable.

Deferred tax

Deferred tax is provided using the balance sheet
method on temporary differences between the tax bases
of assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date.

Deferred tax is recognised on timing differences between
the accounting income and the taxable income for the
year. The tax effect is calculated on the accumulated
timing differences at the end of the accounting period
based on prevailing enacted or subsequently enacted
regulations.

Deferred tax liabilities are recognised for all timing
differences. Deferred tax assets are recognised for
deductible timing differences only to the extent there is
reasonable certainty that sufficient future taxable income
will be available against which such deferred tax assets
can be realised.

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

Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset only if certain
criteria are met.

2.19 Provisions

A Provision is recognised when the Company has a
present obligation (legal or constructive) as a result of a
past event and it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the
amount of the obligation.

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 risks 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 in the statement of profit and loss.

Warranty provisions

A provision for warranty is recognised when the
underlying products and services are sold to the
customer based on historical warranty data and at its

best estimate using expected value method. The initial
estimate of warranty-related costs is revised annually.