1. Summary of material accounting policies:

This note provides a list of the material accounting policies adopted in the preparation of these financial
statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

a. Basis of preparation

i. Compliance with Ind AS

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified
under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules,
2015, as amended from time to time] and other relevant provisions of the Act.

ii. Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the following:

• Derivative instruments that are measured at fair value

• Defined benefit plans - plan assets measured at fair value.

All assets and liabilities have been classified as current or non-current as per the Company's operating cycle
and other criteria set out in the Schedule III of the Companies Act, 2013. Based on the nature of products
and the time between the acquisition of assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12 months for all products and services
except for certain set of products for which operating cycle has been ascertained as 48 months for the
purpose of current and non-current classification of assets and liabilities.

b. Recent Accounting Pronouncements

I) New and Amended Standards

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment
Rules, 2023 dated March 31, 2023 to amend the following Ind AS which are effective for annual periods
beginning on or after April 1,2023. The Company applied these amendments for the first-time.

(i) Definition of Accounting Estimates - Amendments to Ind AS 8

The amendments clarify the distinction between changes in accounting estimates, changes in
accounting policies and the correction of errors. It has also been clarified how entities use
measurement techniques and inputs to develop accounting estimates. The amendments had no
impact on the Company's financial statements.

(ii) Disclosure of Accounting Policies - Amendments to Ind AS 1

The amendments aim to help entities provide accounting policy disclosures that are more useful by
replacing the requirement for entities to disclose their 'significant' accounting policies with a
requirement to disclose their 'material' accounting policies and adding guidance on how entities
apply the concept of materiality in making decisions about accounting policy disclosures.
The amendments have had an impact on the Company's disclosures of accounting policies, but not
on the measurement, recognition or presentation of any items in the Company's financial statements.

(iii) Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to Ind
AS 12

The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no
longer applies to transactions that give rise to equal taxable and deductible temporary differences
such as leases.

The Company previously recognised for deferred tax on leases on a net basis. As a result of these
amendments, the Company has recognised a separate deferred tax asset in relation to its lease
liabilities and a deferred tax liability in relation to its right-of-use assets. Since, these balances qualify
for offset as per the requirements of paragraph 74 of Ind AS 12, there is no impact in the balance
sheet. There was also no impact on the opening retained earnings as at January 01, 2024.

Apart from these, consequential amendments and editorials have been made to other Ind AS.

c. Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker is the Company's board of directors. Refer note
33 for segment information presented.

d. Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of the Company are measured using the currency of the
primary economic environment in which the entity operates (the 'functional currency'). The financial
statements are presented in Indian rupee (INR), which is the Company's functional and presentation
currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation of monetary assets and liabilities denominated in foreign
currencies at year end are recognised in profit and loss and are presented in the Statement of Profit and
Loss on a net basis.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rates at the dates of the initial transactions.

e. Revenue recognition

The Company recognises the revenue when a customer obtains control of a promised good or service and thus
has the ability to direct the use and obtain the benefits from the good or service in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods and services.

The five-step process is applied for recognition of revenue:

(i) identify contracts with customers

(ii) identify the separate performance obligation

(iii) determine the transaction price of the contract

(iv) allocate the transaction price to each of the separate performance obligations, and

(v) recognise the revenue as each performance obligation is satisfied.

(i) Revenue from sale of products

The Company accounts for a contract when it has approval and commitment from parties involved, the
rights of the parties are identified, payment terms are identified, the contract has commercial substance and
collectability of consideration is probable.

Company generate revenue from sale of pumps, valves and related support services. The Company may
promise to provide distinct goods or services within a contract, for example when a contract covers
multiple promises (e.g., supply of pumps, motors and spares), in which case the Company separates the
contract into more than one performance obligation. If a contract is separated into more than one
performance obligation, the Company allocates the total transaction price to each performance obligation
on the basis of the relative standalone selling price of each distinct product or service promised in the
contract. Where standalone selling price is not observable, the Company uses the expected cost-plus
margin approach to allocate the transaction price to each distinct performance obligation.

The Company assesses for the timing of revenue recognition in case of each distinct performance
obligation. The Company first assesses whether the revenue can be recognized over time as it performs if
any of the following criteria is met:

a. The customer simultaneously consumes the benefits as the Company performs, or

b. The customer controls the work-in-progress, or

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

If none of the criteria above are met, the Company recognizes revenue at a point-in-time. The point of
recognition of revenue is determined when the control of the goods or services is transferred which is
generally determined based on when the significant risks and rewards of ownership are transferred to the
customer. Apart from this, the Company also considers its present right to payment, the legal title to the
goods, the physical possession and the customer acceptance in determining whether the control has been
transferred.

In case of revenue to be recognized over time, the Company uses input method to measure the progress for
contracts because it best depicts the transfer of control to the customer which occurs as it incurs costs on
contracts. Under the input method measure of progress, the extent of progress towards completion is
measured based on the ratio of costs incurred to date to the total estimated costs at completion of the
performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs
are incurred.

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price
(net of variable consideration) allocated to that performance obligation. Due to the nature of the work
required to be performed, the estimation of total revenue and cost at completion is complex, subject to
many variables and requires significant judgment. It is common for project contracts to contain penalties,
bonuses or other provisions that can either increase or decrease the transaction price. These variable
amounts generally are awarded upon achievement of certain performance metrics, program milestones or
cost targets and may be based upon customer discretion. The transaction price of goods sold and services
rendered is net of variable consideration on account of various discounts and schemes offered by the
Company as part of the contract.

The Company estimates variable consideration using expected value method of probability-weighted
values at an amount to which it expects to be entitled. The Company includes estimated amounts in the
transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will
not occur and the uncertainty associated with the variable consideration is resolved. The estimates of
variable consideration and determination of whether to include estimated amounts in the transaction price
are based largely on an assessment of the anticipated performance and all information (historical, current
and forecasted) that is reasonably available.

The Company does not expect material financing component adjustments to contracts where the period
between the transfer of the promised goods or services to the customer and payment exceeds one year. As a
consequence, the Company does not adjust any of the transaction prices for the time value of money.

Contracts are modified to account for changes in contract specifications and requirements. The Company
considers contract modifications to exist when the modification either creates new or changes the existing
enforceable rights and obligations. Most of the contract modifications are for goods or services that are not
distinct from the existing contract due to the significant integration service provided in the context of the
contract and are accounted for as if they were part of that existing contract. The effect of a contract
modification on the transaction price and measure of progress for the performance obligation to which it
relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a
cumulative catch-up basis.

The Company recognizes Advances from customers as contractual liability.

When estimates of total costs to be incurred exceed total estimates of revenue to be earned on a
performance obligation related to a contract, a provision for the entire loss on the performance obligation
is recognized in the period.

(ii) Revenue from sale of services

Company generate revenue from sale of pumps, valves and related support services. Revenue from services
is recognised in the accounting period in which the services are rendered.

(iii) Other operating revenue

Revenue comprising of income from ancillary activities incidental to the operations of the Company is
recognized when the right to receive the income is established as per the terms of the contract. Revenue
from export incentives majorly comprises of Duty drawback, Merchandise Export Incentive Scheme
(MEIS) and Remission of Duties and Taxes on Exported Products (RoDTEP) which are recognised on an
accrual basis at specified rates. Refer note 20.

(iv) Other income

Interest income:

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective
interest rate applicable. Interest income is included in Other income in the Statement of Profit and Loss.

Dividends:

Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is
established, it is probable that the economic benefits associated with the dividend will flow to the
Company, and the amount of the dividend can be measured reliably.

f. Income tax

The income tax expense or credit for the period is the tax payable on the current period's taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulations is subject to interpretation.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is
also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax
loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially
enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset
is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a
net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in Statement of Profit and Loss, except to the extent that it relates to
items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity, respectively.

g. Leases

As a lessee:

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Company. Each lease payment is allocated between the principal (liability) and finance
cost. The finance cost is charged to the Statement of Profit and Loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability for each period.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include
the net present value of the fixed payments (including in-substance fixed payments), less any lease incentives
receivable. Company does not have any variable lease payments.

Lease payments to be made under reasonably certain extension options are also included in the measurement of
the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be
readily determined, the lessee's incremental borrowing rate is used, being the rate that the lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with
similar terms and conditions.

Right-of-use assets are measured at cost comprising the following:

• the amount of the initial measurement of lease liability

• any lease payments made at or before the commencement date less any lease incentives received

• any initial direct costs, and

• restoration costs.

Right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line
basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated
over the underlying asset's useful life.

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis
as an expense in the Statement of Profit and Loss. Short-term leases are leases with a lease term of 12 months or
less.

h. Impairment of assets

The management periodically assesses, using external and internal sources, whether there is an indication that
an asset may be impaired. If an asset is impaired, the Company recognises an impairment loss as the excess of
the carrying amount of the asset over the recoverable amount. Recoverable amount is higher of an asset's or
cash generating unit's net selling price and its value in use. Value in use is the present value of estimated future
cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.
An impairment loss is reversed to the extent that the asset's carrying amount does not exceed the carrying
amount that would have been determined if no impairment loss had previously been recognised.

i. Cash and cash equivalents

Cash and cash equivalents include cash on hand, balances with banks in current accounts and EEFC accounts,
fixed deposits with banks with original maturities 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, and bank overdrafts. Bank
overdrafts are shown within borrowings in current liabilities in the balance sheet. Other bank balances include
fixed deposits with original maturities of more than three months and earmarked accounts which includes
unpaid dividend.

j. Trade receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course
of business and reflects the Company's unconditional right to consideration (that is, payment is due only on the
passage of time). Trade receivables are recognised initially at the transaction price as they do not contain
significant financing components. The Company holds the trade receivables with the objective of collecting the
contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest
method, less loss allowance.

k. Borrowing and Borrowing costs

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting period.

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the
year in which they are incurred.

l. Inventories

Inventories are valued at the lower of cost and net realisable value.

Cost of raw materials, components, stores, spares, loose tools and traded goods comprises cost of purchases.
Cost of work-in progress and finished goods comprises direct materials, direct labour and an appropriate
proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal
operating capacity. Cost of inventories also include all other costs incurred in bringing the inventories to their
present location and condition. Costs are assigned to individual items of inventory on the basis of weighted
average basis. Costs of purchased inventory are determined after deducting rebates and discounts. Net
realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.

m. Financial assets

i. Classification

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

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

• 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 profit or 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 assesses whether the financial asset falls within the definition of equity basis the underlying
contractual terms and whether the Company has residual interest in the assets of the entity (investee) after
deducting all of its liabilities. If the financial asset does not meet the definition of equity, the disclosure of
same is assessed based on the substance of the transaction. During the year, the Company has subscribed
shares in a power producer entity as per the regulatory requirement as set out in Electricity Rules, 2005.
Based on the substance of transaction, the amount has been disclosed as security deposit.

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

ii. 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 Statement of Profit and Loss. However, trade receivables that do not contain a
significant financing component are measured at transaction price.

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

Debt instruments

Subsequent measurement of debt instruments depends on the Company's business model for managing the
asset and the cash flow characteristics of the asset. The Company classifies its debt instruments at amortised
cost as below:

• 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 profit or loss when the asset is derecognised or impaired. Interest income
from these financial assets is included in other income using the effective interest rate method.

Equity instruments

The Company subsequently measures equity investment at fair value. The Company's Management elects
to present fair value gains and losses on equity investments in other comprehensive income on an
instrument by instrument basis.

Investment in subsidiaries and associates

The investments in subsidiaries and associates are carried in the financial statements at historical cost
except when the investment, or a portion thereof, is classified as held for sale, in which case measured at
lower of carrying amount and fair value less costs to sell.

Investments in subsidiaries carried at cost are tested for impairment in accordance with Ind AS 36
Impairment of Assets. The carrying amount of the investment is tested for impairment as a single asset by

comparing its recoverable amount with its carrying amount, any impairment loss recognised reduces the
carrying amount of the investment.

iii. Impairment of financial assets

The Company assesses on a forward-looking basis the expected credit loss associated with its assets carried
at amortised cost. The impairment methodology applied depends on whether there has been a significant
increase in credit risk. Refer note 35(A) for details of credit risk.

For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial
Instruments, which requires expected lifetime losses to be recognised from initial recognition of the
receivables.

iv. Derecognition of financial assets

A financial asset is derecognised only when

• The Company has transferred the rights to receive cash flows from the financial asset or

• retains the contractual rights to receive the cash flows of the financial asset but assumes a contractual
obligation to pay the cash flows to one or more recipients.

Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially
all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised.
Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset,
the financial asset is not derecognised.

Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of
ownership of the financial asset, the financial asset is derecognised if the Company has not retained control
of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be
recognised to the extent of continuing involvement in the financial asset.

n. Offsetting financial instruments

Financial assets and liabilities are offset, and the net amount is reported in the balance sheet where there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on
future events and must be enforceable in the normal course of business and in the event of default, insolvency
or bankruptcy of the Company or the counterparty.

o. Property, plant and equipment

Freehold land is stated at historical cost. All other items of property, plant and equipment are stated at
historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the
acquisition of the items.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate,
only when 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. The carrying amount of any component accounted for as a
separate asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement
of Profit and Loss during the reporting period in which they are incurred.

Depreciation methods, estimated useful lives and residual value

Depreciation is provided on the straight-line method/ written down value method over the useful lives of assets
which has been assessed as under the technical advice, taking into account the nature of the asset, the estimated
usage of the asset, the operating conditions of the asset, past history of replacement, maintenance support, etc.,
which are different from those prescribed in Schedule II to the Companies Act, 2013 (Act) except for server and
networking (SLM) and furniture and fixtures (WDV) which are same as prescribed in Schedule II to the Act.
Estimated useful lives of assets are as follows:

The asset's residual values and useful lives are reviewed and adjusted if appropriate, at the end of the reporting
period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount.

Net gains or net losses on disposals are determined by comparing proceeds with carrying amount. These are
included in the Statement of Profit and Loss under other income or other expenses respectively.

>. Intangible assets

Intangible assets are stated at acquisition cost net of tax/ duty credits availed, if any, and net of accumulated
amortisation. 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 Statement of Profit and Loss. Intangible assets are amortized on the straight-line method as
follows:

q. Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of
financial year which are unpaid. Trade and other payables are unsecured and are presented as current liabilities
unless payment is not due within operating cycle determined by the Company after the reporting period. They
are recognised initially at their fair value and subsequently measured at amortised cost using the effective
interest method.