Provisions Contingent Liabilities Contigent

Assets and Commitments

(a) General

Provisions are recognised when the Company
has a present obligation (legal or constructive)
as a result of a past event, 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, the amount of a
provision shall be the present value of expense
expected to be required to settle the obligation
Provisions are therefore discounted, when effect
is material, The discount rate shall be pre-tax rate
that reflects current market assessment of time
value of money and risk specific to the liability.
Unwinding of the discount is recognised in the
Statement of Profit and Loss as a finance cost.
Provisions are reviewed at each balance sheet
date and are adjusted to reflect the current best
estimate.

(b) Contingencies

Contingent liabilities are disclosed when there
is a possible obligation arising from past events,
the existence of which will be confirmed only
by the occurrence or non-occurrence of one
or more uncertain future events not wholly
within the control of the Company or a present
obligation that arises from past events where it is
either not probable that an outflow of resources
will be required to settle or a reliable estimate
of the amount cannot be made. Information on
contingent liability is disclosed in the Notes to
the Financial Statements.

A contingent asset is a possible asset that arises
from past events and whose existence will be
confirmed only by the occurrence or non¬
occurrence of one or more uncertain future
events not wholly within the control of the
entity, Contingent assets are not recognised,
but are disclosed in the notes. However, when

the realisation of income is virtually certain, then
the related asset is no longer a contingent asset,
but it is recognised as an asset.

(xviii) Share capital and Share Premium

Ordinary shares are classified as equity. Incremental
costs directly attributable to the issue of new shares
are shown in equity as a deduction, net of tax, from
the proceeds.

Par value of the equity share is recorded as share
capital and the amount received in excess of the par
value is classified as share premium.

(xix) Revenue Recognition

(a) Sale of goods and Services

Revenue from sale of manufactured goods
is recognised on stisfaction of performance
obligation upon transfer of control of promised
productsto customers in an amount that
reflects the consideration the Company expects
to receive in exchange for those products.

Revenue from rendering of services (other than
EPC business) is recognised over time as and
when the customer receives the benefit of the
Company's performance and the Company has
an enforceable right to payment for services
transferred.

Contract revenue, i.e. revenue from EPC
business,is recognised over time to the extent
of performance obligation satisfied and control
is transferred to the customer. Contract revenue
is recognised at allocable transaction price (net
of variable considerations) which represents the
cost of work performed on the contract plus
proportionate margin, using the percentage of
completion method. Percentage of completion
is the proportion of cost of work performed
to-date, to the total estimated contract costs.
The transaction price of good 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.

Unbilled revenue represents value of goods
and services performed in accordance with the
contract terms but not billed.

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

(b) Other Income
-Interest income

Interest income is recognised on a time
proportion basis using the effective interest

method. When a receivable is impaired, the
Company reduces the carrying amount to its
recoverable amount, being the estimated future
cash flows discounted at the original effective
interest rate of the instrument and continues
unwinding the discount as interest income.
Interest income on impaired loans is recognised
using the original effective interest rate.

- Dividends

Dividend is recognised when the Company's
right to receive the payment is established,
which is generally when shareholders approve
the dividend.

(xx) Taxation

Income tax

Income tax expense comprises current tax expense
and the net change in the deferred tax asset or
liability during the year. Current and deferred taxes
are recognised in Statement of Profit and Loss, except
when they relate to items 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

Current tax

Current tax is measured at the amount of tax expected
to be payable on the taxable income for the year
as determined in accordance with the provisions of
the Income Tax Act,1961 that have been enacted or
subsequently enacted at the end of the reporting
period.

Current tax assets and current tax liabilities are offset
when there is a legally enforceable right to set off the
recognised amounts and there is an intention to settle
the asset and the liability on a net basis.

Deferred tax

Deferred income 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 income 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 the transaction.

Deferred tax assets are recognised only to the extent
that it is probable that either future taxable profits
or reversal of deferred tax liabilities 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 a deferred tax asset is reviewed
at the end of 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 income tax asset to be utilised.

Deferred tax assets and liabilities are measured using
the tax rates and tax laws that have been enacted or
substantively enacted by the end of the reporting
period and are expected to apply when the related
deferred tax asset is realised or the deferred tax liability
is settled.

Deferred tax assets and liabilities are offset when
there is a legally enforceable right to offset current
tax assets and liabilities and when it relates to income
taxes levied by the same taxation authority and the
Company intends to settle its current tax assets and
liabilities simultaneously.

During the year ended 31 March, 2020, the
Government of India vide taxation Laws (Amendment)
Tax Ordinance , 2019 has allowed an option to the
domestic companies to switch to a lower tax rate
structure of 22 % (25.168 % including surcharge
and cess) from the earlier 30 % (34.944 % including
surcharge and cess) subject to the condition that
the Company will not avail any of the specified
deductions/ incentives under the Income Tax Act,
1961. The Company has opted for this new rate
structure and made current tax/deferred tax Provision
with the new rates.

(xxi) Provisions

A provision is recognised when the Company has a
present obligation as a result of past events and it is
probable that an outflow of resources will be required
to settle the obligation, in respect of which a reliable
estimate of the amount can be made. Provisions are
determined based on best estimate required to settle
the obligation at the Balance Sheet date. When a
provision is measured using the cash flows estimated
to settle the present obligation, its carrying amount
is the present value of those cash flows (when the
effect of the time value of the money is material).
The increase in the provisions due to passage of
time is recognised as interest expense. Provisions are
reviewed as at each reporting date and adjusted to
reflect the current best estimate

Contingent liabilities are disclosed when there is
a possible obligation arising from past events, the
existence of which will be confirmed only by the
occurrence or non-occurrence of one or more
uncertain future events not wholly within the control
of the Company or a present obligation that arises
from past events where it is either not probable that
an outflow of resources will be required to settle or
a reliable estimate of the amount cannot be made.
Contingent assets are not disclosed in the financial
statements unless an inflow of economic benefits is
probable.

(xxii) Earnings per Share

As per Ind AS 33, Earning Per Share, Basic earnings per
share are computed by dividing the net profit for the
year attributable to the shareholders' and weighted
average number of shares outstanding during the
year. The weighted average numbers of shares also
includes fixed number of equity shares that are issuable
on conversion of compulsorily convertible preference
shares, debentures or any other instrument, from the
date consideration is receivable (generally the date
of their issue) of such instruments. Diluted earnings
per share is computed using the net profit for the
year attributable to the shareholder' and weighted
average number of equity and potential equity shares
outstanding during the year including share options,
convertible preference shares and debentures, except
where the result would be anti-dilutive. Potential
equity shares that are converted during the year
are included in the calculation of diluted earnings
per share, from the beginning of the year or date of
issuance of such potential equity shares, to the date
of conversion.

(xxii) Employee Benefits

Employee benefits include provident fund, employee
state insurance scheme, gratuity, compensated
absences and performance incentives.

Provident Fund:

The Company has Defined Contribution plan for the
post employment benefits namely Provident Fund
which is recognised by the income tax authorities.
These funds are administered through the Regional
Provident Fund Commissioner and the Company's
contributions thereto are charged to Statement of
Profit and Loss every year.

Compensated Absences:

Accumulated compensated absences, which are
expected to be availed or encashed within 12 months
from the end of the year end are treated as short term
employee benefits. The obligation towards the same
is measured at the expected cost of accumulating
compensated absences as the additional amount
expected to be paid as a result of the unused
entitlement as at the year end.

Accumulated compensated absences, which are
expected to be encashed beyond 12 months from
the end of the year end are treated as other long
term employee benefits. The Company's liability is
actuarially determined (using the Projected Unit
Credit method) at the end of each year. Actuarial
losses/ gains are recognised in the Statement of Profit
and Loss in the year in which they arise.

Gratuity:

The Company has Defined Benefit plan, namely gratuity
for employees (unfunded), the liability for which is
determined on the basis of an actuarial valuation
(using the Projected Unit Credit method) at the end
of each annual reporting period. Remeasurements,
comprising actuarial gains and losses, the effect of

the changes to the return on plan assets (excluding
net interest), is reflected immediately in the balance
sheet with a charge or credit recognised in other
comprehensive income in the period in which they
occur.

(xxiii) Disclosure in respect of operating leases as per
IND AS 116'Leases'

The Company, as a lessee, recognises a right-of-use
asset and a lease liability for its leasing arrangements,
if the contract conveys the right to control the use
of an identified asset. The contract conveys the right
to control the use of an identified asset, if it involves
the use of an identified asset and the Company has
substantially all of the economic benefits from use
of the asset and has right to direct the use of the
identified asset. The cost of the right-of-use asset shall
comprise of the amount of the initial measurement
of the lease liability adjusted for any lease payments
made at or before the commencement date plus any
initial direct costs incurred. The right-of-use assets is
subsequently measured at cost less any accumulated
depreciation, accumulated impairment losses, if any
and adjusted for any remeasurement of the lease
liability. The right-of-use assets is depreciated using
the straight-line method from the commencement
date over the shorter of lease term or useful life of
right-of-use asset.

The Company measures the lease liability at the
present value of the lease payments that are not
paid at the commencement date of the lease. The
lease payments are discounted using the interest
rate implicit in the lease, if that rate can be readily
determined. If that rate cannot be readily determined,
the Company uses incremental borrowing rate.
For short-term and low value leases, the Company
recognises the lease payments as an operating
expense on a straight-line basis over the lease term

(xxiv) Related Party Transactions

Disclosure is being made separately for all the
transactions with related parties as specified under
IND AS 24 "Related Party Disclosure" issued by the
Institute Chartered Accountants of India.

(xxv) Dividend

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

(xxvi) Segment Reporting

The operating segments are the segments for
which separate financial information is available

and for which operating profit/loss amounts are
evaluated regularly by the Managing Director(who
is the Company's Chief Operating Decision Maker) in
deciding how to allocate resources and in assessing
performance.

The accounting policies adopted for segment
reporting are in conformity with the accounting
policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities
have been identified to segments on the basis of their
relationship to the operating activities of the segment.
Inter segment revenue is accounted on the basis of
transactions which are primarily determined based on
market / fair value factors. Revenue, expenses, assets
and liabilities which relate to the Company as a whole
and are not allocable to segments on a reasonable
basis have been included under 'unallocated revenue
/ expenses / assets / liabilities'.

(xxvi) Recent Accounting Developments

Ministry of Corporate Affairs ("MCA”) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. On March 23, 2022,
MCA amended the Companies (Indian Accounting
Standards) Amendment Rules, 2022, as below.

Ind AS 16 - Property Plant and equipment - The
amendment clarifies that excess of net sale proceeds
of items produced over the cost of testing, if any, shall
not be recognised in the profit or loss but deducted
from the directly attributable costs considered as part
of cost of an item of property, plant, and equipment.
The effective date for adoption of this amendment is
annual periods beginning on or after April 1,2022. The
Company has evaluated the amendment and there is
no impact on its financial statements.

Ind AS 37 - Provisions, Contingent Liabilities and
Contingent Assets - The amendment specifies that
the 'cost of fulfilling' a contract comprises the 'costs
that relate directly to the contract'. Costs that relate
directly to a contract can either be incremental costs
of fulfilling that contract (examples would be direct
labour, materials) or an allocation of other costs that
relate directly to fulfilling contracts (an example would
be the allocation of the depreciation charge for an
item of property, plant and equipment used in fulfilling
the contract). The effective date for adoption of this
amendment is annual periods beginning on or after
April 1, 2022, although early adoption is permitted.
The Company has evaluated the amendment and the
impact is not expected to be material.

(xxvii) The figures appearing in the Financial Statements is
rounded off to the nearest lakh or decimals thereof.