Nature and purpose of reserves

Capital Reserve : Due to Business Combination under the common control (merger), it represents the excess of consideration paid against which net asset has been taken over.

Securities Premium Reserve : Securities Premium represents amount received in excess of face value of equity/ preference shares issued. General Reserve : General reserve is used for strengthening the financial position and meeting future contingencies and losses.

Capital Redemption Reserve: Capital redemption reserve represents amount set aside from free reserves which is available for the purpose of issue of equity/preference shares.

Retained Earning : Retained earning represents the profit that the company has earned till date, less any transfer to general reserve if any. Items of Other Comprehensive Income (OCI) - Items of OCI represents the remeasurement gain/loss on defined benefit plans and fair value gain on equity instrument measured through fair value through OCI.

35. Disclosure in respect of employee benefits under Indian Accounting Standard (Ind AS) - 19 "Employee Benefits" are given below:

i) Defined Contribution Plan

Employers' contribution towards provident fund amounting to INR 46.98 Lakhs (Previous year INR 42.56 Lakhs) is recognized as an expense and included in Employee Benefit expenses Note No 29.

ii) Defined Benefit Plan Gratuity

The company provides for gratuity, a defined benefit retirement plan covering eligible employees. The gratuity plan provides lump sum payments to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 days salary for each completed year of service. Vesting occurs on completion of 5 continuous years of service as per Indian law. However, no vesting condition applies in case of death.

The company makes contributions to LIC through a trust, which funds defined benefit plan for qualifying employees.

Expected contribution to gratuity plan for the year 2023-24 is Rs. 111.94 Lakhs.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the standalone balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

H Risk Exposure

Investment Risk-The funds are invested by LIC and they provide returns on the basis of the prevalent bond yields. LIC on an annual basis, requests for contributions to the fund, while the contribution requested may not be on the same interest rate as the prevalent bond yields, based on the past experience it is a low risk.

Interest Risk-LIC does not provide market value of assets, rather maintains a running statement with interest rates declared annually- the fall in interest rate in not therefore offset by increased in value of bonds, hence may pose a risk.

Longevity Risk-Since the gratuity payment happens at the retirement age of 58, longevity impact is very low at this age, hence this is a non-risk.

Salary Risk-The liability is calculated taking into account the salary increases, basis our past experience of salary increases with the assumptions used, they are in line, hence this risk is low.

Level 1: Quoted prices in the active market. This level of hierarchy includes financial assets that are measured by reference to quoted prices in the active market. This category consists of mutual funds, quoted equity shares etc.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The company does not have any investments which are categorized as Level 2.

Level 3: Valuation techniques with unobservable inputs. This level of hierarchy includes items measured using inputs that are not based on observable market data (unobservable inputs). Fair value determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instruments nor based on available market data. This is the case for investment in unlisted equity securities.

Note:

a. There are no transfers between level 1 and level 2 during the year.

b. The fair value of financial assets and liabilities carried at approximate carrying amount measured under Level III hierarchy.

The fair value of the financial assets are determined at the amount that would be received on sell of an financial asset in an orderly transaction between market participants. The following methods and assumptions were used to estimate the fair values:

Investments in mutual funds: Fair value is determined by reference to quotes from the financial institutions, i.e. net asset value (NAV) for investments in mutual funds declared by mutual fund house.

Quoted equity investments: Fair value is determined by reference to quotes from the active market.

Unquoted equity investments: Fair value is the book value of the instrument.

37. Financial risk management

The Company's activities expose it to market risk, liquidity risk and credit risk. The Company's primary risk management focus is to minimize potential adverse effects of market risk on its financial performance. The Company's risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company's activities. The Board of Directors and the Audit Committee is responsible for overseeing the Company's risk assessment and management policies and processes.

Credit risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations. To manage trade receivable, the Company periodically assesses the financial reliability of customers, taking into account the financial conditions, economic trends, analysis of historical bad debts and aging of such receivables. The Company computes an allowance for impairment of trade receivables for unrelated parties based on a simplified approach that represents its expected credit losses. The Company uses an allowance matrix to measure the expected credit loss of trade receivables. Loss rates are based on actual credit loss experienced over the past 3 years. These loss rates are adjusted with scalar factors to reflect differences between current and historical economic conditions and the management's view of economic conditions over the expected lives of the receivables.

Financial instruments that are subject to such risk, principally consist of investments, trade receivables and other loans and advances. None of the financial instruments of the Company results in material concentration of credit risks.

Expected credit loss for trade receivables under simplified approach

The Company recognizes lifetime expected credit losses on trade receivables using a simplified approach, wherein the Company has defined percentage of provision by analyzing historical trend of default relevant to each category of customer based on the criteria defined above and such provision percentage determined have been considered to recognize life time expected credit losses on trade receivables (other than those where default criteria are met).

Other than financial assets mentioned above, none of the financial assets were impaired and there were no indications that defaults in payment obligations would occur.

ii. Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and to ensure funds are available for use as per the requirements. The company mitigates liquidity risk by way of formulation of cash budget and comparison of actual cash flows with budget on a continuous basis.

iii. Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, debt and equity investments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

a. Foreign Currency risk

Currency risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate because of changes in the foreign exchange rate. The Company has exposure to foreign currency risk on account of its payables and receivables in foreign currency which are mitigated through the guidelines under the approved foreign currency risk management policy. The carrying amounts of the company's foreign exchange monetary items as at the end of reporting period are as follows:

Fair value sensitivity analysis for fixed-rate instruments

The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

c. Price Risk

The Company's exposure to Investments securities price risk arises from investments held by the Company and classified in the balance sheet at fair value through profit and loss. To manage its price risk arising from investments in mutual funds, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

For the purpose of the Company's capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders of the parent. The Company's objectives when managing capital are to:

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits to other stakeholders and

- maintain an optimal capital structure to reduce the cost of capital.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and short-term deposits.

In order to achieve this overall objective, the Company's capital management, among other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches of the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2023 and 2022.

The Company has incurred Rs. 121.77 (Previous year : 119.84) for the period ended March 31,2023 towards expense relating to shortterm leases which has not been considered to be recorded as lease liability.

Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.

43. a. Contingent Liabilities in respect of:

(i) Claims against the Company not acknowledged as debts:- Tax matters in dispute under appeal of Rs. 882.70 Lakhs (Previous year 733.15 Lakhs).

(ii) Corporate guarantee (in the form of counter guarantee) extended to Gujarat Industrial Development Corporation (GIDC) for Rs.7.39 Lakhs (Previous year Rs.7.39 Lakhs) on account of Bharuch Eco Infrastructure Limited, for proportionate share of financial assistance pertaining to the Company extended to GIDC by Industrial Development Finance Corporation (IDFC) for laying the common pipe line for treated water from industrial units.

b. Commitments

(i) Estimated amounts of contracts remaining to be executed on capital account and not provided for Rs. 5,534.67 Lakhs (Previous year Rs. 10,640.47 Lakhs).

(ii) Bank guarantees of Rs. 1,651.30 Lakhs (Previous Year 839.09 Lakhs) includes Financial and Performance guarantees issued in favor of Statutory Authorities, PSU, Government bodies and Corporates.

Identification of Segments:

The chief operational decision maker monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit and loss of the segment and is measured consistently with profit or loss in the standalone financial statements. Operating segments have been identified on the basis of the nature of products.

Segment revenue and results:

The expenses and income which are not directly attributable to any business segment are shown as Un-allocable expenditure. Segment assets and liabilities:

Assets used by the operating segment mainly consist of Property, Plant and Equipment, Trade Receivables, Cash and Cash Equivalents and Inventories. Segment Liabilities include Trade Payables and Other Liabilities. Common Assets and Liabilities which cannot be allocated to any of the segments are shown as a part of Un-allocable Assets/ Liabilities.

46. Business combination (merger)

a) The Board of Directors of the Company in its meeting held on August 06, 2020 had approved a Composite Scheme of arrangement under section 230 to 232 and other applicable provisions of the Companies Act 2013 and the provisions of other applicable laws, amongst Company (Transferee Company), Gulshan Holdings Private Limited (erstwhile holding company) (Transferor Company 1), East Delhi Importers and Exporters Private Limited (Transferor Company 2) and their respective creditors and shareholders ("the Scheme"). The Scheme provides for the amalgamation of Transferor Company 1 and Transferor Company 2 into Transferee Company. The Scheme has been approved by the Hon'ble National Company Law Tribunal, Allahabad Bench, Prayagraj ("NCL.T") vide its order dated March 09, 2022. The certified copy of the order has been filed with "The Registrar of Companies, Uttar Pradesh, Kanpur" on 30 March 2022 and the Scheme has come into effect on the said date. The Ind AS financial statements of the Company for the year ended March 31,2021 were approved by shareholders in its Annual General Meeting held on September 18, 2021 and subsequently to give effect of the Scheme, the comparative financial statements for the year ended March 31,2021 have been restated and approved by the Board of Directors in their meeting held on May 20, 2022 and approved by shareholders in its Annual General Meeting held on 28/09/2022. From the date scheme become effective, the Company does not have any holding company.

In terms of the Scheme, the Company has issued and allotted 2,99,82,536 equity shares (2,81,72,536 and 18,10,000 equity shares to the shareholders of Transferor company 1 and Transferor Company 2 respectively) whose names appear in the register of members as on record date, April 14, 2022. Consequently, 2,73,40,067 equity shares of the Transferee Company held by the Transferor Company 1 and Transferor Company 2 shall be deemed to be extinguished and are in the process of cancellation.

As stated above, pursuant to the requirements of Ind AS 103 "Business Combination", the Company has accounted merger by using pooling of interest method in the financial results in line with the Scheme. Accordingly, the financial information presented for the prior periods has been restated as per Ind AS-103.

(b) The certain necessary steps and formalities in respect of transfers of properties, investments, trademark & licenses, approvals and modification of charges in pursuant to the Scheme are under process.

47. The Company has issued and allotted 24,16,000 equity shares of Re. 1 each to Qualified Institutional Buyers on March 24, 2022 at an issue price of 326.48 (including 325.48 securities premium per equity share) which is at a discount of 5 % (i.e. ?17.18 per Equity Share), to the Floor Price of ?343.66 per Equity Share determined, as per the formula prescribed under Regulations 176(1) of the SEBI Regulations, aggregating to ? 78,87,75,680. Pursuant to the allotment of equity shares under Qualified Institutional Placement, the paid up share capital of the Company stands increased by Rs. 24.16 Lakhs. In line with Ind AS, the Company has also recognized direct issue expenses for the placement in other equity as share issue expenses. The proceeds of QIP is being utilized as per the objects of the placement.

49. Figures for the previous period have been regrouped/ rearranged wherever necessary to make them comparable with current figure.50. Standards issued but not yet effective

(i) New and amended standards adopted by the Company

The Ministry of Corporate Affairs had vide notification dated 23 March 2022 notified Companies (Indian Accounting Standards) Amendment Rules, 2022 which amended certain accounting standards, and are effective 1 April 2022. These amendments did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

(ii) New and amended standards issued but not effective

The Ministry of Corporate Affairs has vide notification dated 31 March 2023 notified Companies (Indian Accounting Standards) Amendment Rules, 2023 (the 'Rules') which amends certain accounting standards, and are effective 1 April 2023.

The Rules predominantly amend Ind AS 12, Income taxes, and Ind AS 1, Presentation of financial statements. The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications.

These amendments are not expected to have a material impact on the Company in the current or future reporting periods and on foreseeable future transactions. Specifically, no changes would be necessary as a consequence of amendments made to Ind AS 12 as the Company's accounting policy already complies with the now mandatory treatment.

51. Additional Regulatory Information

(i) The Company has not revalued any of its Property, Plant & Equipment and Intangible assets.

(ii) The Company has not given any Loans or Advances in the nature of loans to promoters, directors, KMP's, & related parties.

(iii) The Company does not have any Benami Property.

(iv) Quarterly returns or statements of current assets filed by the Company with banks or financial Institution are in agreement with the books of accounts.

(v) The Company is not declared as a willful defaulter by Banks or financial Institution or any other lender.

(vi) The Company do not have any transaction with struck off companies.

(vii) There are no charges or satisfaction pending for registration with ROC beyond the statutory period.

(viii) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

(ix) There is no transaction which is not recorded in the books of accounts that has been surrendered or disclosed as Income during the year in the tax assessment under the Income Tax act 1961.

(x) The Company has not traded or invested in Crypto currency during the financial year.