EMS Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

Mar 31, 2025

3. Summary of significant accounting policies

3.1 Overall considerations

The standalone financial statements have been prepared using the significant accounting policies
and measurement basis summarized below. These accounting policies have been used throughout
all periods presented in the standalone financial statements.

Accounting policies have been consistently applied except where a newly issued accounting
standard is initially adopted or a revision to an existing accounting standard requires a change in
the accounting policy hitherto in use.

3.2 Revenue recognition

Revenue is measured at the fair value of consideration received or receivable by the Company
for goods supplied and services provided, excluding trade discounts and other applicable taxes.
Revenue is recognised upon transfer of control of promised goods or services under a contract.

Revenue is recognised when the amount can be measured reliably, it is probable that the economic
benefits associated with the transaction will flow to the Company, the costs incurred or to be
incurred can be measured reliably, and when the criteria for each of the Company’s different
activities has been met.

The Company derives revenues from three types of activities:

a) Construction contracts - Customer contracts towards delivering a sewerage water treatment
facility that is fit for purpose as per the contract.

b) Operation and maintenance contracts - Customer contracts towards operation and
maintenance of sewerage water treatment facilities.

c) Manufacturing - The company is engaged in manufacturing of own items which are used
for construction purposes.

The Company determines its performance obligations included in the contracts signed with
customers. When a customer contract includes both a construction and operation & maintenance,
the performance obligations are separately identified and revenue is recognised in accordance
with the principles of Ind AS 115.

a) Construction Contracts:

Construction contracts generally involve design, supply, construction, installation
and commissioning of sewerage water treatment facilities on turnkey basis, Electricity
transmission and distribution & Building.

The transaction price is usually a fixed consideration with a variable consideration on a
case to case basis. Variable consideration (penalties, damages, claims etc.) is included in the
transaction price to the extent it is highly probable that a significant reversal in the amount
of revenue recognised will not occur.

Construction contracts usually have a single performance obligation, wherein the control
of goods and services are transferred progressively over the period of the contract. The
Company satisfies its performance obligation upon completing the scope of the construction
contract and achieving customer acceptance.

Contract revenue and Contract costs in respect of construction contracts, execution of
which is spread over different accounting periods is recognised as revenue and expense
respectively by using percentage of completion method at the reporting date.

The percentage of completion is measured by reference to the contract costs incurred up to
the end of the reporting period as a percentage of total estimated costs for each contract.
Only costs that reflect work performed are included in cost incurred to date.

When the Company cannot measure the outcome of a contract reliably, revenue is recognised
only to the extent of contract costs that have been incurred and are recoverable.

Unbilled revenue represents the value of goods and services performed in accordance with
the contract terms but not billed and shown as Unbilled dues in Trade Receivables.

The amount of retention money held by the customer pending completion of performance is
disclosed under Other Financial Assets (Non-Current) as Customer Retention withheld.

b) Operation & Maintenance contracts

Operation and maintenance contracts involve operation and maintenance services for water
treatment facilities and the supply of spares. Revenue from operation and maintenance contracts
are recognized as the services are provided and invoiced to the customer, as per the terms of the
contract. Unbilled revenue represents the value of services performed in accordance with the
contract terms but not billed and shown as Unbilled dues in Trade Receivables.

c) The company is engaged in manufacturing of own items which are used for construction
purposes.

Other Income

Interest income is recognized on a time-proportion basis using the effective interest method.

3.3 Cost of sales and services

Cost of sales and services comprise costs including costs that are directly related to the contract,
attributable to the contract activity in general, and such costs that can be allocated to the contract
and specifically chargeable to the customer under the terms of the contracts, which is charged to
the statement of profit and loss.

3.4 Property, Plant & Equipment
Buildings and other equipment

Property, Plant & Equipment (comprising of Building, Plant & Machinery, Vehicles, Furniture &
Fixtures, Office Equipment & Computers ) are initially recognised at acquisition cost, including
any costs directly attributable to bringing the assets to the location and condition necessary for
them to be capable of operating in the manner intended by the Company’s management.

Advances paid towards acquisition of property, plant and equipment outstanding at each balance
sheet date is classified as capital advances under other non-current assets and the cost of
property, plant and equipment not ready for the intended use before reporting date is disclosed
as capital work in progress.

Subsequent expenditure incurred on an item of property, plant and equipment is added to the
book value of that asset only if this increases the future benefits from the existing asset beyond
its previously assessed standard of performance.

Depreciation methods, estimated useful lives and residual value

Depreciation on assets is provided on written down method at the rates and in the manner
prescribed in Schedule II to the Companies Act, 2013.Schedule II to the companies Act 2013
prescribes the useful lives for various class of assets. For certain class of assets, based on technical
evaluation and assessment, Management believes that the useful lives adopted by it reflect the
period over which these assets are expected to be used.

Accordingly for those assets, the useful lives estimated by the management are different from
those prescribed in the Schedule. Management’s estimates of the useful lives for various classes
of fixed assets are as given below:-

The components of assets are capitalised only if the life of the components vary significantly and
whose cost is significant in relation to the cost of respective asset.

- Investment Property

Property that is held for long-term rental yields or for capital appreciation or both is classified
as investment property. Investment property is measured initially at its cost, including
related transaction costs and where applicable borrowing costs. Subsequent expenditure
is capitalised to the asset’s carrying amount only when it is probable that future economic
benefits associated with the expenditure will flow to the Company and the cost of the item
can be measured reliably.

All other repairs and maintenance costs are expensed when incurred. When part of an
investment property is replaced, the carrying amount of the replaced part is derecognised.

3.5 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following
initial recognition, the intangible assets are carried at cost less accumulated amortisation and
accumulated impairment, if any.

Computer software is stated at cost less accumulated amortisation and are being amortised on a
straight line basis over the estimated useful life of 5-10 years.

Amortisation is included within depreciation and amortisation expense in the statement of profit
and loss.

The amortisation period and method are reviewed at each balance sheet date. Residual values
and useful lives are reviewed at each reporting date.

3.6 Impairment of property, plant and equipment

For the purpose of impairment assessment, assets are grouped at the lowest levels for which there
are largely independent cash inflows (cash-generating units). As a result, some assets are tested
individually for impairment and some are tested at cash-generating unit level. Goodwill (if any) is
allocated to those cash generating units that are expected to benefit from synergies of a related
business combination and represent the lowest level within the Company at which management
monitors goodwill.

All individual assets or cash-generating units are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the assets’ (or cash-generating unit’s)
carrying amount exceeds its recoverable amount, which is the higher of fair value less costs of
disposal and value in-use. To determine the value-in-use, management estimates expected future
cash flows from each cash generating unit and determines a suitable discount rate in order to
calculate the present value of those cash flows. The data used for impairment testing procedures
are directly linked to the Company’s latest approved budget, adjusted as necessary to exclude
the effects of future reorganisations and asset enhancements. Discount factors are determined
individually for each cash-generating unit and reflect current market assessments of the time
value of money and assets specific risk factors.

Impairment losses for cash-generating units reduce first the carrying amount of any goodwill
allocated to that cash-generating unit. Any remaining impairment loss is charged pro-rata to the
other assets in the cash-generating unit.

3.7 Leases

The Company recognizes lease contracts as per the single lease accounting model for lessees.
The model requires a lessee to recognize right to use assets and corresponding lease liabilities for
all leases with a lease term of more than twelve months, unless the underlying asset is of a low
value. For such leases the lease payments are recognized as an operating expense on a straight
line basis over the term of the lease contract.

The recognition, measurement, presentation and disclosure of leases are in accordance with the
principles of the standard. At the time of initial measurement, the lease liabilities are recognized
at the present value of lease payments payable. The lease liability is discounted at the interest rate
implicit to the lease, or incremental borrowing rate to arrive at the present value. The lease liabilities
are diluted over the remaining lease period by lease payments. The right to use assets are initially
recognized at lease liability amount. The incremental borrowing rate is considered as 10% which
reflects the borrowing rate in the prevailing economic environment with similar terms and security.

The right to use assets are thereafter depreciated over the period of lease term or the useful life of
underlying asset whichever is lower. An impairment loss is recognised where the carrying amount
of right to use asset exceeds its recoverable amount.

3.8 Investments

- in subsidiaries

Investments in subsidiaries are accounted at cost less impairment, if any. During the year,
EMS Limited has acquired 6000 (60%) shares of Brij Bihari Pulp & Papers private limited at
a premium of '' 12905/- per share at a face value of '' 10/- each per share for an aggregate
amount of '' 7.75 crores. Accordingly it becomes the subsidiary of EMS Limited.

- in unlisted Companies

The Fair value of Polymatech Electronics Limited, being unlisted entity, could not be assessed
because of unavailability of latest financial statement of 31^st March 2025, hence the value of
shares is considered at Cost Price only.

3.9 Financial Instruments

Financial assets (other than trade receivables) and financial liabilities are recognised when the
Company becomes a party to the contractual provisions of the financial instrument and are
measured initially at fair value adjusted for transaction costs, except for those carried at fair
value through statement of profit and loss which are measured initially at fair value.

Trade receivables are recognised at their transaction price as the same do not contain significant
financing component. Subsequent measurement of financial assets and financial liabilities are
described below.

a) Classification and subsequent measurement of financial assets

For the purpose of subsequent measurement financial assets are classified and measured
based on the entity’s business model for managing the financial asset and the contractual
cash flow characteristics of the financial asset at:

a. Amortised cost

b. Fair Value Through Other Comprehensive Income (FVTOCI) or

c. Fair Value Through Profit or Loss (FVTPL)

b) Financial assets at amortised cost

A financial asset is subsequently measured at amortised cost using effective interest rate if it
is held within a business model where the objective is to hold the financial assets to collect
contractual cash flows and the contractual terms gives rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding. The
Company has classified the following financial Assets at amortised Cost as disclosed in Note
40 of the Standalone Financial Statement.

c) Financial assets at Fair Value through Other Comprehensive Income (FVTOCI)

A financial asset is subsequently measured at fair value through other comprehensive income
if it is held within a business model where the objective is both collecting contractual cash
flows and selling financial assets along with the contractual terms giving rise on specified
dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding. There are no assets in this category which are measured at fair value
with gains or losses recognised in Other Comprehensive income. However the actuarial
loss/ gain on remeasurement on defined benefit plan is recognised in other comprehensive
income based on actuarial valuation by a certified actuarial valuer.

d) Financial assets at Fair Value Through Profit or Loss (FVTPL)

Financial assets at FVTPL include financial assets that are designated at FVTPL upon
initial recognition and financial assets that are not measured at amortised cost or at fair

value through other comprehensive income. There are no assets in this category which are
measured at fair value with gains or losses recognised in statement of profit and loss.

Hedge Accounting

For the reporting periods under review, the Company has not designated any forward
currency contracts as hedging instruments.

e) Trade receivables

Trade receivables do not carry any interest and are stated at their normal value as reduced
by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables
are written off when management deems them not to be collectible.

The Company follows ‘simplified approach’ for recognition of impairment loss allowance
on trade receivables which does not require the Company to track changes in credit risk.
The company has created allowance for expected credit risk based on the management
assessment

f) Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognised (i.e. removed from the Company’s balance sheet) when:

i. the rights to receive cash flows from the asset have expired, or

ii. the Company has transferred its rights to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material delay
to a third party under a ‘pass-through’ arrangement; and either (a) the Company has
transferred substantially all the risks and rewards of the asset, or (b) the Company has
neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has
entered into a pass-through arrangement, it evaluates if and to what extent it has retained
the risks and rewards of ownership.

When it has neither transferred nor retained substantially all of the risks and rewards of the
asset, nor transferred control of the asset, the Company continues to recognise the transferred
asset to the extent of the Company’s continuing involvement. In that case, the Company also
recognises an associated liability. The transferred asset and the associated liability are measured
on a basis that reflects the rights and obligations that the Company has retained.

g) Classification, subsequent measurement and derecognition of financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss or at amortised cost. The Company’s financial liabilities include
borrowings, trade payables and other financial liabilities.

Subsequent measurement

Financial liabilities are measured subsequently at amortised cost using the effective interest
method except for derivatives and financial liabilities designated at FVTPL, which are carried
subsequently at fair value with gains or losses recognised in statement of profit and loss (other
than derivative financial instruments that are designated and effective as hedging instruments).
The Company has classified the following financial liabilities at amortised Cost as disclosed in
Note 40 of the Standalone Financial Statement.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified,

such an exchange or modification is treated as the derecognition of the original liability and the
recognition of a new liability. The difference in the respective carrying amounts is recognised in
the statement of profit and loss.

3.10 Inventories

Material at Site- valued at cost Price.

Work in Progress- valued at Cost or NRV, whichever is lower.

3.11 Income Taxes

Tax expense recognised in statement of profit and loss comprises the sum of deferred tax and
current tax not recognised in other comprehensive income or directly in equity.

Calculation of current tax is based on tax rates in accordance with tax laws that have been
enacted or substantively enacted as at the reporting period. Deferred income taxes are calculated
using the liability method on temporary differences between tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes at reporting date.

Deferred taxes pertaining to items recognised in other comprehensive income are also disclosed
under the same head.

Deferred tax assets are recognised to the extent that it is probable that the underlying tax loss or
deductible temporary difference will be utilised against future taxable income. This is assessed
based on the Company’s forecast of future operating results, adjusted for significant non-taxable
income and expenses and specific limits on the use of any unused tax loss or credit.

Changes in deferred tax assets or liabilities are recognised as a component of tax income or
expense in statement of profit and loss, except where they relate to items that are recognised in
other comprehensive income (such as re-measurement of net defined benefit plans) or directly in
equity, in which case the related deferred tax is also recognised in other comprehensive income
or equity, respectively. The company has disclosed Income Tax and its reconciliation in Note 33
of the standalone financial statement.

3.12 Cash & Cash Equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other
short-term, highly liquid investments maturing within three months from the date of acquisition
that are readily convertible into known amounts of cash and which are subject to an insignificant
risk of changes in value.

3.13 Equity & Reserves and Surplus

Share capital represents the nominal (par) value of shares that have been issued and paid-up.
Other components of equity include the following:

i) Retained earnings- This reserve represents undistributed accumulated earnings of the
Company as on the balance sheet date.

ii) Securities premium reserve includes any premiums received on issue of share capital. Any
transaction costs associated with the issuing of shares are deducted from securities premium,

iii) Other comprehensive income represents actuarial loss or gain on remeasurement of
defined benefits plans.

3.14 Post-employment benefits and short-term employee benefits
(i) Short term Employee Benefits

Employee benefits such as salaries, wages, short term compensated absences, bonus, ex-
gratia and performance-linked rewards falling due wholly within twelve months of rendering
the service are classified as short-term employee benefits and are expensed in the period in
which the employee renders the service.

(ii) Post-Employee Benefits

A. Defined contribution plan

The Company’s provident fund scheme and employee state insurance scheme are
defined contribution plans. The contribution paid / payable under the schemes is
recognised as an expense during the period in which the employee renders the service.
The Company has no legal or constructive obligations to pay contributions in addition
to its fixed contributions.

a. Provident fund and Employee state insurance scheme

The Company makes contributions to the statutory provident fund and employee state
insurance scheme in accordance with Employees Provident Fund and Miscellaneous
Provisions Act, 1952 and Employees’ State Insurance Act, 1948. These contributions,
paid or payable, are recognised as expenses in the period in which it falls due.

B. Defined benefits plans

Under the Company’s defined benefit plans, the amount of benefit that an employee
will receive on retirement is defined by reference to the employee’s length of service and
final salary. The legal obligation for any benefits remains with the Company, even if
plan assets for funding the defined benefit plan have been set aside. Plan assets may
include assets specifically designated to a long-term benefit fund as well as qualifying
insurance policies

The defined benefit plans maintained by the Company are as below:

(i) Gratuity& Leave Encashment

The Company has Defined Benefit plan, namely gratuity for employees and leave
encashment , 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.

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Mar 31, 2024

3. Summary of significant accounting policies

3.1 Overall considerations

The standalone financial statements have been prepared using the significant accounting policies and measurement basis summarized below. These accounting policies have been used throughout all periods presented in the standalone financial statements.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

3.2 Investments -in subsidiaries

Investments in subsidiaries are accounted at cost less impairment, if any.

-Investment Property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that

future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably.

All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised.

3.3 Revenue recognition

Revenue is measured at the fair value of consideration received or receivable by the Company for goods supplied and services provided, excluding trade discounts and other applicable taxes. Revenue is recognised upon transfer of control of promised goods or services under a contract.

Revenue is recognised when the amount can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the Company, the costs incurred or to be incurred can be measured reliably, and when the criteria for each of the Company’s different activities has been met.

The Company derives revenues from three types of activities:

a) Construction contracts - Customer contracts towards delivering a sewerage water treatment facility that is fit for purpose as per the contract.

b) Operation and maintenance contracts - Customer contracts towards operation and maintenance of sewerage water treatment facilities.

c) Manufacturing - The company is engaged in manufacturing of own items which are used for construction purposes.

The Company determines its performance obligations included in the contracts signed with customers. When a customer contract includes both a construction and operation & maintenance, the performance obligations are separately identified and revenue is recognised in accordance with the principles of Ind AS 115.

a) Construction Contracts:

Construction contracts generally involve design, supply, construction, installation and commissioning of sewerage water treatment facilities on turnkey basis, Electricity transmission and distribution & Building.

The transaction price is usually a fixed consideration with a variable consideration on a case to case basis. Variable consideration (penalties, damages, claims etc.) is included in the transaction price to the extent it is highly probable that a significant reversal in the amount of revenue recognised will not occur.

Construction contracts usually have a single performance obligation, wherein the control of goods and services are transferred progressively over the period of the contract. The Company satisfies its performance obligation upon completing the scope of the construction contract and achieving customer acceptance.

Contract revenue and Contract costs in respect of construction contracts, execution of which is spread over different accounting periods is recognised as revenue and expense respectively by using percentage of completion method at the reporting date.

The percentage of completion is measured by reference to the contract costs incurred up to the end of the reporting period as a percentage of total estimated costs for each contract. Only costs that reflect work performed are included in cost incurred to date.

When the Company cannot measure the outcome of a contract reliably, revenue is recognised only to the extent of contract costs that have been incurred and are recoverable.

Unbilled revenue represents the value of goods and services performed in accordance with

the contract terms but not billed and shown as Unbilled dues in Trade Receivables.

The amount of retention money held by the customer pending completion of performance is disclosed under Other Financial Assets (Non-Current) as Customer Retention withheld and is reclassified as trade receivables when it becomes due for payment.

b) Operation & Maintenance contracts

Operation and maintenance contracts involve operation and maintenance services for water treatment facilities and the supply of spares. Revenue from operation and maintenance contracts are recognized as the services are provided and invoiced to the customer, as per the terms of the contract.

c) The company is engaged in manufacturing of own items which are used for construction purposes.

Other Income

Interest income is recognized 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 recognized using the original effective interest rate.

3.4 Cost of sales and services

Cost of sales and services comprise costs including costs that are directly related to the contract, attributable to the contract activity in general, and such costs that can be allocated to the contract and specifically chargeable to the customer under the terms of the contracts, which is charged to the statement of profit and loss.

3.5 Property, Plant & Equipment Buildings and other equipment

Property, Plant & Equipment (comprising of Building, Plant & Machinery, Vehicles, Furniture & Fixtures, Office Equipment & Computers ) are initially recognised at acquisition cost, including any costs directly attributable to bringing the assets to the location and condition necessary for them to be capable of operating in the manner intended by the Company’s management.

Advances paid towards acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets and the cost of property, plant and equipment not ready for the intended use before reporting date is disclosed as capital work in progress.

Subsequent expenditure incurred on an item of property, plant and equipment is added to the book value of that asset only if this increases the future benefits from the existing asset beyond its previously assessed standard of performance.

Depreciation methods, estimated useful lives and residual value

Depreciation on assets is provided on written down method at the rates and in the manner prescribed in Schedule II to the Companies Act, 2013.Schedule II to the companies Act 2013 prescribes the useful lives for various class of assets. For certain class of assets, based on technical evaluation and assessment, Management believes that the useful lives adopted by it reflect the period over which these assets are expected to be used.

Accordingly for those assets, the useful lives estimated by the management are different from those prescribed in the Schedule. Management’s estimates of the useful lives for various classes of fixed assets are as given below:-

3.6 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, the intangible assets are carried at cost less accumulated amortisation and accumulated impairment, if any.

Computer software is stated at cost less accumulated amortisation and are being amortised on a straight line basis over the estimated useful life of 5-10 years.

Amortisation is included within depreciation and amortisation expense in the statement of profit and loss.

The amortisation period and method are reviewed at each balance sheet date. Residual values and useful lives are reviewed at each reporting date. In addition, they are subject to impairment as detailed in note 7 of the standalone financial statement.

3.7 Impairment of property, plant and equipment

For the purpose of impairment assessment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill (if any) is allocated to those cash generating units that are expected to benefit from synergies of a related business combination and represent the lowest level within the Company at which management monitors goodwill.

All individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the assets’ (or cash-generating unit’s) carrying amount exceeds its recoverable amount, which is the higher of fair value less costs of disposal and value in-use. To determine the value-in-use, management estimates expected future cash flows from each cash generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the Company’s latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect current market assessments of the time value of money and assets specific risk factors.

Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is charged pro-rata to the other assets in the cash-generating unit.

3.8 Leases

The Company, as a lessee, recognises a right-of-use asset 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 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.

3.9 Financial Instruments

Financial assets (other than trade receivables) and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through statement of profit and loss which are measured initially at fair value.

Trade receivables are recognised at their transaction price as the same do not contain significant financing component. Subsequent measurement of financial assets and financial liabilities are described below.

a) Classification and subsequent measurement of financial assets

For the purpose of subsequent measurement financial assets are classified and measured based on the entity’s business model for managing the financial asset and the contractual cash flow characteristics of the financial asset at:

a. Amortised cost

b. Fair Value Through Other Comprehensive Income (FVTOCI) or

c. Fair Value Through Profit or Loss (FVTPL)

b) Financial assets at amortised cost

A financial asset is subsequently measured at amortised cost using effective interest rate if it is held within a business model where the objective is to hold the financial assets to collect contractual cash flows and the contractual terms gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company has classified the following financial Assets at amortised Cost as disclosed in Note 40 of the Standalone Financial Statement.

c) Financial assets at Fair Value Through Other Comprehensive Income (FVTOCI)

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model where the objective is both collecting contractual cash flows and selling financial assets along with the contractual terms giving rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. At initial recognition, the Company, based on its assessment, makes an irrevocable election to present in other comprehensive income the gain / (loss) on defined benefit plans. The company has sold investment during the year and the profit on sale of investment is classified to the statement of profit & Loss. The gain or loss arising on the sale of investment along with its deferred tax impact during the previous years are reclassified to other equity in the standalone financial statement.

d) Financial assets at Fair Value Through Profit or Loss (FVTPL)

Financial assets at FVTPL include financial assets that are designated at FVTPL upon initial recognition and financial assets that are not measured at amortised cost or at fair value through other comprehensive income. There are no assets in this category which are measured at fair value with gains or losses recognised in statement of profit and loss.

Hedge Accounting

For the reporting periods under review, the Company has not designated any forward currency contracts as hedging instruments.

e) Trade receivables

Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not to be collectible.

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables which does not require the Company to track changes in credit risk. The company has created allowance for expected credit risk based on the management assessment

f) Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Company’s balance sheet) when:

i. the rights to receive cash flows from the asset have expired, or

ii. the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.

When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company’s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

g) Classification, subsequent measurement and derecognition of financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss or at amortised cost. The Company’s financial liabilities include borrowings, trade payables and other financial liabilities.

Subsequent measurement

Financial liabilities are measured subsequently at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in statement of profit and loss (other than derivative financial instruments that are designated and effective as hedging instruments).The Company has classified the following financial liabilities at amortised Cost as disclosed in Note 40 of the Standalone Financial Statement.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from

the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.

3.10 Inventories

Material at Site- valued at cost Price.

Work in Progress- valued at Net Realizable value.

3.11 Income Taxes

Tax expense recognised in statement of profit and loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity.

Calculation of current tax is based on tax rates in accordance with tax laws that have been enacted or substantively enacted as at the reporting period. Deferred income taxes are calculated using the liability method on temporary differences between tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at reporting date. Deferred taxes pertaining to items recognised in other comprehensive income are also disclosed under the same head.

Deferred tax assets are recognised to the extent that it is probable that the underlying tax loss or deductible temporary difference will be utilised against future taxable income. This is assessed based on the Company’s forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit.

Deferred tax is not provided on the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.

Deferred tax liabilities are generally recognised in full, although Ind AS 12 ‘Income Taxes’ specifies limited exemptions. As a result of these exemptions the Company does not recognise deferred tax liability on temporary differences relating to goodwill, or to its investments in subsidiaries.

Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in statement of profit and loss, except where they relate to items that are recognised in other comprehensive income (such as re-measurement of net defined benefit plans) or directly in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively. The company has disclosed Income Tax and its reconciliation in Note 33 of the standalone financial statement.

3.12 Cash & Cash Equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within three months from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

3.13 Equity & Reserves and Surplus

Share capital represents the nominal (par) value of shares that have been issued and paid-up. Other components of equity include the following:

i) Retained earnings- This reserve represents undistributed accumulated earnings of the Company as on the balance sheet date. The company has reduced the previous year’s losses of EMS Himal Hydra JV -Partnership Firm which is not recoverable from the other partner as the project has been completed.

ii) Securities premium reserve includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from securities premium,

iii) Other comprehensive income represents actuarial loss or gain on remeasurement of defined benefits plans.

3.14Post-employment benefits and short-term employee benefits

(i) Short term Employee Benefits

Employee benefits such as salaries, wages, short term compensated absences, bonus, ex-gratia and performance-linked rewards falling due wholly within twelve months of rendering the service are classified as short-term employee benefits and are expensed in the period in which the employee renders the service.

(ii) Post-Employee Benefits

A. Defined contribution plan

The Company’s provident fund scheme and employee state insurance scheme are defined contribution plans. The contribution paid / payable under the schemes is recognised as an expense during the period in which the employee renders the service. The Company has no legal or constructive obligations to pay contributions in addition to its fixed contributions.

a. Provident fund and Employee state insurance scheme

The Company makes contributions to the statutory provident fund and employee state insurance scheme in accordance with Employees Provident Fund and Miscellaneous Provisions Act, 1952 and Employees’ State Insurance Act, 1948. These contributions, paid or payable, are recognised as expenses in the period in which it falls due.

B. Defined benefits plans

Under the Company’s defined benefit plans, the amount of benefit that an employee will receive on retirement is defined by reference to the employee’s length of service and final salary. The legal obligation for any benefits remains with the Company, even if plan assets for funding the defined benefit plan have been set aside. Plan assets may include assets specifically designated to a long-term benefit fund as well as qualifying insurance policies

The defined benefit plans maintained by the Company are as below:

(i) Gratuity& Leave Encashment

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.

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Mar 31, 2023

SIGNIFICANT ACCOUNTING POLICY

EMS Limited ("the Holding Company") and its subsidiaries (collectively referred to as '' the Croup") are engaged in the business of
Sewerage contractors , Sewerage Treatment Tlants(STF) Works, Electricity transmission and distribution and also doing Civil
Construction . The Group also offers services of generating, accumulating, distributing , purchasing,, selling and supplying electric
power from conventional or non conventional energy by bio mass etc.

EMS Infracon Private Limited was incorporated on December 21.20)1) with Registrar of Companies (ROC). Delhi and Haryana under
the provisions of Companies Act 1956. Thereafter, the name of our Group was changed from ''EMS Infracon Private Limited'' to HMS
private Limited'' on October 26, 2022 and thereafter conversion of our Group from private to public Group, pursuant to a special
resolution passed by the shareholders of our Group on October 27, 2022 and a fresh certificate of incorporation consequent to change
of name from EMS Private limited to EMS Limited f The Group") was issued by the ROC on November 25, 2022. The Group''s
Corporate Identity Number is U45205D12010PI..C211609 The address of Corporate office is 701. DLF Tower A, Jasola , New Delhi,
The Board of Directors approved the consolidated financial statements for the year ended March 31, 2023 on 27.07.2023. As at Maich
31 2023, EMS Limited, the holding company owned 100% of SKUEM Water Projects liivate Limited, EMS Green Energy Private
Limited and Canary Infrastructure JYivate 1 jmited ,74% of EMS TCP JV Private Limited and 60% of Mirzapur Ghazipur Si l’s Private
Limited. The holding company Is also having Share in Partnership firm namely EMS Construction (Share 74%) and EMS Himal
Hydro )V (Share 51%)._____

2 Basis of preparation of consolidated financial statements

[) Statement of Compliance and Basis of preparation

The consolidated financial statements ot the Group have been prepared , In compliance Indian Accounting Standards ("Ind AS"), the
provisions of the Companies Act 2013 ("the Companies Act"), as applicable and guidelines issued by the Securities and Exchange
Board of India (“SEBI"). The Ind AS are prescribed under Section 133 of the Companies Act read with Rule 3 of the Companies
(Indian Accounting Standards) Rules, 2015 and amendments issued thereafter.Accounting policies have been applied consistently to
all periods presented in these consolidated financial statements.The consolidated financial statements correspond to the classification
provisions contained in Ind AS 1,"Presentation of Financial Statements", For clarity, various items arc aggregated in the statement ot
profit and loss and balance sheet These items are disaggregated separately in the notes to the consolidated financial statements,
where applicable.

These consolidated financial statements have been prepared on historical cost basis except for certain financial instruments and
defined benefit plans which are measured at fair value or amortised cost at the end of each reporting period. Historical cost is
generally based on the (air value of the consideration given in exchange for goods and services. Fair value is the price that would be
receiv''d to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
All assets and liabilities have been classified as current and non-current as per the Group''s normal operating cycle. Based on the
nature of services rendered to customers and time elapsed between deployment of resources and the realisation in cash and cash
equivalents of the consideration for such services rendered, the Croup has considered an operating cycle of 12 months.

The statement of cash flows has been prepared under indirect method whereby profit or loss is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of income
or expense associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the
Group are segregated. The Croup considers all highly liquid investments that are readily convertible to known amounts of cash and
are sub|ect to an insignificant risk of changes in value to be cash equivalents. All amounts included in the consolidated financial
statements are reported in Lacs of Indian rupees (Rs in Lacs) except share and per share data, unless otherwise statedDue to
rounding off, the numbers presented throughout the document may not add up precisely to the totals and percentages may not
precisely reflect the absolute figures. Previous year figures have been regrouped/rearranged, wherever necessary.

ii) Basis of Measurement _

The consolidated financial statements have been prepared on a historical cost convention and on an accrual basis, except for the
following material items, which have been measured at fair value as required by relevant Ind AS:
a) The defined benefit liabiiity/(asset) is recognised as the present value of defined benefit obligation less fair value of plan assets,
and b) Amortisation and Right of Use Assets on Property, Plant & Equipments as per Ind AS 116._

iii) Basis of Consolidation

The Group consolidates all entities which are controlled by it. The Group establishes control when it has power over the entity, is
exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect the entity''s returns by
using its power over relevant activities of the entity. Entities controlled by the Group are consolidated from the date control
commences until the date control ceases. The results of subsidiaries acquired, or sold, during the year ate consolidated from the
effective date of acquisition and up to the effective date of disposal, as appropnate.The financial statements of the Group companies
are consolidated on a line-by-line basis and all inter-Group transactions, balances, income and expenses are eliminated in full on
cnnsolldariomChanges in the Group''s interests in subsidiaries that do not result in a loss of control are accounted for as equity
transactions. The carrying amount of the Group''s interests and the non-controlling interests s are adjusted to reflect the changes in
their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and
the fair value of the consideration paid or received is recognised directly in equity and attributed to shareholders of the Group.

The consolidated financial statements of all entities used for the purfsose of consolidation are drawn up to same reporting date as that
of the holding Group, ie.period ended March 31,2023.Consolldated Statement of Profit and loss and each component of other
comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interest-,, even
if this results in the non-controlling interests Iiaving a deficit balance. When necessary, adjustments are made to the financial
statements of subsidiary and its joint ventures to bring their accounting policies into line with the Groups accounting policies. All /,
mtra-groupsssacand liabilities, equity, income, expenses and cash flows relating hi transactions between members of the Group tfi ‘
OTCBtuiselul.iiion. The details of the consolidated entities are mentioned in Note 49 : Disclosure of Interestrifi x
Suha^teifsandNbiwbm^rent Interest. ||tl(

—ii- —&----r-1-- ¹ \j—rtH

The preparation of consolidated financial statements in conformity with the recognition and measurement principles of ind AS
requires management to make estimates and judgements that affect the reported balances of assets and liabilities, disclosures of
contingent liabilities as at the date of consolidated financial statements and the reported amounts of income and expenses for the
periods presented. Estimates and underlying assumptions are reviewed onan ongoing basis. Revisions to accounting estimates are
recognised in the period io which (he estimates are revised and future periods are affected. The Group uses the following critical
am Hinting estimates in preparation of its consolidated financial statements:_

a) Useful lives of property, plant and equipment_

The Group depreciates property, plant and equipment on a Written Down Value Method over estimated useful lives of the assets. The
charge in respect of periodic depreciation is derived based on an estimate of an asset''s expected useful life and the expected residual
value at the end of its life. The lives are based on historical experience with similar assets as well as anticipation of future events,
which may impact their life, such as changes in events, which may impact their life, such as changes in technology. The estimated
useful life is reviewed at least annually.

b) Useful lives of intangible assets

The Group amortises intangible assets on a straight-line basis over estimated useful lives of the assets. The useful life is estimated
based on a number of factors including the effects of obsolescence, demand, competition and other economic factors such as the
stability of die industry and known technological advances and the level of maintenance expenditures required to obtain the expected
future cash flows from the assets. The estimated useful life is reviewed at least annually,

c) Revenue recognition__

Limited & EMS TCP JV Private Limited-The Group applies judgement to determine whether each product or service promised to a
customer is capable of being distinct, and is distinct in the context of the contract, if not, the promised product or service is combined
and accounted as a single performance obligation The Group allocates the arrangement consideration to separately identifiable
performance obligation deliverable''s based on their relative standalone selling price.

Tin? Group uses the percentage of completion method using the input (cost expended) method to measure progress towards
completion in respect of fixed price contracts. Percentage of completion method accounting relies on estimates of total expected
contract revenue and costs. Tliis method is followed when reasonably dependable estimates of the revenues and costs applicable to
various elements of tire contract can be made, Key factors that are reviewed in estimating the future costs to complete include
estimates of future labor costs and productivity efficiencies. Because the financial reporting of these contracts depends on estimates
tiut are assessed continually during the term of these contracts, revenue recognised, profit obligations are subject to revisions as the
contract progresses to completion.

When estimates indicate that a loss will be incurred, tire loss is provided for in the period in which the loss becomes probable Volume
discounts are recorded as a reduction of revenue. When he amount of discount varies with the levels of revenue, volume discount is
recorded based on estimate of future revenue from the customer.Closing Work in Progress includes Unbilled revenue calculated as

per INDASV15._______

Mirxapur Ghazipur STPs Private Limited- The revenue has been recognized as per Appendix Dof the Ind As 115Service Concession
Arrangements as the Group had entered into the Service Concession Agreement with Uttar Pradesh Jai Nigam (UPJN) on 2406.2021
for Design, Build, Rehabilitate, Finance, Operate and Transfer Sewage Treatment Plants (STPs) of the capacity as set out along with
associate infrastructure, with operation and maintenance period of 15 years under "One City One Operator" concept through Hybrid
Annuity based PPP model in Mirzapur and Ghazipur, Uttar Pradesh India". The Group has applied financial asset model for
recognition of the revenue as the Group has right to receive cash flows from the UP1N. The revenue under the contract has been
reconized at lair value of the amount due from toe grantor (UPJN) for the activity undertaked and the performance obligations are
satisfied till the c-nd date of the reporting period. In arriving at toe fair value of the revenue and costs the Group has relied upon the
monthly progress report of the actually completed work till the end date of the reporting period. The revenue recognized as per ind
AS 115 and financial asset created will be amortized as per Ind AS 109 Financial Instruments after the completion of the construction
period. The costs attributable to the revenue so recognised are recognized as expense by refemce to the stage of completion and
satisfation of the performance obligation. The unbilled revenue arising out of toe financial asset method has been reconized as
“''Financial Asset-Trade Receivables" under the Non-Current Assets in the consolidated tod AS Financial Statements.

Canary Infrastructure Private Limited, EMS Green Energy Private Limited & SICUEM Water Projects Private Limited- (a)

Sale of services - in SKUEM Water Projects Private Limited, Revenue is recognised from rendering of services over time as the
customer receives the benefit of the Company''s performance and the Company has an enforceable right to payment for services
transferred. No revenue is recognised during toe year as Canary Infrastructure Private Limited and EMS Green Energy Private
Limited as the company is not in working condition.

(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 Group
reduces the carrying amount to its recoverable amount, being the estimated future cash flows discounted at toe original effective
interest r,ite_of-touJnstmment and continues unwinding the discount as interest income. Interest income on impmrgjfcdaaQs^ is ,
&^b»inal effective imprest rate--j/£

d] Impairment of goodwill

Tlie Group estimates the value-in-use of the cash generating units (CGUs) based on the future cash flows after considering current
economic conditions and trends, estimated future operating results and growth rate and anticipated future economic and regulatory
conditions. The estimated cash flows are developed using internal forecasts. The discount rates used for the CGUs represent the
weighted average cost of capital based on the historical market returns of comparable companies,

e) Fair value measurement of financial instruments

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted
prices in active markets, their fail value is measured using valuation techniques including the Discounted Cash Row modeL The
inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is
required in establishing fair values. Judgement include considerations of inputs such as liquidity risk, credit risk and volatility.
Changes in assumptions about these factors could affect I he reported fair value of financial instruments.

Provision for income tax and deferred tax assets

The Group uses estimates and judgements based on the relevant rulings in the areas of allocation of revenue, costs, allowances and
disallowances which is exercised while determining the provision for income tax. A deferred tax asset is recognised to the extent that
it is probable that future taxable profit will be available against which the deductible temporary differences and tax Josses can be
utilised. Accordingly, the Group exercises its judgement to reassess the carrying amount of deferred tax assets at the end of each
reporting period.