EMS Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2025

3.15 Provisions, contingent assets and contingent liabilities

The company recognizes a provision when there is a present obligation as a result of a past
event that probably requires an outflow of resources and a reliable estimate can be made of the
amount of the obligation. These provisions are reviewed at the end of each reporting date and
are adjusted to reflect the current best estimates. The Company uses significant judgement to
disclose contingent liabilities.

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 the obligation or a reliable estimate of the amount cannot be made. Contingent
Liability or Contingent assets are disclosed in Note 35 of the standalone financial statement.

3.16 Earning per Equity Share

Basic earnings per equity share is calculated by dividing the net profit or loss for the period
attributable to equity shareholders by the weighted average number of equity shares outstanding
during the period. The weighted average number of equity shares outstanding during the period
is adjusted for events including a bonus issue, bonus element in a rights issue to existing
shareholders, share split and reverse share split (consolidation of shares), if any. For the purpose
of calculating diluted earnings per equity share, the net profit or loss for the period attributable

to equity shareholders and the weighted average number of shares outstanding during the period
are adjusted for the effects of all dilutive potential equity shares. The company has disclosed
earning per share in Note 34 of the standalone financial statement.

3.17 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted
for the effects of transactions of non-cash nature and any deferrals or accruals of past or future
receipts or payments. In the cash flow statement, cash and cash equivalents includes cash in
hand, cheques on hand, balances with banks in current accounts and other short- term highly
liquid investments with original maturities of 3 months or less, as applicable.

3.18 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying
asset are capitalised during the period of time that is necessary to complete and prepare the asset
for its intended use or sale. Other borrowing costs are expensed in the period in which they are
incurred and reported in finance costs

3.19 Significant management judgment in applying accounting policies and estimation
uncertainty

When preparing the financial statements, management makes a number of judgments, estimates
and assumptions about the recognition and measurement of assets, liabilities, income and
expenses.

(A) Significant management judgment

The following are significant management judgments in applying the accounting policies of
the Company that have the most significant effect on the financial statements.

• Recognition of construction contract revenues

Recognising construction contract revenue requires significant judgement in
determining actual work performed and the estimated costs to complete the work.

• Recognition of deferred tax assets

The extent to which deferred tax assets can be recognised is based on an assessment of
the probability that future taxable income will be available against which the deductible
temporary differences and tax loss carry-forwards can be utilised. In addition,
significant judgment is required in assessing the impact of any legal or economic limits
or uncertainties in various tax jurisdictions.

(B) Estimation Uncertainity

Information about estimates and assumptions that have the most significant effect on
recognition and measurement of assets, liabilities, income and expenses is provided below.
Actual results may be substantially different.

• Impairment of non-financial assets

In assessing impairment, management estimates the recoverable amount of each asset
or cash- generating units based on expected future cash flows and uses an interest
rate to discount them. Estimation uncertainty relates to assumptions about future
operating results and the determination of a suitable discount rate.

• Defined Benefit Obligation (DBO)

Management’s estimate of the DBO is based on a number of critical underlying
assumptions such as attrition rate, mortality, discount rate and anticipation of future
salary increases. Variation in these assumptions may significantly impact the DBO
amount and the annual defined benefit expenses (as analysed in note 21)

• Useful lives of depreciable assets

Management reviews its estimate of the useful lives of depreciable assets at each
reporting date, based on the expected utility of the assets. Uncertainties in these
estimates relate to technological obsolescence that may change the utility of certain
software and IT equipment.

• Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement
date. The fair value measurement is based on the presumption that the transaction to
sell the asset or transfer the liability takes place either:

i. In the principal market for the asset or liability, or

ii. In the absence of a principal market, in the most advantageous market for the asset
or liability.

Management uses valuation techniques to determine the fair value of financial
instruments (where active market quotes are not available) and non-financial
assets. This involves developing estimates and assumptions consistent with how
market participants would price the instrument. Management bases its assumptions
on observable data as far as possible but this is not always available. In that case
management uses the best information available.

Current and non-current classification

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

Considering the nature of business activities of the Company, the time between
deploying of resources for projects / contracts and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as twelve months for the
purpose of current or noncurrent classification of assets and liabilities.

3.20 Related Party Transactions

Disclosure is being made separately for all the transactions with related parties in Note 39 of
the financial statement as specified under IND AS 24 "Related Party Disclosure” issued by the
Institute Chartered Accountants of India. All the transactions with related party are at arm length
price.

3.21 Segment Reporting

The Company is engaged in the business of construction of Building, Transmission line providing
turnkey services in water and wastewater collection, treatment and disposal and manufacturing
of own items which are used for construction purposes.Information is reported to and evaluated
regularly by the Co-operational Decision Maker (CODM) i.e. Managing Director for the purpose
of resource allocation and assessing performance focuses on the business as whole. The CODM
reviews the Company''s performance focuses on the analysis of profit before tax at an overall
entity level. Accordingly, there is no other separate reportable segment as defined by IND AS 108
"Operating Segments".

3.22 Recent Accounting Pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing
standards under Companies (Indian Accounting Standards) Rules as issued from time to time.
Key amendments to Indian Accounting Standards (Ind AS) which are applicable for the year
ended 31^st March 2025 are as follows:

IND AS 117- Insurance Contracts

MCA has amended the Companies (Indian Accounting Standards) Rules 2015, vide notification
dated 12^th August 2024 and outlined scenarios where IND AS 117- “Insurance Contracts”. These
include warranties from manufacturers, dealers or retailers related to goods and services and
employer obligations from employee benefit plans. It also excludes retirement benefit obligations
from defined benefit plans and contractual rights or obligations tied to future use of nonfinancial
items, such as certain license fees and variable lease payments.

To address the anticipated challenges insurers might face in complying with the complex
requirements of IND AS 117, the MCA subsequently introduced the Companies (Indian Accounting
Standards) Third Amendment Rules, 2024, (‘relief amendment). According to this amendment,
insurers are permitted to continue to prepare their financial statements in accordance with
IND AS 104 for submission to their parent company, investor, or venturer for the purpose of
consolidating financial statements until the Insurance Regulatory and Development Authority of
India (IRDAI) mandates the application of IND AS 117. IND AS 117 will continue to apply to the
entities that are not insurers or insurance companies, with effect from 1 April 2024. However
the company is not engaged in Insurance Contracts and hence do not have any impact on the
financial statement.

Amendment to IND AS 116

MCA has amended IND AS 116 vide its notification dated September 9, 2024 related to accounting
for sale and leaseback transactions in the books of lessor and lessee. The amendment requires
seller-lessee to determine lease payments or revised lease payments in a way that seller-lessee
would not recognize any amounts of the gain or loss that relates to the right of use retained by
the seller-lessee. These rules aim to streamline accounting processes and ensure compliance
with updated IND AS requirements. However the Company is not engaged in sale and leaseback
transaction and hence do not have any impact on the financial statement.

Amendment to IND AS 21

The Ministry of Corporate Affairs (MCA) has rolled out the Companies (Indian Accounting Standards)
Amendment Rules 2025, further redefining the Companies (Indian Accounting Standards) Rules
2015 on 7^th May 2025 which is applicable from 1^st April 2025 which is given below:

These changes focus mainly on IND AS 21 “The Effects of Changes in Foreign Exchange Rates.”
The amendment gives clear guidance on how to estimate the “spot exchange rate” when two
currencies cannot be exchanged easily. It clarifies the concept of exchangeability between
Currencies, requiring:

• Assessment at the measurement date for a specific purpose.

• If exchangeability is lacking, entities must estimate the spot exchange rate and disclose the
financial impact.

• A Currency is deemed exchangeable if it can be obtained within a normal administrative time
frame through a market / exchange mechanism creating enforceable rights and obligations.

Note 9.1 : EMS Limited has acquired 6000 (60%) Equity Shares of Brij Bihari Pulp & Papers Private
Limited at a premium of '' 12905 per equity shares at a face value of '' 10/- per share for an aggregate
amount of '' 7.75 Crores on 27^th March 2025. Accordingly the investment has been classified as
Subsidiary.

Note 9.2: 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.

Note 9.3 : On November 30, 2024, during its Annual General Meeting, Polymatech Electronics Limited
approved a 1:5 share split, reducing the face value of each fully paid-up equity share from ''10 to ''2.
The record date for this corporate action was set for December 27, 2024. Consequently, EMS Limited,
which held 300,000 shares at ''10 face value, now holds 1,500,000 shares at ''2 face value.

Notes:

(i) The carrying amount of the current trade receivable is considered a reasonable approximation
of fair value as is expected to be collected within twelve months, such that the effect of any
difference between the effective interest rate applied and the estimated current market rate is
not significant. There are no receivables due from directors or other officers of the Company.

(ii) All of the Company’s trade receivables have been reviewed for indicators of impairment.

(iii) The Company has provided for expected credit loss on its trade receivables using a provisioning
matrix and specific provisioning, where appropriate, representing expected credit losses based
on a range of outcomes.

(e) Terms/rights attached to equity shares

The Company has issued only one class of equity shares having a face value of '' 10/- per share.
Each holder of equity shares is entitled to one vote per share.The Company declares and pays
divdend in Indian rupees. The dividend proposed by the Board of Directors, if any, is subject
to the approval of the shareholders in the ensuing Annual General Meeting. In the event of
liquidation of the company, the holders of equity shares will be entitled to receive remaining
assets of the company, after distribution of all preferential amounts, if any.. The distribution will
be in proportion to the number of equity shares held by the shareholders.

(f) Equity Shares movement during the 5 years preceding March 31,2025

The Company has made Initial Public Offering of 15224925 (Fresh Issue of 6930807 equity shares
and Offer for Sale of 8294118 equity shares) of ''. 10/- each at premium of ''. 201/- per share
aggregating to ''. 32124.59 Lakhs out of which ''.14624.00 Lakhs in the Company & ''.17500.59
Lakhs through OFS on 08^th September, 2023. The issue closed on 12^th September, 2023 and was
over-subscribed 76.21 times. The equity shares are listed on National Stock Exchange of India
Limited (NSE) and BSE Limited (BSE) on 21^st September, 2023. The Company has been alloted
1600000 equity shares of face value of '' 10/- each under Pre- IPO (Private Placement) each at
premium of '' 201/- per share aggregating to '' 3376.00 Lakhs on 18 July,2023.

The Board of Directors of the company, at its meeting held on March 14,2023 has approved
a proposal to increase authorised share capital to '' 60,00,00,000/-(Rupees Sixty Crore only)
divided into 6,00,00,000 (Six Crore) Equity Shares of '' 10/- each from '' 20,00,00,000 (Twenty
Crore) divided into 2,00,00,0000 (Two Crore ) Equity Shares of '' 10/- each and to issue number
of bonus shares of 3,52,50,000 (Three Crore Fifty Two lakh Fifty Thousand) (against existing
1,17,50,000 (One Crore Seventeen Lakh Fifty Thousand) total equity shares existing as fully paid
up in the company in the ratio of 3:1. The shareholders of the company have approved increase
in authorised share capital and bonus share issue on 15 March,2023.

The Board of Directors of the company, at its meeting held on Dec 23,2022 has approved a proposal
to increase authorised share capital to 20,00,00,000/-(Rupees Twenty Crore only) equity shares
divided into 2,00,00,000 (Two Crore) Equity Shares of '' 10/- each from '' 15,00,00,000/-(Rupees
Fifteen Crore only) divided into 1,50,00,000 (One Crore Fifty Lacs only).

The shareholders of the company have approved increase in authorised share capital on Dec
31,2022.

Note 19.3

Commercial Equipment Loans from HDFC Bank at an interest rate of 9.06% per annum which
is repayable in 48 monthly installments commencing from 15^th January 2025 and secured by
hypothecation of Commercial Equipments.

Note 19.4

Commercial Equipment Loan from HDFC Bank at an interest rate of 9.12% per annum which is repayable
in 48 monthly installments commencing from 15^th January 2025 and secured by hypothecation of
Commercial Equipment

Note 19.5

Commercial Equipment Loan from HDFC Bank at an interest rate of 9.23% per annum which is repayable
in 48 monthly installments commencing from 15^th January 2025 and secured by hypothecation of
Commercial Equipment

Note 19.6

Project Loan from HDFC Bank at an interest rate of 9.28 % per annum which is repayable in 60 monthly
installments against Project - Vikasnagar for development of Water Supply and Sewerage System with
term of work of 48 months and 18 years of O&M, which commences from 26^th September 2024

(a) Defined Benefit Plans

Gratuity & Leave Encashment

The Company operates a defined benefit gratuity plan for its employees. The gratuity scheme
provides for lump sum payment to vested employees at retirement/death while in employment
or on termination of employment of an amount equivalent to 15 days salary payable for each
completed year of service or part thereof in excess of 6 months subject to a limit of INR 20.00
lakhs (March 31, 2024: INR 20.00 lakhs & March 31, 2023:INR 20.00 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 i.e. projected unit credit
method has been applied as that used for calculating the defined benefit liability recognised
in the balance sheet.

v) Risk Exposure

The defined benefit obligations have the undermentioned risk exposures :

Interest rate risk : The defined benefit obligation calculated uses a discount rate based on
government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary Inflation risk : Higher than expected increases in salary will increase the defined
benefit obligation.

Demographic risk : This is the risk of variability of results due to unsystematic nature of
decrements that include mortality, withdrawal , disability and retirement. The effect of these
decrements on the defined benefit obligation is not straight forward and depends upon the
combination of salary increase, discount rate and vesting criteria.

Investment risk : The present value of the defined benefit plan liability is calculated using
a discount rate determined by reference to high quality corporate bond yields; if the return
on plan asset is below this rate, it will create a plan deficit.

b) Based on Timing of revenue recognition

Revenues from construction contracts and operation & maintenance contracts are recognised
on ‘Over a point in time’ basis and ‘At a point in time’ basis respectively.

c) Transaction price allocated to the remaining sales contracts

Revenues expected to be recognised in the future related to performance obligations that are
unsatisfied or partially unsatisfied as at March 31, 2025 amounting to INR 171100 Lakhs.

Construction contracts are progressively executed over a period of upto 3 years and based
on specific project schedules. Operation and maintenance contracts are expected to be
executed over a period of 1 to 20 years.

d) Reconciliation of sale of services with contract price except operations and maintenance
contracts

NOTE: 36: Segment Reporting

The Company is engaged in the business of construction of Building , Transmission line , providing
turnkey services in water and wastewater collection, treatment and disposal and manufacturing of
own items used for construction purposes. Information is reported to and evaluated regularly by the
Coperational Decision Maker (CODM) i.e. Managing Director for the purpose of resource allocation
and assessing performance focuses on the business as whole. The CODM reviews the Company’s
performance focuses on the analysis of profit before tax at an overall entity level. Accordingly, there
is no other separate reportable segment as defined by IND AS 108 “Operating Segments”

The company at its meeting held on 29^th May 2024 has considered and approved the elevation of
the designation of Mr Ashish Tomar , Managing Director of the company from the post of Managing
Director to Managing Director cum Chief Financial Officer of the company w.e.f 5^th June 2024.

The company at its meeting held on 29^th May 2024 has considered and approved the resignation of Mr
Gajender Parihar, Chief Financial Officer & Key Managerial Personnel of the Company (KMP) w.e.f 5^th
June 2024.

The Board of Directors have approved the appointment of Mr Nand Kishore Sharma as the company
secretary and Compliance Officer of the company (Key Managerial Personnel) w.e.f 28^th June 2024.

** EMS Limited has acquired 6000 Equity Shares of Brij Bihari Pulp & Papers Private Limited at a
premium of '' 12905 per equity shares at a face value of '' 10/- each per share for an aggregate amount
of '' 7.75 Crores on 27^th March 2025.

ii) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial
instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost
and for which fair values are disclosed in the financial statements. to provide an indication about
the reliability of the inputs used in determining fair value, the company has classified its financial
instruments into the three levels prescribed under the accounting standard.

Note No : 41

A) FINANCIAL RISK MANAGEMENT

The Company’s principal financial liabilities comprises of borrowings, trade payables, other
payables and other financial liabilities . The main purpose of these financial liabilities is to finance
the Company’s operations. The Company’s principal financial assets include loans, trade and
other receivables, and cash and cash equivalents that derive directly from its operations. The
Company also holds investments.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior
management oversees the management of these risks. The Company’s senior management
ensures that the Company’s financial risk activities are governed by appropriate policies and
procedures and that financial risks are identified, measured and managed in accordance
with the Company’s policies and risk objectives. It is the Company’s policy that no trading in
derivatives for speculative purposes may be undertakenThe Board of Directors reviews and agrees
policies for managing each of these risks, which are summarised below.

(a) Market risk

Market risk is the risk that the fair value of 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. Financial instruments affected by market risk include loans and borrowings.

The Company has no direct exposure to foreign currency risk.

-Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates. The Company’s exposure to the
risk of changes in market interest rates relates primarily to the Company’s long-term debt
obligations with floating interest rates. The Company has fixed deposits as margin money for
a period between 3 months to exceeding 12 months. All the fixed deposits are with banks,
accordingly there is no significant interest rate risks pertaining to these deposits.

Interest rate sensitivity

The following table illustrates the sensitivity of profit and equity to a reasonably possible
change in interest rates of /- 1% for the year ended March 31, 2024 (March 31, 2023:

(b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial
instrument or customer contract, leading to a financial loss. The Company is exposed
to credit risk from its operating activities (primarily trade receivables) and from its financing
activities, including investments, deposits with banks and financial institutions and other
financial instruments.

(i) Trade receivables

The Company’s customer profile include public sector enterprises. Accordingly , the
Company’s customer credit risk is very low. The Company’s average project execution
cycle is around 18 to 36 months. General payment terms include mobilisation advance,
monthly progress payments with a credit period ranging from 45 to 90 days and certain
retention money to be released at the end of the project. In some cases, retentions are
substituted with bank guarantees. The Company has a detailed review mechanism
of overdue customer receivables at various levels within the organisation to ensure
proper attention and focus for realisation.

Further, Company has an ongoing credit evaluation process in respect of customers
who are allowed credit period.

(i) The Company is making provisions on trade receivables based on Expected Credit
Loss (ECL) model. The reconciliation of ECL is as follows

(c) Liquidity risk

Liquidity risk is the risk that the Company may encounter difficulty in meeting its present
and future obligations associated with financial liabilities that are required to be settled
by delivering cash or another financial asset. The Company’s objective is to maintain a
balance between continuity of funding and flexibility through the use of bank overdrafts,
bank loans and finance leases. The Company closely monitors its liquidity position and
deploys a robust cash management system. It aims to minimise these risks by generating
sufficient cash flows from its current operations, which in addition to the available cash and
cash equivalents and sufficient committed fund facilities, will provide liquidity.The liquidity
risk is managed on the basis of expected maturity dates of the financial liabilities.
The carrying amounts are assumed to be reasonable approximation of fair value.

B) Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital,
compulsorily convertible preference shares, securities premium and all other equity reserves
attributable to the equity holders. The primary objective of the Company’s capital management is to
maximise the shareholder value.The Company manages its capital structure and makes adjustments
in light of changes in economic conditions and the requirements of the financial covenants. The
Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net
debt. The Company’s policy is to keep the gearing ratio between 0% and 25% The Company includes
within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

The Company’s overall strategy remains unchanged from previous year. The funding requirements
are met through a mixture of equity, internal fund generation.

The Company monitors capital on the basis of the gearing ratio which is net debt divided by total
capital (equity plus net debt).

Net debt are non-current and current debts as reduced by cash and cash equivalents, other
bank balances and current investments. Equity comprises all components including other
comprehensive income.

C) Dividend

The final dividend,if any, on shares will be 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.

The Company declares and pays dividends in Indian rupees. Company is required to pay/
distribute dividend after deducting applicable withholding income taxes. The remittance of
dividends out side India is governed by Indian law on foreign exchange and is also subject to
withholding tax at applicable rates.

The Board of Directors in their meeting on 29^th May,2024 declared an final dividend of '' 1/-
per equity share. This results in net cash outflow of '' 555.31 Lacs during the year.

Note: 42: ADDITIONAL REGULATORY INFORMATION

(A) The Company has not been declared a wilful defaulter by any bank or financial institution or
consortium thereof in accordance with the guidelines on wilful defaulters issued by the RBI.

(B) The Company has advanced, loaned any fund to/from any person or entity for lending or
investing but has not provided guarantee except to Joint Ventures/ Subsidiaries to/on behalf of
the ultimate beneficiary during the reporting years. The Company has issued Bank Guarantee
on behalf of Mirzapur Ghazipur STPs Private Limited and EMS-TCP JV Private Limited and also
given corprorate guarantee to the bank for Mirzapur Ghazipur STPs Private Limited.

(C) There is no charges which is to be registered or to be satisfied but there are certain charges which
is yet ot be satisfied with roc after repayement of loans and management is psrsuing for the same
as told by them.

(D) The company has working capital limit and is required to submit statements with banks and
other financial institutions, the statement submitted to the bank is in agreement with the books
of account as told by the management of the company.

(E) No proceedings have been initiated or pending against the Company for holding any Benami
Property under the Benami Transactions ( Prohibitions) Act, 1988 and the rules made thereunder.

(F) No transactions have been found which were not recorded in the books of accounts or that has
been surrendered or disclosed as income during the year in the tax assessments.

(G) The company does not have any relationship with companies struck off (as defined by Companies
Act, 2013) and did not enter into transactions with any such company for the quarter and nine
months ended 31^st March 2025.

(H) The company has not traded or invested in Crypto currency or Virtual Currency during the
financial year.

(I) Balance of Trade Receivables, Other Non Current Assets, GST Recoverable & Payable, Advances
to related parties, Suppliers & Others, Security Deposits (Received) & (Paid), Other Current &
Non Current Financial Assets , Other Financial Liabilities ,Trade Payables and Inventories have
been taken at their book value and are subject to confirmation and reconciliation. . Cost of Sales
& Services as well as Gross Turnover as per GST Returns, GST Payable/ Recoverable have been
taken at their book value and are subject to confirmation and reconciliation. Provision for Interest

on Delayed Payment of MSME creditors under Section 22 of the MSME Act, 2006, if any, made to
concerned MSME creditors has been made by the management of the company.

In term of our report attached

For Rishi Kapoor & Company For and on behalf of the Board of Directors of EMS Limited

Chartered Accountants
FRNo.006615C

(Jyoti Arora) (Ram Veer Singh) (Ashish Tomar)

Partner Chairman & Director Managing Director & CFO

M. No. 455362 Din No. 02260129 Din No. 03170943

Place : Ghaziabad (Nand Kishore)

Date : 28.05.2025 Company Secretary

UDIN : 25455362BMGIGA5553 M.No 72046

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Mar 31, 2024

3.15 Provisions, contingent assets and contingent liabilities

The company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. These provisions are reviewed at the end of each reporting date and are adjusted to reflect the current best estimates. The Company uses significant judgement to

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 the obligation or a reliable estimate of the amount cannot be made. Contingent Liability or Contingent assets are disclosed in Note 35 of the standalone financial statement.

3.16 Earning per Equity Share

Basic earnings per equity share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares), if any. For the purpose of calculating diluted earnings per equity share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. The company has disclosed earning per share in Note 34 of the standalone financial statement.

3.17 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future receipts or payments. In the cash flow statement, cash and cash equivalents includes cash in hand, cheques on hand, balances with banks in current accounts and other short- term highly liquid investments with original maturities of 3 months or less, as applicable.

3.18 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period in which they are incurred and reported in finance costs

3.19 Significant management judgment in applying accounting policies and estimation uncertainty

When preparing the financial statements, management makes a number of judgments, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.

(A) Significant management judgment

The following are significant management judgments in applying the accounting policies of the Company that have the most significant effect on the financial statements.

• Recognition of construction contract revenues

Recognising construction contract revenue requires significant judgement in determining actual work performed and the estimated costs to complete the work.

• Recognition of deferred tax assets

The extent to which deferred tax assets can be recognised is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry-forwards can be utilised. In addition, significant judgment is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions.

(B) Estimation Uncertainity

Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially different.

• Impairment of non-financial assets

In assessing impairment, management estimates the recoverable amount of each asset or cash- generating units based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.

• Defined Benefit Obligation (DBO)

Management’s estimate of the DBO is based on a number of critical underlying assumptions such as attrition rate, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses (as analysed in note 21)

• Useful lives of depreciable assets

Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of certain software and IT equipment.

• Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

i. In the principal market for the asset or liability, or

ii. In the absence of a principal market, in the most advantageous market for the asset or liability.

Management uses valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available.

Current and non-current classification

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

Considering the nature of business activities of the Company, the time between deploying of resources for projects / contracts and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current or noncurrent classification of assets and liabilities.

3.20 Related Party Transactions

Disclosure is being made separately for all the transactions with related parties in Note 39 of the financial statement as specified under IND AS 24 "Related Party Disclosure” issued by the Institute Chartered Accountants of India.

3.21 Segment Reporting

The Company is engaged in the business of construction of Building, Transmission line providing turnkey services in water and wastewater collection, treatment and disposal and manufacturing of own items which are used for construction purposes.Information is reported to and evaluated regularly by the Co-operational Decision Maker (CODM) i.e. Managing Director for the purpose of resource allocation and assessing performance focuses on the business as whole. The CODM reviews the Company''s performance focuses on the analysis of profit before tax at an overall entity level. Accordingly, there is no other separate reportable segment as defined by IND AS 108 "Operating Segments”.

3.22 Recent Accounting Pronouncements

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. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

(e) Terms/rights attached to equity shares

The Company has issued only one class of equity shares having a face value of Rs 10/- per share. Each holder of equity shares is entitled to one vote per share.The Company declares and pays divdend in Indian rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts, if any.. The distribution will be in proportion to the number of equity shares held by the shareholders.

(f) Equity Shares movement during the 5 years preceding March 31,2024.

The Company has made Initial Public Offering of 15224925 (Fresh Issue of 6930807 equity shares and Offer for Sale of 8294118 equity shares) of Rs. 10/- each at premium of Rs. 201/- per share aggregating to Rs. 32124.59 Lakhs out of which Rs.14624.00 Lakhs in the Company & Rs.17500.59 Lakhs through OFS on 08^th September, 2023. The issue closed on 12^th September, 2023 and was over-subscribed 76.21 times. The equity shares are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) on 21^st September, 2023. The Company has been alloted 1600000 equity shares of face value of Rs 10/- each under Pre- IPO (Private Placement) each at premium of Rs 201/- per share aggregating to Rs 3376.00 Lakhs on 18 July,2023.

The Board of Directors of the company, at its meeting held on March 14,2023 has approved a proposal to increase authorised share capital to Rs 60,00,00,000/-(Rupees Sixty Crore only) divided into 6,00,00,000 (Six Crore) Equity Shares of Rs 10/- each from Rs 20,00,00,000 (Twenty Crore) divided into 2,00,00,0000 (Two Crore ) Equity Shares of Rs 10/- each and to issue number of bonus shares of 3,52,50,000 (Three Crore Fifty Two lakh Fifty Thousand) (against existing 1,17,50,000 (One Crore Seventeen Lakh Fifty Thousand) total equity shares existing as fully paid up in the company in the ratio of 3:1. The shareholders of the company have approved increase in authorised share capital and bonus share issue on 15 March,2023.

The Board of Directors of the company, at its meeting held on Dec 23,2022 has approved a proposal to increase authorised share capital to 20,00,00,000/-(Rupees Twenty Crore only) equity shares divided into 2,00,00,000 (Two Crore) Equity Shares of Rs 10/- each from Rs 15,00,00,000/-(Rupees Fifteen Crore only) divided into 1,50,00,000 (One Crore Fifty Lacs only). The shareholders of the company have approved increase in authorised share capital on Dec 31,2022.

v) Risk Exposure

The defined benefit obligations have the undermentioned risk exposures :

Interest rate risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary Inflation risk : Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal , disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria.

Investment risk : The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high quality corporate bond yields; if the return on plan asset is below this rate, it will create a plan deficit.

b) Based on Timing of revenue recognition

Revenues from construction contracts and operation & maintenance contracts are recognised on ‘Over a point in time’ basis and ‘At a point in time’ basis respectively.

c) Transaction price allocated to the remaining sales contracts

Revenues expected to be recognised in the future related to performance obligations that are unsatisfied or partially unsatisfied as at March 31, 2024 amounting to INR 162595 Lakhs.

Construction contracts are progressively executed over a period of upto 3 years and based on specific project schedules. Operation and maintenance contracts are expected to be executed over a period of 1 to 20 years.

NOTE: 36: Segment Reporting

The Company is engaged in the business of construction of Building , Transmission line , providing turnkey services in water and wastewater collection, treatment and disposal and manufacturing of own items used for construction purposes. Information is reported to and evaluated regularly by the Coperational Decision Maker (CODM) i.e. Managing Director for the purpose of resource allocation and assessing performance focuses on the business as whole. The CODM reviews the Company''s performance focuses on the analysis of profit before tax at an overall entity level. Accordingly, there is no other separate reportable segment as defined by IND AS 108 "Operating Segments"

Note No : 41

A) FINANCIAL RISK MANAGEMENT

The Company’s principal financial liabilities comprises of borrowings, trade payables, other payables and other financial liabilities . The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds investments.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

(a) Market risk

Market risk is the risk that the fair value of 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. Financial instruments affected by market risk include loans and borrowings.

The Company has no direct exposure to foreign currency risk.

- Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates. The Company has fixed deposits as margin money for a period between 3 months to exceeding 12 months.

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including investments, deposits with banks and financial institutions and other financial instruments.

(i) Trade receivables

The Company’s customer profile include public sector enterprises. Accordingly , the Company’s customer credit risk is very low. The Company’s average project execution cycle is around 18 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases, retentions are substituted with bank guarantees. The Company has a detailed review mechanism of overdue customer receivables at various levels within the organisation to ensure proper attention and focus for realisation.

Further, Company has an ongoing credit evaluation process in respect of customers who are allowed credit period.

(i) The Company is making provisions on trade receivables based on Expected Credit Loss (ECL) model. The reconciliation of ECL is as follows

Liquidity risk is the risk that the Company may encounter difficulty in meeting its present and future obligations associated with financial liabilities that are required to be settled by delivering cash or another financial asset. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans and finance leases. The Company closely monitors its liquidity position and deploys a robust cash management system. It aims to minimise these risks by generating sufficient cash flows from its current operations, which in addition to the available cash and cash equivalents and sufficient committed fund facilities, will provide liquidity.The liquidity risk is managed on the basis of expected maturity dates of the financial liabilities. The carrying amounts are assumed to be reasonable approximation of fair value.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

B) Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, compulsorily convertible preference shares, securities premium and all other equity reserves attributable to the equity holders. The primary objective of the Company’s capital management is to maximise the shareholder value.The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company’s policy is to keep the gearing ratio between 0% and 25%. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

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

C) Dividend

The final dividend,if any, on shares will be 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.

The Company declares and pays dividends in Indian rupees. Company is required to pay/ distribute dividend after deducting applicable withholding income taxes. The remittance of dividends out side India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

The Board of Directors in their meeting on 14-November-2023, declared an interim dividend of Rs 1/- per equity share for the financial year ended March 31, 2024. This results in net cash outflow of Rs 555.31 Lacs during the year.

Note: 42: ADDITIONAL REGULATORY INFORMATION

(A) The Company has not been declared a wilful defaulter by any bank or financial institution or consortium thereof in accordance with the guidelines on wilful defaulters issued by the RBI.

(B) The Company has neither advanced, loaned excpet joint venture or invested funds nor received any fund to/from any person or entity for lending or investing or providing guarantee to/on behalf of the ultimate beneficiary during the reporting years. The Company has issued Bank Guarantee on behalf of Mirzapur Ghazipur STPs Private Limited and EMS-TCP JV Private Limited and also given corprorate guarantee to the bank for Mirzapur Ghazipur STPs Private Limited.

(C) There is no charges which is to be registered or to be satisfied but there are certain charges which is yet ot be satisfied with roc after repayement of loans and management is psrsuing for the same as told by them.

(D) The company has working capital limit and is required to submit statements with banks and other financial institutions, the statement submitted to the bank is in agreement with the books of account as told by the management of the company.

(E) No proceedings have been initiated or pending against the Company for holding any Benami Property under the Benami Transactions ( Prohibitions) Act, 1988 and the rules made thereunder.

(F) No transactions have been found which were not recorded in the books of accounts or that has been surrendered or disclosed as income during the year in the tax assessments.

(G) The company does not have any relationship with companies struck off (as defined by Companies Act, 2013) and did not enter into transactions with any such company for the year ended March 31,2024.

(H) The company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(I) Balance of Trade Receivables, GST Recoverable, Advances to related parties, suppliers & others, Security Deposits (Received), Other Financial Assets , Other Non Current Assets, Other Financial Liabilities, Trade Payables & Advance from Customer, Inventories have been taken at their book value and are subject to confirmation and reconciliation as well as Inventories has been taken, valued , verified and certified by the management of the Company.

In terms of our report even date attached

For Rishi Kapoor & Company For and on behalf ofthe Board of Directors of EMS Limited

Chartered Accountants

FRNo.006615C

(Jyoti Arora) (Ram Veer Singh) (Ashish Tomar)

Partner Chairman & Director Managing Director

M. No. 455362 Din No. 02260129 Din No. 03170943

Place : Ghaziabad (Gajendra Parihar)

Date : 29.05.2024 Chief Financial Officer

UDIN: 24455362BKBLEH6530

---

Mar 31, 2023

Provisions and contingent liabilities

The Group estimates the provisions that have present obligations as a result of past events and il is probable that outflow of resources
will Ire required to settle the obligations. These provisions are reviewed at the end of each reporting period and are adjusted to reflect
the current best estimates. The Group uses significant judgements to assess contingent liabilities. Contingent liabilities are recognised
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 die Group 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 the obligation or a reliable estimate of the amount cannot be made. Contingent liability is recognised in Note No 40 of the
consolidated financial statements.

f) Oefiued benefit plans and compensated absences:_

The cost of the defined benefit plans, compensated absences and the present value of the defined benefit obligations are based on
actuarial valuation using the projected unit credit method. An actuarial valuation involves making various assumptions that may
differ from actual developments in die future. These include the determination of the discount rate, future salary increases and
mortality rates. Due to die complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions, ATI assumptions are reviewed at each reporting date._

3 MATERIAL ACCOUNTING POLICY INFORMATION

i) Functional and Presentation Currency _____

These consolidated financial statements are presented in Indian rupees in lacs rounded off fo two decimal places as permitted by
Schedule HI to the Act., which is the funclionaf currency of the Croup.__

Li) Financial instruments

_a) Non-derivative financial instruments:

Non-derivative financial instruments consist oh

Financial assets, wltich include cash and cash equivalents, trade receivables, unbilled receivables, finance lease receivables, employee
and other advances, investments in equity and debt securities and eligible current and non-current assets: Financial assets are
derecognised when substantial risks and rewards of ownership of the financial asset have been transferred. In cases where substantial
risks and rewards of ownership of the financial assets are neither transferred nor retained, financial assets are derecognised only when
die Group has not retained control over the financial asset.Financial liabilities, which include long and short term loans and
borrowings, bank overdrafts, trade payables, lease liabilities, and eligible current and non-current liabilities. The Group classifies all
financial liabilities as subsequently measured al amortised cost, except for financial liabilities at fair value through profit or loss. Such
liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value. 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 Heated as die 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.Non-derivative financial instruments are recognised
initially at fair value. Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally
enforceable right to offset die recognised amounts and diere is an intention to setdc on a net basis to realise the asset and setUe the
liability simultaneously Subsequent to initial recognition, non-derivative financial instruments are measured as described below:

A) Cash and cash equivalents ___

The Group''sjaslLjind cash equivalents consist of cash on hand and in banks and demand deposits with banks, which canjje
withdraK^''S^injt tif^rvwithou! prior notice or penalty on the principal \

For tli^mftpdSesTiT''ltie statement of cash flows, cash and cash equivalents include cash on hand, in banks and demand deji^tts^yith
baid/y. jdomc overdrabyind are considered part of the Group''s cash management system. jj

—TrfT-v I ^ •Jl ''.l'' i V rp~

ft) Investments

Financial instruments measured at fair value through other comprehensive income (FVTOQ);

For investments designated to be classified as FVTOC1, movements in fair value of investments are recognised in other
comprehensive income and the gain or loss is not transferred to statement of profit and loss on disposal of investments. For
investments designated to be classified as FVTPL, both movements In fair value of investments and gain or loss on disposal of
investments are recognised in the statement of profit and loss.

Financial instruments measured at Amortised Cost

Financial assets are measured at amortised cost when asset is held within a business model, whose objective is to hold assets for
collecting contractual cash flows and contractual terms of the asset give rise on specified dates to cash flows that arc solely for
payments of principal and interesl. Such financial assets are subsequently measured at amortised cost using the effective interest rate
(EIR) method. The losses arising from impairment are recognised in the Statement of profit and loss. This category generally applies
to irade and nlfipr rprefyablps ___

Financial Instruments measured at Profit & Loss

Financial assets under this category are measured initially as well as at each reporting date at fair value with all changes recognised in
profit or loss._

Derecognition of Financial assets:

A financial asset is primarily derecognised when the rights to receive cash flows from the asset have expired or the Group haS''
transferred its rights to receive cash flows from the asset if an entity transfers a financial asset in a transfer that qualifies for
derecognition in its entirety and retains the right to service the financial asset for a fee, it shall recognise either a servicing asset or a
servicing liability for that servicing contract. If the fee to be received is not expected to compensate the entity adequately for
performing the servicing, a servicing liability for the servicing obligation shall be recognised at its fair value. If the fee to be received
is expected to be more than adequate compensation for tire servicing, a servicing asset shall be recognised for the servicing right at an
amount determined on the basis of an allocation of the carrying amount of the larger financial asset.

~ Ollier financial assets

W___^___

Otlter financial assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
They are presented as current assets, except for those maturing later than 12 months after the reporting date which are presented as
non-current assets. These are initially recognised at fail value and subsequently measured at amortised cost using the effective
interest method, less any impairment losses. These comprise trade receivables,unbilled receivables, finance lease receivables,
employee and other advances and other eligible currenl and non-current assets. _

pj Property, plant and equipment
Recognition and measurement

Properly, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any. Cost includes
expenditures directly attributable to the acquisition of the asset. General and specific borrowing costs directly attributable lo the

construction of a qualifying asset are capitalised as part of the cost. __

Depreciation_____

n^pfiviatini^ on fixed assets is determined based on the estimated useful life of the assets using Ihe written down value method as
prescribed under the schedule U lo the Companies Act, 2013. Individual assets costing less than Rs. 5000.00 or less are depreciated
within a year of acquisition. Depreciation on assets purchased/sold during the period is proportionately charged. Leasehold land is
amortized on a straight line basis over the period of lease. Intangible assets, if any, are amortized over their useful life on a straight
line method. The estimated usefid life of assets is reviewed anti where appropriate are adjusted, annually. When parts of an item of
property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property,
plant and equipment. Subsequent expenditure relating to property, plant and equipment is capitalised only when it is probable that
future economic benefits associated with these will flow to the Group and the cost of the item can be measured reliably.

E) Leases_ ______

As a Lessee _____

The Group “S lease asset classes primarily consist of leases for Land and Plant & Machinery. The Group assesses whether a contract
contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of
an identified asset, the Group assesses whether, (i) the contract involves the use of an identified asset (ii) the Group has substantially
all of the economic benefits from use* of the asset through the period of the lease and (ill) the Group has the right to direct the use of

the asset. , .

At the dale of commencement of the lease, the Group recognizes a right-of-use asset ("ROLF) and a corresponding lease liability tor
all lease arrangements in which it U a lessee, except for leases with a term of twelve months or less (short-term leases) and low value
leases. For these short-term and low value lease$,the Group recognizes the lease payments as an operating expense on a straight-line
basis over the tetm of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term, ROD assets and
lease liabilities includes these options when it is reasonably certain that they will be exercised. The righk-of-use assets are initially
recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior lo the
commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less
accumulated depreciation and impairment losses.

Rjght-of-use assets are depreciated from Ihe commencement date on a straight-line basis over the shorter of the lease term and useful
life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable. For the purpose of impairment testing, tire recoverable amount (ue. the higher of
the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset docs not generate cash
flows that are Wcrelv milpnontient of ibosp from other awK

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are
dlScoumestBnnfcJi*¹ interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rales in the
cou^to^S^iie^Nliese leases. Lease liabilities are remeasured with a corresponding adjustment lo the related right of use asset if
jf^iOrrf^^n^x’it^ateessint-nt if whether it will exercise an extension or a termination option. Lease liability and ROU asset have
bcy&eparalely raMeniemin the Consolidated Balance Sheet and lease payments have been classified as financing cash flows.

-----a*—V

F) Investment I''lOpcriies_

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Group, 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 wili flow to the Croup 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.

G) Employee Benefit

The Group provides for the various benefits plans to the employees These are categorized into Defined Benefits Plans and Defined
Contributions Plans. Defined contribution plans includes the amount paid by the group towards the liability for Provident fund to the
employees provident fund organization and Employee State insurance fund in respect of ESI and defined benefits plans includes the
retirement benefits, such as gratuity.

a. In respect Defined Contribution Plans, contribution made to the specified fund based on the services rendered by the employees are
charred to Statement of Profit & Loss in the vear in which services are rendered bv the employee.

b. Liability in respect of Defined Long Term benefit plan is determined at the present value of the amounts payable determined using
actuarial valuation techniques performed by an independent actuarial at each balance sheet date usrng the projected unit credit
methods. Re-measurement, comprising actuarial gain and losses, the effects of assets ceiling (if applicable) and the return on plan
assets (excluding interest), is reflected immediately in the statement of Financial Position with a charge or credit recognized in other
comprehensive income in the period in which they occur. Past Service cost is recognized in the statement of profit & loss in the period
of plan amendment

c. Liabilities (or short term employee benefits are measured at undiscounted amount of the benefits expected to be paid and charged to
Statement of Profit & Loss in the year in which the related service is rendered.

H) inventories_____

EMS Limited & EMSTCPJV Private Limited

Inventories i.e. Material at site is valued at Cost Price as well as dosing work ui progress is valued at realizable price and calculated as
per Ind AS 115.

Canary Infrastructure Private Limited ,EMS Green Energy Private Limited & Mirra put GbazJpur STPs Private Limited
Not Applicable being no inventories in the Group.

SKI. EM Water Projects Private Limited

Inventories i.e. Stores and consumables are valued at cost price._

I) Statement of Cash Flows

Cash flows are reported using the indirect method, whereby profit for the period 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 item of income or expenses associated
with investing or financing cash flows. The cash from operating, investing and financing activities of tile Group are segregated.

J) Recent Accounting Standards

Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting
Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from Apnl 1,
2023, as below:

Ind AS 1 - Presentation of Financial Statements

The amendments require companies to disclose their material accounting policies rather than their significant accounting policies.
Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions
of primary users of general purpose financial statements. The Group does not expect this amendment to have any significant impact in
its financial statements,

Ind AS 12 - Income Taxes

The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The
amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it
no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The
Group is evaluating the impact, if am'', in its financial statements,
ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in
accounting estimates has been replaced with a definition Of accounting estimates. Under the new definition, accounting estimates are
"monetary amounts in financial statements that are subject to measurement uncertainty". Entities develop accounting estimates If
accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Group
does not expect this amendment to have any significant impact in its financial statements.

K) Business combinations _ _

flhe Croup accounts tor tb business combinations under acquisition method of accounting. Acquisition related cosls are recognised in

the consolidated statement of profit and loss as incurred. The acquiree''s identifiable assets. Liabilities and contingent liabilities that
meet the condition for recognition are recognised at their fair values at the acquisition date

Purchase consideration paid in excess of the fair value of net assets acquired is recognised as goodwill. Where the fair value of
identifiable assets and liabilities exceed the cost of acquisition, after reassessing the fair values of toe net assets and contingent
liabilities, toe excess is recognised as capital reserve.

The interest of non-controlling shareholders is initially measured either at fair value or at toe non-controlling interests'' proportionate
share ot the acquiree''s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis.
Subsequent to acquisition, the carrying amount of non-con trolling interests Is toe amount of those interests at initial recognition p!u> -
toe non-controlling interests'' share of subsequent changes in equity of subsidiaries. //j;

BqSfrp^i''tjjftfcStwtions arising from transfers of interests in entities that are under common control are accounted at historical cost-The
(^Viascr-bvfjriie^iany consideration given and the aggregate historical carrying amounts of assets and liabilities of toe acninrep
/ uiuiftv is rixord^d ^Shareholders'' eouitv. _ _ . 11—l—i—J •

Hrr-r\ ~ V4*\\ - \