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.

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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 •

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