Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of ' 10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting except for Interim dividend. 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. The distribution will be in proportion to the number of equity shares held by the shareholder.

(i) The balance unexercised equity shares held by the ESOP Trust at the end of the year had been reduced against the share capital as if the trust is administered by the Company itself. The securities premium related to the unexercised equity shares held by the trust at the close of the year amounting to ' 355.60 Lakhs (March 31,2022 : ' 355.60 Lakhs) has been reduced from securities premium account and adjusted against the loan outstanding from the ESOP Trust.

(ii) The shareholders of the Company, at their meeting held on September 27, 2021 had approved the "Asian Energy Services Limited - Employee Stock Option Plan - 2021" ("AESL ESOP 2021") authorizing grant of maximum 380,744 stock options to the eligible employees. During the current year, the Company has granted 380,000 (March 31,2022: Nil) employee stock options to the eligible employees including that of group company pursuant to such scheme.

(iii) During the current year, no stock options were exercised (March 31,2022: 320,186 stock options).

(iv) During the current year, no equity shares of the Company were purchased by the ESOP trust vide open market transactions (March 31,2022: 320,186 equity shares).

(a) Nature of security and terms of repayment of long term borrowings

The Company has availed vehicle loans. Interest rate charged is fixed at 9.90% p.a for all loans except one loan which is at fixed rate of 10% p.a. The vehicles financed through such borrowing are forming part of the property, plant and equipment and have been hypothecated for the said borrowings. The borrowings will be repaid by the Company in equal predetermined instalments over a period of 48 months from the borrowing origination date.

(b) Working capital facilities from bank

(i) Working capital loan is secured by way of lien on certain fixed deposits and counter indemnity, hypothecation of stock and book debts of the Company. The facility is also secured by way of personal security of Kapil Garg (Director), Ritu Garg (Promoter) and Aman Garg (relative of promoter and director). The interest rate applicable to the facility is computed using 1 year MCLR plus spread (11.05 % p.a. as on March 31,2023). This loan is repayable on demand. Further, Oilmax Energy Private Limited has also provided a Corporate Guarantee to the bankers towards such working capital facilities.

(ii) The quarterly returns/statements of current assets filed by the Company with bank is in agreement with the books of accounts for all the quarters in which such returns/statements were required to be filed by the Company except for following instance:

2. Other monies for which the Company is contingently liable:

(b) The Hon’ble Supreme Court of India ("SC") by their order dated February 28, 2019, in the case of Surya Roshani Limited & others v/s EPFO, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Due to numerous interpretation issues relating to the applicability of SC judgement for the past period, if any, the impact is not ascertainable at present and consequently no effect has been given in the financial statements.

It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of pending resolution of the respective proceedings, as it is determined only on receipt of judgements/decisions pending with various authorities.

33. DISCLOSURES PERTAINING TO IND AS 116 - LEASES

The Company has lease contracts for its office premises and oilfield equipment. Generally, the Company is restricted from

assigning the leased assets. The Company’s obligation under its leases are secured by the lessor’s title to leased assets.

1. Recognition and derecognition Right-of-use assets:

(i) The Company has de-recognized right-of-use assets of Nil (March 31,2022: ' 30.34 Lakhs) during the year on account of changes in terms of the lease arrangements.

(ii) The net carrying value of right-of-use assets as at March 31, 2023 amounts to ' 299.13 Lakhs (March 31, 2022: ' 365.02 Lakhs) and has been disclosed separately in note 4 to the standalone financial statements.

2. The Company has recognized the following expenses in the Statement of Profit and Loss:

(i) Depreciation expense from right-of-use assets of ' 418.82 Lakhs (March 31,2022: ' 350.73 Lakhs) (Refer note 4).

(ii) Interest on lease liabilities of ' 18.60 Lakhs (March 31,2022: ' 15.57 Lakhs) (Refer note 27).

(iii) Expense amounting to ' 1,035.60 Lakhs (March 31,2022: ' 974.83 Lakhs) related to leases of low-value assets and leases with less than twelve months of lease term. These have been included under machine hire charges, vehicle hire charges and rent expenses (Refer note 25 and note 29).

3. The total net cash outflow for the payment of lease liability and interest is ' 496.17 Lakhs (March 31, 2022: ' 326.00 Lakhs).34. FAIR VALUE MEASUREMENTS

The fair value of financial assets and liabilities is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Fair value hierarchy

Financial assets and financial liabilities measured at fair value in the Balance sheet are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows: Level 1: Prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Fair value of financial assets and liabilities measured at amortized cost

The carrying amounts of trade receivable, cash and cash equivalents, other bank balances, loans, current security deposit, trade payables and other current financial liabilities are considered to be the same as their fair values, due to their short term nature.

The fair value of security deposit has been calculated based on the cash flows discounted using an estimate of current lending rate.

The fixed deposit and non-current borrowing are with highly rated banks and financial institution at fair interest rate, and their carrying values approximates fair value.

Fair value of financial assets measured at FVTPL

The fair values of investments in mutual fund units is based on the net asset value ('NAV') as stated by the issuers of these mutual fund units in the published statements as at reporting date.

Fair value of financial assets at FVTOCI

The fair value of investments carried at FVTOCI is determined, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. The fair value of these investments is categorised as Level 3 because the shares are neither listed on an exchange and there were no recent observable arm's length transactions in the shares.

There are no transfers in either level during the reporting periods.

35. FINANCIAL RISK MANAGEMENT

The Company's activities expose it to credit risk, liquidity risk and market risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements. The Companies risk management is done in close co-ordination with the board of directors and focuses on actively securing the Company's short, medium and long-term cash flows by minimizing the exposure to volatile financial markets. Longterm financial investments are managed to generate lasting returns. The Company does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Company is exposed are described below:

Credit risk

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. The Company is exposed to credit risk from loans and advances to related parties, trade receivables, bank deposits and other financial assets.

Bank deposits are placed with reputed banks / financial institutions. Hence, there is no significant credit risk on such fixed deposits.

The Company does not have significant credit risk from loans given considering these are provided to related parties or to financial institution for shorter duration. Mutual fund investments are made in liquid and overnight plans of renowned asset management company only. The credit risk associated with bank, security deposits and mutual fund investments is relatively low.

The Company trades with recognized and credit worthy third parties. The Company periodically assesses the financial reliability of the counter party, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable.

Credit risk on trade receivables is limited as the Company's customer base majorly includes reputed and large corporate groups and public sector enterprises. It is the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. Also, generally the Company does not enter into sales transaction with customers having credit loss history. In addition, trade receivable balances are monitored on an on-going basis with the result that the Company's exposure to bad debts is not significant. In case of trade receivables due from related parties and in case of disputed trade receivables, the Company performs individual credit risk assessment and creates expected credit loss allowance (ECL) based on internal assessment. Further, the Company computes ECL on undisputed trade receivables at each reporting date, based on provision matrix which is prepared considering historically observed overdue rate over expected life of trade receivables and is adjusted for forward-looking estimates.

Foreign currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD. Foreign exchange risk arises from recognized assets and liabilities denominated in a currency that is not the Companies functional currency. The Companies operations in foreign currency creates natural foreign currency hedge. This results in insignificant net open foreign currency exposures considering the volumes and operations of the Company.

b) For reconciliation of loss allowance on trade receivables, refer note 10.1 Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities - borrowings, trade payables, lease liabilities and other financial liabilities.

The Company’s principal sources of liquidity are cash and cash equivalents, current investments and the cash flow that is generated from operations. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived. The Company closely monitors its liquidity position and maintains adequate source of funding.

Maturities of financial liabilities :

The tables below analyze the Company’s financial liabilities into relevant maturity groupings based on the maturities for all non-derivative financial liabilities. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. For contractual maturities of lease liabilities, refer note 33.

Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and net asset value (NAV) of mutual fund units will affect the Company’s income or the value of its holdings of financial instruments.

Mutual fund price risk

The value of unquoted mutual fund investments measured at fair value through profit and loss as at March 31, 2023 is ' 1,314.93 Lakhs (March 31, 2022: Nil). A 10% change in value for year ended March 31, 2023 would result in an impact of ' 131.49 Lakhs (March 31,2022: Nil).

Interest rate risk

This refers to risk to Company’s cash flow and profits on account of movement in market interest rates.

For the Company the interest risk arises mainly from interest bearing borrowings which are at floating interest rates. To mitigate interest rate risk, the Company closely monitors market interest and as appropriate makes use of hedged products and optimise borrowing mix / composition.

An equal and opposite impact would be experienced in the event of an opposite change in interest rate by a similar percentage. The above calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.

36. CAPITAL MANAGEMENT

The Company objectives when managing capital are to safeguard their ability to continue as a going concern so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal structure to reduce the cost of capital. In order to maintain or adjust the Capital structure, the Company may adjust the amounts of dividends paid to shareholders, return capital to shareholders, issue new shares or sell new assets to reduce debt. The Company does not have externally imposed capital requirements.

37. EMPLOYEE BENEFITS1. Short term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, incentives and allowances, short terms compensated absences, etc., and the expected cost of bonus, ex-gratia are recognized in the year in which the employee renders the related service.

2. Long term employee benefits

(i) Defined benefit plan

Gratuity (funded) :

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service.

The sensitivity analyzes above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the method (Projected Unit Credit Method) used to calculate the liability recognized in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period. Sensitivities due to mortality and turnover are not material and hence impact of change due to these not calculated.

(ii) Defined contribution plan

Provident fund and employee's state insurance corporation

The Company pays fixed contribution to the provident fund, employee's state insurance corporation entities and labour welfare fund in relation to several state plans and insurances for individual employees. This fund is administered by the respective Government authorities, and the Company has no legal or constructive obligations to pay contributions in addition to its fixed contributions, which are recognized as an expense in the year that related employee services are received.

D. Other outstanding arrangement:

Kapil Garg and Ritu Garg have provided personal security towards working capital loan availed by the Company.

The Holding Company has also provided a Corporate Guarantee to the bankers towards working capital facilities availed by the Company. The amount outstanding towards such borrowings is ' 1,557.14 Lakhs as on March 31, 2023 (March 31,2022 : ' 401.17 Lakhs).

^A The figures does not include provision for gratuity since it is actuarially determined for the Company as a whole. Further, 72,736 stock options were granted to KMP during the year.

* The figures are based on contractual arrangement executed and does not include the impact of Ind AS adjustments.

** Provision towards outstanding loan and interest accrued thereon aggregating ' 208.50 Lakhs has been made during the current year.

Notes:

The closing amount pertaining to investment made in subsidiaries and joint ventures is not considered as a part of disclosure on outstanding balance due from subsidiaries.

39. UN-HEDGED FOREIGN CURRENCY EXPOSURES:

For un-hedged foreign currency exposure, refer section 'Foreign currency risk’ under Note 35 - Financial Risk Management.

41. EVENTS OCCURRING AFTER THE REPORTING PERIOD

No adjusting or significant non-adjusting events have occurred between March 31,2023 and the date of authorisation of these standalone financial statements.

42. SEGMENT INFORMATION

(a) The Company publishes standalone financial statements along with the consolidated financial statements. Accordingly, as per Ind AS 108 'Operating Segments’, no disclosures related to the segments are presented in these standalone financial statements.

43. EXPLANATION IN RELATION TO INVESTMENT IN A SUBSIDIARY - ADMCC

As at March 31, 2023, the Company has an investment of ' 651.50 Lakhs ( March 31, 2022 : ' 651.50 Lakhs) in its wholly owned subsidiary company, Asian Oilfield and Energy Services DMCC ('ADMCC'). Also, the Company has payable of ' 436.89 Lakhs (USD 531,391) as on March 31,2023 [March 31,2022: ' 774.47 Lakhs (USD: 1,021,627)] to ADMCC. In the current year, ADMCC has incurred losses amounting to ' 3,806.81 Lakhs (USD 4,735,349) and the contract with its only customer has been terminated. ADMCC has contractual right to receive the outstanding amount from its customer towards the work carried out till the date of suspension of work, in addition to other remedies available under the contract. The customer of ADMCC has been settling its obligations on regular basis and post suspension of project, ADMCC has been able to realise significant amount of its receivables. At present, such customer is in advance stage of carrying out novation of one of the vendor’s balance of ' 2,119.34 Lakhs (USD 2,577,744), pursuant to which the project liability and customer receivable shall reduce with an equivalent amount. ADMCC is confident of the recoverable value of its property, plant and equipment and has some capital assets that are completely depreciated, but because of their utility, these assets have a value that is higher than the salvage amount. The management remains positive regarding realization of project related assets and settling project related liabilities based on discussion with the aforesaid customer as part of its overall settlement. As at March 31, 2023, the net worth of ADMCC is ' 893.84 Lakhs (USD 1,087,169) which is higher than the carrying value of investment in the books of the Company.

Basis the facts mentioned above and considering the expected settlement between ADMCC and its customer in foreseeable future, management is confident of realising the value of its investments in ADMCC and accordingly no impairment has been recognized in the standalone financial statements.

f) Cost to obtain or fulfil the contract:

(i) Amount of amortization recognized in Statement of Profit and Loss during the year : Nil (March 31,2022: Nil)

(ii) Amount recognized as contract assets in relation to cost incurred for obtaining contract as at March 31, 2023 : Nil (March 31,2022: Nil)

g) In the normal course of business, the payment terms given to majority of the customers ranges from 30 to 60 days. 46. CODE ON SOCIAL SECURITY, 2020

The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period in which the Code becomes effective.

48. OTHER STATUTORY INFORMATION AS PER SCHEDULE III TO THE ACT

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any transactions with Companies whose name has been struck off from the register of Companies.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with registrar of Companies beyond the statutory period.

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

(v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

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

These are the summary of significant accounting policies and other explanatory information referred to in our report of even date.