a) Freehold land includes land at Pune and Tamil Nadu, the title deeds of which are in the name of the nominees of the company. Deemed gross book value INR 27.44 Lacs (31st March 2023: INR 27.44 Lacs)

b) Buildings on freehold land includes residential flats, the cost of which includes:

- INR 250 (31st March 2023: INR 250) being the value of 5 Shares (unquoted) of INR 50 each, fully paid up in Sunrise Co-operative Housing Society Limited.

- INR 3,500 (31st March 2023: INR 3,500) being the value of 70 Shares (unquoted) of INR 50 each, fully paid up in Usha Milan Co-operative Society Limited.

c) Buildings on freehold land includes residential flats acquired at Mumbai, the society formation of which is in progress.

Deemed gross book value INR 41.15 Lacs (31st March 2023: INR 41.15 Lacs)

Net book value INR 32.85 Lacs (31st March 2023: INR 33.88 Lacs)

d) Buildings on freehold land includes residential flats comprising of 2 LIG flats (Nos. B-16 and B-17) and 1 MIG flat (No. B-14) at Hosur, the title deeds of which are awaited from authorities.

Deemed gross book value INR Nil (31st March 2023: INR Nil)

Net book value INR Nil (31st March 2023: INR Nil)

e) Buildings on freehold land includes office premises given on operating lease :

Deemed gross book value INR 126.31 Lacs (31st March 2023: INR 125.41 Lacs)

Accumulated depreciation INR 37.76 Lacs (31st March 2023: INR 32.87 Lacs)

Depreciation for the year INR 4.89 Lacs (2022-23: INR 4.76 Lacs)

Net book value INR 88.54 Lacs (31st March 2023: INR 92.54 Lacs)

f) Addition to Property, plant and equipment includes amount of INR 108.01 Lacs (2022-23: INR 157.09 Lacs) pertaining to research and development.

g) Certain property, plant and equipment are given as security for borrowings, the details relating to which have been described in note 18 and note 21

The company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

Significant management judgement is required in determining provision for deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income and the period over which deferred income tax assets will be recovered.

(b) Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of INR 1 per share (Previous year par value of INR 10 per share). Each holder of equity shares 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 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 preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(a) Description of nature and purpose of each reserve

Security premium account: Securities premium account is used to record the premium on issue of shares. Securities premium also includes the difference between the face value of the equity shares and the consideration received in respect of shares issued pursuant to employee stock options scheme. The reserve is utilised in accordance with the provisions of the Act.

Special reserve: Special reserve is created by the company in past as per provision of section 45 - IC of the Reserve Bank of India Act, 1934 for repayment of fixed deposit holders.

General reserve: The company created a General Reserve in earlier years pursuant to the provisions of the Companies Act wherein certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirement to transfer profits to General Reserve is not mandatory. General reserve represents appropriation of retained earnings and are available for distribution to shareholders.

Treasury shares: Treasury shares represents equity shares of the company held by IEI Shareholding (Staff Welfare) Trusts as well as HMIL Shareholding (Staff Welfare) Trusts

(a) Indian rupees loan from financial institution for capital expenditure carries interest rate from 8% p.a. to 10.45% p.a., presently @ 9.35% p.a. as on 31st March 2024. The loan is secured by first charge on movable and immovable fixed assets pertaining to Reverse Osmosis Membrane manufacturing facility project at Goa and is repayable in 20 equal quarterly instalments with moratorium of 6 months from the actual commercial operations date.

(b) Indian rupees loan from financial institution for capital expenditure carries interest rate @ 9.25% p.a. as on 31st March 2024. The loan is secured by first charge on movable and immovable fixed assets pertaining to a Resin manufacturing facility project at Roha, Maharashtra and is repayable in 20 equal quarterly instalments with moratorium of 6 months from the commercial operations date.

(c) Indian rupees loan from a bank for execution of BOOT order from a company and carries interest rate of 9.45% p.a. as on 31st March 2024. The loan is secured by exclusive charge on movable fixed assets and current assets arising out of the said BOOT order and is repayable in 20 equal quarterly instalments with moratorium of 8 quarters from the date of first disbursement.

(d) Indian rupees loan of INR 925 Lacs from a bank for capital expenditure carried interest rate from 10% p.a. to 10.95% p.a. Loan was repayable in 48 months from the date of the first disbursement. The loan was secured by exclusive first charge on three residential properties. The said Indian rupees loan of INR 925 Lacs has been fully repaid during financial year 2023-2024.

(e) Indian rupees loan of INR 1,400 Lacs from a bank for capital expenditure carried interest rate from 8.40% p.a. to 10.25% p.a. Loan was repayable in 48 months from the date of the first disbursement. The loan was secured by exclusive first charge on three residential properties. The said Indian rupees loan of INR 1,400 Lacs has been fully repaid during financial year 2023-2024.

(f) Indian rupee vehicle loans from banks and finance companies @ interest rate from 7.50% to 9.00% p.a. The loans were repayable within a period of 60 months in equal monthly installments along with interest, from the various dates of disbursements. The loans were secured by hypothecation of under lying vehicles. The said Indian rupee vehicle loans have been fully repaid during financial year 2023-2024.

(a) The working capital loan is secured by joint hypothecation of book debts and stocks and collateral security by way of charge on the fixed assets at its manufacturing facilities situated in Hosur, Patancheru, Vashi, Goa, Ankleshwar and Mumbai (Office Premises). The working capital loan is repayable on demand and carries interest @ 7.90% to 10.70% p.a.

(b) The working capital loan raised by amalgamated wholly owned subsidiary, was secured by hypothecation of book debts and stocks and collateral security by way of charge on the movable and immovable fixed assets situated at Wada, Thane. The working capital loan was repayable on demand and carried floating interest @ 15.60 % p.a. The said working capital loan has been fully repaid during financial year 2023-24.

(a) The equity shares of the company were split / sub-divided from 1 equity share of face value of INR 10 each to 10 equity shares of face value of INR 1 each with effect from 12th June 2023 (record date). The basic and diluted earnings per share for the previous year has been restated to give effect of the share split as per Ind AS 33.

38. Employee benefits

A. Gratuity

The company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn basic salary) for each completed year of service. The scheme is funded to a separate trust duly recognised by Income tax authorities.

The following table summarises the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the gratuity plan.

a) Amounts recognised as an expense and included in note 31:

Gratuity in “Contribution to provident and other funds” INR 359.99 Lacs (2022-23: INR 555.69 Lacs).

B. Provident fund

The company's provident fund schemes which are administered through Government of India are defined contribution plan. The company's contribution paid / payable under the scheme is recognised as expense in the statement of profit and loss during the year in which the employee renders the related services. There are no other obligations other than the contribution payable to the respective fund.

The company's provident fund scheme which is managed by trust set up by the company, the contribution to the provident fund is remitted to a separate trust established for this purpose based on a fixed percentage of the eligible employees' salary and charged to statement of profit and loss. Shortfall, if any, in the fund assets, based on the government specified minimum rate of return, will be made good by the company and charged to statement of profit and loss. The actual return earned by the fund has mostly been higher than the government specified minimum rate of return in the past years. There is a shortfall of INR 129.89 Lacs in the fund as on 31st March 2024 as per valuation report, which has been provided for by the company (As on 31st March 2023 shortfall of INR 74.56 Lacs was provided for).

C. Defined contribution plan

Amount recognised as an expense and included in the note 31 - “Contribution to provident and other funds” of the statement of profit and loss INR 932.88 Lacs (2022-23: INR 778.34 Lacs).

D. Other employee benefits

Amounts recognised as an expense and included in note 31

Leave encashment in “Salaries, wages and bonus” INR 562.97 Lacs (2022-23: INR 566.24 Lacs)

E. The net provision for leave encashment liability upto 31st March 2024 is INR 2,511.90 Lacs (31st March 2023: INR 2,222.29 Lacs) Note:

The Indian parliament has approved the Code of Social Security, 2020 (‘the code'), which, inter alia, deals with employee benefits during employment and post-employment. The code has been published in the gazette of India. The effective date of the code and rules thereunder are yet to be notified. In view of this, the impact of the change, if any, will be assessed and recognised post notification of the relevant provisions.

39. Financial instruments

Financial instruments - Fair values and risk management

A. Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels. It does not include the fair value information for current financial assets and current financial liabilities not measured at fair value if their carrying amount is a reasonable approximation of fair value

* Excludes investments measured at cost.

** The company has not disclosed the fair value of current financial instruments such as trade receivables, cash and cash equivalents, bank balances - others, loans, others, borrowings, lease liabilities, trade payables and other financial liabilities because their carrying amounts are a reasonable approximation of fair value.

B. Measurement of fair values

Valuation techniques and significant unobservable inputs

The following table shows the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used. The cost of unquoted investments included in Level 3 of fair value hierarchy approximate their fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

C. Fair value hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in an active market. This includes listed equity instruments, traded debentures and mutual funds that have quoted price / declared NAV. The fair value of all equity instruments (including debentures) which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market (for example, traded bonds/debentures, over the counter derivatives). The fair value in this hierarchy 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 values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. Financial instruments such as unlisted equity shares, loans are included in this hierarchy.

D. Inter level transfers:

There are no transfers between levels 1 and 2 as also between levels 2 and 3 during the year

E. Financial risk management:

The company has exposure to the following risks arising from financial instruments:

Ý Credit risk;

Ý Liquidity risk; and

Ý Market risk

(i) Risk management framework

The company's board of directors has overall responsibility for the establishment and oversight of the company's risk management framework.

The company's risk management policies are established to identify and analyses the risks faced by the company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the company's activities. The company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The audit committee oversees how management monitors compliance with the company's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the major observation are periodically reported to the audit committee.

Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the company's receivables from customers.

Trade receivables

Credit risk is managed through credit approvals and continuously monitoring the creditworthiness of customers to which the company grants credit terms in the normal course of business. In respect of trade receivables, the company is not exposed to any significant credit risk exposure to any single counter party or any group of counterparties having similar characteristics. Trade receivables consist of a large number of customers in various geographical areas. The company assesses the credit quality of the customer based on market intelligence, past payment history and defaults.

Credit risk management procedure includes regular monitoring of outstanding trade receivables to ensure risk of credit loss is minimal.

As per policy, trade receivables are classified into different buckets based on the overdue period. There are different provisioning norms for each bucket which are ranging from 25% to 100%.

Cash and cash equivalents

The company held cash and cash equivalents of INR 11,038.25 Lacs as at 31st March 2024 (as at 31st March 2023: INR 15,861.46 Lacs). The cash and cash equivalents are held with banks with good credit ratings.

Other bank balances

The company held other bank balances equivalents of INR 42,459.04 Lacs as at 31st March 2024 (as at 31st March 2023: INR 35,834.63 Lacs). The other bank balances are mainly temporary surplus fund invested in fixed deposits with banks having good rating and margin money against bank guarantees issued by banks on the company's behalf.

Investments

The company has invested an insignificant amount in listed securities. The company does not expect any losses.

Other financial assets

Other financial assets mainly comprise of tender deposits and security deposits which are given to customers or governmental agencies in relation to contracts bid / execution and are assessed by the company for credit risk on a continuous basis.

(ii) Liquidity risk

Liquidity risk is the risk that the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the company's reputation.

The company has obtained fund and non-fund based working capital limits from various banks. The company invests its temporary surplus funds in bank fixed deposit.

The company is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate risk and certain other price risks, which result from both its operating and investing activities.

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 to the floating rate debt obligations.

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates, in cases where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

Fair value sensitivity analysis for fixed-rate instruments:

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

Cash flow sensitivity analysis for variable-rate instruments:

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased / (decreased) equity and profit or loss by the amount shown below. This analysis assumes that all other variables remain constant.

The risk estimates provided assume a change of 100 basis points interest rate for the interest rate benchmark as applicable to the borrowings summarised above. This 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.

Foreign currency risk

The company is exposed to currency risk on account of its revenue generating and operating activities in foreign currency. The functional currency of the company is Indian Rupee. The exchange rate between the Indian rupee and foreign currencies has changed in recent periods and may continue to fluctuate in the future.

Sensitivity analysis:

A reasonably possible strengthening / weakening of the Indian Rupee against foreign currency at 31st March would have affected the measurement of financial instruments denominated in US dollars and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

40. Disclosure as per Ind AS 115

(a) The company offers wide range of solutions across the water cycle from pre-treatment to process water treatment, waste water treatment, recycle, zero liquid discharge, sewage treatment, packaged drinking water, sea water desalination etc. The company is also engaged in manufacturing resins, speciality chemicals for water and waste water treatment as well as non-water applications.

The type of work in the contracts with the customers involves designing, engineering, supply of materials, installation and commissioning of the plant, project management, operations and maintenance. The effect of initially applying Ind AS 115 on the Company's revenue from contracts with customers is described in Note 1.17.

(b) Revenue disaggregation as per industry vertical and geography has been included in segment information (Refer note 41).

(c) Contract balances

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers in respect of contracts in progress:

(e) Performance obligation

The company evaluates whether each contract consists of a single performance obligation or multiple performance obligations. Contracts where the company provides a significant integration service to the customer by combining all the goods and services are concluded to have a single performance obligations. Contracts with no significant integration service, and where the customer can benefit from each unit on its own, are concluded to have multiple performance obligations. In such cases consideration is allocated to each performance obligation, based on standalone selling prices. Where the company enters into multiple contracts with the same customer, the company evaluates whether the contract is to be combined or not by evaluating factors such as commercial objective of the contract, consideration negotiated with the customer and whether the individual contracts have single performance obligations or not.

The company recognises contract revenue over time as the performance creates or enhances an asset controlled by the customer. For such arrangements revenue is recognised using cost based input methods. Revenue is recognised with respect to the stage of completion, which is assessed with reference to the proportion of contract costs incurred for the work performed at the balance sheet date relative to the estimated total contract costs.

Any costs incurred that do not contribute to satisfying performance obligations are excluded from the company's input methods of revenue recognition as the amounts are not reflective of our transferring control of the plant to the customer. Significant judgment is required to evaluate assumptions related to the amount of net contract revenues, including the impact of any performance incentives, liquidated damages, and other forms of variable consideration.

If estimated incremental costs on any contract, are greater than the net contract revenues, the Company recognises the entire estimated loss in the period the loss becomes known.

Variations in contract work, claims, incentive payments are included in contract revenue to the extent that may have been agreed with the customer and are capable of being reliably measured.

(f) Dividend income is recorded when the right to receive payment is established. Interest income is recognised using the effective interest method.

(g) Revenue from sale of goods is recognises at the point in time when control of the assets is transferred to the customer, generally on delivery of the goods.

(h) Revenue related to fixed price maintenance and support services contracts where the company is standing ready to provide services is recognised based on time elapsed mode and revenue is straight lined over the period of performance.

(i) Reconciliation of revenue recognised in the statement of profit and loss

The following table discloses the reconciliation of amount of revenue recognised: