l. Provisions

Provisions are recognised when the Company
has a present obligation (legal or constructive)
as a result of a past event and it is probable that
an outflow of resources embodying economic
benefits will be required to settle the obligation
and a reliable estimate can be made of the
amount of the obligation. The expense relating
to a provision is presented in the statement of
profit and loss net of any reimbursement.
Provisions are determined based on the best
estimate required to settle the obligation at the
balance sheet date and measured using the
present value of cash flows estimated to settle
the present obligations (when the effect of time
value of money is material). These are reviewed
at each balance sheet date and adjusted to
reflect the current best estimates. When
discounting is used, the increase in the provision
due to the passage of time is recognised as a
finance cost.

m. Contingent liabilities

A contingent liability is a possible obligation that
arises from past events whose existence will be
confirmed by the occurrence or non-occurrence
of one or more uncertain future events beyond
the control of the Company or a present
obligation that is not recognized because it is
not probable that an outflow of resources will be
required to settle the obligation or the amount of
the obligation cannot be measured with sufficient
reliability. The Company does not recognize a
contingent liability but discloses its existence in
the financial statements, contigent assets are
only disclosed when it is probable that has
economic benefits will flow to the entity.

n. Financial instruments

A financial instrument is any contract that gives
rise to a financial asset of one entity and a
financial liability or equity instrument of another
entity.

Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contractual provisions of the financial
instruments.

i. Financial Assets

All regular way purchases or sales of financial
assets are recognised and derecognised on a
trade date basis. Regular way purchases or sales
are purchases or sales of financial assets that
require delivery of assets within the time frame
established by regulation or convention in the
marketplace.

All recognised financial assets are subsequently
measured in their entierly at either amortised cost
or fair value, depending on the classification of
the financial assets.

Classification of financial assets:

Debt instruments that meet the following
conditions are subsequently measured at
amortised cost (except for debt instruments that
are designated as at fair value through profit or
loss on initial recognition):

• the asset is held within a business model
whose objective is to hold assets in order
to collect contractual cash flows; and

• the contractual terms of the instrument give
rise on specified dates to cash flows that
are solely payments of principal and interest
on the principal amount outstanding.

Debt instruments that meet the following
conditions are subsequently measured at fair
value through other comprehensive income
(except for debt instruments that are designated
as at fair value through profit or loss on initial
recognition):

the asset is held within a business model whose
objective is achieved both by collecting
contractual cash flows and selling financial
assets; and the contractual terms of the
instrument give rise on specified dates to cash
flows that are solely payments of principal and
interest on the principal amount outstanding.

By default, all other financial assets are
measured subsequently at fair value through
profit or loss (FVTPL).

Despite the foregoing, the Company may make
the following irrevocable election / designation
at initial recognition of a financial asset:

• the Company may irrevocably elect to
present subsequent changes in fair value
of an equity investment in other
comprehensive income if certain criteria are
met (see (iii) below); and

• the Company may irrevocably designate a
debt investment that meets the amortised
cost or FVTOCI criteria as measured at
FVTPL if doing so eliminates or significantly
reduces an accounting mismatch (see (iv)
below).All other financial assets are
subsequently measured at fair value."

(i) Amortised cost and effective interest
method:

The effective interest method is a method of
calculating the amortised cost of a debt
instrument and of allocating interest income over
the relevant period.

For financial assets other than purchased or
originated credit-impaired financial assets (i.e.
assets that are credit-impaired on initial
recognition), the effective interest rate is the rate
that exactly discounts estimated future cash
receipts (including all fees and points paid or
received that form an integral part of the effective
interest rate, transaction costs and other
premiums or discounts) excluding expected credit
losses, through the expected life of the debt
instrument, or, where appropriate, a shorter
period, to the gross carrying amount of the debt
instrument on initial recognition. For purchased
or originated credit-impaired financial assets, a
credit-adjusted effective interest rate is calculated
by discounting the estimated future cash flows,
including expected credit losses, to the amortised
cost of the debt instrument on initial recognition.

The amortised cost of a financial asset is the
amount at which the financial asset is measured
at initial recognition minus the principal
repayments, plus the cumulative amortisation
using the effective interest method of any
difference between that initial amount and the
maturity amount, adjusted for any loss allowance.
The gross carrying amount of a financial asset is
the amortised cost of a financial asset before
adjusting for any loss allowance.

Interest income is recognised using the effective
interest method for debt instruments measured
subsequently at amortised cost and at FVTOCI.
For financial assets other than purchased or
originated credit-impaired financial assets,
interest income is calculated by applying the
effective interest rate to the gross carrying
amount of a financial asset, except for financial
assets that have subsequently become credit-
impaired (see below). For financial assets that
have subsequently become credit-impaired,
interest income is recognised by applying the
effective interest rate to the amortised cost of the

financial asset. If, in subsequent reporting
periods, the credit risk on the credit-impaired
financial instrument improves so that the financial
asset is no longer credit-impaired, interest
income is recognised by applying the effective
interest rate to the gross carrying amount of the
financial asset.

For purchased or originated credit-impaired
financial assets, the Company recognises
interest income by applying the credit-adjusted
effective interest rate to the amortised cost of
the financial asset from initial recognition. The
calculation does not revert to the gross basis
even if the credit risk of the financial asset
subsequently improves so that the financial asset
is no longer credit-impaired.

Interest income is recognised in profit or loss and
is included in the 'Other income' line item.

(ii) Debt instruments classified as at FVTOCI:

The debt instruments are initially measured at
fair value plus transaction costs.

Subsequently, changes in the carrying amount of
these debt instruments as a result of foreign
exchange gains and losses (see below),
impairment gains or losses (see below), and
interest income calculated using the effective
interest method (see (i) above) are recognised in
profit or loss. The amounts that are recognised in
profit or loss are the same as the amounts that
would have been recognised in profit or loss if
these debt instruments had been measured at
amortised cost. All other changes in the carrying
amount of these debt instruments are recognised
in other comprehensive income and accumulated
in a separate component of equity. When these
debt instruments are derecognised, the
cumulative gains or losses previously recognised
in other comprehensive income are reclassified
to profit or loss.

Equity instruments designated as at FVTOCI:

On initial recognition, the Company may make
an irrevocable election (on an instrument-by¬
instrument basis) to designate investments in
equity instruments as at FVTOCI. Designation
at FVTOCI is not permitted if the equity
investment is held for trading:

Investments in equity instruments at FVTOCI are
initially measured at fair value plus transaction
costs.

Subsequently, they are measured at fair value
with gains and losses arising from changes in
fair value recognized in other comprehensive

income and accumulated in a separate
component of equity. The cumulative gain or loss
is not reclassified to profit or loss on disposal of
the equity investments, instead, it is transferred
to retained earnings.

Dividends on these investments in equity
instruments are recognised in profit or loss in
accordance with Ind AS 109, unless the
dividends clearly represent a recovery of part of
the cost of the investment. Dividends are
included in the 'Other income' line item in profit
or loss.

The Company designates all investments in
equity instruments that are not held for trading
as at FVTOCI on initial recognition.

A financial asset is held for trading if:

• It has been acquired principally for the
purpose of selling it in the near term; or

• On initial recognition it is part of a portfolio
of identified financial instruments that the
Company manages together and has a
recent actual pattern of short-term profit¬
taking;

(iv) Financial assets at fair value through
profit or loss (FVTPL):

Financial assets that do not meet the criteria for
being measured at amortised cost or FVTOCI
(see (i) to (iii) above) are measured at FVTPL.
Specifically:

• Investments in equity instruments are
classified as at FVTPL, unless the
Company designates an equity investment
that is neither held for trading (see (iii)
above).

• Debt instruments that do not meet the
amortised cost criteria or the FVTOCI
criteria (see (i) and (ii) above) are classified
as at FVTPL. In addition, debt instruments
that meet either the amortised cost criteria
or the FVTOCI criteria may be designated
as at FVTPL upon initial recognition if such
designation eliminates or significantly
reduces a measurement or recognition
inconsistency (so called 'accounting
mismatch') that would arise from measuring
assets or liabilities or recognising the gains
and losses on them on different bases. The
Company has not designated any debt
instruments as at FVTPL.

Financial assets at FVTPL are measured at fair
value at the end of each reporting period, with
any fair value gains or losses recognised in profit
or loss. The net gain or loss recognised in profit

or loss includes any dividend or interest earned
on the financial asset and is included in the 'other
income' line item.

Foreign exchange gains and losses:

The carrying amount of financial assets that are
denominated in a foreign currency is determined
in that foreign currency and translated at the spot
rate at the end of each reporting period.
Specifically:

• for financial assets measured at amortised
cost that are not part of a designated
hedging relationship, exchange differences
are recognised in profit or loss in the 'other
income' line item ;

• for debt instruments measured at FVTOCI
that are not part of a designated hedging
relationship, exchange differences on the
amortised cost of the debt instrument are
recognised in profit or loss in the 'other
income' line item. As the foreign currency
element recognised in profit or loss is the
same as if it was measured at amortised
cost, the residual foreign currency element
based on the translation of the carrying
amount (at fair value) is recognised in other
comprehensive income in a separate
component of equity;

• for financial assets measured at FVTPL that
are not part of a designated hedging
relationship, exchange differences are
recognised in profit or loss in the 'other
income' line item as part of the fair value
gain or loss; and

• for equity instruments measured at
FVTOCI, exchange differences are
recognised in other comprehensive income
in a separate component of equity.

Impairment of financial assets:

The Company recognises a loss allowance for
expected credit losses on investments in debt
instruments that are measured at amortised cost
or at FVTOCI, lease receivables, trade receivables
and contract assets, financial guarantee contracts,
and certain other financial assets measured at
amortised cost such as deferred consideration
receivable on disposal of subsidiaries. The amount
of expected credit losses is updated at each
reporting date to reflect changes in credit risk since
initial recognition of the respective financial
instrument.

Expected credit losses are the weighted average
of credit losses with the respective risks of default
occurring as the weights. Credit loss is the

difference between all contractual cash flows that
are due to the Company in accordance with the
contract and all the cash flows that the Company
expects to receive (i.e. all cash shortfalls),
discounted at the original effective interest rate (or
credit-adjusted effective interest rate for purchased
or originated credit-impaired financial assets). The
Company estimates cash flows by considering all
contractual terms of the financial instrument (for
example, prepayment, extension, call and similar
options) through the expected life of that financial
instrument.

The Company measures the loss allowance for
a financial instrument at an amount equal to the
lifetime expected credit losses if the credit risk
on that financial instrument has increased
significantly since initial recognition. If the credit
risk on a financial instrument has not increased
significantly since initial recognition, the
Company measures the loss allowance for that
financial instrument at an amount equal to 12-
month expected credit losses. 12-month
expected credit losses are portion of the life-time
expected credit losses and represent the lifetime
cash shortfalls that will result if default occurs
within the 12 months after the reporting date and
thus, are not cash shortfalls that are predicted
over the next 12 months. For trade receivables,
the Company always measures the loss
allowance at an amount equal to lifetime
expected credit losses.

Further, for the purpose of measuring lifetime
expected credit loss allowance for trade
receivables, the Company has used a practical
expedient method as permitted under Ind AS
109. This expected credit loss allowance is
computed based on a provision matrix which
takes into account historical credit loss
experience and adjusted for forward-looking
information.

De-recognition of financial assets:

The Company derecognises a financial asset
only when the contractual rights to the cash flows
from the asset expire, or when it transfers the
financial asset and substantially all the risks and
rewards of ownership of the asset to another
entity. If the Company neither transfers nor
retains substantially all the risks and rewards of
ownership and continues to control the
transferred asset, the Company recognises its
retained interest in the asset and an associated
liability for amounts it may have to pay. If the
Company retains substantially all the risks and
rewards of ownership of a transferred financial
asset, the Company continues to recognise the

financial asset and also recognises a
collateralized borrowing for the proceeds
received.

On derecognition of a financial asset measured
at amortised cost, the difference between the
asset's carrying amount and the sum of the
consideration received and receivable is
recognised in profit or loss. In addition, on
derecognition of an investment in a debt
instrument classified as at FVTOCI, the
cumulative gain or loss previously accumulated
in a separate component of equity is reclassified
to profit or loss. In contrast, on derecognition of
an investment in an equity instrument which the
Company has elected on initial recognition to
measure at FVTOCI, the cumulative gain or loss
previously accumulated in a separate component
of equity is not reclassified to profit or loss, but is
transferred to retained earnings."

Financial liabilities and equity instruments
Classification as debt or equity:

Debt and equity instruments issued by the
Company are classified as either financial
liabilities or as equity in accordance with the
substance of the contractual arrangements and
the definitions of a financial liability and an equity
instrument.

Equity instruments:

An equity instrument is any contract that
evidences a residual interest in the assets of an
entity after deducting all of its liabilities. Equity
instruments issued by the Company are
recognised at the proceeds received, net of direct
issue costs. Repurchase of the Company's own
equity instruments is recognised and deducted
directly in equity. No gain or loss is recognised
in profit or loss on the purchase, sale, issue or
cancellation of the Company's own equity
instruments.

All financial liabilities are measured subsequently
at amortised cost using the effective interest
method or at FVTPL.

However, financial liabilities that arise when a
transfer of a financial asset does not qualify for
derecognition or when the continuing
involvement approach applies, and financial
guarantee contracts issued by the Company, are
measured in accordance with the specific
accounting policies set out below.

Financial Liabilities at FVTPL:

Financial liabilities are classified as at FVTPL
when the financial liability is (i) held for trading
or (ii) it is designated as at FVTPL.

A financial liability is classified as held for trading
if:

• it has been acquired principally for the
purpose of repurchasing it in the near term;
or

• on initial recognition it is part of a portfolio
of identified financial instruments that the
Company manages together and has a
recent actual pattern of short-term profit¬
taking.

A financial liability other than a financial liability
held for trading may be designated as at FVTPL
upon initial recognition if:

• such designation eliminates or significantly
reduces a measurement or recognition
inconsistency that would otherwise arise;

• or the financial liability forms part of a group
of financial assets or financial liabilities or
both, which is managed and its
performance is evaluated on a fair value
basis, in accordance with the Company's
documented risk management or
investment strategy, and information about
the grouping is provided internally on that
basis;

Financial liabilities at FVTPL are measured at
fair value, with any gains or losses arising on
changes in fair value recognised in profit or loss
The net gain or loss recognised in profit or loss
incorporates any interest paid on the financial
liability and is included in the 'other income' line
item in profit or loss.

However, for financial liabilities that are
designated as at FVTPL, the amount of change
in the fair value of the financial liability that is
attributable to changes in the credit risk of that
liability is recognised in other comprehensive
income, unless the recognition of the effects of
changes in the liability's credit risk in other
comprehensive income would create or enlarge
an accounting mismatch in profit or loss. The
remaining amount of change in the fair value of
liability is recognised in profit or loss. Changes
in fair value attributable to a financial liability's
credit risk that are recognised in other
comprehensive income are recognised in
retained earnings. Gains or losses on financial
guarantee contracts issued by the Company that
are designated by the Company as at FVTPL
are recognised in profit or loss.

Financial liabilities subsequently measured at
amortised cost:

Financial liabilities that are not held-for-trading
or designated as at FVTPL, are measured

subsequently at amortised cost using the
effective interest method.

The effective interest method is a method of
calculating the amortised cost of a financial
liability and of allocating interest expense over
the relevant period. The effective interest rate is
the rate that exactly discounts estimated future
cash payments (including all fees and points paid
or received that form an integral part of the
effective interest rate, transaction costs and other
premiums or discounts) through the expected life
of the financial liability, or (where appropriate) a
shorter period, to the amortised cost of a financial
liability.

Foreign exchange gains and losses:

For financial liabilities that are denominated in a
foreign currency and are measured at amortised
cost at the end of each reporting period, the
foreign exchange gains and losses are
determined based on the amortised cost of the
instruments. These foreign exchange gains and
losses are recognised in the 'other income' line
item in profit or loss for financial liabilities.

The fair value of financial liabilities denominated
in a foreign currency is determined in that foreign
currency and translated at the spot rate at the
end of the reporting period. For financial liabilities
that are measured as at FVTPL, the foreign
exchange component forms part of the fair value
gains or losses and is recognised in profit or loss
for financial liabilities.

Derecognition of financial liabilities:

The Company derecognises financial liabilities
when, and only when, the Company's obligations
are discharged, cancelled or have expired. The
difference between the carrying amount of the
financial liability derecognised and the
consideration paid and payable is recognised in
profit or loss.

When the Company exchanges with the existing
lender one debt instrument into another one with
the substantially different terms, such exchange
is accounted for as an extinguishment of the
original financial liability and the recognition of a
new financial liability. Similarly, the Company
accounts for substantial modification of terms of
an existing liability or part of it as an
extinguishment of the original financial liability
and the recognition of a new liability. It is
assumed that the terms are substantially different
if the discounted present value of the cash flows
under the new terms, including any fees paid
net of any fees received and discounted using
the original effective rate is at least 10 per cent

Offsetting of financial instruments

Financial assets and financial liabilities are offset
and the net amount is reported in the balance
sheet if there is a currently enforceable legal right
to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the
assets and settle the liabilities simultaneously.

o. Cash and cash equivalents

Cash comprises of cash on hand and demand
deposits with banks. Cash Equivalents are short
term balances (with an original maturity of three
months or less from the date of acquisition),
highly liquid investments that are readily
convertible into known amounts of cash which
are subject to an insignificant risk of changes in
value. Bank balances other than the balance
included in cash and cash equivalents represents
balance on account of unpaid dividend and
margin money deposit with banks.

p. Dividend

Final dividends on shares are 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
Board of Directors of the Company. The
Company declares and pays dividends in Indian
rupees and are subject to applicable taxes

q. Cash Flow statement

Cash flows are reported using the indirect
method, whereby profit / (loss) after tax is
adjusted for the effects of transactions of non¬
cash nature and any deferrals or accruals of past
or future cash receipts or payments. The cash
flows from operating, investing and financing
activities of the Company are segregated based
on the available information.

r. Earnings per share

Basic earnings per share is computed by dividing
the profit / (loss) after tax by the weighted
average number of equity shares outstanding
during the year. Diluted earnings per share is
computed by dividing the profit / (loss) after tax
as adjusted for dividend, interest and other
charges to expense or income relating to the
dilutive potential equity shares, by the weighted
average number of equity shares considered for
deriving basic earnings per share and the
weighted average number of equity shares which
could have been issued on the conversion of all
dilutive potential equity shares. Potential equity
shares are deemed to be dilutive only if their
conversion to equity shares would decrease the
net profit per share from continuing ordinary
operations. Potential dilutive equity shares are
deemed to be converted as at the beginning of
the period, unless they have been issued at a
later date. The dilutive potential equity shares
are adjusted for the proceeds receivable had the
shares been actually issued at fair value (i.e.
average market value of the outstanding shares).
Dilutive potential equity shares are determined
independently for each period presented. The
number of equity shares and potentially dilutive
equity shares are adjusted for share splits /
reverse share splits and bonus shares, as
appropriate.

t. Leases

The Company 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 Company assesses whether:
(1) the contract involves the use of an identified
asset (2) the Company has substantially all of
the economic benefits from use of the asset
through the period of the lease and (3) the
Company has the right to direct the use of the
asset.

At the date of commencement of the lease, the
Company recognizes a right-of-use asset
(“ROU”) and a corresponding lease liability for
all lease arrangements in which it is 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 leases, the
Company recognizes the lease payments as an
operating expense on a straight-line basis over
the term of the lease.

Certain lease arrangements includes the options
to extend or terminate the lease before the end
of the lease term. ROU assets and lease liabilities
includes these options when it is reasonably
certain that they will be exercised.

The right-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 to 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

Right-of-use assets are depreciated from the
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, the
recoverable amount (i.e. the higher of the fair
value less cost to sell and the valuein-use) is
determined on an individual asset basis unless
the asset does not generate cash flows that are
largely independent of those from other assets.
In such cases, the recoverable amount is
determined for the Cash Generating Unit (CGU)
to which the asset belongs. Refer to the
accounting policies in section (i) impairement of
non financial assets.

The lease liability is initially measured at
amortized cost at the present value of the future
lease payments. The lease payments are
discounted using the interest rate implicit in the
lease or, if not readily determinable, using the
incremental borrowing rates in the country of
domicile of the leases. Lease liabilities are
remeasured with a corresponding adjustment to
the related right of use asset if the Company
changes its assessment if whether it will exercise
an extension or a termination option.

Short-term leases

The Company applies the short-term lease
recognition exemption to its short-term leases
(i.e., those leases that have a lease term of 12
months or less from the commencement date

and do not contain a purchase option). Lease
payments on short-term leases are recognised
as expense on a straight-line basis over the lease
term.

u. Segment reporting

Operating segments reflect the Company's
management structure and the way the financial
information is regularly reviewed by the
Company's Chief operating decision maker
(CODM). The CEO of the company has been
identified as the Chief Operating Decision Maker
(CODM) as defined by Ind AS 108, Operating
Segments. The CODM considers the business
from both business and product perspective
based on the dominant source, nature of risks
and returns and the internal organisation and
management structure. The operating segments
are the segments for which separate financial
information is available and for which operating
profit / (loss) amounts are evaluated regularly
by the CODM in deciding how to allocate
resources and in assessing performance.

The accounting policies adopted for segment
reporting are in line with the accounting policies
of the Company. Segment revenue, segment
expenses, segment assets and segment

liabilities have been identified to segments on
the basis of their relationship to the operating
activities of the segment.

Inter-segment revenue, where applicable, is
accounted on the basis of transactions which are
primarily determined based on market / fair value
factors.

Revenue, expenses, assets and liabilities which
relate to the Company as a whole and are not
allocable to segments on reasonable basis have
been included under “unallocated revenue /
expenses / assets / liabilities”.

v. Provision for Warranty

The estimated liability for product warranties is
recorded when products are sold. These
estimates are established using historical
information on the nature, frequency and
average cost of warranty claims and
management estimates regarding possible future
incidence based on corrective actions on product
failures. The timing of outflows will vary as and
when warranty claim will arise.

Standards notified but not yet effective

There are no standards that are notified and not yet
effective as on the date.

Nature and purpose of reserves
Securities Premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes
such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

Capital reserve

A scheme of amalgamation of Maharashtra Weldaids Limited (MWL) with the Company, with effect from April 1, 1992,
became effective on February 18, 1994. Accordingly, the results of MWL have been incorporated in the results of the
Company in the financial year ended March 31, 1994. On amalgamation the assets, liabilities and reserves of MWL have
been incorporated at that Company's book values and the net difference between such values and the net consideration is
accounted for as Capital reserve.

General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a
specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a
dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total
dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act
2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.
However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific
requirements of Companies Act, 2013.

Retained Earnings

Retained earnings are the profits / (loss) that the Company has earned/incurred till date, less any transfers to general
reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on
defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.

31. Significant accounting judgements, estimates and assumptions

The preparation of the Company's Financial Statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result
in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Other disclosures relating to the Company's exposure to risks and uncertainties includes:

• Financial risk management objectives and policies Note 39

• Capital management Note 40

Judgements

In the process of applying the Company's accounting policies, management has not made any judgement, which has
significant effect on the amounts recognised in the Financial Statements.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are described below. The Company based its assumptions and estimates on parameters available when
the financial statements were prepared. Existing circumstances and assumptions about future developments, however,
may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes
are reflected in the assumptions when they occur.

Provision for expected credit losses of trade receivables

The Company uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on days
past due for groupings of various customer segments that have similar loss patterns. The provision matrix is initially
based on the Company's historical observed default rates. The Company will calibrate the matrix to adjust the historical

credit loss experience with forward-looking information. At every reporting date, the historical observed default rates are
updated and changes in the forward-looking estimates are analysed. The information about the ECLs on the Company's
trade receivables is disclosed in Note 8.

Allowances for slow / Non-moving Inventory and obsolescence:

An allowance for Inventory is recognised for cases where the realisable value is estimated to be lower than the inventory
carrying value. The inventory allowance is estimated taking into account various factors, including prevailing sales
prices of inventory item and losses associated with obsolete / slow-moving / redundant inventory items. The Company
has, based on these assessments, made adequate provision in the books.

Deferred income taxes

The Company's tax expense for the year is the sum of the total current and deferred tax charges. The calculation of the
total tax expense necessarily involves a degree of estimation and judgement in respect of certain items. A deferred tax
asset is recognised when it has become probable that future taxable profit will allow the deferred tax asset to be
recovered. Recognition, therefore involves judgement regarding the prudent forecasting of future taxable gains and
profits of the business.

Defined benefit plans

The cost of the defined benefit plan and other post-employment benefits and the present value of the obligation are
determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from
actual developments in the future. These include the determination of the discount rate, future salary increases and
mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details
about defined benefit obligations are given in Note 33.

A. Gratuity plan

The Company has a defined benefit gratuity plan for employees which requires contributions to be made to a separately
administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972 ("Act"). Under the Act, every
employee who has completed five years or more of service is entitled to this Gratuity payment, on departure, of 15
days' salary (last drawn salary) for each completed year of service subject to a maximum of Rs. 20 lakhs. The
Company has established a trust to setup an employee group gratuity scheme for providing gratuity benefits to eligible
employees as per the rules of the scheme. The gratuity scheme is funded with Life Insurance Corporation of India
("LIC") for the purpose of providing gratuity benefits to its employees. The Trust is administered by the Board of
Trustees, which is responsible for the administration of the plan assets. The present value of the defined benefit
obligation, and the related current service cost, were measured using the projected unit credit method.

B. Pension fund

The Company has a defined benefit pension plan for employees which requires contributions to be made to a separately
administered fund. The pension benefits payable to the employees are based on the employee's service and last drawn
salary at the time of leaving. The employees do not contribute towards this plan and the full cost of providing these
benefits are met by the Company. The Company has setup an income tax approved irrevocable trust fund to finance the
plan liability. The Company has funded the defined benefit obligation with Life Insurance Corporation of India.
The present value of the defined benefit obligation, and the related current service cost, were measured using the
projected unit credit method.

Notes:

(i) The Company is contesting the demands and the Management, including its tax advisors, believe that it is possible,
but not probable, the action will succeed and accordingly no provision for liability has been recognised in the
financial statements.

(ii) The timing of the outflow in respect of the above are determinable only on receipt of judgements/decisions pending
before various forums / authorities. The aforesaid amounts do not include any interest to the extent it has not been
determined.

(iii) From time to time, the Company is involved in claims and legal matters arising in the ordinary course of business.
Management is not currently aware of any matters that will have a material adverse effect on the financial position,
results of operations, or cash flows of the Company.

(iv) Excise duty / Service tax cases includes disputes pertains to determination of assessable value, short payment of
service tax on expenditure incurred in foreign currency, inadmissibility of CENVAT credit and applicability of service
tax under reverse charge mechanism, etc.

(v) Income tax cases pertains to disallowance of expenses, etc.

(vi) Sales tax case pertains to reversal of Input Tax Credit on inter-state sales.

(vii) Other cases includes dispute pertains to Non-submission of Bill of Entries under Foreign Exchange Management
Act, 1999 etc.

** Amount is less than the rounding off norm adopted by the Company

*** ESAB corporation, USA being an ultimate holding company of ESAB India Limited, has given a corporate guarantee for
securing the working capital facility from JP Morgan, Chase Bank, N.A.

**** EWAC Alloys Limited, India being a fellow subsidiary of ESAB India Limited, have given 2 surety bonds in favour of
Assistant Director, Directorate of Enforcement, Mumbai in respect of appeal pending in Appellate Tribunal of foreign
exchange pertaining to non-submission of Bill of Entry.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm's length
transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.
There have been no guarantees provided or received for any related party receivables or payables. For the year ended
March 31, 2025, the Company has not recorded any impairment of receivables relating to amounts owed by related
parties (March 31,2024: Nil). This assessment is undertaken each financial year through examining the financial position
of the related party and the market in which the related party operates.

The investment in unquoted equity shares (Level 3 in the fair value hierarchy) of the company consists of third party
power companies invested at face value as per statutory requirements.

There have been no transfers between the level 1, level 2 and level 3 during the period.

In determining fair value measurement, the impact of potential climate-related matters, including legislation, which may
affect the fair value measurement of assets and liabilities in the financial statements has been considered. At present,
the impact of climate-related matters is not material to the Company's financial statements.

38. Fair values

The management considers that the carrying amounts of financial assets and financial liabilities recognised in the
financial statements approximate their fair values. Refer note 41 for the value of all financial instruments

39. Major Financial risk management objectives

The Company is exposed to certain financial risks that could have significant influence on the Company's business and
operational/ financial performance. These include market risk (including commodity price risk, currency risk and interest
rate risk), credit risk and liquidity risk.

The Management reviews and approves risk management framework and policies for managing these risks and monitor
suitable mitigating actions taken by the management to minimise potential adverse effects and achieve greater
predictability to earnings.

In line with the overall risk management framework and policies, the treasury function provides services to the business,
monitors and manages through an analysis of the exposures by degree and magnitude of risks. The Company does not
enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The Board
of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

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: commodity price risk, currency risk and interest rate risk.

Commodity Price Risk

The Company is exposed to commodity price risks primarily on Steel and Minerals. Price and supply disruptions arising
from geopolitical and other developments could affect the Company's financial assets, profitability and future cash
flows. The Company reviews its commercial arrangements with suppliers and customers at periodic intervals to adapt
to changes arising from commodity price and availability risks.

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes
in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily
to the Company's operating activities like import of raw materials, components and capital goods from outside India,
incurs few expenditure as well as make export sales to countries outside India.

Unhedged foreign currency

The carrying amounts in Indian Rupees of the Company's foreign currency denominated monetary assets and monetary
liabilities at the end of the reporting period are as follows:

Forward Exchange Contracts

There are no forward foreign exchange contracts outstanding as at 31 March 2025.

Interest rate risk

The Company is not exposed to interest rate risk because there are no borrowings.

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 deposits with banks and financial institutions. The Company has adopted a policy of dealing
only with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults.

Trade receivables consist of a large number of customers, spread across India. Ongoing credit evaluation is performed on
the financial condition of accounts receivable.

a. Trade receivables

Customer credit risk is managed by the company subject to the Company's established policy, procedures and control
relating to customer credit risk management.

An impairment analysis is performed at each reporting date using a provision matrix based on transaction date to
measure expected credit losses. The calculation reflects the probability-weighted outcome and reasonable and supportable
information that is available at the reporting date about past events, current conditions and forecasts of future economic
conditions. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial
assets disclosed in Note 41. The Company evaluates the concentration of risk with respect to trade receivables as low,
as its customers are located in several jurisdictions and industries and operate in largely independent markets.

b. Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company's treasury department in
accordance with the Company's policy. Investments of surplus funds are made only with approved counterparties and
within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company's Board of
Directors on an annual basis and may be updated throughout the year subject to approval of the Company's Finance
Committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through
counterparty's potential failure to make payments.

The Company invests only on quoted liquid mutual funds with very low credit risk, which are classified under fair value
through profit and loss. The Company's maximum exposure to credit risk for the components of the balance sheet at 31
March 2025 and 31 March 2024 is the carrying amounts as illustrated in Note 7.

Liquidity risk

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and by continuously monitoring
forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The Company manages liquidity risk by maintaining sufficient cash and cash equivalents including bank deposits and availability
of funding through an adequate amount of committed credit facilities to meet the obligations when due. Management monitors
rolling forecasts of liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity
management also involves projecting cash flows considering level of liquid assets necessary to meet obligations by matching
the maturity profiles of financial assets & liabilities and monitoring balance sheet liquidity ratios.

40. Capital management

The Company manages capital risk in order to maximize shareholders' profit by maintaining sound/optimal capital
structure. For the purpose of the Company's capital management, capital includes equity share Capital and Other
Equity and Debt includes Borrowings and Current Maturities of Long term Debt net of Cash and bank balances and
short term investments. The Company monitors capital on the basis of the following gearing ratio. There is no change
in the overall capital risk management strategy of the Company compared to last year.

43 Segment information

ESAB India Limited (‘the Company’) operates in the segment of fabrication technology. This includes
manufacturing and selling of welding, cutting and allied products and also provides engineering, support
and consulting services.

As defined in Ind AS 108, the chief operating decision maker (CODM), evaluates the Company’s performance,
allocate resources based on the analysis of the various performance indicator of the Company as a single
unit. Therefore, there is no reportable segment for the Company as per the requirement of Ind AS 108
“Operating Segments”.

(iii) The Company does not have any transactions with companies struck off under sec 248 of the Companies

Act, 2023 or Section 560 of the Companies Act, 1956 during the financial year. (March 31,2024:Nil)

(iv) The Company has not been declared as wilful defaulter by any bank or financial institution or other
lender.

. (v) The Company does not have any charges or satisfaction which is yet to be registered with ROC

beyond the statutory period.

(vi) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial
year. (March 31,2024: Nil)

(vii) The Company has 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 i ndirectly 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.

(viii) The Company has 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 i ndirectly 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. (March 31,
2024: Nil)

(ix) The Company does not have any such transaction which is not recorded in the books of accounts that
has been surrendered or disclosed as income during the year in the tax assessments under the
Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax
Act, 1961).

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

45. Others

As per the requirement of the rule 3(1) of the Companies (Accounts) Rules, 2014, the Company uses only
such accounting softwares for maintaining its books of account that have a feature of recording audit trail of
each and every transaction creating an edit log of each change made in the books of accounts except that
(i) in respect of a software operated by a third party software service provider, for maintaining payroll
records, in the absence of service organisation control report covering the audit trail requirement for the
period 1 January 2025 to 31 March 2025, we are unable to comment whether the audit trail feature of the

said software was enabled and operated. The Company has established and maintained an adequate
internal control framework over its financial reporting and based on its assessment, has concluded that the
internal controls for the year ended 31 March 2025 were effective.

Additionally, the audit trail that was enabled and operated for part period during the year ended 31 March
2024, has been preserved by the Company as per the statutory requirements for record retention for the
period it was enabled.

46. Events after the reporting period

The board of directors have proposed dividend after the balance sheet date which are subject to approval
by the shareholders at the annual general meeting. Refer note 15 for details.

As per our report of even date attached For and on behalf of the Board of Directors of ESAB INDIA LIMITED

For Deloitte Haskins & Sells Rohit Gambhir N Ramesh Rajan

Chartered Accountants Managing Director Director

Firm Registration No. 008072S DIN: 06686250 DIN: 01628318

P Usha Parvathy B Mohan G Balaji

Partner Director & Chief Financial Officer Company Secretary

Membership No. 207704 DIN: 00261434

Place: Chennai
Date : May 27, 2025