A. COMPANY OVERVIEW
BGR Energy Systems Limited ('the Company’) Is a public limited company Incorporated under the provisions of the Companies Act, 1956. Its equity
shares are listed on Bombay Stock Exchange ('BSE') and National Stock Exchange ('NSE').The Company Is a manufacturer of capital equipment for
Power Plants, Petrochemical Industries, Refineries, Process Industries and undertakes turnkey Balance of Plant ('BOP') and Engineering Procurement
and Construction ('EPC') contracts for Power plants. The Company has been achieving Its objectives through Its five business units: Power projects,
Electrical projects, Oil and Gas equipment, Environmental engineering and Air Fin Coolers.
The standalone financial statements for the year ended March 31, 2025 were approved by the Board of Directors and auttiorlsed for Issue on
28.05.2025
B. BASIS OF PREPARATION
I) Statement of Compliance
The financial statements are prepared In accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual
basis except for certain financial Instruments which are measured at fair values, the provisions of the Companies Act, 2013 (Act) (to the extent
notified) and guidelines Issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read
with the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
The company adopted Ind AS from 1st April 2015. Accounting policies have been consistently applied except where a newly Issued accounting
standard Is Initially adopted or a revision to an existing accounting standard require a change In the accounting policy hitherto In use.
U) Use of estimates
The preparation of the financial statements In conformity with Ind AS requires management to make estimates. Judgements and assumptions. These
estimates, Judgements and assumptions affect the applications of accounting policies and the reported amounts of assets and liabilities, the
disclosures of contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period.
Application of accounting policies that require critical accounting estimates Involving complex and subjective Judgements and the use of assumptions
In these financial statements have been disclosed below:
a. Recognition of revenue
b. Recognition of deferred tax asset: availability of future taxable profit
c. Measurement of defined benefit obligations: Key actuarial assumptions
d. Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources
e. Estimation of useful life of property, plant and equipment and intangible assets
f. Estimation of current tax expense and payable
g. Estimation on assessing the Lease term as the non-cancellable period of a lease Including anticipated renewals and the applicable discount rate.
Accounting estimates are reviewed on an on-going basis from period to period. Actual results could differ from those estimates. Appropriate changes
In octlmatoG arc made as and when management becomes aware of changes In circumstances surrounding the octlmatoc. Changes In tho octlmotcc
are reflected In the financial statements In the period In which change are made and, if material, their effects are disclosed In the notes to the
financial statements.
iii) Functional and presentation currency
Items Included In the financial statements of the Company are measured using the currency of the primary economic environment In which the
Company operates ('the functional currency').
The financial statements are presented In Indian Rupee (INR), which Is Company’s functional and presentation currency.
The Standalone Financial Statements are presented In Indian Currency which Is also the Company's functional currency. All amounts have been
rounded off to the nearest lakhs, unless otherwise stated along with the comparative figures for the previous year ended.
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A number of (he Company's accounting policies and disclosures require the measurement of fair values, for both financial and non-flnanclal assets
and liabilities. The Company has an established control framework with respect to the measurement of fair values.
Fair value categorised Into different levels In a fair value hierarchy based on the Inputs used In the valuation techniques as follows:
Level 1: quoted prices (unadjusted) In active markets for Identical assets or liabilities.
Level 2: Inputs other than quoted prices Included In Level 1 that are observable for the asset or liability, either directly
(l.e. prices) or Indirectly (l.e. derived from prices)
Level 3: Inputs for the assets or liability that are not based on observable market data (unobservable Inputs)
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the Inputs used to measure
the fair value of an asset or a liability fall Into different levels of the fair value hierarchy, then the fair value measurement is categorised In Its entirety
In the same level of the fair value hierarchy as the lowest level Input that Is significant to the entire measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has
occurred.
Further Information about the assumption made In measuring fair values are Included In fair value measurement forming part of notes to accounts,
v) Current versus non-current classification
The Company presents assets and liabilities In the balance sheet based on current/ non-current classification.
An asset Is treated as current when It Is:
1. Expected to be realised or Intended to be sold or consumed In normal operating cycle, or
2. Held primarily for the purpose of trading, or
3. Expected to be realised within twelve months after the reporting period, or
4. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting
period
All other assets are classified as non-current
A liability Is current when:
1. It Is expected to be settled In normal operating cyde, or
2. It Is held primarily for the purpose of hading, or
3. It Is due to be settled within twelve months after the reporting period, or
4. There Is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle Is the time between the acquisition of assets for processing and their realisation In cash and cash equivalents. The Company has
Identified project life as Its operating cycle for construction contracts and tweleve months for Capital goods segment.
Operating cycle for the business activities of the Company covers the duration of the spedfic project/contract/product llne/servlce Including the
defect liability period, wherever applicable and extends up to the realisation of receivables (Including retention money) within the agreed credit
period normally applicable to the respective lines of business.
C.MATERIAL ACCOUNTING POLICIES INFORMATION
i) Property, Plant and Equipment
a) Recognition S Measurement
Property, Plant and Equipment are stated at cost, less accumulated depredation and Impairment losses, if any. Cost of property, plant and equipment
comprises its purchase cost, Including Import duties and non - refundable taxes or levies and any directly attributable cost to bring the item to
working condition as intended by management. Further, any trade discounts and rebates are deducted. Any gain or loss on disposal of property,
plant and equipment Is recognised as profit or loss.
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b) Subsequent Recognition
Expenditure Is capitalised only If It is probable that the future economic benefits associated with the expenditure will flow In the Company,
*The Management believes that the useful lives as given above best represents the period over which Management expects to use these assets,
which are different from the useful lives prescribed In the Schedule-n of the Companies Act,2013.
Assets costing not more than Rs.5000/- unit Is expensed In the profit and loss account In the year In which there purchased.
d) Capital Work-in-progress
Capital Work-In Progress Includes cost of property, plant and equipment under Installatlon/under developments as at the Balance Sheet date.
Property, Plant and Equipment not ready for the Intended use on the date of Balance Sheet are disclosed as "Capital work-ln-progress" at cost, less
Impairment losses, If any.
e) Transition to IndAS
On transition to Ind AS, the Company has decided to continue with the carrying value of all Its property, plant and equipment recognised as at April
1, 2015, measured as per previous GAAP and use that carrying amount as the deemed cost of such property, plant and equipment.
II) Intangible Assets
a) Recognition & Measurement
Intangible assets are stated at cost, less accumulated amortisation and Impairment losses, If any.
b) Subsequent Recognition
Expenditure Is capitalised only If It Increases the future economic benefits embodied In the related specific asset All other expenditure Is recognised
In profit or loss as Incurred.
c) Amortisation
The Company amortises the Intangible assets over the estimated useful life made by the Management using Stralght-llne method, and Is Included In
Depreciation and amortisation In the Statement of Profit and Loss.
d) Transition to Ind AS
On transition to Ind AS, the Company has decided to continue with the carrying value of all Its Intangible asset recognised as at April 1, 2015,
measured as per previous GAAP and use that carrying amount as the deemed cost of such Intangible asset.
iii) Investment Properties
Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties are measured Initially at cost
Including transaction costs. Subsequent to Initial recognition. Investment properties are stated at cost less accumulated depreciation and Impairment
losses.
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Depredation on Investment property, wherever applicable, Is provided on straight line basis as per useful lives prescribed In Part C of Schedule II to
Companies Act 2013.
Investment properties are de-recognlsed either on disposal or on permanent withdrawal from use. Any gain or loss on disposal of Investment
property Is determined as the difference between net disposal proceeds and the carrying amount of the property and Is recognised fn the Statement
of Profit anrl I n«. « -
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. The Company evaluates If an arrangement qualifies to be a lease as per the requirements of Ind AS 116. The Company's lease asset
classes primarily consist of leases for land and buildings
a) Recognition & Measurement
The Company recognizes a right of use (ROU) asset and a corresponding lease liability, at the date of commencement of the lease. The Company
recognize ROU asset and lease liability for all lease arrangements except for leases with a term of 12 months or less (Short Term Lease) and low value
leases.
The ROU assets are Initially recognized at cost which Is the Initial measurement of lease liability adjusted for any lease payment made at or prior to the
commencement date of the lease plus any Initial direct cost less any lease Incentives.
The Lease Liability Is recognized at the present value of the lease payments that are not paid at the commencement date of the lease. The lease
payments discounted using the company's Incremental borrowing rate.
In cases of short-term leases 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.
b) Subsequent Recognition
The ROU assets are subsequently measured at cost less accumulated depredation, Impairment loss, if any and adjusted for any re-measurement of the
lease liability.
The lease liabilities are subsequently measured by adding Interest on lease liability to the carrying value, reducing the lease payments made to the
carrying value and adjusting any reassessment or lease modification to the carrying value.
c) Amortization
The ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the lease
assets.
d) Impairment
The ROU assets are tested for Impairment whenever there Is an indication that their carrying value may not be recoverable and Impairment loss, If any,
Is recognized In the statement of profit and loss.
The lease liability has been separately presented In the Balance Sheet. The ROU assets have been dassified under Property, Plant and Equipment. In
the statement of cash flow, the lease payments, which comprises of principal payment of lease liability and Interest thereon, have been classified under
financing activities. The Lease payment on account of Short-Term Leases or low value lease have been dassified under operating activities
v) Inventories
Raw materials. Components, Stores and Spares, work-in-progress and Finished Goods are valued at lower of cost and net realizable value. Cost of
Inventories Is determined on a weighted average basis. Finished goods and work-in-progress include cost of conversion and other costs Incurred in
bringing the inventories to their present location and condition.
Raw-materials, Components and other supplies are considered to be realizable at cost If the finished products, In which they will be used are expected
to be sold at or above cost
In the case of manufactured Inventory, cost Includes an appropriate share of fixed production overhead based on normal operating capacity.
vi) Foreign currency transactions
Transactions In foreign currencies are recorded in the functional currency at the exchange rates prevailing on the date of transaction. Monetary assets
and liabilities denominated In foreign currencies are translated Into the functional currency at the exchange rate prevailing at the reporting date. Non¬
monetary assets and liabilities that are measured at fair value In a foreign currency are translated Into functional currency at the exchange rate when
the fair value was determined. Non-monetary assets and liabilities that are measured based on the historical cost in a foreign currency are translated
at the exchange rate at the date of the transaction. Exchange differences are recognised In the profit or loss.
vli) Employee benefits
a) Short-term employee benefits:
Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss for the year In which
related services are rendered.
b) Post employment benefits:
i) Defined contribution plan:
Company's contributions pald/payable during the year towards provident fund, pension scheme and employees' state Insurance ('ESI') scheme are
recognized In the statement of profit and loss.
II) Defined benefit plan:
Company’s liability towards gratuity In accordance with the Payment of Gratuity Act, 1972 is determined based on actuarial valuation using the
Projected Unit Credit Method as at the reporting date. The company contributes all the ascertained liabilities to SBI Life Insurance which administers
the contributions and makes the payment at retirement, death, Incapacitation or termination of employment.
c) Other Long-term employee benefits:
The Company provides for compensated absences subject to certain rules. The employees are entitled to accumulate such absences for avallment as
well as encashment As per the regular past practice followed by the employees, it Is not expected that the entire accumulated absence shall be
encashed or availed by the employees during the next twelve months and accordingly the benefit Is treated as other long-term employee benefits. The
liability Is recognized on the basis of the present value of the future benefit obligations as determined by actuarial valuation.
d) All actuarial galns/losses In respect of post employment benefits and other long term employee benefits are charged to Other Comprehensive
Income. /
a. Recognition and initial measurement
Trade receivables are Initially recognised when they are originated. All other financial assets and financial liabilities are Initially recognised when the
Company becomes a party to the contractual provisions of the instruments.
The Company measures a financial asset or financial liability at its fair value plus or minus, In the case of a financial asset or financial liability not at fair
value through profit or loss (FVTPL), transaction costs that are directly attributable to the acquisition or Issue of the financial asset or financial liability.
b. Financial assets - Classification
On initial recognition, a financial asset Is classified as, measured at
X. Amortised cost;
2. Fair value through other comprehensive Income (FVOCI) - debt Instrument;
3. Fair value through other comprehensive Income (FVOCI) - equity Instrument;
4. Fair value through profit and loss (FVTPL)
Financial assets are not reclassified subsequent to their Initial recognition, except If and In the period the Company changes its business model for
managing financial assets.
c. Financial assets - Measurement
A financial asset is measured at amortised cost If It meets both of the following conditions and Is not designated as at FVTPL;
1. The asset Is held within a business model whose objective Is to hold assets to collect contractual cash flows; and
2. The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
A financial asset Is measured at FVTOCI if it meets both of the following conditions and Is not designated as at FVTPL:
1. The asset is held within a business model whose objective is achieved by both collecting contractual cash flows and
2. The contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and Interest on the
principal amount outstanding
On Initial recognition of an equity Investment that Is not held for trading, the Company may Irrevocably elect to present subsequent changes In the
Investment's fair value In OCI (designated as FVOCI - equity Investment). This election Is made on an Investment by Investment basis.
All financial assets not classified as measured at amortised cost or FVTOCI as described above are measured at FVTPL.
On Initial recognition, the Company may irrevocably designate a financial asset as measured at FVTPL if doing so eliminates or significantly reduces
accounting mismatch that would otherwise arise from recognising them as measured at amoiUsed cost oi at FVOCI.
d. Financial assets Ý Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the right to
receive the contractual cash flows In a transaction in which subsequently all of the risk and rewards of ownership of the financial asset are transferred
or In which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial
asset.
If the Company enters into transaction whereby it transfers asset recognised on Its balance sheet, but retains either all or substantially all of the risks
and rewards of the transferred assets, the transferred assets are not derecognised.
e. Financial liabilities - Classification
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability Is classified as at FVTPL if it Is classified as held for
trading, or it Is a derivative or it Is designated as such on initial recognition.
f. Financial liabilities Ý Measurement
Financial liabilities measured at FVTPL are measured at fair value and net gains and losses. Including any interest expense, are recognised in profit or
loss.
Other financial liabilities are measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses
are recognised in profit or loss.
g. Financial liabilities - Derecognition
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired. The Company also derecognises
a financial liability when its term are modified and the cash flows under the modified terms are substantially different, where a new financial liability
based on the modified terms is recognised at fair value. Any gain or loss on derecognition In these cases, shall be recognised in profit or loss.
h. Offsetting
Financial assets and liabilities are offset and the net amount presented In the balance sheet when, and only when, the Company currently has a legally
enforceable right to set off the amounts and it Intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
ix) Investments in subsidiaries and joint venture
Investment in subsidiaries and joint ventures are carried at cost less accumulated impairment (ie., -permanent diminution In value), if any in the
financial statements.
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The Company designates certain foreign exchange forward and options contracts as cash flow hedges to mitigate the risk of foreign exchange
exposure on highly probable forecast transactions.
When a derivative Is designated as a cash flow hedging Instrument, the effective portion of changes In the fair value of the derivative Is recognized In
other comprehensive Income and accumulated In the cash flow hedging reserve. If the hedging instrument no longer meets the criteria for hedge
accounting, then hedge accounting Is discontinued prospectively. If the hedging Instrument expires or is sold, terminated or exercised, the cumulative
gain or loss on the hedging Instrument recognized In cash flow hedging reserve till the period the hedge was effective remains in cash flow hedging
reserve until the forecasted transaction occurs. The cumulative gain or loss previously recognized In the cash flow hedging reserve is transferred to the
net profit In the Statement of Profit and Loss upon the occurrence of the related forecasted transaction. If the forecasted transaction Is no longer
expected to occur, then the amount accumulated In cash flow hedging reserve Is reclassified to net profit In the Statement of Profit and Loss.
xl) Impairment
a. Financial assets
The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair value through profit or
loss. Loss allowance for trade receivables and contract assets with no significant financing component is measured at an amount equal to lifetime ECL
The application of simplified approach does not require the Company to track changes in credit risk. Rather, It recognises impairment loss allowance
based on lifetime ECLs at each reporting date, right from Its Initial recognltlon.The amount of expected credit losses (or reversal) that Is required to
adjust the loss allowance at the reporting date to the amount that Is required to be recognised Is recognized as an Impairment gain or loss In profit or
loss.
b. Non-financial assets (Intangible assets and property, plant and eguipment)
Intangible assets and property, plant and equipment 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 (l.e. the higher of the fair value less cost to sell and the value-ln-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. If such assets are considered to be Impaired, the
Impairment to be recognized In the Statement of Profit and Loss Is measured by the amount by which the carrying value of the assets exceeds the
estimated recoverable amount of the asset. An Impairment loss Is reversed in the statement of profit and loss if there has been a change In the
estimates used to determine the recoverable amount. The carrying amount of the asset Is Increased to Its revised recoverable amount, provided that
this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no
impairment loss been recognized for the asset In prior years.
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