Notes to Accounts of Aeroflex Industries Ltd.

Mar 31, 2025

(a) Term loan from Kotak Mahindra Bank Limited is secured against hypothecation of Bus no. MH 46 BM 7420. The loan is repayable in 60 equated monthly instalments of INR 55,614/- each commencing from 15^th April 2021 and the last instalment is payble on 15^th March 2026. Rate of Interest as on 31^st March 2025 is @ 9.48% There was no continuing default in the repayment of instalment and interest thereon.

(b) Term loan from Kotak Mahindra Bank Limited is secured against hypothecation of Bus no. MH 46 CL 7668. The loan is repayable in 38 equated monthly instalments of INR 97,550/- each commencing from 20^th July 2024 and the last instalment is payble on 20^th August 2027 Rate of Interest as on 31^st March 2025 is @ 9.30% There was no continuing default in the repayment of instalment and interest thereon.

(c) Term loan from Kotak Mahindra Bank Limited is secured against hypothecation of Bus no. MH 46 CL 9456. The loan is repayable in 38 equated monthly instalments of INR 97,550/- each commencing from 15^th September 2024 and the last instalment is payble on 15^th October 2027 Rate of Interest as on 31^st March 2025 is @ 9.30% There was no continuing default in the repayment of instalment and interest thereon.

(a) Term loan from Kotak Mahindra Bank Limited is secured against hypothecation of Bus no. MH 46 BM 7420. The loan is repayable in 60 equated monthly instalments of INR 55,614/- each commencing from 15^th April 2021 and the last instalment is payble on 15^th March 2026 Rate of Interest as on 31^st March 2025 is @ 9.48% There was no continuing default in the repayment of instalment and interest thereon.

(b) Term loan from Kotak Mahindra Bank Limited is secured against hypothecation of Bus no. MH 46 CL 7668. The loan is repayable in 38 equated monthly instalments of INR 97,550/- each commencing from 20^th July 2024 and the last instalment is payble on 20^th August 2027 Rate of Interest as on 31^st March 2025 is @ 9.30% There was no continuing default in the repayment of instalment and interest thereon.

(c) Term loan from Kotak Mahindra Bank Limited is secured against hypothecation of Bus no. MH 46 CL 9456. The loan is repayable in 38 equated monthly instalments of INR 97,550/- each commencing from 15^th September 2024 and the last instalment is payble on 15^th October 2027 Rate of Interest as on 31^st March 2025 is @ 9.30% There was no continuing default in the repayment of instalment and interest thereon.

NOTE 38: INFORMATION RELATED TO MICRO, SMALL & MEDIUM ENTERPRISES

The Company has amount due to suppliers under Micro, Small and Medium Enterprises Development Act 2006 (MSMED) as at 31^st March 2025. The following information has been given in respect to such suppliers who have identified themselves as "Micro, Small & Medium Enterprises" under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) as at 31^st March 2025.

There are no Micro, Small and Medium Enterprises, to whom the Company owes (principal and/or interest), which has been outstanding for more than 45 days as at the balance sheet date. There were delay in payments to Micro, Small and Medium Enterprises for more than 45 days during the year for which no provision for interest has been made. As per the management, the Company has mutual understanding with such parties for different payment terms while purchasing materials from them and the payment to them is made as per agreed terms accordingly. As per management there are no MSME registered parties with whom the Company has any dispute related to the principal or interest towards the delayed payments so happened during the year over and above the agreed terms of payment.

NOTE 39: EMPLOYEE BENEFITSA) Defined Contribution Plan

Provident Fund: The contribution to the provident fund of employees are made to a government administered provident fund and there are no further obligations beyond making such contribution.

B) Defined Benefit Plan

Gratuity: The Company participates in the employee''s group gratuity-scheme of Life Insurance Corporation Limited, a funded defined benefit plan for qualifying employees. Gratuity is payable to all eligible employees on death or on separation/ termination in terms of the provisions of the Payment Of Gratuity (Amendment) Act, 1997, or as per Company''s scheme whichever is more beneficial to the employees. The Company made payments for the gratuity for the year ended based on the actuarial valuation of the gratuity liability as done by the LIC and the same has been provided in the books of accounts. Payments of the Company to such gratuity fund has been considered as expenditure for the year and the fund lying with LIC under the gratuity fund is not accounted as assets as the same is towards the defined future liability of the Company.

Provident fund: The Company makes provident fund contribution to the government administered provident fund and has no further liability towards the same.

C) Amounts Recognised as Expense:

i) Defined Contribution Plan: Employer''s contribution to provident fund amounting to INR 101.09 Lakhs has been included under contribution to provident funds

ii) Defined Benefit Plan: Gratuity amount payable for INR 66.93 Lakhs has been shown as payable at the year ended to the LIC gratuity fund as calculated based on actuarial valuation of the gratuity made by the Life Insurance Corporation.

NOTE 40: FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES 1. CAPITAL MANAGEMENT:

The Company''s financial strategy aims to support its strategic priorities and provide adequate capital to its businesses for growth and creation of sustainable stakeholder value. The Company funds its operations through internal accruals, borrowings etc. The Company aims at maintaining a strong capital base largely towards supporting the future growth of its businesses as a going concern

Level 2: Inputs other than quoted price included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

3. FINANCIAL RISK MANAGEMENT:

The activities of the Company exposes it to a number of financial risks namely market risk, credit risk and liquidity risk. The Company seeks to minimise the potential impact of unpredictability of the financial markets on its financial performance. The Company does regularly monitor, analyse and manage the risks faced by the Company and to set and monitor appropriate risk limits and controls for mitigation of the risks.

A) Management of 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 companies of three type of risk interest rate risk, price risk and currency rate risk. Financial instrument affected by market risk includes borrowings and investments. The Company has international trade operations and is exposed to a variety of market risks, including currency and interest rate risks.

i) Management of interest rate risk:

Interest rate risk is the risk that the fair value of future cash flow of a financial instrument will fluctuate because of changes in market interest rates. The Company has least interest rate risk since its borrowing has mainly in fixed rate of interest which is repayable in installments for the term loan availed by it from bank.

ii) Management of currency risk:

Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company has foreign currency trade receivables and payables which are exposed to foreign exchange risk. The Company mitigates the foreign exchange risk by setting appropriate exposure limits, periodiclally monitoring of the exposures etc. The exchange rates have been volatile in the recent period and may continue to be volatile in the future. Hence the operating results and financials of the Company may be impacted due to volatility of the rupee against foreign currencies.

Exposure to currency risk: The Company has exposure mainly in USD/EUR/GBP converted to functional currency i.e. INR. The Company has the following financial assets and financial liabilities as at 31^st March 2025 :

iii) Management of price risk:

The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs. The Company''s commodity risk is managed centrally through well established control processes and future market position in accordance with the risk management policy. Further the Company invests its surplus funds in deposits with banks on short term tenors on fixed interest rate and the same is not exposed to any price risk. This risk is mitigated by investing the funds in various tenors depending on the liquidity needs of the Company.

B) Management of Credit Risk:

Credit risk refers to the risk of default on its obligations by a counterparty to the group resulting in a financial loss to the group. The group is exposed to credit risk from its operating activities ie trade receivable, foreign exchange transactions and financial instruments. Credit risk from trade receivables is managed through the Company''s policies, procedures and controls relating to customer credit risk management by establishing credit limits, credit approvals and monitoring creditworthiness of the customers to which the group extends credit in the normal course of business. Outstanding customer receivables are regularly monitored. The group has no concentration of credit risk as the customer base is widely distributed. The group''s historical experience of collecting receivables and level of default indicate that credit risk is low and generally uniform across markets consequently, trade receivables are considered to be a single class of financial assets. All overdue customer balances are evaluated taking into account the age of the dues, specific credit circumstances, the track record of the counterparty etc. Loss allowances and impairment is recognised, where considered appropriate by responsible management. The Company has receivable at the year ended where in the debtor''s parties are under NCLT. The total amount of receivable from such debtors is for INR 15.40 Lakhs. The management is hopeful to receive the same therefore the same has been considered good at the year ended.

C) Management of Liquidity Risk:

Liquidity risk is the risk that the Company may not be able to meet its present and future cash obligations without incurring unacceptable losses. The Company''s objective is to maintain at all times, optimum levels of liquidity to meet obligations. The Company closely monitors its liquidity position and has a cash management system. The Company maintains adequate sources of financing including debt and overdraft from banks and financial markets at optimised cost. The Company''s current assets aggregate to INR 23,273.76 Lakhs (Previous year - INR 27,976.47 Lakhs) including cash and cash equivalents and other bank balances of INR 2,535.01 Lakhs (Previous year - INR 10,548.74 Lakhs) against an aggregate current liability of INR 8,044.67 Lakhs (Previous year - INR 8,080.81 Lakhs) and non-current liabilities due between one year to three years amounting to INR NIL (Previous year - NIL) and non-current liabilities due after three years amounting to INR NIL(Previous year - NIL) on the reporting date. Further, while the Company''s total equity stands at INR 34,192.35 Lakhs (Previous year - INR 29,325.84 Lakhs), it has non-current borrowings of INR 32.64 Lakhs (Previous year - INR 6.34 Lakhs). In such circumstances, liquidity risk or the risk that the Company may not be able to settle or meet its obligation as they become due does not exist.

NOTE 41: DIVIDEND

The Company has declared dividend for the FY 2023-24 in the Annual General meeting of the Company held on 8^th July 2024.

The dividend so declared has been accounted and adjusted during the year towards the brought forward balances of the profit

& loss account.

NOTE 42: SEGMENT INFORMATION

The segment-wise reporting is not applicable for the Company as required in accordance with Ind AS 108 for the year ended

31^st March 2025.

NOTE 43: EVENTS AFTER REPORTING DATE

The Board of Directors at their Board meeting held on 30^th April, 2025 have recommended final dividend of INR 0.30 per fully

paid up equity share of INR 2/- each for the financial year ended 31^st March 2025, subject to approval of shareholders at ensuing

Annual General Meeting of the Company

NOTE 44: OTHER DISCLOSURES

44.1 In the opinion of the Board of Directors, the current assets are approximately of the value stated if realised in the ordinary course of business. The provisions for all known liabilities are adequate and are not in excess of the amount considered reasonably necessary. Sundry debtors and creditors balances which are not receivable or payable due to the operational reasons, has been written off or written back during the year and accounted accordingly. There are disputable receivables for INR 15.40 Lakhs for which the said parties are under NCLT. The management is of the opinion that the said amount is estimated at fair chance of the recovery and has not been identified as bad-debts or contingent recovery.

44.2 The Company has received Show Cause Notice for GST Liability of INR 7,761.30 Lakhs raised since FY 2019-20 to 2024-25 which is towards the GST refunds claimed by the Company for the Input Tax credit availed towards export of goods. The GST department has raised the said SCN under the contention that the refund so claimed under rule 89(4) & 96(10) of CGST Rules 2017 is erroneous. The Company has filed writ petition in Bombay High Court against the said Show Cause Notice. The Bombay High Court has granted interim stay and no demand has been confirmed against the said Show Cause Notice till the date of the Balance sheet and the matter is still subjudice. The Company has further received Show Cause Notice from the GST department for demand of INR 359.47 Lakhs towards the disallowance of the GST Input credit claimed for the IPO expenses. The Company has filed the reply to the GST department with required documents & explanations for allowability of the said input GST credit. GST Department has not called for any further clarification and no demand has been confirmed in the matter till the date of the Balance sheet.

44.3 Additional liability, if any, arising pursuant to respective assessment under various fiscal statutes, shall be accounted for in the year of assessment. Also interest liability for the delayed payment of the statutory dues, if any, has been accounted for in the year in which the same are being paid.

44.4 Balances of Debtors & Creditors & Loans & Advances taken & given are subject to confirmation and consequential adjustments, if any. Debtors & creditors balances has been shown separately and the advances received & paid from/to the parties is shown as advance from customers and advance to suppliers.

44.5 The Company has not traded or invested in crypto currency or virtual currency during the financial year.

44.6 As per information available, the Company has no transactions which are not recorded in the books of accounts and which are surrendered or disclosed as income during the year in the tax assessment or in search or survey or under any other relevant provisions of the Income Tax Act, 1961.

44.7 The Company does not hold any benami property and no proceedings has been initiated or pending against the Company for holding any benami property under Benami Transactions (Prohibition) Act 1988 and rules made there under.

44.8 Title deeds of all the immovable properties held by the Company are in the name of the Company. No revaluation of the property, plant and equipment and intangible assets held by the Company were done during the previous year, as the management is in the opinion that the same is not material and the same will be reviewed in the subsequent years. Further the Company is not holding any leased assets which are required to be disclosed separately.

44.9 The Company has outstanding term loan availed from Kotak Mahindra Bank at the year ended against hypothecation of vehicle and the charge for the same is duly registered with Registrar of Companies within statutory period.

44.10The Company has not been declared as willful defaulter by any bank or financial Institution or any other lender during the financial year.

44.11 The Company did not have any transactions during the year with the companies which are struck off under section 248 of the Companies Act 2013 or section 560 of the Companies Act 1956.

44.12As per the information & details available on records and the disclosure given by the management, the Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act read with the Companies (Restriction on number of layers) Rules 2017.

44.13 As per the information & details available on records and the disclosure given by the management, the Company has not advanced, loaned or invested to any other person or entity or foreign entities with the understanding that the intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company or provided any guarantee, security or like to or on behalf of the Company. Further the Company has not received any funds from any person, entity including the foreign entity with the understanding that the Company shall directly or indirectly lend, invest or guarantee, security or like manner on behalf of the funding party.

44.14There are no amounts due to be credited to Investor Education and Protection Fund in accordance with section 125 of the Companies Act, 2013 as at the year end.

44.15The Company has overdue receivables against the export realisation of goods for INR equivalent to 5,337.13 Lakhs due to various business reasons. As per the information available and as intimated by the management, the Company is in process of availing extension from RBI through its authorised dealers for the overdue realisations however till the date of the balance sheet such extension has not been made.

44.16The Company''s fixed assets & investments which has been impaired and has become non useful to the Company has been recognised to the profit & loss account for the value over and above the recovered value of such assets and investments.

44.17 With respect to disclosures pursuant to Section 186 (4) of the Companies Act, 2013 the Company has not given any amount in the nature of loan nor has provided any guarantee or security to any entity in connection with loan during the year. The Company has made investment in a wholly owned Indian subsidiary during the year. Further the investment in foreign subsidiary has been impaired and has been recognised to the profit & Loss account during the year as the said foreign subsidiary has been struck off and become non operational during the period.

44.18No scheme of arrangement has been approved by the competent authority in terms of sections 230 to 237 of the Companies Act, 2013.

NOTE 45

All amounts disclosed in the financial statements and notes have been rounded off to the nearest Lakhs and decimal thereof

as per the requirements of schedule III to the companies act, 2013, unless otherwise stated.

NOTE 46

The financial statements has been authorised for issue by the Board of directors on dated 30^th April 2025

NOTE 47

Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/

disclosure

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Mar 31, 2024

There are no Micro, Small and Medium Enterprises, to whom the Company owes (principal and/or interest), which has been outstanding for more than 45 days as at the balance sheet date. There were delay in payments to Micro, Small and Medium Enterprises for more than 45 days during the year for which no provision for interest has been made. As per the management, the Company has mutual understanding with such parties for different payment terms while purchasing materials from them and the payment to them is made as per agreed terms accordingly. As per management there are no MSME registered parties with whom the Company has any dispute related to the principal or interest towards the delay payments so happened during the year over and above the agreed terms of payment.

The financial instruments are categorized into following levels based on the inputs used to arrive at fair value measurements described below:

Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.

Level 2: Inputs other than quoted price included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

3. Financial Risk Management:

The activities of the Company exposes it to a number of financial risks namely market risk, credit risk and liquidity risk. The Company seeks to minimize the potential impact of unpredictability of the financial markets on its financial performance. The Company does regularly monitor, analyze and manage the risks faced by the Company and to set and monitor appropriate risk limits and controls for mitigation of the risks.

A) Management of Market Risk:

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises to three type of risk, interest rate risk, price risk and currency rate risk. Financial instrument affected by market risk includes borrowings and investments. The Company has international trade operations and is exposed to a variety of market risks, including currency and interest rate risks.

i) Management of interest rate risk:

Interest rate risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate because of changes in market interest rates. The Company is having least interest rate risk since it has repaid the major borrowing during the year. Further the outstanding borrowing has the fixed rate of interest which is repayable in installments for the term loan availed by it from bank.

ii) Management of currency risk:

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company has foreign currency trade receivables and payable and advances given to suppliers and received from customers. The Company mitigates the foreign exchange risk by setting appropriate exposure limits, periodic monitoring of the exposures etc. The exchange rates have been volatile in the recent period and may continue to be volatile in the future. Hence the operating results and financials of the Company may be impacted due to volatility of the rupee against foreign currencies.

iii) Management of price risk:

The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs. The Company''s commodity risk is managed centrally through well-established control processes and also future market position in accordance with the risk management policy. Further the Company invests its surplus funds in deposits with banks on short term tenors on fixed interest rate and the same is not exposed to any price risk. This risk is mitigated by investing the funds in various tenors depending on the liquidity needs of the Company.

B) Management of Credit Risk:

Credit risk refers to the risk of default on its obligations by a counter party to the Company resulting in a financial loss to the Company. The Company is exposed to credit risk from its

operating activities i.e. trade receivable, foreign exchange transactions and other financial instruments. Credit risk from trade receivables is managed through the Company''s policies, procedures and controls relating to customer credit risk management by establishing credit limits, credit approvals and monitoring creditworthiness of the customers to which the Company extends credit in the normal course of business. Outstanding customer receivables are regularly monitored. The Company has no concentration of credit risk as the customer base is widely distributed. The Company''s historical experience of collecting receivables and level of default indicate that credit risk is low and generally uniform across markets consequently, trade receivables are considered to be a single class of financial assets. All overdue customer balances are evaluated taking into account the age of the dues, specific credit circumstances, the track record of the counterparty etc. Loss allowances and

impairment is recognized, where considered appropriate by responsible management. The Company has receivable at the year ended where in the debtor''s parties are under NCLT. The total amount receivable from such debtors is for '' 15.40 Lakhs. The management is hopeful to receive the same therefore the same has been considered good at the year ended.

C) Management of Liquidity Risk:

Liquidity risk is the risk that the Company may not be able to meet its present and future cash obligations without incurring unacceptable losses. The Company''s objective is to maintain at all times, optimum levels of liquidity to meet obligations. The Company closely monitors its liquidity position and has a cash management system. The Company maintains adequate sources of financing including debt and overdraft from banks and financial markets at optimized cost. The Company''s current assets aggregate to '' 27,976.47 Lakhs (PY 2023: '' 15,435.82 Lakhs) including cash and cash equivalents and other bank balances of '' 10,548.74 Lakhs (2023: '' 618.43 Lakhs) against an aggregate current liability of '' 8,080.81 Lakhs (2023: '' 7,894.97 Lakhs) and Non-Current liabilities due between one year to three years amounting to '' NIL Lakhs (2023: 98.57) and Non-Current liabilities due after three years amounting to NIL (2023: NIL) on the reporting date. Further, while the Company''s total equity stands at '' 29,325.84 Lakhs (2023: '' 11,418.74 Lakhs), it has Non-Current borrowings of '' 6.34 Lakhs (2023: '' 1,968.63 Lakhs). In such circumstances, liquidity risk or the risk that the Company may not be able to settle or meet its obligation as they become due does not exist.

NOTE 41: EMPLOYEE BENEFITS

A) Defined Contribution Plan

Provident Fund: The contribution to the provident fund of employees are made to a government administered provident fund and there are no further obligations beyond making such contribution.

B) Defined Benefit Plan

Gratuity: The Company participates in the employee''s group gratuity-scheme of life insurance corporation limited, a funded defined benefit plan for qualifying employees. Gratuity is payable to all eligible employees on death or on separation/termination in terms of the provisions of the payment of gratuity (Amendment) act, 1997, or as per Company''s scheme whichever is more beneficial to the employees. The Company made payments for the gratuity for the year ended based on the actuarial valuation of the gratuity liability as done by the LIC and the same has been provided in the books of accounts. Payments of the Company to such gratuity fund has been considered as expenditure for the year and the fund laying with LIC under the gratuity fund is not been accounted as assets as the same is towards the defined future liability of the Company.

Provident fund: The Company makes provident fund contribution to the government administered provident fund. The Company has no part to play in this respect.

C) Amounts Recognized as Expense:

i) Defined Contribution Plan:

Employer''s contribution to provident fund amounting to '' 89.44 Lakhs has been included under contribution to provident funds.

ii) Defined Benefit Plan:

Gratuity amount payable for '' 16.54 Lakhs till the year ended out of which '' 10 Lakhs has been paid to the LIC gratuity fund as calculated based on actuarial valuation of the gratuity made by the Life Insurance Corporation and the balance amount has been shown as payable at the year ended.

NOTE 44: SEGMENT INFORMATION

The Company operates in a single segment i.e. manufacturing of product, hence segment-wise reporting is not applicable as required in accordance with Ind AS 108.

NOTE 45: DIVIDEND

The Company has declared dividend for the FY 2022-23 in the Annual General meeting of the Company held on July 08, 2023. The dividend so declared has been accounted and adjusted during the year from the brought forward balances of the profit & loss account.

NOTE 46: UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM

I) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other source or kind of funds) to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding (whether recorded in writing or otherwise) the Intermediary (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

II) The Company has not received any fund from any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding (whether recorded in writing or otherwise) that the Company shall (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

NOTE 47: OTHER DISCLOSURES

I) In the opinion of the Board of Directors, the current assets are approximately of the value stated if realized in the ordinary course of business. The provisions for all known liabilities are adequate and are not in excess of the amount considered reasonably necessary. Sundry debtors and creditors balances which are not receivable or payable due to operational reasons, has been written off or written back during the year and accounted accordingly.

II) Additional liability if any, arising pursuant to respective assessment under various fiscal statues, shall be accounted for in the year of assessment. Also interest liability for the delay payment of the statutory dues, if any, has been accounted for in the year in which the same are being paid.

III) Balances of Debtors & Creditors & Loans & Advances taken & given are subject to confirmation and consequential adjustments, if any. Debtors & creditors balances has been shown separately and the advances received & paid from/to the parties is shown as advance from customers and advance to suppliers.

IV) The Company has not traded or invested in crypto currency or virtual currency during the financial year.

V) As per informations available, the Company has no transactions which are not recorded in the books of accounts and which are surrendered or disclosed as income during the year in the tax assessment or in search or survey or under any other relevant provisions of the Income Tax Act, 1961.

VI) The Company do not hold any benami property and no proceedings has been initiated or pending against the Companyfor holding any benami property under Benami Transactions (Prohibition) Act, 1988 and rules made there under.

VII) Title deeds of all the immovable properties held by the Company are in the name of the Company. No revaluation of the property, plant and equipment and intangible assets held by the Company were done during the previous year, as the management is of the opinion that the same is not material and the same will be reviewed in the subsequent years. Further the Company is not holding any leased assets which are required to be disclosed separately.

VIII) The Company had foreign currency loan availed from Kotak Mahindra Bank Ltd and also working capital term loan availed during the preceding years and the same has been fully repaid during the year. All

the charges registered with the ROC against the said loans has been duly discharged during the year. The Company has outstanding term loan availed from Kotak Mahindra Bank at the year ended against hypothecation of vehicle and the charge for the same is duly registered with Registrar of Companies within statutory period.

IX) The Company has not been declared as willful defaulter by any bank or financial Institution or any other lender during the financial year.

X) The Company did not have any transactions during the year with the companies which are struck off under Section 248 of the companies Act 2013 or Section 560 of the companies Act 1956.

XI) As per the information & details available on records and the disclosure given by the management, the Company has complied with the number of layers prescribed under clause (87) of Section 2 of the companies Act read with the Companies (Restriction on number of layers) Rules 2017.

XII) As per the information & details available on records and the disclosure given by the management, the Company has not advanced, loaned or invested to any other person or entity or foreign entities with the understanding that the intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company or provide any guarantee, security or like to or on behalf of the Company. Further the Company has not received any funds from any person, entity including the foreign entity with the understanding that the Company shall directly or indirectly lend, invest or provide guarantee, security or like manner on behalf of the funding party.

XIII) There are no amounts due to be credited to Investor Education and Protection Fund in accordance with Section 125 of the companies act, 2013 as at the year end.

XIV) The Company has over due receivables against the export realization of goods for '' equivalent to 3,234.65 Lakhs due to the various business reasons. Further as per the information available and as intimated by the management, the Company is in process of availing extension from RBI through its authorized dealers for the overdue realizations however till the date of the balance sheet such extension has not been approved.

XV) There is no impairment of any assets during the reporting period.

XVI) With respect to disclosures pursuant to Section 186(4) of the Companies Act, 2013 the Company has not given any amount in the nature of loan nor has provided any guarantee or security to any entity in connection with loan during the year. The Company has investment in its wholly owned subsidiary as given in note 5.

XVII) No scheme of arrangement has been approved by the competent authority in terms of sections 230 to 237 of the Companies Act, 2013.

XVIII) All amounts disclosed in the financial statements and notes have been rounded off to the nearest Lakhs and decimal thereof as per the requirements of schedule III to the Companies Act, 2013, unless otherwise stated.

XIX) The Company has submitted documents to Registrar of Companies (ROC) Mumbai on dated September 06, 2023, for change of its Listing status from "unlisted

to listed" in the master data of the Company on MCA portal post Initial Public Offer. However, the change in the status has not been updated by ROC till the date of the balance sheet and the same is still under process and is pending with ROC for further action to change the status of the Company in the master data-the Company Information on the portal.

Note: While calculating Net capital Turnover Ratio & Return on capital employed, we have considered average working capital & average capital employed respectively. Further IPO funds unutilized at the year ended has been subtracted from the working capital & capital employed as the same has not been utilized for business operations during the year to show the fair comparison of the ratios.

For (*) Please refer below Notes:

Explanation for change in ratio by more than 25% as compared to previous year:

i) Current ratio has increased mainly due to the liquidity available and kept under cash & cash equivalent & bank balances at the year ended.

ii) Debt-Equity Ratio has decreased due to repayment of borrowings and increase in equity.

iii) Debt Service Coverage Ratio has decreased due reduction in interest cost after repayment of borrowing from IPO consideration.

iv) Return on Equity Ratio has decreased due to increase in equity via IPO during the year.

v) Net capital turnover ratio has decreased due to healthy cash flow in working capital.

vi) Return on investment has not been calculated as investment is in subsidiary which has not generated any revenue to the Company during the year.

NOTE 49: The financial statements has been authorized for issue by the Board of Directors on dated May 06, 2024. NOTE 50: EVENTS AFTER REPORTING DATE

a) The Board of Directors at their Board meeting held on May 06, 2024 have recommended final dividend of '' 0.25 per fully paid up equity share of '' 2/- each for the financial year ended March 31, 2024, subject to approval of shareholders at ensuing Annual General Meeting of the Company.

b) The Company has signed Share Purchased Agreement after the balance sheet date for purchase of 100% equity shares of Hyd-Air Engineering Private Limited engaged in the business activities of Precision Engineering on April 02, 2024.

NOTE 51: Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current

year''s classification/disclosure.

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Mar 31, 2023

3.8 Provisions:

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognized as provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting year, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of time value of money is material). When some or all of the economic benefits required to settle, provisions are expected to bo recovered from a third paiiy, a receivable is recognized as an asset ii is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

3.9 Contingent liabilities and contingent assets :

Contingent liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement, unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not accounted in the financial statements unless an inflow of economic benefits is probable.

3.10 Financial instruments:

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments and are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or liabilities on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

FIMANClALASSinS:

Initial recognition and measurement

At initial recognition, financial asset is measured at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss arc expensed in profit or loss.

Classification and subsequent measurement

For purposes of subsequent measurement, financial assets are classified in following categories:

a) at amortized cost; or

b) nt fair value through other comprehensive income; or

c) at fair value through profit or loss.

The classification depends on the entity''s business model for managing tire financial assets and the contractual terms of tire cash flows. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and recetvablcs are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. These include trade receivables, loans, deposits, balances with banks, and other financial assets with fixed or determinable payments.

Fair value through profit or Joss: Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit or loss. Interest income from these financial assets is included in other income.

Impairment:

The Company applies the expected credit loss model for recognizing impairment loss on financial assets measured at amortized cost, other contractual right to receive cash or other financial assets not designated at fair value through profit or loss. ''! ho loss allowance for a financial instrument is 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 increase significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal 12-month expected credit lasses. 12-month expected credit losses are portion of the lifetime expected credit losses and represent the lifetime cash shortfalls that will result if the default occurs within 12 months after the* reporting date.

For trade receivables or any contractual right to receive cash or another financial assets that results from transactions that arc within the scope of hid AS IS, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses. The Company lias used a practical expedient permitted by Ind AS 109 and determines the expected credit loss allowance based on a provision matrix which takes into account historical credit loss experience and adjusted for forward looking information.

De-recognition;

The Company derecognizes financial asset When the contractual right to the cash flows from the asset expires, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party . If the Company neither transfers nor retains substantially all the risks and towards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for the amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of the transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralized borrow''ing for the proceeds received.

On de-recognilior. of a financial asset, the difference between the asset’s carrying amount and the sum of consideration received and receivable and the cumulative gain or loss that had been recognized in otiter comprehensive income, if any, is recognized in the Statement of Profit or Loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of the financial asset.

FINANCIAL LIABILITIES :

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss and at amortized cost, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of borrowings and payables, net of directly attributable transaction casts.

Classification

Financial liabilities and equity instruments issued by tire Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equip.^- 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 recognized at the proceeds received net of direct issue costs.

Subsequent measurement

Financial liabilities at fair twine thronfth profit or foss

Financial liabilities at fail'' value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Gains or losses on liabilities held for trading are recognized in the Statement of Profit and Less.

Financial liabilities (that are not held for trading or not designated at fair value through profit or loss) are measured at amortized cost at the end of subsequent accounting year The carrying amounts of financial liabilities that are subsequently measured at amortized cost are determined based m the effective interest method.

Effective interest method is a method of calculating amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rale is the rate that exactly discounts estimated future cash payments (including all foes, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. Interest expenses of these financial liabilities are included in finance cost. Expenditure incurred for management of the finance of the company are forming part of the finance cost.

Foreign exchange gains and losses fur assets & liabilities :

Financial Assets and liabilities denominated in a foreign currency and are measured at amortized cost at the end of each reporting year, the foreign exchange gains and losses are determined based on the amortized cost of the instruments and are recognized in the Statement of Profit or Loss.

The fair value of financial Assets and liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of tire reporting period. For financial Assets and liabilities that die measured at fair value through profit or loss, lire foreign exchange component forms part of the fair value gains or losses and is recognized in the Statement of Profit and Loss except in case of the amount outstanding to creditors towards the fixed assets purchased in earlier years and amount is outstanding payable, in that case every year tire difference in the exchange fluctuation has been adjusted towards the cost of the fixed assets so purchased and has uniformly followed the practice.

De-recognition:

Financial assets liabilities are derecognized when, and only when, the obligations art* discharged, cancelled or have expired. An exchange with a lender of a debt instruments with substantially different terms is accounted for as an extinguishment of thp original financial assets and liability and recognition of a new financial assets and liability. Similarly, a substantial modification of the terms of an existing financial assets and liability is accounted for as an extinguishment of the original financial assets and liability and the recognition of a new'' financial assets and liability. The difference between the carrying amount of a financial assets and liability is derecognized anti the consideration paid or payable is recognized in the Statement of Profit or Loss.

3.11 Employee Benefits :

Short-term Employee Benefits:

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 montits after the end of tire year in which the employees render the related service are recognized in respect of employees'' services up to the end of the year and are measured at the amounts expected to be paid when the liabilities are settled. The Liabilities are presented as current employee benefit obligations in the balance sheet

Post-employment benefits

a) Defined contribution plans

Employees benefits in the form of the Company''s contribution to Provident Fund, Pension scheme, Superannuation Fund and Employees State Insurance are defined contribution schemes. Payments to defined contribution retirement plans are recognized as expenses when the employees have rendered the service entitling them to the contribution.

Provident fund: The employees of the Company arc entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employee''s'' salary (currently 12% of employees'' salary), The contributions as specified under the law arc made lo the provident fund and pension fund administered by the Regional Provident Fund Commissioner. The Company recognizes such contributions as an expense when incurred.

b) Defined benefit plans

The defined benefit obligation recognized in the balance sheet represents the actual deficit or surplus in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting year, regardless of when the actual settlement is expected to occur.

Gratuity: The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company has made payments for the annual applicable gratuity liability to LIC gratuity Scheme where the gratuity liability will be paid to the employees by UC when the same is due to pay. The liability for the defined gratuity benefit plan is provided on the basis or actuarial valuation carried out by life Insurance corporation of India and the due payment is made on yearly basis to liC towards the fund. ____

3.12 Inventories:

Inventories are valued at after reviewing the cost and net realizable value considering the various other related parameters and uniformity of the valuation. Costs incurred in bringing each product to its present location and condition are accounted for as follows:

Raw materials, packaging materials and stores and spare parts are valued at after reviewing the cost and net realizable value considering the various other related parameters and uniformity of the valuation. Cost includes purchase price, freight inwards and other expenditure incurred in bringing such inventories to their present location and condition. In determining the cost, weighted average cost method is used.

Work in progress, manufactured finished goods and traded goods are valued at cost ot production till the date work completed. Cost of work in progress and manufactured finished goods is determined on the weighted average basis and comprises direct material, cost of conversion and other costs incurred in bringing these inventories to their present location and condition. Cost of traded goods is determined on a weighted average basis.

Provision of obsolescence on inventories is considered on the basis of management''s estimate based on demand and market of the inventories. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale. 1 he comparison of cost and net realizable value is made on item by item basis.

3.13 Cash and cash equivalents:

Cash and cash equivalents comprise cash in hand and short-term deposits with original maturities of three months or less that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

3.14 Earnings Per Share:

The Company reports bask and diluted earnings per share (Ere) in accordance with Indian Accounting Standard 33 ’Earnings per Share''. Basic Ere is computed by dividing the net profit or loss attributable to ordinary equity holders by the weighted average number of equity shares outstanding at the year ended. Diluted EPS is computed by dividing the net profit or loss attributable to ordinary equity holders by weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares (except where the results are anti-dilutive).

NOTE 4. Significant accounting judgments, estimates and assumptions :

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, anti 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 tire carrying amount of assets or liabilities affected in future years.

The key assumptions concerning the future and other key sources of estimation uncertainty at die year end 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 as below. Tine Company based on its assumptions and estimates oil parameters available, when the financial statements were prepared, the 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 the)- occur.

a) Impairment of property, plant and equipment:

Determining whether property, plant and equipment is impaired requires an estimation of the value in use of the cash-generating unit. The value in use calculation requires the management to estimate the future cash flows expected to arise from Lhe cash-generating unit and a suitable discount rate in order to calculate present value. When the actual future cash flows are less than expected, a material impairment loss may arise, property, plant and equipment which are out dated or not in use are impaired and shown at the net releasable value and difference to the written down value and net releasable value is transferred to profit & loss account for the year.

b) Useful lifes of property, plant and equipment:

The Company reviews the estimated useful lives of property, plant and equipment at the- end of each reporting year.

c) Provision for litigations and contingencies:

The provision for litigations and contingencies are determined based on evaluation made by Hip management of the present obligation arising from past events the settlement of which is expected to result in outflow of resources embodying economic benefits, which involves judgements around estimating the ultimate outcome of such past events and measurement of the obligation amount. Due to the judgements involved in such estimations lhe provisions are sensitive to the actual outcome in future periods. -—^

___

d) Recognition of Deferred Tax :

The extent to which deferred tax assets and liabilities can be recognized is based on an assessment of die profitability of the Company''s future taxable income against which the deferred tax provisions can be utilized.

NOTE 32 : OTHER NOTES :

I. In I he opinion of the Board of Directors, the current assets are approximately of the value stated if realized in the ordinary Course of business. Tire provisions for all known liabilities are adequate and are not in excess of die amount considered reasonably necessary. Sundry debtors and creditors balances which arc not receivable or payable due to the operational reasons, has been written oft or written back during the year and accounted accordingly.

II. Additional liability if any, arising pursuant to respective assessment under various fiscal statues, shall be accounted for in the year of assessment. Also interest liability for Lite delay payment of the statutory dues, if any, has been accounted for in the year in which the same are being paid.

III. Balances of Debtors k Creditors & Loans k Advances taken k given are subject to confirmation and are subject to consequential adjustments, if any. Debtors & creditors balances has been shown separately and the advances received & paid from/to tire parties is shown as advance from customers and advance to suppliers.

IV. Micro, Small & Medium Enterprises:

The* company Iras amount due to suppliers under Micro, Small arid Medium Enterprises Development Act 2006 (MSMED) as at 31''* March, 2023. Tin; following informations has been given in respect to such suppliers who have identified themselves as "Micro, Small & Medium Enterprises" under Micro, Small and Medium Enterprises Development Act, 2036 (MSMED) as at 31” March 2023:

There are amount outstanding for more than 43 days as at the balance sheet date for Rs 619.75 lakhs for which no provision for interest has been made. As per the management, the company has mutual understanding with such overdue parties for different payment terms while purchasing materials front them and the payment to them is made accordingly. Further the company has MSME registered supplier''s overdue outstanding for Rs 32.64 lakhs with whom no such agreement exists and no Interest provision has been made for any of such outstanding amount at the year ended. As per management there -^ -¹ are no MSME registered parties with whom the company has any dispute related to the overdue outstanding amount and the amount so outstanding is due to various business issues & compliances in normal course and the same shall be settled with due course of time.

V. The company has not traded or invested in crypto currency or virtual currency during the financial year.

VI. As per informations available, the company has no transactions which are not recorded in the books of accounts and which are surrendered or disclosed as income during the year in the tax asvssment or in search or survey or under any othei relevant provisions of Hie Income Tax Act, 1961.

VII. Corporate Social Responsibility:

As per Section 135 of tire Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (C$i<) activities. The areas for CSR activities are mainly towards contribution given to the approved trust through which such expenses has been incurred. The following disclosure has been given with respect to the CSR activities of die company held during tire previous year:

(i) Gross amount required to be spent by the company during the financial year is for Rs. 31.05 I akhs. The amount spent during the year till the date of Balance sheet is for Rs 38.25 Lakhs of which 6.75 Lakhs is pertaining to the spending done for earlier year whereas Fs 31.50 Lakhs has been spent from the amount required to be spend during Lire year and/or before the time period stipulated in the companies AcL

(ii) CSR expenditure incurred during the year ended :

Construction/acquhition of any asset : NIL - On purposes other than the above : 31.50 Lakhs

(iii) Related Party Transaction: No related party sending has been done by the company for CSR spending.

(iv) iho company performed CSR activities by way of contribution to the eligible trust for the CSR related activities.

VIII. Title deeds of all the immovable properties held by the company are in die name of the company. No revaluation of tire property, plant and equipment''s and intangible assets held by the company were done during the previous year, as the management is in the opinion drat the same is not material and the same will be reviewed in the subsequent years. Further the company is not holding any leased assets which is required to be disclosed separately.

IX. The company do not hold any benami property and no proceedings lias been initiated or ponding against the company for holding any benami property under Benami Transactions (Prohibition) Act 198S and rules made there under.

X. The company has outstanding foreign currency loan availed from Kotak Mahindra Bank Ltd during the preceding years and also working capital Term loan availed during the year. The loan so availed is charged with immovable properties of the company and hypothecation of all present and future current &¦ Fixed (Movable k Immovable) assets of the company, plant & machinery located at factory premises. The total such charge registered with ROC is for Rs 4334 l,akhs. The Periodic statements related to the inventor}'' has been submitted with the hank. There is some material variation in the stock statement submitted to bank as compared to the inventory as shown in the Balance sheet. As per the management, the variation is mainly due to the time gap of the stock in trade as reported to the hank and the total stock in trade held by the company. The stock in trade submitted to the bank is only for the items held in stock for the period upto 120 days where as in the balance sheet the overall stock in trade held at the year ended has been reported.

XL The company has not been declared as willful defaulter by any hank or financial Institution or any other lender during the financial year.

XII. The company do not had any transactions during the year with the companies which are struck off under section 248 of the companies Act 2013 or section 360 of the companies Act 1956.

XIII. The company has registered all the charges which are required to be registered under the terms of the loans & liabilities and submitted documents with ROC within statutory period.

XIV. As per the informations k details available on records and the disclosure given by the management, the company has complied with the number of layers prescribed under clause (87) of section 2 of the companies Act read with the Companies (Restriction on number of layers) Rules 2017.

XV. As per (ho informations & details available on records and the disclosure given by the management, the company has not advanced, loaned or invested to any other person or entity or foreign entities with the understanding that the intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company or provided any guarantee, security or like to or on behalf of the company. Further the company has not received any funds from any person, entity including the foreign emit)- with live understanding that the company shall directly or indirectly lend, invest or guarantee, security or like manner on behalf of the funding party.

XVI. 1 here are no amounts due to be credited to investor education and protection fund in accordance with section 125 of the companies act, 2(11.1 as at the year end.

XVII. There are no significant subsequent events that would require adjustments or disclosures in the financial statements as on the balance sheet date.

XV111. The financial statements has been authorized for issue by the Board of directors on dated 15^,:'' May 2023.

XIX. All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs and decimal thereof as per the requirements of schedule HI to the companies act 2013, unless otherwise stated.

XX. DIVIDEND:

The company has declared dividend for the FY 2021-22 in tire Annual General meeting of the company held on 3^rd September 2022. The dividend so declared has been accounted and adjusted from the accumulated brought forward balance of the profit & loss account.

XXI. Financial instruments and related disclosures :

1. CAPITAL MANAGEMENT:

The company''s financial strategy aims to support its strategic priorities and provide adequate capital to its businesses for growth and creation of sustainable stakeholder value. The company funds its operations through internal accruals, borrowings etc. The company aims at maintaining a strong capital base largely towards supporting the future growth of its businesses as a going concern.

A) Management of Market Risk : Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk companies of three type of risk interest rate risk, price risk ami currency rate risk. Financial instrument affected by market risk includes borrowings and investments. The company has international trade operations and is exposed to a variety of market risks, including currency and interest rate risks.

i) Management of interest rate risk :

Interest rate risk is the risk that the lair value or future cash flow of a financial instrument will fluctuate because of changes in market interest rates. The company is having least interest rate risk since its borrowing has mainly in fixed rate of interest which is repayable in installments for the term loan availed by it from bank.

ii) Management of currency risk:

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. ''Hie company has foreign currency trade receivables and payable and has also availed term loans in foreign currency from bank which are exposed to foreign exchange risk. The company mitigates the foreign exchange risk by setting appropriate exposure limits, periodic monitoring of the exposures etc. The exchange rates have been volatile in the recent period and may continue to be volatile in the future. Hence the operating results and financials of the company may lx? impacted due to volatility of the rupee against foreign currencies.

Exposure to currency risk : The company has exposure mainly in USD/EURO/GBP converted to functional currency i.e. INR. The company has the following financial assets and financial liabilities as at March 31, 2023 :

in) Management of price risk :

The company has no surplus for investment in debt mutual funds, deposits etc. The company does make very material deposit with the banks to provide security/margin against guarantee given by the banks. Deposit is made m Fixed rate instrument. In view of this it is not susceptible to market price risk, arising from changes in interest rates or market yields which may impact the return and value of the investments.

B) Management of Credit Risk :

Credit risk refers to the risk of default on its obligations by a counterparty to the company resulting in a financial loss to the company. The company is exposed to credit risk from its operating activities ie trade receivable, foreign exchange transactions and financial instruments. Credit risk from trade receivables is managed through the company''s policies, procedures and controls relating to customer credit risk management by establishing credit limits, credit approvals and monitoring creditworthiness of the customers to which tl* company extends credit in the normal course of business. Outstanding customer receivables are regularly monitored. The company lias no concentration of credit risk as the customer base is widely distributed, lire company''s historical experience of collecting receivables and level of default indicate that credit risk is low and generally uniform across markets consequently, trade receivables are considered to be a single class of financial assets. All overdue customer

C) Management of Liquidity Risk :

Liquidity risk is the risk that the company may not be able to meet its present and future cash obligations without incurring unacceptable losses. The company''s objective is to maintain at all times, optimum levels of liquidity to meet obligations. The company closely monitors its liquidity position and lias a cash management system. The company maintains adequate sources of financing including debt and overdraft from banks and financial markets at optimized cost The company''s current assets aggregate to Rs.15435.82 lakhs (PY 2022-Rs. 12894.52 Lakhs) including cash and cash equivalents and other bank balances of Rs. 618.43 lakhs {2022-Rs. 831.05 lakhs) against an aggregate current liability of Rs. 7,894.97 lakhs (2022-Rs.7522.12 lakhs) non-current liabilities due between one year to three years amounting to Rs. 98.57 lakhs (2022- 93.13) and non-current liabilities due after three years amounting to NIL (2022 - NIL) on the reporting date. Further, while the company''s total equity stands at Rs. 11418.74 lakhs (2022-Rs. 8631.78), it lias non-current borrowings of Rs. 1,968.63 lakhs (2022-Rs. 2098.64). In such circumstances, liquidity risk or the risk that the company may not be able to settle or meet its obligation as they become due does not exist.

D) Fair value measurement Fair value hierarchy:

Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:

level 1 : Quoted prices (unadjusted) m active market lor identical assets or liabilities.

Level 2 : Inputs other than quoted price included within level 1 that arc observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e, derived from prices). The fair value of financial instruments that are not traded in an active market is determined using market approach and valuation techniques which maximize the use of observable market data ami rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instruments are observable, the instrument is included in level 2.

Level 3 : Inpuls for the assets or liabilities that arc not based on observable market data (unobservable inputs).

If one or more of the significant inputs Ls not based on observable market data, the fair value is determined using generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparty.

The fair value of trade receivables, trade payables and other current financial assets and liabilities is considered to be equal to the carrying amounts of these items due to their short-term nature. Where such items are non-current in nature, the same has been classified as level 3 and fair determined using discounted cash flow basts. Similarly unquoted equity instruments where most recent information to measure fair value is instruments, or if there is a wide range of possible fair value measurements, cost has beer, considered as the best estimate of faiT value

There has been no change in the valuation methodology for level 3 inputs during the year. The company has not classified any material financial instruments under level 3 of the fair value hierarchy.

There were no transfers between level 1 and level 2 during the year. The Fair Value hierarchy of all the financial assets and financial liabilities has been measured at fair value on recurring basis for Level -2 for the year ended 31March 2023 as well as in previous year ended on 31^s* March 2022.

XXII. EMPLOYEE BENEFITS:

A) Defined Contribution Plan

Provident Fund: The contribution to tlse provident fund of employees are made to a government administered provident fund and there are no further obligations beyond making such contribution.

B) Defined Benefit Plan

Gratuity: The company participates in the employee''s group gratuity-scheme of life insurance corporation limited, a funded defined benefit plan for qualifying employees. Gratuity is payable to all eligible employees on death or on separation/termination in terms of the provisions of the payment of gratuity (Amendment) act, 1997, or as per company''s scheme whichever is more beneficial to the employees. The company made payments for the gratuity for the year ended based on the actuarial valuation of the gratuity liability'' as done by the LiC and the same has been provided in the books of accounts. Payments of the company to such gratuity fund has been considered as expenditure for the year and the fund laying with LIC under tire gratuity fund is not been accounted as assets as the same is towards the defined future liability of the company.

Provident fund:_The company makes provident fund contribution to the government administered provident fund. The company has no part to play in this respect.

C) Amounts Recognized as Expense:

i) Defined Contribution Plan: Employer''s contribution to provident fund amounting to Rs. 70.87 lakhs has been included under contribution to provident funds.

ii) Defined Benefit Plan: Gratuity'' cost amounting to Rs.89.6-i lakhs till the year ended and the same has been paid to the LIC gratuity fund as calculated based on actuarial valuation of the gratuity made by the Life insurance corporation.

XXIII. Capital Work in progress ( (TVIP) :

The company has incurred expenses towards setting up & commissioning and for purchase of the equipment''s for the expansion project and the same has been shown under the capital work in progress for the company. The expenses incurred for the project work in progress and which is not ready for put to use till the year ended is for Rs. 64,25 lakhs. Tire Ageing schedule of tangible assets under CWIP is as follows:

The Company has vide resolution passed at the meeting of the Ikiard of Directors dated February 13, 2023 and resolution of Shareholders passed in the EGM dated February 15, 2023 approved the sub-division of 01 (one) Equity Share of face value *10/- each into 05 (Five) Equity Shares of face value *02/- each and incidental change in authorized equity share capital of the Company from 35,000,000 Equity Shares of *10/- each, to 175,000,000 Equity Shares of \ 02/- each & Paid up Share Capital from 2,2S,64,074 Equity Shares of *10/- each, to 11,43,20,370 Equity'' Shares of ? 02/- each. Previous year equity shares are shown at Rs 10/- each and EPS is also calculated accordingly.

XXVIII. Company has over due receivables against the export realization of goods for INR equivalent to 2871.42 Lakhs due to the various business reasons. Further as per the information''s available and as intimated by the management, the company is in process of availing extension from KBl through its authorized dealers for the overdue realizations.

XXIX. No scheme of arrangement has been approved by the competent authority in terms of sections 230 to 237 of the companies act, 203 3.

XXX. The management Is of the opinion that there is no contingent liability exists a: tire year ended therefore no separate provision is made for the same. There will be liability of the interest on the short fall in payment of advance Tax for the FY 2022-23 and also may attract liability'' of interest on the overdue MSME suppliers balance of Ks 32.61 laklvs for which no specific agreement or term sheet has been signed for the payment terms and are overdue outstanding because of the various business issues k compliances in normal course and the same shall be settled with due course of time. No provision for the same has been made on the balance sheet date.

XXXI. RELATED PARTY DISCLOSURES:

i. Key Management Personnel:

Asad Daud : Managing Director

Mustafa Abid Karhwala : VYholetime Director & CFO

- Kinjal Shah : Company Secretary & Compliance Officer

- Deepak Kalera : Cl-O (Resigned on 4^th June 2022)

XXXVII. The Company has filed DRHP on dated 31⁴* March 2023 with SEBI for com in] out with Initial Public Offer (IPO) and the same is pending for approval.

XXXVIII. Previous year''s figures have been regrouped/reclassified wherever nccessan to correspond with the current year''s classification/disclosure.

Notes from "1 “ to " 32 " form an integral part of the Accounts._

As per our Report of even date attached For and on behalf of the Board

FOR SHWETA JAIN & CO ffifh/y

CHARTERED ACCOUNTASAQ/fJAUD F.R.N.: 1276731V (MANAGING DIRECTOR)

„ _nW •$/ \o\ (DIN-02491539)

^ T«AM8 jJ (fUA|) M! ^

priyankajaju .jfj/ mustafXakachwala

(Partner) v! t/ WHOIJBTfMB DIRECTOR & CFO

Membership No: 416197 (DIN-03124453)

Place : Mumbai Dated: 15* May 2023

UUIN No :23416197RGWG0T7172 KINJnLSHAH

COMPANY SECRETARY tM.No: A5867S)