Notes to Accounts of Gujarat Craft Industries Ltd.

Mar 31, 2025

1.13 Provisions, Contingent Liabilities and Contingent Assets:

A Provisions are recognized when the Company has present obligation (legal or constructive) as a
result of past events, for which it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made for the
amount of the obligation.

Contingent Liabilities are disclosed by way of notes to Financial Statements. Contingent assets
are not recognized in the financial statements but are disclosed in the notes to the financial
statements where an inflow of economic benefits is probable. Provisions and contingent liabilities
are reviewed at each Balance Sheet date.

B If the effect of the time value of money is material, provisions are discounted using a current pre¬
tax rate that reflects, when appropriate, the risks specific to the liability.

1.14 Employee benefits

A Short Term Employee Benefits:

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

B Post-Employment Benefits:

i) Defined Contribution Plans:

State governed Provident Fund Scheme and Employees State Insurance Scheme are defined
contribution plans.

The contribution paid / payable under the schemes is recognized during the period in which
the employees render the related services.

ii) Defined Benefit Plans:

The Employee’s Gratuity Fund Scheme and compensated absences is Company’s defined
benefit plans. The present value of the obligation under such defined benefit plan is
determined based on actuarial valuation using the Projected Unit Credit Method, which
recognizes each period of service as giving rise to additional unit of employee benefits
entitlement and measures each unit separately to build up the final obligation. The obligation
is measured at the present value of the estimated future cash flows. The discount rates used
for determining the present value of the obligation under defined benefit plans, is based on
the market yields on Government Securities as at the Balance Sheet date, having maturity
periods approximating to the terms of related obligations.

For defined benefit plans, the amount recognized as ‘Employee benefit expenses’ in the
Statement of Profit and Loss is the cost of accruing employee benefits promised to employees
over the year and the costs of individual events such as past/future service benefit changes
and settlements (such events are recognized immediately in rate to the net defined benefit
liability or asset is charged or credited to ‘Finance costs’ in the Statement of Profit and Loss.
Any differences between the interest income on plan assets and the return actually achieved,
and any changes in the liabilities over the year due to changes in actuarial assumptions or
experience adjustments within the plans, are recognized immediately in ‘Other comprehensive
income’ and subsequently not reclassified to the Statement of Profit and Loss.

All defined benefit plans obligations are determined based on valuations, as at the Balance
Sheet date, made by independent actuary using the projected unit credit method. The
classification of the Company’s net obligation into current and non-current is as per the
actuarial valuation report.

Gains or losses on the curtailment or settlement of any defined benefits plans are recognized
when the curtailment or settlement occurs. Past service cost is recognized as expense on a
straight-line basis over the average period until the benefits become vested.

C Long Term Employee Benefits:

The employees’ long term compensated absences are company’s defined benefit plans.
The present value of the obligation is determined based on the actuarial valuation using the
projected unit credit method as at the date of the balance sheet. In case of funded plans, the
full value of plan assets is reduced from the gross obligation to recognize the obligation on
the net basis.

1.15 Financial instruments

Initial Recognition and Measurement:

The company recognizes a financial asset in its balance sheet when it becomes party to the contractual
provisions of the instrument. All financial assets are recognized initially at fair value, plus in the case of
financial assets not recorded at fair value through profit or loss (FVTPL), transaction cost that are
attributable to the acquisition of the financial asset.

Where the fair value of a financial asset at initial recognition is different from its transaction price, the
difference between the fair value and the transaction price is recognized as a gain or loss in the
Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market
price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that
users data from observable markets (i.e. level 2 input).

In case the fair value in not determined using a level 1 or level 2 inputs as mentioned above, the
difference between the fair value and transaction price is deferred appropriately and recognized as a

gain in the Statement of Profit and Loss only to the extent the such gain or loss arises due to a change
in factor that market participants take into account when pricing the financial asset.

However trade receivables that do not contain a significant financing component are measured at
transaction price.

Investments and Other Financial Assets

(i) Classification

The Company classifies its financial assets in the following measurement categories:

(1) those to be measured subsequently at fair value (either through other comprehensive income,
or through the Statement of Profit and Loss), and

(2) those measured at amortised cost.

The classification depends on the Company’s business model for managing the financial
assets and the contractual terms of the cash flows.

(ii) Measurement

At initial recognition, the Company measures a financial asset at its fair value. Transaction costs
of financial assets carried at fair value through the Profit and Loss are expensed in the Statement
of Profit and Loss.

Derivative Financial InstrumentsInitial recognition and subsequent measurement The Company
uses derivative financial instruments, such as forward currency contracts its foreign currency
risks. Such derivative financial instrument recognised at fair value on the date on which a derivative
contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as Financial liabilities when the fair value is
negative. Any gain & losses arising from the change in Fair Value of Derivative are taken directly
to Profit & Loss Account

Debt instruments:

Subsequent measurement of debt instruments depends on the Company’s business model for
managing the asset and the cash flow characteristics of the asset. The Company classifies its debt
instruments into following categories:

(1) Amortised cost:

Assets that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortised cost. Interest income
from these financial assets is included in other income using the effective interest rate method.

(2) Fair Value through Other Comprehensive Income:

Assets that do not meet the criteria for amortised cost are measured at fair value through
Other Comprehensive Income. Interest income from these financial assets is included in
other income.

Equity instruments:

The Company measures its equity investment other than in subsidiaries, joint ventures and
associates at fair value through profit and loss. However where the Company’s management
makes an irrevocable choice on initial recognition to present fair value gains and losses on
specific equity investments in other comprehensive income (Currently no such choice made),
there is no subsequent reclassification, on sale or otherwise, of fair value gains and losses to the
Statement of Profit and Loss.

Impairment of investments:

The Company reviews its carrying value of investments carried at cost annually, or more frequently
when there is indication for impairment. If the recoverable amount is less than its carrying amount,
the impairment loss is recorded in the Statement of Profit and Loss. When an impairment loss
subsequently reverses, the carrying amount of the Investment is increased to the revised estimate
of its recoverable amount, so that the increased carrying amount does not exceed the cost of the

Investment. A reversal of an impairment loss is recognised immediately in Statement of Profit or
Loss.

Impairment of Financial Assets

The Company recognizes loss allowances using the expected credit loss (ECL) model for the
financial assets which are not fair valued through profit or loss.

For trade receivables and contract assets, the Company applies a simplified approach in calculating
ECLs. Therefore, the Company does not track changes in credit risk, but instead recognises a loss
allowance based on lifetime ECLs at each reporting date. The Company has established a provision
matrix that is based on its historical credit loss experience, adjusted for forward-looking factors
specific to the debtors and the economic environment.

For all other financial assets, ECLs are measured at an amount equal to the 12-month ECL,
unless there has been a significant increase in credit risk from initial recognition in which case
those are measured at lifetime ECL. The amount of ECL (or reversal) that is required to adjust the
loss allowance at the reporting date to the amount that is required to be recognized is recognized
as an impairment loss in the Statement of Profit and Loss.

Derecognition:

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is derecognized(i.e. removed from the company’s balance sheet) when any of
the following occurs:

i. The contractual rights to cash flows from the financial asset expires;

ii. The company transfers its contractual rights to received cash flows of the financial assets
and has substantially transferred all the risk and rewards of ownership of the financial assets;

iii. The company retains the contractual rights to receive cash flows but assumes a contractual
obligations to pay the cash flows without material delay to one or more recipients under a
‘pass-through’ arrangement (thereby substantially transferring all the risks and rewards of
ownership of the financial asset);

iv. The company neither transfers nor retains substantially all risk and rewards of ownership
and does not retain control over the financial asset.

In cases where company has neither transferred nor retained substantially all of the risks and
rewards of the financial asset, but retains control of the financial assets, the Company continues
to recognize such financial asset to the extent of its continuing involvement in the financial asset.
In that case, the Company also recognizes an associated liability. The financial asset and the
associated liability are measured on a basis that reflects the rights and obligations that the Company
has retained.

On De-recognition of a financial asset, (except as mentioned in ii above for financial assets
measured a FVTOCI), the difference between the carrying amount and the consideration received
is recognized in the Statement of Profit and Loss.

Financial liabilities:

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through
profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments
in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs.

The Company’s financial liabilities include trade and other payables, loans and borrowings
including bank overdrafts, financial guarantee contracts and derivative financial instruments.

Subsequent measurement

The Company’s financial liabilities include trade and other payables, loans and borrowings
including bank overdrafts, financial guarantee contracts and derivative financial instruments.

For purposes of subsequent measurement, financial liabilities are classified in two categories:

• Financial liabilities at fair value through profit or loss

• Financial liabilities at amortised cost (loans and borrowings)

Financial liabilities at fair value through profit or loss

Financial liabilities at fair 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.

Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes derivative financial instruments entered
into by the Company that are not designated as hedging instruments in hedge relationships as
defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading
unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are
satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in
own credit risk are recognized in OCI. These gains/ losses are not subsequently transferred to
P&L. However, the Company may transfer the cumulative gain or loss within equity. All other
changes in fair value of such liability are recognised in the statement of profit and loss. The
Company has not designated any financial liability as at fair value through profit or loss.

Financial liabilities at amortised cost (Loans and borrowings)

This is the category most relevant to the Company. After initial recognition, interest-bearing loans
and borrowings are subsequently measured at amortised cost using the EIR method. Gains and
losses are recognised in profit or loss when the liabilities are derecognised as well as through the
EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs
in the statement of profit and loss.

This category generally applies to borrowings. For more information refer Note 15 & 19.

1.16 Foreign Currency Translation
Initial Recognition:

On initial recognition, transactions in foreign currencies entered into by the Company are recorded in
the functional currency (i.e. Indian Rupees), by applying to the foreign currency amount, the spot
exchange rate between the functional currency and the foreign currency at the date of the transaction.
Exchange differences arising on foreign exchange transactions settled during the year are recognized
in the Statement of Profit and Loss.

Measurement of Foreign Currency Items at Reporting Date:

Foreign currency monetary items of the Company are translated at the closing exchange rates. Non¬
monetary items that are measured at historical cost in a foreign currency, are translated using the
exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a
foreign currency, are translated using the exchange rates at the date when the fair value is measured.

1.17 Cash and Cash Equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term
deposits with an maturity of three months or less, which are subject to an insignificant risk of changes
in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and
short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an
integral part of the Company’s cash management.

1.18 Cash Flow Statement

Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing
activities. Cash flow from operating activities is reported using indirect method adjusting the net profit
for the effects of:

i. changes during the period in inventories and operating receivables and payables, transactions of
a non-cash nature;

ii. non-cash items such as depreciation, provisions, and unrealized foreign currency gains and
losses etc.; and

iii. all other items for which the cash effects are investing or financing cash flows.

1.19 Events after Reporting Date

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the
end of the reporting period, the impact of such events is adjusted within the financial statements.
Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.

1.20 Key Accounting Estimates and Judgments

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

Critical Accounting Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year, are described below:

A. Income Taxes

The Company’s tax jurisdiction is India. Significant judgments are involved in estimating budgeted
profits for the purpose of paying advance tax, determining the provision for income taxes, including
amount expected to be paid/recovered for uncertain tax positions (Refer note 18).

B. Property, Plant and Equipment

Property, plant and equipment represent a significant proportion of the asset base of the Company.
The charge in respect of periodic depreciation is derived after determining an estimate of an
asset’s expected useful life and the expected residual value at the end of its life. The useful lives
and residual values of Company’s assets are determined by the management at the time the
asset is acquired and reviewed periodically, including at each financial year end. The lives are
based on historical experience with similar assets as well as anticipation of future events, which
may impact their life, such as changes in technical or commercial obsolescence arising from
changes or improvements in production or from a change in market demand of the product or
service output of the asset.

C. Defined Benefit Obligation

The costs of providing pensions and other post-employment benefits are charged to the Statement
of Profit and Loss in accordance with IND AS 19 ‘Employee benefits’ over the period during which
benefit is derived from the employees’ services. The costs are assessed on the basis of assumptions
selected by the management. These assumptions include salary escalation rate, discount rates,
expected rate of return on assets and mortality rates. The same is disclosed in Note 43, ‘Post
Retirement Benefit Plans’.

D. Fair Value Measurement of Financial Instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet
cannot be measured based on quoted prices in active markets, their fair value is measured using

valuation techniques, including the discounted cash flow model, which involve various judgments
and assumptions.

1.21 When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot
be measured based on quoted prices in active markets, their fair value is measured using valuation
techniques, including the discounted cash flow model, which involve various judgments and
assumptions.

Recent Accounting Pronouncements

The Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year
ended on March 31,2025, MCA has notified Ind AS 117 - Insurance Contracts and amendments to Ind
AS 116 - Leases, relating to sale and leaseback transactions, effective from April 1,2024. The Company
has assessed these amendments and determined that they do not have any significant impact on its
financial statements.

On May 07, 2025, MCA notified the amendment in Ind AS 21-The Effects of Changes in Foreign
Exchange Rates. These amendments aim to provide guidance on assessing whether a currency is
exchangeable and on estimating the spot exchange rate when exchangeability is lacking. The
amendments are effective from annual periods beginning on or after April 1, 2025. The Company is
currently assessing the probable impact of these amendments on its financial statement.

Outflow in respect of (a) and (b) disputes /contingencies are dependent upon final outcome of the
disputes or ultimate agreement to resolve the differences.

B. Commitment

Commitments on account of estimated amount of contract remaining to be executed on capital
account and not provided for relating to Property Plant and Equipment is Rs.1169.40 Lakhs

The fair value of the financial assets and liabilities are included at the amount of which the instrument

could be exchanged in a current transaction between willing parties, other than in a forced or liquidation

sale.

The following methods and assumptions were used to estimate the fair values:

1. Fair Value of Cash and short term deposits, trade and other short term receivables, trade payables,
other current liabilities, short term loans from banks and other financial institutions approximate
their carrying amount largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rate are evaluated by the company based
on parameters such as interest rates and individual credit worthiness of the counter party. Based
on this evaluation, allowances are taken to account for expected losses of these
receivables.Accordingly, fair values of such instruments is not materially different from their carrying
amounts:-

For the financial assets and liabilities that are measured at fair values, the carrying amount are
equal to the fair value.

Valuation Methodology

i) Fair Value of Derivatives: The fair value of Forward Foreign Exchange contracts is determined
using observable forward exchange rates at the balance sheet date.

ii) Investments in equity shares included in Level 3 of the fair value hierarchy have been valued
using the cost approach to arrive at their fair value. Cost of unquoted equity instruments has been
considered as an appropriate estimate of fair value because of a wide range of possible fair value
measurements and cost represents the best estimate of fair value within that range.

The Company uses the following hierarchy for determining and disclosing the fair value of
financial instruments by valuation technique:

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

• Level 2: Other techniques for which all inputs which have a significant effect on the recoded

fair value are observable, either directly or indirectly.

• Level 3: Techniques which use inputs that have a significant effect on the recoded fair value

that are not based on observable market data.

For assets which are measured at fair value as at Balance Sheet date, the classification of fair
value calculations by category is summarized below:

35 Capital risk Management

Equity Share capital and other equity are considered for the purpose of company’s capital management.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to
optimise returns to shareholders. The Capital structure of the company is based on management’s
judgment of its strategic and day-to-day needs with a focus on total equity to maintain investor,creditors
and market confidence and to sustain future development and growth of its business.

The management and the Board of Directors monitors the return on capital as well as the level of
dividends to shareholders. The company may take appropriate steps in order to maintain, or if necessary
adjust, its capital structure.

36 Financial risk management

The Company’s business activities are exposed to a variety of financial risks, namely liquidity risk,
market risks and credit risks. The company’s senior management has the overall responsibility for
establishing and governing the company’s risk management framework. The company has constituted
a risk management committee, which is responsible for developing and monitoring the company’s risk
management policies. The company’s risk management policies are established to identify and analyse
the risks faced by the company, to set and monitor appropriate risk limits and controls, periodically
review the changes in market conditions and reflect the changes in the policy accordingly. The key
risks and mitigating actions are also placed before the Audit Committee of the company.

A. Management of Liquidity Risk

Liquidity risk is the risk that the company will face in meeting its obligation associated with its
financial liabilities. The Company’s approach in managing liquidity is to ensure that it will have
sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this
management considers both normal and stressed conditions.

Due to dynamic nature of the underlying businesses, company treasury maintains flexibility in
funding by maintaining availability of under committed credit lines. Management monitors rolling
forecasts of the company’s liquidity position (comprising the undrawn borrowing facilities) and
cash and cash equivalents on the basis of expected cash flows.

The following table shows the maturity analysis of the company’s financial liabilities based on the
contractually agreed undiscounted cash flows along with its carrying value as at the Balance
sheet date.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments
will fluctuate because of changes in market interest rates. In order to optimize the Company’s
position with regards to interest income and interest expenses and to manage the interest
rate risk, treasury performs a comprehensive corporate interest rate risk management by
balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.
According to the Company interest rate risk exposure is only for floating rate borrowings. For
floating rate liabilities, the analysis is prepared assuming that the amount of the liability
outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis
point increase or decrease is used when reporting interest rate risk internally to key
management personnel and represents management’s assessment of the reasonably possible
change in interest rates.

C Management of Credit Risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations
as agreed. To manage this, the Company periodically assesses financial reliability of customers,
taking into account the financial condition, current economic trends, and analysis of historical bad
debts and ageing of accounts receivable. Individual risk limits are set accordingly.

The company considers the probability of default upon initial recognition of asset and whether
there has been a significant increase in credit risk on an ongoing basis through out each reporting
period. To assess whether there is a significant increase in credit risk, the company compares the
risk of default occurring on asset as at the reporting date with the risk of default as at the date of
initial recognition. It considers reasonable and supportive forwarding-looking information such
as:

i) Actual or expected significant adverse changes in business,

ii) Actual or expected significant changes in the operating results of the counterparty,

iii) Financial or economic conditions that are expected to cause a significant change to the
counterparty’s ability to meet its obligations,

iv) Significant increase in credit risk on other financial instruments of the same counterparty,

v) Significant changes in the value of the collateral supporting the obligation or in the quality of
the third-party guarantees or credit enhancements.

The Company measures the expected credit loss of trade receivables and loan from individual
customers based on historical trend, industry practices and the business environment in which
the entity operates. Loss rates are based on actual credit loss experience and past trends. Based
on the historical data, loss on collection of receivable is not material hence no additional provision
considered.

Exposure to credit risk

The carrying amount of financial assets represents maximum credit exposures.The maximum
credit exposure to credit risk was Rs. 3266.46 and Rs. 2852.26 as at March 31, 2025 and March
31,2024 respectively being total of carrying amount of balance principally with banks, other bank
balances, Loans, Trade receivable-billed and other financial assets.

The company’s exposure to customers is diversified and except one customer as at March 31,
2025 comprising 10.37% of Revenue and one customer as at March 31,2024 comprising 10.68%
of Revenue, no single customer contributes to more than 10% of Revenue as at March 31,2025
and March 31, 2024.

37 Earnings per Share (EPS) as per Indian Accounting Standard 33:

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the
Company by the weighted average number of Equity shares outstanding during the year. Diluted EPS
amounts are calculated by dividing the profit attributable to equity holders of the Company (after
adjusting for interest on the convertible preference shares) by the weighted average number of Equity
shares outstanding during the year plus the weighted average number of Equity shares that would be
issued on conversion of all the dilutive potential Equity shares into Equity shares.

Risk Exposure - Asset Volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan
assets underperform this yield, this will create a deficit. Most of the plan asset investments is in
fixed income securities with high grades and in government securities. These are subject to
interest rate risk and the fund manages interest rate risk derivatives to minimize risk to an acceptable
level. A portion of the funds are invested in equity securities and in alternative investments %
which have low correlation with equity securities. The equity securities are expected to earn a
return in excess of the discount rate and contribute to the plan deficit.

(i) Leave obligations

The leave obligations cover the Company’s liability for sick and earned leave. The amount of the
provision of Rs. 9.80 Lakh - [31st March, 24: Rs. 9.85 Lakh] is presented as liabilities.

(ii) Defined contribution plans

The Company also has certain defined contribution plans. Contributions are made to provident
fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions
are made to registered provident fund administered by the government. The obligation of the
Company is limited to the amount contributed and it has no further contractual nor any constructive
obligation. The expense recognized during the period towards defined contribution plan is Rs.
6.78 Lakh (PY: Rs. 6.52 Lakh).

41 The Code on Social Security, 2020 (‘Code’) has been notified in the Official Gazette of India on
September 29, 2020, which could impact the contributions of the Company towards certain employment
benefits. The effective date from which changes are applicable is yet to be notified and the rules are yet
to be framed. Impact, if any, of the change will be assessed and accounted in the period of notification
of the relevant provisions.

42 (i) The Company has not traded or invested in Crypto Currency or Virtual Currency during the

financial year.

(ii) No proceedings have been initiated or are pending against the Company for holding any benami
property under the Benami Transactions (Prohibition) Act,1988 (45 of 1988) and rules made
thereunder.

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

(a) directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the company (ultimate beneficiaries) or

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

(iv) The Company has not received any fund from any person(s) or entity(ies), including foreign
entities (funding party) with the understanding (whether recorded in writing or otherwise) that the
Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

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

(vi) The Company does not have any transactions with companies which are struck off.

(vii) The Company has not entered with any Scheme(s) of arrangement in terms of sections 230 to 237
of the Companies Act, 2013.

(viii) The Company do not have any subsidiary, so there is no requirement to comply with the number
of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on
number of Layers) Rules, 2017.

(ix) The Company has been maintaining its books of accounts in the accounting software which has
feature of recording audit trail of each and every transaction, creating an edit log of each change
made in books of account along with the date when such changes were made and ensuring that
the audit trail cannot be disabled, throughout the year as required by proviso to sub rule (1) of rule
3 of The Companies (Accounts) Rules, 2014 known as the Companies (Accounts) Amendment
Rules, 2021. The Company has preserved Audit trail as per statutory requirements for record
retention.

As per our report of even date F°^{r 3}"d °f ^the BO*?? ^{Directors of}

For KANTILAL PATEL & CO. ^Industries

CHARTERED ACCOUNTANTS ^As^{hok Chh}*J.^{er Chha)e}.T

_{Firm reaistration nU}mb_er- 1₀4₇44W ^[M^anagmg ^{Director] [Jt}. M^anagmg ^Director]

^{Firm registration number}. ^104744W [DIN: 00280185] [DIN:05184646]

^{Jinal A. Patel} CA Jhanvi Jansari CS Se)al Kanbi

^Partner [Chief financial officer] [Company Secretary]

^Membership ^no.. ¹⁵³⁵⁹⁹ [mRN: 140266] [MRN:47980]

Place : Ahmedabad Place : Ahmedabad

Date : May 27, 2025 Date : May 27, 2025

---

Mar 31, 2024

1.13 Provisions, Contingent Liabilities and Contingent Assets:

A Provisions are recognized when the Company has present obligation (legal or constructive) as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation.

Contingent Liabilities are disclosed by way of notes to Financial Statements. Contingent assets are not recognized in the financial statements but are disclosed in the notes to the financial statements where an inflow of economic benefits is probable. Provisions and contingent liabilities are reviewed at each Balance Sheet date.

B If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability.

1.14 Employee benefits

A Short Term Employee Benefits:

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

B Post-Employment Benefits:

i) Defined Contribution Plans:

State governed Provident Fund Scheme and Employees State Insurance Scheme are defined contribution plans.

The contribution paid / payable under the schemes is recognized during the period in which the employees render the related services.

ii) Defined Benefit Plans:

The Employee''s Gratuity Fund Scheme and compensated absences is Company''s defined benefit plans. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government Securities as at the Balance Sheet date, having maturity periods approximating to the terms of related obligations.

For defined benefit plans, the amount recognized as ‘Employee benefit expenses'' in the Statement of Profit and Loss is the cost of accruing employee benefits promised to employees over the year and the costs of individual events such as past/future service benefit changes and settlements (such events are recognized immediately in rate to the net defined benefit liability or asset is charged or credited to ‘Finance costs'' in the Statement of Profit and Loss. Any differences between the interest income on plan assets and the return actually achieved, and any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognized immediately in ‘Other comprehensive income'' and subsequently not reclassified to the Statement of Profit and Loss.

All defined benefit plans obligations are determined based on valuations, as at the Balance Sheet date, made by independent actuary using the projected unit credit method. The classification of the Company''s net obligation into current and non-current is as per the actuarial valuation report.

Gains or losses on the curtailment or settlement of any defined benefits plans are recognized when the curtailment or settlement occurs. Past service cost is recognized as expense on a straight-line basis over the average period until the benefits become vested.

C Long Term Employee Benefits:

The employees'' long term compensated absences are company''s defined benefit plans. The present value of the obligation is determined based on the actuarial valuation using the

projected unit credit method as at the date of the balance sheet. In case of funded plans, the full value of plan assets is reduced from the gross obligation to recognize the obligation on the net basis.

1.15 Financial instruments

Initial Recognition and Measurement:

The company recognizes a financial asset in its balance sheet when it becomes party to the contractual provisions of the instrument. All financial assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss (FVTPL), transaction cost that are attributable to the acquisition of the financial asset.

Where the fair value of a financial asset at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that users data from observable markets (i.e. level 2 input).

In case the fair value in not determined using a level 1 or level 2 inputs as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain in the Statement of Profit and Loss only to the extent the such gain or loss arises due to a change in factor that market participants take into account when pricing the financial asset.

However trade receivables that do not contain a significant financing component are measured at transaction price.

Investments and Other Financial Assets

(i) Classification

The Company classifies its financial assets in the following measurement categories:

(1) those to be measured subsequently at fair value (either through other comprehensive income, or through the Statement of Profit and Loss), and

(2) those measured at amortised cost.

The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash flows.

(ii) Measurement

At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of financial assets carried at fair value through the Profit and Loss are expensed in the Statement of Profit and Loss.

Debt instruments:

Subsequent measurement of debt instruments depends on the Company''s business model for managing the asset and the cash flow characteristics of the asset. The Company classifies its debt instruments into following categories:

(1) Amortised cost:

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in other income using the effective interest rate method.

(2) Fair Value through Other Comprehensive Income:

Assets that do not meet the criteria for amortised cost are measured at fair value through Other Comprehensive Income. Interest income from these financial assets is included in other income.

Equity instruments:

The Company measures its equity investment other than in subsidiaries, joint ventures and associates at fair value through profit and loss. However where the Company''s management makes an irrevocable choice on initial recognition to present fair value gains and losses on specific equity investments in other comprehensive income (Currently no such choice made), there is no subsequent reclassification, on sale or otherwise, of fair value gains and losses to the Statement of Profit and Loss.

Derecognition:

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the company''s balance sheet) when any of the following occurs:

i. The contractual rights to cash flows from the financial asset expires;

ii. The company transfers its contractual rights to received cash flows of the financial assets and has substantially transferred all the risk and rewards of ownership of the financial assets;

iii. The company retains the contractual rights to receive cash flows but assumes a contractual obligations to pay the cash flows without material delay to one or more recipients under a ‘pass-through'' arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);

iv. The company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.

In cases where company has neither transferred nor retained substantially all of the risks and rewards of the financial asset, but retains control of the financial assets, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognizes an associated liability. The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

On De-recognition of a financial asset, (except as mentioned in ii above for financial assets measured a FVTOCI), the difference between the carrying amount and the consideration received is recognized in the Statement of Profit and Loss.

Financial liabilities:

Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are classified as fair value through profit and loss. Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method.

1.16 Foreign Currency Translation Initial Recognition:

On initial recognition, transactions in foreign currencies entered into by the Company are recorded in the functional currency (i.e. Indian Rupees), by applying to the foreign currency amount, the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss.

Measurement of Foreign Currency Items at Reporting Date:

Foreign currency monetary items of the Company are translated at the closing exchange rates. Nonmonetary items that are measured at historical cost in a foreign currency, are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date when the fair value is measured.

1.17 Cash and Cash Equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

1.18 Cash Flow Statement

Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method adjusting the net profit for the effects of:

i. changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature;

ii. non-cash items such as depreciation, provisions, and unrealized foreign currency gains and losses etc.; and

iii. all other items for which the cash effects are investing or financing cash flows.

1.19 Events after Reporting Date

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.

1.20 Recent Accounting Pronouncements issued but not yet effective:

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards.

33 Fair Value Measurement

Financial Instrument by category and hierarchy

The fair value of the financial assets and liabilities are included at the amount of which the instrument

could be exchanged in a current transaction between willing parties, other than in a forced or liquidation

sale.

The following methods and assumptions were used to estimate the fair values:

1. Fair Value of Cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amount largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rate are evaluated by the company based on parameters such as interest rates and individual credit worthiness of the counter party. Based on this evaluation, allowances are taken to account for expected losses of these receivables.Accordingly, fair values of such instruments is not materially different from their carrying amounts:-

For the financial assets and liabilities that are measured at fair values, the carrying amount are equal to the fair value.

34 Capital risk Management

Equity Share capital and other equity are considered for the purpose of company''s capital management. The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The Capital structure of the company is based on management''s judgment of its strategic and day-to-day needs with a focus on total equity to maintain investor,creditors and market confidence and to sustain future development and growth of its business.

The management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

35 Financial risk management

The Company''s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risks. The company''s senior management has the overall responsibility for establishing and governing the company''s risk management framework. The company has constituted a risk management committee, which is responsible for developing and monitoring the company''s risk management policies. The company''s risk management policies are established to identify and analyse the risks faced by the company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the company.

A. Management of Liquidity Risk

Liquidity risk is the risk that the company will face in meeting its obligation associated with its financial liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this management considers both normal and stressed conditions.

Due to dynamic nature of the underlying businesses, company treasury maintains flexibility in funding by maintaining availability of under committed credit lines. Management monitors rolling forecasts of the company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows.

The following table shows the maturity analysis of the company''s financial liabilities based on the contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. According to the Company interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, the analysis is prepared assuming that the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

C Management of Credit Risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through out each reporting period. To assess whether there is a significant increase in credit risk, the company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business,

ii) Actual or expected significant changes in the operating results of the counterparty,

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligations,

iv) Significant increase in credit risk on other financial instruments of the same counterparty,

v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.

The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.

Exposure to credit risk

The carrying amount of financial assets represents maximum credit exposures.The maximum credit exposure to credit risk was Rs. 2852.26 lakhs and Rs. 2468.92 lakhs as at March 31,2024 and March 31,2023 respectively being total of carrying amount of balance principally with banks, other bank balances, Trade receivable-billed and Trade receivables-unbilled and other financial assets.

The company''s exposure to customers is diversified and except one customer as at March 31, 2024 and two customers as at March 31,2023, no single customer contributes to more than 10% and 10% of Trade receivable-billed and Trade receivable-unbilled as at March 31, 2024 and March 31,2023.

No Significant changes in estimation techniques or assumptions were made during the year.

36 Earnings per Share (EPS) as per Indian Accounting Standard 33:

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent (after adjusting for interest on the convertible preference shares) by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

Risk Exposure - Asset Volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk derivatives to minimize risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments % which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit.

(i) Leave obligations

The leave obligations cover the Company''s liability for sick and earned leave. The amount of the provision of '' 9.85 Lakh - [31st March, 23: '' 6.10 Lakh] is presented as liabilities.

(ii) Defined contribution plans

The Company also has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognized during the period towards defined contribution plan is '' 6.52 Lakh (PY: '' 3.40 Lakh).

) Revenue from operations for the year ending March 31, 2024 includes '' Nil (PY : '' 189.05 lakh) relating to Reimbursement of SGST which is recognized on receipt of “Eligibility Certificate” for application made under Gujarat Textile Policy, 2012.

43 The Code on Social Security, 2020 (‘Code'') has been notified in the Official Gazette of India on September 29, 2020, which could impact the contributions of the Company towards certain employment benefits. The effective date from which changes are applicable is yet to be notified and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in the period of notification of the relevant provisions.

44 (i) The Company has not traded or invested in Crypto Currency or Virtual Currency during the

financial year.

(ii) No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act,1988 (45 of 1988) and rules made thereunder.

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

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries) or

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

(iv) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

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

(vi) The Company does not have any transactions with companies which are struck off.

(vii) The Company has not entered with any Scheme(s) of arrangement in terms of sections 230 to 237 of the Companies Act, 2013.

(viii) The Company do not have any subsidiary, so there is no requirement to comply with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

(ix) The Company has been maintaining its books of accounts in the accounting software which has feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled, throughout the year as required by proviso to sub rule (1) of rule 3 of The Companies (Accounts) Rules, 2014 known as the Companies (Accounts) Amendment Rules, 2021.

For and on behalf of the Board of Directors of As p^{er our re}p^{ort of even date} Gujarat Craft Industries Limited

^{For KANTILAL PATEL} & ^C°. CIN : L25111GJ1984PLC007130

C^HARTE^RED _^ACC°^UNT^ANTS Ashok Chhajer Rishab Chhajer

^{Firm registration number: 104744W} [Managing Director] [Jt. Managing Director]

_{Jinal A}. _Patel [DIN: 00280185] [DIN:05184646]

Partner CA Jhanvi Jansari CS Sejal Kanbi

Membership no.: 153599 [Chief financial officer] [Company Secretary]

Place : Ahmedabad ^{MRN : 140266 MRN : 47980}

Date : May 27, 2024 Place : Ahmedabad

Date : May 27, 2024

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Mar 31, 2015

1. Corporate information

Gujarat Craft Industries Limited (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange, Chennai Stock Exchange and Ahmedabad Stock Exchange in India. The company is engaged in the manufacturing of HDPE / PP woven fabrics, sheets, sacks, PE tarpaulin. The company caters to both domestic and international markets.

2. Basis of preparation

The financial statements of Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards notified U/S 133 of CA 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles. In applying the accounting policies considerations have been given to prudence, substance over form and materiality.

3. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

4. Gratuity and other post-em ployment benefit plans

a. The company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 469 (in '000) [Year ended 31 March, 2014 Rs. 232 (in '000)] for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to this plan by the company is at rate specified in the rules of the schemes.

b. The company operates two defined plans, viz., gratuity and leave encashment, for its employees. Under the gratuity plan, every employee who has completed atleast five years of service gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service. The plans are not funded by the company.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and amounts recognized in the balance sheet for the respective plans.

5. Related party disclosures

Names of related parties and related party relationship

Key management personnel Ashok Chhajer Rishab Chhajer Binod Chhajer Kashyap Mehta

Relative of Key Management Susma Chhajer personnel

Enterprises where Key management Personnel Has significant Influence

Typhoon Financial Serv. Ltd Ethnic Appereal P. Ltd. Rishabh Business P. Ltd

Worldwide Impex Pvt. Ltd Technomod Prop. P. Ltd. Indian Agrotech Ltd.

APA Finance Ltd

Woodlands Consultancy Services Pvt. Ltd.

6. Capital and other commitments

Estimated amount of contract remaining to be executed in Capital Account (net of advances) not provided for Rs. 1,481 in ('000) (P.Y. Rs. 1,000 ('000).

7. DERIVATIVE INSTRUMENTS:

Foreign currency exposure that are not hedged by derivative instruments as on 31st March, 2015 US $ 897 ('000) Equivalent to Rs. 57,159 ('000) (P.Y. $ NIL Equivalent to Rs. NIL)

8. Amount of expenditure incurred in research and development is Rs. Nil (P.Y. Rs. Nil).

9. The balances of trade receivables / payables are subject to confirmation. Adjustments including provisions / write-off, if any, required in accounts, will be made on reconciliation and / or settlement.

10. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006 Based on the information available with the company there are no suppliers who are registered under the Micro, Small and Medium Enterprises Development Act, 2006 as at March 31st, 2015. Hence, the disclosure relating to amounts unpaid as at the year end to gather interest paid / payable under this Act have not been given.This is relied upon by the auditors.

11. Contingent Liabilities and Commitments 31 March 2015 31 March 2014 Rs. in (000) Rs. in (000)

Income Tax Liability for which the company has preferred an appeal before the CIT (A). 30,272 -

30,272 -

12. Money received against share warrants

The Board of Directors of the company at their meeting held on 14th January, 2013 and as approved at its Extra Ordinary General Meeting held on 23rd February, 2013 have resolved to create, offer, issue and allot up to 17,75,000 Equity Warrants, convertible into 17,75,000 Equity shares of Rs. 10/- each on a preferential allotment basis, pursuant to Section 81(1A) of the Companies Act, 1956, at a conversion price of Rs. 27/- per Equity Share of the Company, arrived at in accordance with the SEBI Guidelines in this regard and subsequently these warrants were allotted on 6th March, 2013 and 28th october, 2014 to the promoters and money was received from them.

The warrants have been converted into equivalent number of shares on payment of the balance amount before 5th September, 2014 (being 18 months from the date of Allotment of Equity Warrants).

13. The figures for the previous year have been regrouped wherever necessary so as to make it comparable with those of the current year.

14. Company is in process of recruiting company secretary as required under the provision of section 203 of The Companies Act, 2013. And as such the accounts are not signed by the company secretary.

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Mar 31, 2014

1 Gratuity and other post-employment benefit plans

a. The company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 232 (Rs.000) (Year ended 31 March, 2013 Rs. 236 (Rs.000)) for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to this plan by the company is at rate specified in the rules of the schemes.

b. The company operates two defined plans, viz., gratuity and leave encashment, for its employees. Under the gratuity plan, every employee who has completed atleast five years of service gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service. The plans are not funded by the company.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and amounts recognized in the balance sheet for the respective plans. Statement of profit and loss

Net employee benefit expense recognized in the employee cost

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

2 Capitalization of expenditure

During the year, the company has capitalized the following expense of revenue nature to the cost of fixed asset/ capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective note is net of amounts capitalized by the company.

3 Segment information

Based on the guiding principle given in Accounting Standard-17 on Segment Reporting (issued by the Institute of Chartered Accountants of India), the Company''s primary business is manufacturing of P.E.Tarpaulin,HD/PP Woven Sacks, Fabrics which have similar risks and returns, Accordingly there are no separate reportable segment as far as primary segment is concerned.

4 Related party disclosures

Names of related parties and related party relationship

Key management personnel :

Ashok Chhajer Rishab Chhajer Binod Chhajer Kashyap Mehta

Relative of Key Management personnel :

Susma Chhajer

Enterprises where Key management Personnel Has significant Influence

Typhoon Financial Serv. Ltd Worldwide Impex Pvt. Ltd

Ethnic Appereal P. Ltd. Technomod Prop. P. Ltd.

Rishabh Business P. Ltd Indian Agrotech Ltd.

Woodlands Consultancy Services Pvt. Ltd. APA Finance Ltd

Related party transactions

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:

Note: The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave benefits, as they are determined on an actuarial basis for the company as a whole.

5 Capital and other commitments

Estimated amount of contract remaining to be executed in Capital Account (net of advances) not provided for Rs. 1,000 (Rs.000) (P.Y. Rs. 74,188 (Rs.000))

6 DERIVATIVE INSTRUMENTS:

Foreign currency exposure that are not hedged by derivative instruments as on 31st March,2014 US $ NIL Equivalent to Rs. NIL (P.Y. $ NIL Equivalent to Rs. NIL)

7 Trade receivables include Rs. 1,892 (Rs.000) which are outstanding for more than three years and the same is considered fully realisable and good of recovery in the opinion of the management.

8 Amount of expenditure incurred in research and development is Rs. Nil.(P.Y. Rs. Nil)

9 The balances of trade receivables / payables are subject to confirmation. Adjustments including provisions / write-off, if any, required in accounts, will be made on reconciliation and / or settlement.

10 Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

Based on the information available with the company there are no suppliers who are registered under the Micro, Small and Medium Enterprises Development Act,2006 as at March 31st, 2014.

Hence, the disclosure relating to amounts unpaid as at the year end to gather interest paid / payable under this Act have not been given.This is relied upon by the auditors.

11 Contingent Liabilities and Commitments 31 March 2014 31 March 2013

Income Tax Liability for which the company has preferred an appeal before the CIT (A). - 9,024

- 9,024

12 Money received against share warrants

The Board of Directors of the company at their meeting held on 14th January, 2013 and as approved at its Extra Ordinary General Meeting held on 23rd February, 2013 have resolved to create, offer, issue and allot up to 17,75,000 Equity Warrants, convertible into 17,75,000 Equity shares of Rs. 10/- each on a preferential allotment basis, pursuant to Section 81(1A) of the Companies Act, 1956, at a conversion price of Rs. 27/- per Equity Share of the Company, arrived at in accordance with the SEBI Guidelines in this regard and subsequently these warrants were allotted on 6th March, 2013 to the promoters and the 25% (i.e. Rs. 7/- per Equity Warrant ) application money amounting to Rs. 12,425( Rs.000) was received from them. All warrants have been converted into equivalent number of shares by April 28, 2014 (within 18 months from the date of Allotment of Equity Warrants) after receipt of balance amount.

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Mar 31, 2013

1. Corporate information

Gujarat Craft Industries Limited (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange, Chennai Stock Exchange and Ahmedabad Stock Exchange in India. The company is engaged in the manufacturing of HDPE / PP woven fabrics, sheets, sacks, PE tarpaulin. The company caters to both domestic and international markets.

2. Basis of preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles. In applying the accounting policies considerations have been given to prudence, substance over form and materiality.

3 Gratuity and other post-employment benefit plans

a. The company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 236 in (‘000) (Year ended 31 March, 2011 Rs. 192 in (‘000)) for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to this plan by the company is at rate specified in the rules of the schemes.

b. The company operates two defined plans, viz., gratuity and leave encashment , for its employees. Under the gratuity plan, every employee who has completed atleast five years of service gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service. The plans are not funded by the company.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and amounts recognized in the balance sheet for the respective plans.

4 Capitalization of expenditure

During the year, the company has capitalized the following expense of revenue nature to the cost of fixed asset/ capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective note is net of amounts capitalized by the company.

5 Segment information

Based on the guiding principle given in Accounting Standard-17 on Segment Reporting (issued by the Institute of Chartered Accountants of India), the Company''s primary business is manufacturing of PE.Tarpaulin, HD/PP Woven Sacks, Fabrics which have similar risks and returns, Accordingly there are no separate reportable segment as far as primary segment is concerned.

6 Related party disclosures

Names of related parties and related party relationship

Key management personnel Ashok Chhajer

Rishab Chhajer Binod Chhajer Kashyap Mehta

7 Capital and other commitments

Estimated amount of contract remaining to be executed in Capital Account (net of advances) not provided for" 74,188 in (‘000) (PY." 2,887/- in (‘000))

8 Prior period income

Prior period income includes amount received towards interest subsidy relating to earlier year (under TUF scheme) in respect of loan taken for purchase of plant and machinery.

9 DERIVATIVE INSTRUMENTS:

Foreign currency exposure that are not hedged by derivative instruments as on 31st March,2013 US $ NIL Equivalent to " NIL (PY. $ NIL Equivalent to " NIL)

10 Trade receivables include " 585 in (‘000) (PY. " 868 in (‘000) which are outstanding more than six months and considered as doubtful. However, no provision has been made there against as company has filed suits for recovery of the amounts and it considers the same good of recovery.

11 Amount of expenditure incurred in research and development is " Nil.(PY " Nil)

12 The balances of trade receivables / payables are subject to confirmation. Adjustments including provisions / write-off, if any, required in accounts, will be made on reconciliation and / or settlement.

13 Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

Based on the information available with the company there are no suppliers who are registered under the Micro, Small and Medium Enterprises Development Act,2006 as at March 31st, 2013.

Hence, the disclosure relating to amounts unpaid as at the year end to gather interest paid / payable under this Act have not been given.This is relied upon by the auditors.

14 Contingent Liabilities and Commitments

31 March 2013 31 March 2012 in (000) ~ in (000)

Income Tax Liability for which the company has preferred an appeal before the CIT (A). 9,024 9,024

15 Money received against share warrants

The Board of Directors of the company at their meeting held on 14th January, 2013 and as approved at its Extra Ordinary General Meeting held on 23rd February, 2013 have resolved to create, offer, issue and allot up to 17,75,000 Equity Warrants, convertible into 17,75,000 Equity shares of " 10/- each on a preferential allotment basis, pursuant to Section 81(1 A) of the Companies Act, 1956, at a conversion price of" 27/- per Equity Share of the Company, arrived at in accordance with the SEBI Guidelines in this regard and subsequently these warrants were allotted on 6th March, 2013 to the promoters and the 25% (i.e." 7/- per Equity Warrant) application money amounting to " 12,425/- in (‘000) was received from them.

The warrants may be converted into equivalent number of shares on payment of the balance amount at any time on or before 5th September, 2014 (being 18 months from the date of Allotment of Equity Warrants). In the event the warrants are not converted into shares within the said period, the Company is eligible to forfeit the amounts received towards the warrants.

16 The figures for the previous year have been regrouped wherever necessary so as to make it comparable with those of the current year.

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Mar 31, 2012

1. Corporate information

Gujarat Craft Industries Limited (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange, Chennai Stock Exchange and Ahmedabad Stock Exchange in India. The company is engaged in the manufacturing of HDPE/PP woven fabrics, sheets, sacks, PE tarpaulin. The company caters to both domestic and international markets.

2. Basis of preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles. In applying the accounting policies considerations have been given to prudence, substance over form and materiality.

3. Share capital

a. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of 10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

4. Long-term borrowings

Term loans from State Bank of India are taken during the financial year 2006-07 to 2011-12 and carries interest 14.5% to 16.75 % p.a. The loan is repayable in 72 monthly installments along with interest, from the date of loan. The loan is secured by hypothecation of entire current assets of the company and hypothecation of existing Plant & Machineries, Electric installation, Building & Proposed machineries & Building. (Also guaranteed by Managing Director)

5. Short-term borrowings From Bank:

The above amount includes

Secured borrowings Unsecured borrowings

Hypothecation of entire current assets of the company and hypothecation of existing Plant & Machineries, Electric installation,Building & Proposed machineries & Building. The cash credit is repayable on demand and carries interest @ 11.75% to 13.25% p.a. (Also guaranteed by Managing Director)

6 Gratuity and other post-employment benefit plans

a. The company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 191 in (Rs.000) (Year ended 31 March, 2011 Rs. 139 in (Rs.000) for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to this plan by the company is at rate specified in the rules of the schemes.

b. The company operates two defined plans, viz., gratuity and leave encashment, for its employees. Under the gratuity plan, every employee who has completed atleast five years of service gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service. The plans are not funded by the company.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and amounts recognized in the balance sheet for the respective plans.

7 Segment information

Based on the guiding principle given in Accounting Standard-17 on Segment Reporting (issued by the Institute of Chartered Accountants of India), the Company's primary business is manufacturing of PE.Tarpaulin, HD/PP Woven Sacks, Fabrics which have similar risks and returns, Accordingly there are no separate reportable segment as far as primary segment is concerned.

8 Capital and other commitments

Estimated amount of contract remaining to be executed in Capital Account (net of advances) not provided for Rs. 2,887 (PY.Rs. 26,854)

9 Prior period income

Prior period income includes amount received towards interest subsidy relating to earlier year (under TUF scheme) in respect of loan taken for purchase of plant and machinery.

10 DERIVATIVE INSTRUMENTS:

Foreign currency exposure that are not hedged by derivative instruments as on 31st March, 2012 US $ NIL Equivalent to Rs. NIL (P.Y. $ NIL Equivalent to Rs. NIL)

11 Trade receivables include Rs. 868/- (P.Y.Rs. 2,405) which are outstanding more than six months and considered as doubtful.However,no provision has been made there against as company has filed suits for recovery of the amounts.

12 Amount of expenditure incurred in research and development is Nil. (P.Y. Nil)

13 Receivables and payables are subject to confirmations.

14 Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

Based on the information available with the company there are no suppliers who are registered under the Micro, Small and Medium Enterprises Development Act,2006 as at March 31st, 2012.

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Mar 31, 2011

As at As at 31-03-2011 31-03-2010 (Rs.in'000) (Rs.in'000)

A) CONTINGENT LIABILITIES NOT PROVIDED FOR :

i) Differential amount of Custom/Excise Duty in respect of machinery imported under EPCG Scheme. - 634 Note: Future Cash outflows respect of above will depend if company is unable to fulfill export obligations of Rs. Nil (P.Y. Rs. 4440 within next Six Years)

ii) Bank Guarantee given by bank on behalf of the company 1750 3043

d) Employee Benefits :

(i) Defined Contribution plans :

Amount of Rs. 140 (P.Y. Rs. 137) is recognized as expenses and included in "Payment to and Provision for Employees" (Schedule '16') in the Profit and Loss Account.

(ii) Defined Benefit Plans :

Gratuity & Leave Encashment : (unfunded).

(c) Principal actuarial assumptions at the balance sheet date (expressed as weighted averages)

The estimates of future salary increase considered in actuarial valuation, take account of inflation, seniority, Promotion and other relevant factors, such as supply and demand in the employment market.

e) RESEARCH AND DEVELOPMENT EXPENSES:

Amount of expenditure incurred on Research and Development is Rs. NIL (P.Y.Rs.NIL)

f) EARNINGS PER SHARE :

i) The amount used as the numerator in calculating basic and diluted earning per share is the net profit for the year disclosed in the profit and loss account.

ii) The weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 3113300 (P.Y. 3113300).

g) In accordance with AS 9, "Revenue Recognition", excise duty on Sales amounting to Rs.21161 (P.Y. Rs. 17056) has been deducted from Sales in profit and loss account. Whereas, net difference in excise duty on inventory of Finished goods of Rs.200 (P.Y. - Rs. 612) is shown under materials.

h) RELATED PARTY DISCLOSURES: (As identified by Management)

i) Key Management Personnel :

Ashok Chhajer

Kashyap R. Mehta

Binod Chhajer

i) SEGMENT INFORMATION :

Based on the guiding principle given in Accounting Standard-17 on Segment Reporting, the Company's primary business is manufacturing of P.E.Tarpaulin,HD/PP Woven Sacks, Fabrics which have similar risks and returns, Accordingly there are no separate reportable segment as far as primary segment is concerned.

j) DERIVATIVE INSTRUMENTS:

Foreign currency exposure that are not hedged by derivative instruments as on 31st March, 2011 US $ NIL Equivalent to Rs.NIL (P.Y. $ NIL Equivalent to Rs. NIL)

k) Based on the information available with the company there are no suppliers who are registered under the Micro, Small and Medium Enterprises Development Act,2006 as at 31st March, 2011.

Hence, the disclosure relating to amounts unpaid as at the year end to gather interest paid / payable under this Act have not been given.This is relied upon by the auditors.

l) Sundry debtors include Rs. 2405/- (P.Y.Rs.1497) which are outstanding more than six months and considered as doubtful. However,no provision has been made there against as company has filed suits for recovery of the amounts.

m) Sundry debtors and creditors are subject to confirmations.

n) The additional information pursuant to the provisions of Paragraphs 3 and 4 of Part-II of the Schedule VI to the Companies Act,1956.

o) (i) Previous year figures have been restated wherever necessary to make them comparable with the current year's figures.

(ii) All the figures are in rupees thousands, unless stated otherwise.

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Mar 31, 2010

A) CONTINGENT LIABILITIES NOT PROVIDED FOR :

i) Differential amount of Custom/Excise Duty in respect

of machinery imported under EPCG schene. 634 634

Note: Future Casth outflows respect of above will depend if company is unable to fulfill export obligations of Rs. 4440 witthin next Six Year (P.Y. Rs. 4440 within next Seven Years)

ii) Bank Guarantee given by bank on behalf of the company 3043 1253

b) Employee Benefits :

(i) Defined Contribution plans :

Amount of Rs. 78 (P.Y. Rs. 65) is recognized as expenses and included in "Payment to and Provision for Employees" (Schedule 16) in"the Profit and Loss Account.

(ii) Defined Benefit Plans :

Gratuity & Leave Encasthment : (unfunded).

c) RESEARCH AND DEVELOPMENT EXPENSES:

Amount of expenditure incurred on Researcth and Development is Rs. NIL (P.Y.Rs.NIL)

d) EARNINGS PER SHARE :

i) the amount used as the numerator in calculating basic and diluted earning per share is the net profit for the year disclosed in the profit and loss account.

ii) the weighted average number of equity shares used as the denominator in calculating both basic and diluted earnings per share is 3113300 (P.Y. 3113300).

e) In accordance with Ast 14 (Revised) on Disclosure of Revenue from Sales transactions issued by Institute of Chartered Accountants of India, excise duty on Sales amounting to Rs. 17056 (P.Y. Rs. 21856)has been deducted from Sales in profit and loss account, whereas net difference in excise duty on inventory of Finished goods of Rs. 612 (P.Y. - Rs. 155) is shown under materials.

f) RELATED PARTY DISCLOSURES: (As identified by Management)

i) Key Management Personnel :

Ashok Kumar Chhajer

Kashyap R. Mehta

Binod Chhajer

g) DERIVATIVE INSTRUMENTS:

Foreign currency exposure that are not hedged by derivative instruments as on 31stMarch,2010- US $ NIL Equivalent to Rs.NIL (P.Y. $ NIL Equivalent to Rs. NIL)

h) Based on the information available with the company there are no suppliers who are registered under the Micro, Small and Medium Enterprises Development Act, 2006 as at March 31st, 2010.

Thance, the disclosure relating to amounts unpaid as at the year end to gather interest paid / payable under this Act have not been given. This has been relied upon by the Auditors.

i) Sundry debtors include Rs.1497 (P.Y,Rs.872) wthich are outstanding more than six months and considered as doubtful. However,no provisionhas been made.

j) Sundry debtors and creditors are subject to confirmations.

k) the additional information pursuant to the provisions of Paragrapths 3 and 4 of Part-ll of the Scthedule VI to the Companies Acl,1956.

1) the installed capacity is as certified by the management.

2) Includes 10 Wit. (37 Mt.) done for outsiders and 424 Mt.(500 Mt.) converted from outsiders:

l) (i) Previous year figures have been restated wherever necessary to make them comparable with the current years figures.

(ii) Ail the figures are in rupees thousands, unless stated otherwise.