Notes to Accounts of Rasi Electrodes Ltd.

Mar 31, 2023

26.8 Provision, Contingent Liability and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be outflow of resources. Provisions are determined by discounting the expected future cash flows at a pre- tax rate that reflects current market assessment of the time value of money and the risks specific to the liability. Contingent liabilities not provided for, are disclosed in the accounts by way of Notes.

26.9 Cash Flow statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows are segregated into operating, investing and financing activities.

26.10 Borrowing Cost

Borrowing costs that are attributable to the acquisition/Construction/Acquisition/Production of qualifying assets (Assets which requires substantial period of time to get ready for its intended use) are capitalized as part of the cost of that asset. All other borrowing cost is charged to revenue.

26.11 Government Subsidy / Grant

Grants from the government are recognized at their fair value where there is reasonable assurance that the grant will be received and the company will comply with all attached conditions. All government grants are initiallyrecognized by way of setting up as deferred income. Governmentgrants relating to income are subsequently recognized in the profit or loss over the period necessary to match them with the cost that they are intended to compensate. Government grants relating to the purchase of property plant and equipment are subsequently recognized in profit or loss on a systematic basis over the expected life of the related depreciable asset.

26.12 Foreign Currency Transactions Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are reported using the closing rate or at the forward contracted rates. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction, and non-monetary items which are carried at fair value or other similar value denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange differences

Exchange differences arising on the settlement of monetary items or on reporting Company’s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

26.13 Earnings per Share

Basic Earnings per share is calculated by dividing the Net profit or loss after tax attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted EPS is determined by adjusting the Profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares.

26.14 Income Tax

The tax provision is considered as stipulated in IND AS 12 and includes current and deferred tax liability. The company recognizes the accumulated deferred tax liability based on accumulated time difference using current tax rate. The company as a conservative measure does not reckon deferred tax asset. Both the current tax and deferred tax liability relating to items recognized outside the profit or loss is recognized either in “other Comprehensive Income” or directly in “Equity” as the case may be.

The Company elected to exercise the option permitted under Section 115BAA of the Income-tax Act, 1961 as introduced by the Taxation Laws (Amendment) Act, 2019 Accordingly, the Company has recognised Provision for Income tax for the quarter and year ended March 31,2020 and remeasured its deferred tax assets /liabilities on thebasis, the rate prescribed in 1he said section.

26.15 Segment Reporting

As the company has only one business segment i.e., manufacture and marketing of welding electrodes and only one geographical segment, the segment reporting requirement as per IND AS 108 is not applicable to the company.

26.16 Impairment of Non- financial Assets

i) The carrying values of non-financial assets are reviewed for impairment at each Balance Sheet date, if there is any indication of impairment based on internal and external factors.

ii) Non-financial assets are treated as impaired when the carrying amount of such asset exceeds its recoverable value. After recognition of impairment loss, the depreciation / amortization for the said assets is provided for remaining useful life based on the revised carrying amount, less its residual value if any, on straight line basis.

iii) An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired.

iv) An impairment loss is reversed when there is an indication that the impairment loss may no longer exist or may have decreased.

26.17 Financial Instruments

A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the relevant instrument and are initially measured at fair value. T ransaction costs that are directly attributable to the acquisition or issue of financial assets and financial 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 financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

26.20 Fair value measurement

i) Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ii) The fair value of an asset or a liability is measured / disclosed using the assumptions that the market participants would use when pricing the asset or liability, assuming that the market participants act in the economic best interest.

iii) All assets and liabilities for which fair value is measured are disclosed in the financial statements are categorized within fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. The fair value hierarchy is described as below:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2: Valuation techniques for which the lowest level inputs that are significant to the fair value measurement are directly or indirectly observable. Level 3: Valuation techniques for which the lowest level inputs that are significant to the fair value measurement are unobservable.

iv) For assets and liabilities that are recognized in the Balance sheet on a recurring basis, the company determines whether transfers have occurred between levels in the hierarchy by reassessing categorization at the end of each reporting period (i.e.) based on the lowest level input that is significant to the fair value measurement as a whole.

v) For the purpose of fair value disclosures, the company has determined the classes of assets and liabilities based on the nature, characteristics and risks of the assets or liabilities and the level of the fair value hierarchy as explained above.

vi) The basis for fair value determination for measurement and / or disclosure purposes is detailed below:

a. Investments in Equity

The fair value is determined by reference to their quoted prices at the reporting date. In the absence of the quoted price, the fair value of the equity is measured using generally accepted valuation techniques.

b. Forward exchange contracts

The fair value of forward exchange contracts is based on the quoted price if available; otherwise it is estimated by discounting the difference between contractual forward price and current forward price for the residual maturity of the contract using government bond rates.

c. Non-derivative financial liabilities

The fair value of non-derivative financial liabilities viz, borrowings are determined for disclosure purposes calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.

26.21 Significant Estimates and Judgments

The preparation of the financial statements requires 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. Actual results could vary from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision effects only that period or in the period of the revision or future periods, if the revision affects both current and future years.

Accordingly, the management has applied the following estimates / assumptions / judgments in preparation and presentation of financial statements:

(i) Property, Plant and Equipment, Intangible Assets and Investment Properties

The residual values and estimated useful life of PPEs, Intangible Assets and Investment Properties are assessed by technical team duly reviewed by the management at each reporting date. Wherever the management believes that the assigned useful life and residual value are appropriate, such recommendations are accepted and adopted for computation of depreciation/ amortization. Also, management judgment is exercised for classifying the asset as investment properties or vice versa.

(ii) Current Taxes

Calculations of income taxes for the current period are done based on applicable tax laws and management’s judgments by evaluating positions taken in tax returns and interpretations of relevant provisions of law.

(iii) Contingent Liabilities

Management judgments is exercised for estimating the possible outflow of resources, if any, in respect of contingencies / claims / litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

(iv) Impairment of Trade receivables

The impairment for financial assets are done based on assumptions about risk of default and expected loss rates. The assumptions, selection of inputs for calculation of impairment are based on management judgments considering the past history, market conditions and forward-looking estimates at the end of each reporting date.

(v) Impairment of Non-financial assets (PPE/Intangible Assets / Investment Properties)

The impairment of non-financial assets is determined based on estimation of recoverable amount of such assets. The assumptions used in computing the recoverab le amount are based on management judgments considering the timing of future cash flows, discount rates and the risks specific to the asset.

(vi) Defined Benefit Plans and Other long term benefits

The cost of the defined benefit plan and other long term benefits, and the present value of such obligation are determined by the independent actuarial valuer. Management believes that the assumptions used by the actuary in determination of the discount rate, future salary increases, mortality rates and attrition rate are reasonable. Due to the complexities involved in the valuation and its long term nature, this obligation is highly sensitive to changes in these assumptions.

(vii) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities could not be measured based on quoted prices in active markets, management uses valuation techniques including the Discounted Cash Flow (DCF) model, to determine its fair value. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgments is exercised in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility.

26.7. Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into force from October 02, 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. The Company has not received any memorandum as required to be filed by the suppliers with the notified authorities under the above said act claiming their status as micro, small or medium enterprises. Consequently, the amount paid / payable to these parties is considered to be Nil.

26.8. The amount shown as outstanding from Trade receivables includes an amount of Rs.25.77 lakhs which are subject to dispute. However, the management considers the amount as fully realizable and hence they are considered as good.

26.9 Other Statutory Information (to the extent applicable) - Part:1

(i) There is no Immovable Property, title deeds of those are not held in the name of the Company.

(ii) The Company has no investment property and accordingly its fair valuation is not required at year end.

(iii) & (iv) No revaluation of Property, Plant & Equipment (Including ROU) & Intangible assets has been carried out duringthe year.

(v) The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs or other related parties as defined under Companies Act, 2013, either severally or jointly with any other person and no balances towards the same is outstanding as on the end of the financial year.

(vi) Capital work in progress relates to currently ongoing project for building construction and is outstanding for less than a year. None of the Capital Work in progress are overdue or exceeded its cost compared to its original plan and none of the projects have been suspended during the year.

(vii) The Company does not have any intangible assets under development.

(viii) The Company neither have any Benami property, nor any proceeding has been initiated or pending against theCompany for holding any Benami property.

(ix) With regard to the borrowings made by the Company from banks on the basis of security of its current assets, the company regularly submits the prescribed returns or statements of current assets at periodic intervals. The statements and returns are in agreement with the books of accounts and there are no material discrepancies.

(x) The Company is not declared wilful defaulter by any bank or financial institution or other lender.

(xi) The Company does not have any transactions with companies struck off.

(xii) The Company does not have any charges or satisfaction which is yet to be registered with Registrar Of Companies(ROC) beyond the statutory period.

(xiii) The Company has not made any investments till 31 -03-2022 in Subsidiaries hence compliance with number oflayers prescribed under clause (87) of Section 2 of the Act read with Companies (restriction on number of layers)Rules, 2017 is not applicable

(xiv) . The prescribed financial ratios are furnished in Note 23 above.

(xv) Compliance with approved Scheme(s) of arrangements in terms of Sec 230 - 237 of Companies Act 2013 - NotApplicable

(xvi) (A) The Company has not advanced or loaned or invested funds in any other person(s) or entity(ies), includingforeign entities (Intermediaries) with the understanding that the Intermediary shall:- directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (U ltimateBeneficiaries) or - provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(xvi) (B) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (FundingParty) with the understanding (whether recorded in writing or otherwise) that the Company shall: - directly orindirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of theFunding Party (Ultimate Beneficiaries) or - provide any guarantee, security or the like on behalf of the UltimateBeneficiaries.

Other Statutory Information (to the extent applicable) - Part:2

(i) The Company does not have any such transaction which is not recorded in the books of accounts that has beensurrendered or disclosed as income during the year in the tax assessments u nder the I ncome Tax Act, 1961 (suchas, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(ii) The provisions of section 135 of the Companies Act, 2013, relating obligation to spend on Corporate Social Responsibility is not applicable to the Company during the financial year.

(iii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

26.10The figures have been rounded off to the nearest rupee.

26.11 Previous year figures have been reclassified wherever necessary to correspond to the current year classification.

As per our report attached for and behalf of the Board of Directors

For Poonam Ankit and Associates C hartered Accountants FRN:017409s

POONAM JAIN M B. RANJIT KUMAR KOTHARI B POPATLAL KOTHARI

Partner [M.No: 228039] Director Managing Director

UDIN: 23228039BGVSDE5381 DIN: 01560805 DIN: 00594168

JAGRUTI JAIN P KASHYAP KOTHARI

Company Secretary Chief Financial Officer

Place: Chennai Date : 30^THMAY 2023

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Mar 31, 2015

1. The Company has only one class of shares namely equity shares comprising of nominal value of Rs 10 per equity shares. Each holder of equity shares is entitled to one vote per share. The shareholders have the right to receive interim dividends, if any, declared by the Board of Directors and final dividends proposed by the Board of Directors and approved by the shareholders. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. The equity shareholders have all other rights as available to the equity shareholders as per the provisions of the Companies Act, 1956, read together with the Memorandum of Association and Articles of Association of the Company as applicable.

2. Out of 61,61,100 Equity shares issued subscribed and paid up, 13,60,000 Equity shares of Rs 10/- each have been issued and allotted as fully paid bonus shares on 29th December 2007 by capitalisation of General Reserves.

3. Short term borrowings from Banks represents working capital borrowings by way of cash credit repayable on demand. They are secured by hypothecation of raw-materials, work in progress, finished goods, book debts and a part of plant and machineries, and additionally secured by equitable mortgage by deposit of title deeds of land and personal guarantees of promoter directors.

4. The Company has not accepted any deposits from public. The deposits represents unsecured security deposits from dealers which will be retained with the Company till such time the dealership arrangement continues.

5. The Company has not borrowed any funds from related parties.

6.Related Party Transactions during the year ended 3f'March 2015: 1. Relationships

a. Key Management Personnel

Mr B. Popatlal Kothari - Managing Director

Mr P Kashyap Kothari - Factory Manager

b. Relatives of Key Managerial Personnel:

Mr P Nitya Kothari

7. The Company operates in a single segment and as such disclosures under segmental reporting is not applicable.

8.The Depreciation on tangible assets have been re-computed based on useful life of assets, under straight line method as prescribed under Schedule II to the Companies Act, 2013. The re-computation has resulted in the excess depreciation amounting to Rs 669810 being written off against the assets as on 1 st April 2014 which has been adjusted against the retaining earnings in the reserves as at the beginning of the year.

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Mar 31, 2014

1.1. CONTINGENT LIABILITIES

A disclosure for contingent liability is made when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

1.2. Related Party Transactions 1. Relationships

a. Key Management Personnel

Mr B. Popatlal Kothari - Managing Director Mr P Kashyap Kothari - Factory Manager

b. Relatives of Key Managerial Personnel:

Mr P Nitya Kothari

1.3. The Company operates in a single segment and as such disclosures under segmental reporting is not applicable.

1.4. The figures have been rounded off to the nearest rupee.

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Mar 31, 2013

1.1. Related Party Transactions 1. Relationships

a. Key Management Personnel

Mr B. Popatlal Kothari - Managing Director Mr P Kashyap Kothari - Factory Manager

b. Relatives of Key Managerial Personnel: Mr P Nitya Kothari

1.2. The Company operates in a single segment and as such disclosures under segmental reporting is not applicable.

1.3. The figures have been rounded off to the nearest rupee.

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Mar 31, 2012

1.01 The Company has only one class of shares namely equity shares comprising of nominal value of Rs 10 per equity shares. Each holder of equity shares is entitled to one vote per share. The shareholders have the right to receive interim dividends, if any, declared by the Board of Directors and final dividends proposed by the Board of Directors and approved by the shareholders. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. The equity shareholders have all other rights as available to the equity shareholders as per the provisions of the Companies Act, 1956, read together with the Memorandum of Association and Articles of Association of the Company as applicable.

1.02 Out of 47,60,000 Equity shares issued subscribed and paid up, 13,60,000 Equity shares of Rs 10/- each have been issued and allotted as fully paid bonus shares on 29th December 2007 by capitalization of General Reserves.

2.01 Short term borrowings from Banks represents working capital borrowings by way of cash credit repayable on demand. They are secured by hypothecation of raw-materials, work in progress, finished goods, book debts and a part of plant and machineries, and additionally secured by equitable mortgage by deposit of title deeds of land and personal guarantees of promoter directors.

2.02 The Company has not accepted any deposits from public. The deposits represents unsecured security deposits from dealers which will be retained with the Company till such time the dealership arrangement continues.

1.03 The Company has not borrowed any funds from related parties.

3.01 Out of the total amount shown under sundry creditors, an amount of Rs 343435 is due to two small scale industrial unit which exceeds Rs 100,000 and which are due for more than 30 days. Names of the small scale industrial undertakings (as compiled by the Company based on the information available and relied upon by the Auditors) to whom the Company owe a sum which is outstanding for more than 30 days are as follows:

4.1..Related Party Transactions 1. Relationships

a. Key Management Personnel

Mr B. Popatlal Kothari - Managing Director

Mr P Kashyap Kothari - Factory Manager

b. Relatives of Key Managerial Personnel:

Mr P Nitya Kothari

Mrs Aanchal Kothari

4.2.. The Company operates in a single segment and as such disclosures under segmental reporting is not applicable.

4.3. The figures have been rounded off to the nearest rupee.

4.4. The Revised Schedule VI has become effective from 1st April 2011 for the preparation of financial statements. 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, 2010

1. Out of the total amount shown under sundry creditors, an amount of Rs 7,93,521 is due to two small scale industrial unit which exceeds rupees one lakh and which are due for more than 30 days. Names of the small scale industrial undertakings (as compiled by the Company based on the information available and relied upon by the Auditors) to whom the Company owe a sum which is outstanding for more than 30 days are as follows:

2. Related Party Transactions

1. Relationships

a. Key Management Personnel B. Popatlal Kothari - Managing Director P. Kashyap Kothari - Factory Manager

3. The Company operates in a single segment and as such disclosures under segmental reporting is not applicable.

4. As per the requirements of AS-22, the company has accounted the cumulative net deferred tax asset in respect of timing differences between book and tax profit as on 31st March 2010 amounting to Rs 22245 and deferred tax (accrual) for the cur/ent year amounting to Rs. 200271 in the Profit and Loss Account.

5. The figures have been rounded off to the nearest rupee.

6. The figures pertaining to the previous year have been to conform to current years classification.