Notes to Accounts of Rungta Irrigation Ltd.

Mar 31, 2024

The company has issued shares on right basis in proportion to 1:1.25 per share as per letter of offer dated 23/11/2022. Accordingly 11070125 no. of shares had been allotted on 21/12/2022 against which we had received Rs. 3 per share as application money. Later on the company opened the window for first call money @ Rs. 4 per share and in this we had received first call money on 11045274 no. of shares only. Later on we had received second call money @ Rs. 3 per share on 11037073 no. of shares. For balance shareholders, again window was opened and received amount for some balance shares. Now we had pending payment of first call money for 3526 shares and second call money for 916 shares.

a) Rights,Preferences and restrictions attached to shares

The company has one class of equity shares having a par value of ^ 10 per share.Each shareholder is eligible for one vote per share held.In the event of liquidation,the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts,in proportion to their shareholding.

a. Term Loan

India Rupee loan from bank comprises of loans having interest in the range of 8.00% p.a. to 8.50 % p.a.

Term Loan are secured by first pari passu charge on entire present and future current assets and second charge on present and future movable fixed assets of the Company situated at Industrial Property located at TS No. F32 1PT and cadastre No. 120-3pt,RS No. 64, Beside Vasavi Pigments, Near Durgamma Temple, Dariyalatippa Road,Adavipolam Yanam,Pondicherry-533464, & Industrial Property located at Plot No. C-176,Bulandshahar Road,Indus trial Area,Site No. 1,Ghaziabad,UP and industrial property located at Plot No. C-165,Bulandshahar Road,Industrial Area,Site No. 1,Ghaziabad,UP

b. Loans against movable assets hypothecated for vehicles carries an interest rate of 6.64% to 8% p.a.

Working Capital Facilities of the Company from banks are secured by first pari passu charge on entire present and future current assets and second charge on present and future movable fixed assets of the Company situated at Industrial Property located at TS No. F32 1PT and cadastre No. 120-3pt,RS No. 64, Beside Vasavi Pigments,Near Durgamma Temple,Dariyalatippa Road,Adavipolam Yanam, Pondicherry-533464, & Industrial Property located at Plot No. C-176,Bulandshahar Road,Industrial Area,Site No. 1,Ghaziabad,UP and industrial property located at Plot No. C-165,Bulandshahar Road,Industrial Area,Site No. 1,Ghaziabad,UP

33.2 Fair Value Hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments.

(a) To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

There are no transfers between level 1 and level 2 during the year

(b) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

-the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

All of the resulting fair value estimates are included in level 2 or level 3, where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.

(c) Fair value estimation

Estimated fair value disclosures of financial instruments are made in accordance with the requirements of Ind AS 107 "Financial Instruments: Disclosure". Fair value is defined as the amount at which the instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm''s length transaction, other than in forced or liquidation sale. As no readily available market exists for a large part of the Company''s financial instruments, judgment is necessary in arriving at fair value, based on current economic conditions and specific risks attributable to the instrument. The estimates presented herein are not necessarily indicative of the amounts the Company could realize in a market exchange from the sale of its full holdings of a particular instrument.

The following summarizes the major methods and assumptions used in estimating the fair values of financial instruments.

Interest-bearing borrowings

Fair value is calculated based on discounted expected future principal and interest cash flows. The carrying amount of the Company''s loans due after one year is also considered as reasonable estimate of their fair values as the nominal interest rates on the loans due after one year are variable and considered to be a reasonable approximation of the fair market rate with reference to loans with similar credit risk level and maturity period at the reporting date.

Trade and other receivables / payables

Receivables / payables typically have a remaining life of less than one year and receivables are adjusted for impairment losses. Therefore, the carrying amounts for these assets and liabilities are deemed to approximate their fair values, as the allowance for estimated irrecoverable amounts is considered a reasonable estimate of the discount required to reflect the impact of credit risk.

Other long term receivables

These receivables are regularly reviewed and adjusted for impairment losses. Therefore, management considers the carrying amount of these receivables to approximate fair value.

(d) Valuation process

The accounts & finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the chief financial officer (CFO) and the audit committee (AC).

Discussions of valuation processes and results are held between the CFO, AC and the valuation team at least once every three months, in line with the Company''s quarterly reporting periods.

The main level 3 inputs for unlisted equity securities, contingent considerations and indemnification asset used by the Company are derived and evaluated as follows:

• Discount rates are determined using a capital asset pricing model to calculate a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the asset.

• Risk adjustments specific to the counterparties (including assumptions about credit default rates) are derived from credit risk grading determined by the Company''s internal credit risk management group.

• Earnings growth factor for unlisted equity securities are estimated based on market information for similar types of companies.

Changes in level 2 and 3 fair values are analyzed at the end of each reporting period during the quarterly valuation discussion between the CFO, AC and the valuation team. As part of this discussion the team presents a report that explains the reason for the fair value movements.

Note 34: Financial risk management

(a) Risk management framework

In the ordinary course of business, the Company is exposed to a different extent to a variety of financial risks: foreign currency risk, interest rate risk, liquidity risk, price risk and credit risk. In order to minimize any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts, foreign currency option contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

(b) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investments in financial instruments.

The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit risk very closely both in domestic and export market. The Management impact analysis shows credit risk and impact assessment as low.

Trade and other receivables

Credit risk is the risk that a customer may default or not meet its obligations to the company on a timely basis, leading to financial losses by the Company. The management has an advance collection /credit policy criteria in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. Before accepting a new customer, the Company uses an internal credit system to assess the potential customer''s credit quality and defines credit limits separately for each individual customer. The gross carrying amount of trade receivables as at 31st March 2024 aggregates Rs 4524.37 lacs (Previous year ended 31st March 2023 Rs 3345.35 Lacs). The Company reviews for any required allowance for impairment that represents its expected credit losses in respect of trade receivables.

Investments are reviewed for any fair valuation loss on periodically basis and necessary provision/fair valuation adjustments has been made based on the valuation carried by the management to the extent available sources, the management does not expect any investment counterparty to fail to meet its obligations.

(c ) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due. The Company''s liquidity position is carefully monitored and managed. The Company has in place a detailed budgeting and cash forecasting process to help ensure that it has adequate cash available to meet its payment obligations.

Further, the Company continues to maintain enough liquidity buffer to meet additional demands that may emerge on account of COVID-19 crisis.

The following table provides details of the remaining contractual maturity of the Company''s financial Liabilities. It has been drawn up based on the undiscounted cash flows and the earliest date on which the Company can be required to pay. The table includes only principal cash flows.

(d) Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements can not be normally predicted with reasonable accuracy.

(e ) Currency risk

The Company''s functional currency in Indian Rupees (INR). The Company undertakes transactions denominated in the foreign currencies; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates affects the Company''s revenue from export markets and the costs of imports, primarily in relation to raw material. The Company is exposed to exchange rate risk under its trade and debt portfolio.

(f) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in INR.

The Company manages its capital to ensure to continue as a going concern while maximizing the return to the equity holders through optimization of the debt to equity balance. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Apart from internal accrual , sourcing of capitalised one through judicious combination of equity and borrowing , both short term and long term.

Consistent with others in the industry, the Company monitors capital on the basis of the optimum gearing ratio of Net debt (comprising total liabilities) in proportion to Total Equity.

Note 37: Contingent Liabilities:

37.01 Contingent Liabilities (Bank Guarantee & Legal cases) :

The company has given counter guarantee to the bankers against guarantees issued by Banks on behalf of the company amounting to Rs.1434.98 Lacs (Previous Year: Rs. 855.97 Lacs). The liability may arise in case of failure in supply of material or malfunctioning of products supplied by the Company.

37 02 Few cases under various laws are pending against the Company at different judiciaries, the outcome of which may

result in certain losses to the Company to the extent of Rs. 91.54/-lacs (previous year Rs.106.22/- lacs.)

The company has reviewed all its pending litigations and proceedings and no provision has been considered necessary since the company does not expect the outcome of these proceedings to have a materially effect on financial statements.

Note 38: Capital & other Commitments:

Capital Commitments: Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Nil (31 March, 2023: Nil)

Note 40: Employee Benefis Plan (A) Defined Contribution Plans

The Company has a defined contribution plan in respect of provident fund. 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 group is limited to the amount contributed and it has no further contractual nor any constructive obligation.

(B) Defined Benefit Plans

(a) Description of the employee Benefit Plan

The company has an obligation towards gratuity, unfunded defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of the employment of an amount equivalent to 15 days/ one month salary, as applicable, payable for each completed year of service or part thereof in excess of six months in terms of Gratuity scheme of the company or as per payment of Gratuity Act, whichever is higher. Vesting occurs upon completion of five years of service

(b) Risk exposure Investment Risk

The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount risk which is determined by reference to market yields at the end of the reporting period on government bonds. Currently, for the plan in India, it has relatively balanced mix of investments in Insurance related products.

Interest Rate Risk

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt .

Longevity Risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability

Salary Risk

"The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability. No other post-retirement benefits are provided to the employees.

In respect of the plan in India, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31,2024 by an actuary."

(1) Increase in Profit & reduction in debt led to increase in debt service coverage ratio.

(2) Higher profitability led to increase in return on equity.

(3) Higher profitability led to increase in inventory turnover ratio.

(4) Increase in purchase cost as well in increase in trade payable led to decrease in trade payable turnover ratio.

(5) Increase in Profit & revenue led to increase in net profit margin.

(6) Increase in PBIT & capital employed led to increase in return on capital employed.

(7) Increase in market price of investment has lead to increase in return on investment.

Note 46: Recasted, Re-grouped & reclassified

Previous year figures have been recasted, re-grouped and reclassified, wherever necessary to confirm to the current year classification.

This is the balance sheet referred to in our report of even date

---

Mar 31, 2023

2.13 Provisions

Provisions are recognised when the company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Provisions in the nature of long term are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

2.14 Employee Benefits

a) Short Term Obligations

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

b) Post-Employment Obligations Defined contribution plans

The Company''s contribution to provident fund are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.

Defined benefit plan

For defined benefit plans in the form of gratuity, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in the Other Comprehensive Income in the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested and otherwise is amortized.

2.15 Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is received. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.

Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excludes taxes/ duties collected on behalf of the government.

(a) Sale of goods

Revenue from the sale of goods is recognized, when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of consideration received or receivable, net of returns and allowances, trade discounts, volume rebates. Accordingly, revenues from sale of goods are stated gross of GST not received by the company on its own account but collected on behalf of the government and accordingly, are excluded from revenue.

(b) Interest income

Interest income is recognized using the time proportion basis, based on the underlying interest rates.

(c) Rental Income

Rental income is recognized on a time-apportioned basis in accordance with the underlying substance of the relevant contract.

(d) Dividend

Dividend is recognized when the company''s right to receive the payment is established, which is generally when shareholders approve the dividend.

2.16 Income Taxes

The income tax expense is the tax payable on the current period''s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

2.17 Foreign currency transactions and translation

Transactions in foreign currencies are recorded in functional currency at the exchange rates prevailing at the date of the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currency are translated to the functional currency at the exchange rates prevailing at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognised in the statement of profit and loss with the exception for exchange differences on foreign currency borrowings relating to qualifying assets under construction are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings.

2.18 Borrowing Costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Transaction cost in respect of long-term borrowings are amortised over the tenure of respective loans using effective interest method. All other borrowing costs are recognised in the statement of profit and loss in the period in which they are incurred. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred.

2.19 Contingent Liability and Contingent Assets

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. Information on contingent liability is disclosed in the Notes to the Financial Statements. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity, Contingent assets are not recognized, but are disclosed in the notes. However, when the realization of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognized as an asset.

2.20 Earnings per Share

As per Ind AS 33, Earning per Share, Basic earnings per share are computed by dividing the net profit for the year attributable to the shareholders'' and weighted average number of shares outstanding during the year. The weighted average numbers of shares also includes fixed number of equity shares that are issuable on conversion of compulsorily convertible preference shares, debentures or any other instrument, from the date consideration is receivable (generally the date of their issue) of such instruments. Diluted earnings per share is computed using the net profit for the year attributable to the shareholder'' and weighted average number of equity and potential equity shares outstanding during the year including share options, convertible preference shares and debentures, except where the result would be anti-dilutive. Potential equity shares that are converted during the year are included in the calculation of diluted earnings per share, from the beginning of the year or date of issuance of such potential equity shares, to the date of conversion.

2.21 Share Capital and Securities Premium Reserve

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

Par value of the equity share is recorded as share capital and the amount received in excess of the par value is classified as securities premium reserve.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

There are no transfers between level 1 and level 2 during the year

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

-the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

All of the resulting fair value estimates are included in level 2 or level 3, where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.

Fair value estimation

Estimated fair value disclosures of financial instruments are made in accordance with the requirements of Ind AS 107 "Financial Instruments: Disclosure". Fair value is defined as the amount at which the instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm''s length transaction, other than in forced or liquidation sale. As no readily available market exists for a large part of the Company''s financial instruments, judgment is necessary in arriving at fair value, based on current economic conditions and specific risks attributable to the instrument. The estimates presented herein are not necessarily indicative of the amounts the Company could realize in a market exchange from the sale of its full holdings of a particular instrument.

The following summarizes the major methods and assumptions used in estimating the fair values of financial instruments.

Interest-bearing borrowings

Fair value is calculated based on discounted expected future principal and interest cash flows. The carrying amount of the Company''s loans due after one year is also considered as reasonable estimate of their fair values as the nominal interest rates on the loans due after one year are variable and considered to be a reasonable approximation of the fair market rate with reference to loans with similar credit risk level and maturity period at the reporting date.

Trade and other receivables / payables

Receivables / payables typically have a remaining life of less than one year and receivables are adjusted for impairment losses. Therefore, the carrying amounts for these assets and liabilities are deemed to approximate their fair values, as the allowance for estimated irrecoverable amounts is considered a reasonable estimate of the discount required to reflect the impact of credit risk.

Other long term receivables

These receivables are regularly reviewed and adjusted for impairment losses. Therefore, management considers the carrying amount of these receivables to approximate fair value.

b) Valuation process

The accounts & finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the chief financial officer (CFO) and the audit committee (AC).

Discussions of valuation processes and results are held between the CFO, AC and the valuation team at least once every three months, in line with the Company''s quarterly reporting periods.

The main level 3 inputs for unlisted equity securities, contingent considerations and indemnification asset used by the Company are derived and evaluated as follows:

• Discount rates are determined using a capital asset pricing model to calculate a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the asset.

• Risk adjustments specific to the counterparties (including assumptions about credit default rates) are derived from credit risk grading determined by the Company''s internal credit risk management group.

• Earnings growth factor for unlisted equity securities are estimated based on market information for similar types of companies.

Changes in level 2 and 3 fair values are analysed at the end of each reporting period during the quarterly valuation discussion between the CFO, AC and the valuation team. As part of this discussion the team presents a report that explains the reason for the fair value movements.

Note 34: Financial risk management

A) Risk management framework

In the ordinary course of business, the Company is exposed to a different extent to a variety of financial risks: foreign currency risk, interest rate risk, liquidity risk, price risk and credit risk. In order to minimize any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts, foreign currency option contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

B) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investments in financial instruments.

The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit risk very closely both in domestic and export market. The Management impact analysis shows credit risk and impact assessment as low.

Trade and other receivables

Credit risk is the risk that a customer may default or not meet its obligations to the company on a timely basis, leading to financial losses by the Company. The management has an advance collection /credit policy criteria in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. Before accepting a new customer, the Company uses an internal credit system to assess the potential customer''s credit quality and defines credit limits separately for each individual customer. The gross carrying amount of trade receivables as at 31st March 2022 aggregates Rs 3678.41 lacs (Previous year ended 31st March 2021 Rs 2785.24 Lacs). The Company reviews for any required allowance for impairment that represents its expected credit losses in respect of trade receivables.

Investments are reviewed for any fair valuation loss on periodically basis and necessary provision/fair valuation adjustments has been made based on the valuation carried by the management to the extent available sources, the management does not expect any investment counterparty to fail to meet its obligations.

C) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial a sset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due. The Company''s liquidity position is carefully monitored and managed. The Company h as in place a detailed budgeting and cash forecasting process to help ensure that it has adequate cash available to meet its payment obligations.

Further, the Company continues to maintain enough liquidity buffer to meet additional demands that may emerge on account of COVID-19 crisis.

The following table provides details of the remaining contractual maturity of the Company''s financial Liabilities. It has been drawn up based on the undiscounted cash flows and the earliest date on which the Company can be required to pay. The table includes only principal cash flows.

D) Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

E) Currency risk

The Company''s functional currency in Indian Rupees (INR). The Company undertakes transactions denominated in the foreign currencies; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates affects the Company''s revenue from export markets and the costs of imports, primarily in relation to raw material. The Company is exposed to exchange rate risk under its trade and debt portfolio.

Exposure to currency risk

The summary of quantitative data about the Company''s exposure (Unhedged) to currency risk as reported to the management of the Company is as follows:

37.01 Contingent Liabilities (Bank Guarantee & Legal cases) :

The company has given counter guarantee to the bankers against guarantees issued by Banks on behalf of the company amounting to Rs.855.97 Lacs (Previous Year: Rs. 570.53 Lacs). The liability may arise in case of failure in supply of material or malfunctioning of products supplied by the Company.

37.02 Few cases under various laws are pending against the Company at different judiciaries, the outcome of which may result in certain losses to the Company to the extent of Rs. 106.22/-lacs (previous year Rs.104.81/-lacs.)

Note 47: Recasted, Re-grouped & reclassified

Previous year figures have been recasted, re-grouped and reclassified, wherever necessary to confirm to the current year classification.

As per our Report of even date

For Mamraj & Co. For and On Behalf of the Board

CHARTERED ACCOUNTANTS

Firm Registration Number: 006396N

Sd/- Sd/- Sd/-

CA Mamraj Agarwal Mahabir Prasad Rungta Shruti Rungta

Partner Chairman cum Managing Director Executive Director

Membership No.: 084944 DIN-00235632 DIN-00229045

Sd/- Sd/-

Place: New Delhi Swati Garg Ayushi Vijay

Date: 23.05.2022 Chief Financial Officer Company Secretary

UDIN: 23084944BHALVY9544

---

Mar 31, 2015

1. Right/preference/restrictions attached to equity shares

Terms/rights attached to equity shares: The Company has only one class of equity shares having at par value of Rs.10 per share. Each holder of equity share 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 Company after distribution of all preferential amounts,if any. The distribution will be in proportion to the number of equity shares held by the share holders.

2.Employee Benefits:

Shortterm benefits

i. Short term employee benefits are recognized as an expense at the undiscounted amount in the profit & loss account of the year in which the related service is rendered.

ii. Post employment benefits

Gratuity and leave encashment which are defined benefits are accrued based on the actuarial valuation as at Balance sheet date by an independent actuary. The Company has opted for a Group Gratuity cum life Insurance Scheme of the Life Insurance Corporation of India for part of the employees and the contribution is charged to the profit and loss account each year. For other than funded plan, the expense is recognized, as calculated on the basis of present value of the amount payable as determined by the actuarial valuation. The liability recognized in the balance sheet is the present value of the defined benefit obligation less the fair value of funded plans. All actuary gain and losses are charged to the profit and loss account.

3. Contingent liabilities not provided for:

a) Sales Tax Authorities have raised demand for Rs. 12.75 Lac ( Previous year Rs. 12.75 lac) for various assessment years and the matters are pending with Appellate Authorities and High Court. As per opinion, the appeals are likely to be decided in favour of the Company.

b) The Excise Department has raised a demand of Rs. 1.52 lac against Service Tax on Transaction charges and the matters are pending with the appellate authorities. As per opinion, the appeals are likely to be decided in the favour of the Company (Previous Year: Rs. 1.52 Lac).

c) The company has given counter guarantee to the bankers against guarantees issued by Banks on behalf of the company amounting to Rs. 588.67 Lacs (Previous Year: Rs. 524.00 Lac). The liability may arise in case of failure in supply of material or malfunctioning of products supplied by the Company.-

4. Estimated amount of contracts remaining to be executed on capital account and not provided for is

Rs. NIL (Previous Year: Rs. NIL).

5. Preferential allotment of convertible warrants and its conversion into Equity Shares. During the

year NIL (Previous year NIL)

6. The Company has recalled the balance outstanding loan of Rs.230.34 lacs(Previous Year Rs.290.34 lacs) given to M/s Rungta Projects Limited. The balance dues are yet to be recovered and as explained, the company is taking adequate steps to recover fully during 2015-16. year.

7. Segment Information

The financial results relates mainly to Irrigation products. In accordance with Accounting Standard 17, financial results of Hiring of Equipments are not shown separately, since it is less than the limit specified for separate disclosure.

8. Figures of previous year have been regrouped wherever found necessary to make them comparable with that of current year.

---

Mar 31, 2014

(1) Employee Benefits:

Short term benefits

i. Short term employee benefits are recognized as an expense at the undiscounted amount in the profit & loss account of the year in which the related service is rendered.

ii. Post employment benefits

Gratuity and leave encashment which are defined benefits are accrued based on the actuarial valuation as at Balance sheet date by an independent actuary. The Company has opted for a Group Gratuity cum life Insurance Scheme of the Life Insurance Corporation of India for part of the employees and the contribution is charged to the profit and loss account each year. For other than funded plan, the expense is recognized, as calculated on the basis of present value of the amount payable as determined by the actuarial valuation. The liability recognized in the balance sheet is the present value of the defined benefit obligation less the fair value of funded plans. All actuary gain and losses are charged to the profit and loss account.

(2) Contingent liabilities not provided for:

a) Sales Tax Authorities have raised demand for Rs. 12.75 Lac ( Previous year Rs. 12.75 lac) for various assessment years and the matters are pending with Appellate Authorities and High Court. As per opinion, the appeals are likely to be decided in favour of the Company.

b) The Excise Department has raised a demand of Rs. 1.52 lac against Service Tax on Transaction charges and the matters are pending with the appellate authorities. As per opinion, the appeals are likely to be decided in the favour of the Company (Previous Year: Rs. 1.52 Lac).

c) The company has given counter guarantee to the bankers against guarantees issued by Banks on behalf of the company amounting to Rs. 524.00 Lacs (Previous Year: Rs. 620.71 Lac). The liability may arise in case of failure in supply of material or malfunctioning of products supplied by the Company.

(3) Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. NIL (Previous Year: Rs. NIL).

(4) Preferential allotment of convertible warrants and its conversion into Equity Shares.

During the year NIL (Previous year NIL)

(5) As regards the balance payment of Rs.250 Lac Cumulative Redeemable Preference Shares subscribed by IDBI Bank Ltd, the company has re-paid in full (in 3 EMI) to IDBI Bank Ltd till 30.06.2013 in terms of One Time Settlement (OTS) of dues vide letter Ref: No.1052 SAIC/Pref. Shares/2012-13 dated March 28, 2013 of the IDBI Bank Ltd, Mumbai. The CRPS dues become NIL.

(6) The Company has recalled the outstanding loan of Rs.290.34 lacs(Previous Year Rs.290.34 lacs) given to M/s Rungta Projects Limited. The dues are yet to be recovered and as explained, the company is taking adequate steps to recover the same. The management is of the opinion that the outstanding loan will be fully recoverable during the financial year 2014-15.

(7) Segment Information

The financial results relates mainly to Irrigation products. In accordance with Accounting Standard 17, financial results of Hiring of Equipments are not shown separately, since it is less than the limit specified for separate disclosure.

(8) Figures of previous year have been regrouped wherever found necessary to make them comparable with that of current year.

---

Mar 31, 2013

1 (1). Employee Benefits:

Shortterm benefits

i. Short term employee benefits are recognized as an expense at the undiscounted amount in the profit & loss account of the year in which the related service is rendered.

ii. Post employment benefits

Gratuity and leave encashment which are defined benefits are accrued based on the actuarial valuation as at Balance sheet date by an independent actuary. The Company has opted for a Group Gratuity cum life Insurance Scheme of the Life Insurance Corporation of India for part of the employees and the contribution is charged to the profit and loss account each year. For other than funded plan, the expense is recognized, as calculated on the basis of present value of the amount payable as determined by the actuarial valuation. The liability recognized in the balance sheet is the present value of the defined benefit obligation less the fair value of funded plans. All actuary gain and losses are charged to the profit and loss account.

1 (2). Contingent liabilities not provided for:

a) Sales Tax Authorities have raised demand for Rs. 12.75 Lac (Previous year Rs. 12.75 lac for various assessment years and the matters are pending with Appellate Authorities and High Court. As per opinion, the appeals are likely to be decided in favour of the Company.

b) The Excise Department has raised a demand of Rs. 1.52 lac against Service Tax on Transaction charges and the matters are pending with the appellate authorities. As per opinion, the appeals are likely to be decided in the favour of the Company (Previous Year: Rs. 1.52 Lac).

c) The company has given counter guarantee to the bankers against guarantees issued by Banks on behalf of the company amounting to Rs. 620.71 Lacs (Previous Year: Rs. 744.96 Lac). The liability may arise in case of failure in supply of material or malfunctioning of products supplied by the Company.

1(3). Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. NIL (Previous Year: Rs. NIL).

1(4) Preferential allotment of convertible warrants and its conversion into Equity Shares. During the year NIL (Previous year NIL.)

1(5) As regards. Cumulative Redeemable Preference Shares of Rs.250 Lac (Previous Year Rs- 334 lac) subscribed by IDBI Bank Ltd, the company has re-paid the balance payment of Rs 250 Lac outstanding as on 31.03.2013 in full (in 3 EMI) to IDBI Bank Ltd till 30.06.2013 in terms of One Time Settlement (OTS) of dues vide letter Ref: No. 1052 SAIC/Pref. Shares/2012-13 dated March 28, 2013 of the IDBI Bank Ltd, Mumbai. The CRPS dues become NIL as on 30.06.2013.

(b) As per explanation given to us the management has obtained certificates from the firms for the balance amount invested as mentioned before each as above as on 31.03.2013.Although no business activity during the year under review, in the opinion of management the investment is considered good.

1(6). Name and balances with the Bank, other than scheduled Banks in Current Accounts are as under.

In none of these Banks any of the directors or their relative is interested.

1(7). The Company has recalled the outstanding loan of Rs. 290.34 lacs(Previous Year Rs. 290.34lacs) given to M/s Rungta Projects Limited. The dues are yet to be recovered and as , explained, the company is taking adequate steps to recover the same. The management is of the opinion that the outstanding loan will be fully recoverable during the financial year 2013-14

$ Accessories, components and fittings includes purchase of various bought out items used in Sprinkler/ Drip Irrigation System and individually none of them account for 10% or more of the total value of raw material consumed.

1(8) Segment Information

The financial results relates mainly to Irrigation products. !n accordance with Accounting Standard 17, financial results of Hiring of Equipments are not shown separately, since it is less than the limit specified for separate disclosure.

1(9) Figures of previous year have been regrouped wherever found necessary to make them comparable with that of current year.

---

Mar 31, 2012

1(1) Employee Benefits:

i. Short term benefits

Short term employee benefits are recognized as an expense at the undiscounted amount in the profit & loss account of the year in which the related service is rendered.

ii. Post employment benefits

Gratuity and leave encashment which are defined benefits are accrued based on the actuarial valuation as at Balance sheet date by an independent actuary. The Company has opted for a Group Gratuity cum life Insurance Scheme of the Life Insurance Corporation of India for part of the employees and the contribution is charged to the profit and loss account each year. For other than funded plan, the expense is recognized, as calculated on the basis of present value of the amount payable determined by the actuarial valuation. The liability recognized in the balance sheet is the present value of the defined benefit obligation less the fair value of funded plans. All actuary gain and losses are charged to the profit and loss account.

1(2) Contingent liabilities not provided for:

a. Sales Tax Authorities have raised demand for Rs. 12.75 Lac ( Previous year Rs. 12.75 lac for various assessment years and the matters are pending with Appellate Authorities and High Court. As per opinion, the appeals are likely to be decided in favour of the Company.

b. The Excise Department has raised a demand of Rs. 1.52 lac against Service Tax on Transaction charges and the matters are pending with the appellate authorities. As per opinion, the appeals are likely to be decided in the favour of the Company (Previous Year: Rs. 1.52 Lac).

c. The company has given counter guarantee to the bankers against guarantees issued by Banks on behalf of the company amounting to Rs. 744.96 Lacs (Previous Year: Rs. 464.63 Lac). The liability may arise in case of failure in supply of material or malfunctioning of products supplied by the Company.

1(3) Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. NIL (Previous Year: Rs. NIL).

1(4) Preferential allotment of convertible warrants and its conversion into Equity Shares. During the year NIL ( Previous year NIL)

1(5) The Company has not redeemed the Cumulative Redeemable Preference Shares of Rs 334 Lac subscribed by IDBI Bank Limited and also dividend has not been provided on these shares since Nov.2005.

a. All the above Firms have suspended their businesses and no annual accounts are being prepared by these Firms. No profit or loss from these firms is accounted for against the share of the Company in the Firms. In the opinion of the management, the profit or loss of the Firms are not material, considering the suspension of the businesses. The management is of the opinion that investment in the Capital of these Firms is fully recoverable.

1(6) Name and balances with the Bank, other than scheduled Banks in Current Accounts are as under. In none of these Banks any of the directors or their relative is interested.

1(7) The Company has recalled the loan given to M/s Rungta Projects Limited in Nov'' 09 with interest charged up to Sep''09. The dues are yet to be recovered and as explained, the company is taking adequate steps to recover the same. No interest is being charged on the loan from Oct'' 09 onwards, considering the uncertainty over recovery of interest after recall of loan. The management is of the opinion that the outstanding is fully recoverable.

1(8) Figures of previous year have been regrouped wherever found necessary to make them comparable with that of current year.

---

Mar 31, 2011

1. Contingent liabilities not provided for:

a. Sales Tax Authorities have raised demand for Rs. 12.75 lacs ( Previous year Rs. 19.74 lacs for various assessment years and the matters are pending with Appellate Authorities and High Court. As per opinion, the appeals are likely to be decided in favor of the Company.

b. The Excise Department has raised a demand of Rs. 1.52 lacs against Service Tax on Transaction charges and the matters are pending with the appellate authorities. As per opinion, the appeals are likely to be decided in the favor of the Company (Previous Year: Rs. 1.52 Lacs).

c. The company has given counter guarantee to the bankers against guarantees issued by Banks on behalf of the company amounting to Rs. 464.43 Lacs (Previous Year: Rs. 351.90 Lacs). The liability may arise in case of failure in supply of material or malfunctioning of products supplied by the Company.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. NIL (Previous Year: Rs. NIL).

3. Preferential allotment of convertible warrants and its conversion into Equity Shares

a. During the year NIL (Previous year the company issued 20,50,000 Convertible warrants of Rs. 35/- each aggregating to Rs. 717.50 Lakhs, which were converted into 20,50,000 Equity Shares of Rs. 10/- each at a premium of Rs. 25/- each on 12.01.2010. The object of the issue was to fund the expansion of operation at Greater Naiad including relocating of Ghaziabad Unit to Greater Naiad.)

4. The arrear of cumulative dividend on cumulative Redeemable Preference Shares is not provided at the revised rate of 7.5%. The original dividend rate was 12% which was subsequently reduced to 7.50%.

b. All the above Firms have suspended their businesses and no annual accounts are being prepared by these Firms. No profit or loss from these firms is accounted for against the share of the Company in the Firms. In the opinion of the management, the profit or loss of the Firms are not material, considering the suspension of the businesses. The management is of the opinion that investment in the Capital of these Firms is fully recoverable.

5. Name and balances (Including maximum balances during the year) with the Bank, other than scheduled Banks in Current Accounts are as under. In none of these Banks any of the directors or their relative is interested.

6. The Company has recalled the loan given to M/s Rungta Projects Limited in Nov' 09 with interest charged up to Sep'09. The dues are yet to be recovered and the company is taking adequate steps to recover the same. No interest is being charged on the loan from Oct' 09 onwards, considering the uncertainty over recovery of interest after recall of loan. The management is of the opinion that the outstanding is fully recoverable.

7. Profit & Loss account has been debited during the year with Rs. 26194/-, debited as sales tax expense being interest Rs. 25194/- on delayed payment of sales tax and penalty Rs. 1000/- on delayed submission of returns for the year 2007-08 of Jabalpur branch.

8 Segment Information

The financial results relates mainly to Irrigation products. In accordance with Accounting Standard 17, financial results of Hiring of Equipments are not shown separately, since it is less than the limit specified for separate disclosure.

9 Figures of previous year have been regrouped wherever found necessary to make them comparable with that of current year.

---

Mar 31, 2010

1. Contingent liabilities not provided for:

a. Sales Tax Authorities have raised demand of Rs. 19.74 lacs for various assessment years and matters are sending with Appellate Authorities and High Court. As per opinion, the appeals are likely to be decided in favour of the Company. (Previous Year: Rs. 26.66 Lacs)

b. The Excise Department has raised a demand of Rs. 1.52 lacs against Service Tax on Transportation charges and the matters are pending with the appellate authorities. As per opinion, the appeals are likely to be decided in the favour of the Company (Previous Year: Rs. 1.52 lacs)

c. The company has given counter guarantee to the bankers against Guarantees issued by Banks on behalf of the company amounting to Rs. 351.90 Lacs (Previous year Rs. 294.13 Lacs). The liability may arrive in case of failure in supply of material or malfunctioning of products supplied by the Company.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. NIL (Previous year Rs. Nil).

3. Preferential allotment of Convertible Warrants and its conversion into Equity Shares

a. During the year, Company had issued 20,50,000 Convertible Warrants of Rs. 35/- each aggregating to Rs. 717.50 Lakhs, which was converted into 20,50,000 Equity Shares of Rs. 10/- each at a premium of Rs. 25/- each on 12/01/2010. The object of the issue was to fund the expansion of operation at Greater Noida including relocating of Ghaziabad Unit to Greater Noida.

b. Out of the total fund of Rs. 717.50 lakhs raised through issue, Rs. 142.61 Lakhs has been utilised by giving advance to Greater Noida Authority for purchase of land (including the payment of Rs. 120.53 lakhs incurred before the receipt of preferential warrants proceeds). Out of the remaining unutilised part of the issue Rs. 528.25 lakhs given as ICD and remaining utilised for existing business of the Company.

4. The arrear of cumulative dividend on Cumulative Redeemable Preference Shares calculated @ 7.50% is Rs. 135.80 lakhs (Previous year Rs. 110.75 lakhs). The original dividend rate was 12% which was subsequently reduced to 7.50% hence the arrear is calculated @ 7.50%.

5. The Company has recalled the loan given to M/s Rungta Projects Limited in Nov-09 with interest charged up to Sep-09. The dues are yet to be recovered and the Company is taking adequate steps to recover the same. No interest is being charged on the loan from Oct-09 onwards considering the uncertainty over recovery of interest after recall of loan. The management is of the opinion that the outstanding is fully recoverable.

6. Figures of previous year have been regrouped wherever found necessary to make them comparable with that of current year.