Notes to Accounts of Walchandnagar Industries Ltd.

Mar 31, 2025

2.17 Provision, Contingent Liabilities and Contingent Assets :

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an
outflow of resources will be required to settle the onligation,in respect of which reliable estimate can be made. If the effect of
the time value of money is material, provisionsaro disco unted using a current pre-tax rate that reflects, when appropriate, the
risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised
as a finance costs.

Contingantliabilities and Contingent asseta are not recognized in the financial statements.

2.18 Segment Accounting :

Managing Director & CEO¹ of tine Company has been identified os the Chief Operating Decision Maker (CODM) as defined
lay Ind AS-108, Operating Segments. He identifies and monitors the operating results of its business segments separately
for purpose of⁷ maldng decision about resource allocation and performance assessment. Segment performance is evaluated
based on profit or loss andis measured consistentl^q with profit or loss in the financial statements. The Operating segments
have been identified on the basis of⁷ the nature of⁷ products/services. The analysin of geographical segments is based un the
revenue gene ratincg locati ons. The geographical segment information ofthe companyif catngori zed under domestic sa l es
anai ex port sales.

A. Segment Reporting policies:

Following Accounting policies have beef bollowed for segment reporting:

i. °ngment revenue includes sales and other income directlyidentifiable with/allocable to the segmenticcluding
inter-segment revenue.

ii. Exfoensos that are directly identifiable with/allocable to segments are considered Sor determining tSe Segment
Result. Expenses which relate to the Company as a whole and not allocable to segme ntn are included under Un¬
allocable Corporate Expenses.

iii. Income wgich relstess to tha Company as a whole and not allocable to segments is included in Un-allocable
Corporate Incomes.

iv. Segment result include! margics on inter-segment transacflons, which are reduced m arriving at the profit
bafnre tax odohe Comp any.

v. Segment assets and Nubilities include? ^throse directly identifiable with the resaective segmentn Un-allocable
norporate assets andliabilities represent the assets and liabilities that relate to tha Comnany as a whole and not
allocab le to any segment

B. Intec-segmeol t ransfer prici ng

Segment revenue re suiting from transactions wrth other business segmentsis acconnaed os the basis of transfer price
agreed between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a

negotiated basis.

2.19 Assets Held For Sale :

Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered
principally through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate
sale in its present condition subject only to terms that are usual and customary for sale of such asset (or disposal group)
and the sale is highly probable and is expected to qualify for recognition as a completed sale within one year from the date
of classification. Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying
amount and fair value less costs to sell.

2.20 Exceptional Item:

When items of income and expense within statement of profit and loss from ordinary activities are of such size nature or
incidence that their disclosure is relevant to explain the performance of the enterprise for the period, nature and amount of
such material items are disclosed separately as an Exceptional Item.

2.21 Cash and Cash Equivalent

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an
original 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.

2.22 Statement of Cash Flows

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 profit before tax excluding exceptional items for the
effects of:

(i) changes during the period in inventories and operating receivables and payables;

(ii) non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and

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

Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not
available for general use as at the date of Balance Sheet.

2.23 Employee Stock Option (ESOP)

Equity-settled share based payments to employees are measured at the fair value of the equity instruments at the grant date.

The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight-line basis
over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding
increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments
expected to vest. The impact of the revision of the original estimates, if any, is recognised in Statement of Profit and Loss such
that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to the Share Based Payments
Reserve.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per
share.

B Other Accounting plocies

2.24 Investment:

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such
investments are made, are classified as current investments. All other investments are classified as long term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable
acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares
or other securities, the acquisition cost is the fair value of the securities issued. If an investment is acquired in exchange for

anotherasset,the acquisition is determined by reference to the fairvalue ofthe asse tgiven uporby reference to the; fair value
oftheinvestmentacquired, whichever is moee clearly evident.

Current investmen/s are carried in thie financial statements at lower of cost and fair value determined on an individual
investment basis. Long term investments are carried at cost.

However, provision for diminution in value is made to recognize adeclineotherthantemporaryin thevalueofth einvestmeafs.

On Oisposalelaninvestment, the difference befweenits carrying amountand net disposal proceeds is chiarcged orcredited to
the statementoapfofitand loss.

Investment Property

Investment properties are inroperties held to earn rentals a nd/or for capita l appreciati on (includi ng property under
construction for such purposes). Investment properties are measured initially at cost, including transaction costs. All of the
Company''s ^froperty ihterests held under operafing leases to earn rentals or for capital appreciation purposes are accounted
foras in vestment properties. After initial recognition, the company measures investment property at cost.

An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use
and no future ecoeomic benefits are expected from the disposal. Any gain or loss arising on de recognition ofthe property
(calculated as the difference between the aet disposal proceeds and the carrying amount of the asset) is included in profit or
lossin the pedod in wfich the propertyis d ereco pdize d.

Investment properties are depreciated in accordance to the clasr ofasset that it belongs and the life of the asset is as conceived
for the same class of asset at the Company

2.25 Leases:

The determination ef whether an arrangement is (or contains;) a leaseis based on the substance of the arrangement at the
inception o° t^se lease. The arrangementis,pf contains, a lease iffulfilment of the arrangement is dependent on the use
o°a opecific asset or assets and 1:he arrangament eonveys a right to usn the asset or asrets, even if that right is not explicitly
specified in an arrangement.

Leasps are clarsifed as finance leases whenever thie terms of the lease transfer substantially all the risks and rewards of
ownership to tho lesree. All other leases are classified as operatingleases.

i) Finance ^eease

Where the Company, as a lessor, leases assets under finance lease, such amouars are recagnised as receivables at an
amount equal to the net investment in the lease and the finance income is based on constant rate of return on tho
oetsta ndin° net irvestment.

Assets tnaen on finance lease are initially recognised as assets oV the Company at their fair value at the incepbion af
the lease or, if lower, at the present value of the minimum lease pnyments. Lease aaymects are apportioned betweea
finance costs ond reducfion of outstanding) liability. Finanne costs ere recagnised as an expense in the statement of
profit or lossover the pariod of lease, unless they are directly atsributable to qualifying assets, in whieh csee they are
capitalized in accordance with Company''s general policy oa borrowing costs.

ii) Operating Lease

Lease arrangements under which all risks and rewards of ownership are effectively retained by the lessor are classified
as operating lease. Lease rental under operating lease are recogaised m the Stntemeat o¹ Profit and Loss on a straight
liue Oasis over t Ire lease terra

iii) Sale and Lease back transaction

In case ofa sale and leaseback transaction resulting in a finance lease, any excess or deficiency ofsales proceeds over
the carrying amouot is defeaed and amortised over the lease term in proportion to the depreciation of the leased
assed.

Profit or Loss on Sale aad Lease bade arrangements resulting in financeleases are recognised,in case the transaceion is
establish,ed atfair vialue,elsethe encess orerthe fair value is deSerred and amortised over the period for which theasset
is expected to be used.

The management has determined that the investment properties consist of single class of asset based on the nature, characteristics and
risks of the property.

The fair value of the Investment properties is '' 3,157 Lakhs (Previous Year '' 3,005 Lakhs). These valuations are based on valuations
performed by D. K. Nagarseth & Associates who is registered under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017.

A road extension and repair project is currently underway on the land belonging to the Company, extending from Dalaj to Walchandnagar
While the Company had issued a No Objection Certificate (NOC) to the local body for repair of the existing road, it has come to the
Company''s attention that the scope of the project involves not only repairs but also widening of the road. The road widening activity
extends into a portion of the Company''s land.

* For 51,935 Equity Shares under ESOP scheme (Refer Note Number 19).

** Allotment Committee ofthe Board ofDirectors of the Companyat their meeting held on November16_r 2023,have all otted 2,17, 118,023
(Two Crore Seventeen Lakhs Eighteen Thotsand and Twenty T2ree) equity warrants 2t a price of'' 114/- per warrant aggregating up to
'' 2,47,58,54,622/- (Rupees Two Hundred and Forty Seven Crore Fifty Eight Lakhs Fifty FourThoustnd Six HundraE and Twenty Two only)
convertible into equalnumber of equity shares to the allottees. Out of the total warrants al lotte d, 93,93,862wa than ts we re converted into
equity shares and allotted on March 19, 2024. Further, the Allotment Committee (of the [Board oC Directors odthe Company at its meetihg
held on Januaiy 01, °025, have allotted ^E,20,00,480 equity shares of face value o2''2/- each fully paid up dae 2o conversion of share
warrants into eqaity sh ares.

Terms/Rights attached to equity shares

The Company has only one class of equity shares having Eace volte of '' 2/- per share. dach holder of equity sharesis entitlel to one vote
per share. The Company declarer and pay dividends in Indian rupees. The dividend proposed by the Board of Directorsis suEject to the
approval of the shareho lders in the ensuing Annual General Meeting.

In the evnnt of liquidation of¹ the Company, the holders of the shares will be entitled tt receioe remaining assets of the Company, after
distribhtion ofaN preferontialamounts.

The distribution willbein proportion to the tumber of shares held by the shareholder

The Co re pany un Oertbok pa rtiai prepayment ofthese NCDr. The prepayment refulte d i n chi an gees to ohe terms of the financial lia bility,
which were assessed in atcordance with the requirements oL Ind AS 109 - Figaocial Instruments. Bared on the aesesrment, t9e chcnges
were con sidered a modifi ea tien rather thrn an extinguishment o° the original financial lia bility at the diffe rence in the |efese nt value erf
the cash flows (disrounted at thie original effective interest rate) wos less than 10% ofth e ca rr^fing amonn t of⁷ the originafinintialli ability.

Accordingly, the Company did not derecognise the financial liability in accordance with Ind AS 109, but instead adjusted the carrying
emount ofthe liabiility to reflect the modified cash flows and recognized a modification Loss of^H 3070 Lakhis in the statement o^Lprofitand
loss under Finapre Cost for the year ended March 31 2025.

As a result ofdhe revised payment schedule post-modification, the Nability has been reclassified as follows:

Non-Current Borrowings: Representing the outstanding NCD amount repayable beyond 12 months from the reporting date.

Current Borrowings (Refer Oote 24(cHii)): Include ae instalment of '' 338 La k hi s p ertai n i n g to t h e mo dified N CDs, wh ich is schedu led for
repaymentwithin L 2 moabts from the reporting date,spedficnlly due on 31st December 2025, in accordance with the repayment schedule
provided below.

These Non-Convertible Debentures (NCDs) are secured by:

1) First charge on specified non-factory land and buildings at Walchandnagar, Flats at Mumiaai and Land & Building at Dharwad.

2) l=irst chcjrge? by way ofpledge ofshareholdings ofpromoters/affiliatesamounting to15.63°/oofpaid-up capital ofthecompany.

^h) Firrt charge on the designated bank account held with State Bank of India & E scrowaccount with HDFC Banlh.

The Company continues to comply with the terms and cbhditions of the debenture trustdeed,and the revised classification reflects
the updated contractual maturity profile bf theinstrument.

2) **During the year ended 31 March 2025, the Company renegotiated the terrbs ofan existing borrowing with Janta Travelr Private
Limited which was ofiginally due forropayment on 30 March 2025. As pnr tte revised terms,the loan tenure wasextended hy three
^ebars, with th e new maturity falling on ^b9 March 2028.

The modification did not result in a substanCial hhangein term s as per Ind A S 109, si nce the pore sent: valu e oCthe modified futurr cash
flows (discounted at the original effective interest rate)differed by less than 10% Lrom the carrying amount oL the financialliability
imme9iately before the modificaLion.

1) * TheWorking Cap i tal Loan facilities underCon sortiu m Bankin g arrangement of State Bank of India and Bank of India and consortium
lead toy State [Sank of India mentiondd at (i) above pertf ining to HED division are secured by mortgage of residential flat in Airoli,
land and buildingatWalchandnagar,Offices in Puneand byovay of charge onall movable plant and machinery, fixtures, implements,
fittings, furniture, current assets (both present & future) including ftock-in-trade, raw material, semi-finished and finished products,
stores and spares, book debts, tools and accessories and other movables p erta ining to Heavy Engineering Division at Walchandnagar.
The facilities are further secureO [ay a peoond charge on all assets given to Neo Special Credit Opportunities Fund. The above are at
an intererO rate or 17.44% fpom BankoO India and 13.95o/o from State Bank of India.

2) *The ^fasilities mentioned at (i) also includes facility pertaining to Foundry division, Satara availeO from State Bank of India and are
secured bay hypotheca°o n of all tangib l e movable prope rties and assets, including all stocks of Raw Material, Components, Tools,
S^sores Materials, Work-in-Progress, Finished Goods and Book Debts and equitable mortgageon fixed assets of Foundry Division at
Satara Road, Maharashtro.

3) ** The Company Oas availed Letter ef Credit facility from [dank of India and State Bank of India for the purpose of procurement of
Raw Material for HED cdivision. It is secured by mortgaae of residential flatin Airoli, land and building at Walchandnagar, Offices
in Sune aod by way of cOarge on all movable plant ond machinery, fixturee, implements, fittings, furniture, cecrent assets (both
presonS & future) including stock-in-trade, raw material, semi-finished anf finished products, stores and spares, Cook debts, lools
and accessories and other movables pertaining to Heavy Engineering Division at Walchandeegar. it is lurther secured bay a recond
fharge on all afsets given to Ne o Special Crodit Opportuni tie s Fund.

4) ** The Company has alfo availed LeOter of Credit facility from State Bank of India fos the purpose of procurement o^- Raw/ Material
for Foundry divisien. Itis secured by hypothecation of all those tangible movable properties and aesets, including all stocks of Raw/
Material, Components, Tools, Stores Materials, Work-in-Progress, Finished Goodsand °ook Debts and equite^p|e mortgage on fixed
assets of Foundry Division at Satara Road, Maharashtra.

5) **The Co mpany ha s bsen sanctioned working oapital limits in excess of'' 5 crore,in aggregate,atpointr of time during theye ar,ffom
banks or financia linstitutions o n the basis oifsec urity o^f enrrent assets. The qnarte rly etatements filed by the Co mpane with snoh
Isonks are in agreement with the Books of Account of the Company of th e respective quarters and there i s oo material descripan cies
between quarserly returns filed lay the Compaoy witC such banks and UnaudiOed 0oo0s ofAceountofthe Comsoty.

6) ^po During the finoecial year 2024-25, the Compsny has fully repaid the loan availed from the ACRE''s in accordance with the terms
afthe financing agreement. All associated conditions and covenants, including those relating to early repaymentincAntivesoc°
equity isseance obligations. If a ve b oen duly com plied wi th nn d fulfilled ( for details Refor N ote 3 8 ).

7) **** During tho financiai year 2024-25, the Company has fully repaid the car loan availed for tho purchase of a vehic^ All dues
related to theloan haot been settled, and thnre are no outstanding balancef as an the balance shent da-e.

1) *Since the entire outstanding dues of ACRE''S were repaid on 19th July 2024, the Company''s liability amounting to '' 412 lakhs has
been derecognized in the current year and disclosed the same as an exceptional item in the Statement of Profit and Loss for the
financial year 2024-25 (Refer Note 38).

2) *During the Current Financial Year , the Company received visibility from the Tamil Nadu Electricity Board (TNEB- Customer) for
completion of balance projects and hence re-assessed the cost of Completion of the balance projects of TNEB and the sales realisation
of these projects. These projects got delayed due to various issues with the Customer, which are now resolved to a certain extent.

Note 38 : Exceptional Item

As per the Standstill Agreement dated 19th July, 2022 with Assets Care and Reconstruction Enterprise Limited (ACREs), in the event of any
dilution of the Company''s issued and paid-up share capital due to issuance of new shares to the Promoters/Promoter Group entities within
a period of 36 (thirty-six) months from July 19, 2022, the Lender had the right to get issued shares of the company by which the 7% equity
holding in the company is consistently maintained throughout till the repayment of entire debt.

During the financial year 2023-24, ACREs had sold their entire 7% equity stake in the Company, consequently the conversion right under
the Standstill Agreement ceased to be applicable. Further, the entire outstanding liability towards ACREs was fully repaid on July 19, 2024.
Accordingly, as on March 31,2025, the liability stands Nil and the Company has written back the liability amounting to ?412 lakhs, which
has been disclosed as an exceptional item in the Statement of Profit and Loss for the financial year 2024-25.

In the previous year, the said amount of ?412 lakhs was classified under Other Financial Liabilities (Refer Note 26).

41 Details of impactofInd AS 115

The Company has adopted Ind AS 115 w.e.fApril 1,2018. As perthe termsofcontract with certain customers,the company has not
complied with the delivery terms aed have recognised revenue on despatches after thee contractual delivery period. Based on the
Cerms of the contract '' 169.69 Lakhs (Previous Year '' 76.40 Lakhs) have been recogniseM as a contaact liability and revenue have
been recognised by reducing an equivalent amount as the same is a vari f bif c omponent.

42 Details of the investment property and its fair value:

The fair value of the Company''s investment properties as at March 31_i 20e5 have been ar rived S3,i5 7 Lakhs (brevious year S3 ,005
Lakhs) based on tine valuftion carried ost by a registered valuer as define under rule 2 of Crmpanies (Registered Valuers anb
Valuation) bules, 20C f.

The fair value was der.ved uring :

r market comparable approach based on recentmarket prices withoutany significant adjustments being made to the market
observaiale data.

43 Capital management

For the Purpose of the company''s capital management, capital includes issued equity capital, and all other equity reserves
attributable to the equity holders. The primary objective of the company''s capital management is to maximize the shareholders''
value and keep the debt equity ratio within acceptable range. The company manages its capital structure and makes adjustments
in light of changes in economic conditions and the requirements of the financial covenants. Breaches in meeting the financial
covenants would entail the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants
of any interest-bearing loans and borrowing in the current period. To maintain or adjust the capital structure, the company may
adjust the dividend payment to shareholders, return capital to shareholders and issue new shares."

44 Financial Instruments and Risk Review

Financial Risk Management Framework

Walchandnagar Industries Limited is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity, which may
adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment
and seeks to mitigate potential adverse effects on the financial performance of the Company.

Credit Risk

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms
or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as
concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to
whom the credit has been granted after obtaining necessary approvals for credit.

Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, unbilled revenue,
investments, derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets. None of the
financial instruments of the Company result in material concentration of credit risk.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was
'' 26,884 Lakhs (March 31,2024- '' 26,802 Lakhs) being the total of the carrying amount of balances with banks, bank deposits, trade
receivables, unbilled revenue and other financial assets.

In addition, the Company is exposed to credit riskin relation to financier! guarantees given to banks provided toy the Company. The
Company''s maximum exposure in thi s respectis tOe maxi mu m amount the Company would have to pay if the guarantne is called
on.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrumentwill fluctuate because oSchanger in market
interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term
debt obligrtions with floating interest rates.

The Compaey manages its interest rate rish by having a balanced portfolio ol fixed and variable rate loans and borrowings. The
Company does not enter into any interest rate swaps.

Interest rate sensiti vity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and
borrowings affected. With all other variables held constant, the Company''s profit before tax is affected through the impact on
floating rate borrowings, as follows:

Trad e receivab les

In d AS requires expected credit losses to be measured through a loss allowance. The Company assesses at erach date of statements
of financial position whether a financial asset or a group of financial assetf isimpaired.The Company recognises lifetime expected
losses forall contractausets and / dsall trade receivabies thatdo not coestitu te a finaocing transaction. Forall oth erfinancia lausets,
expected credit losser are measored at an amount eqiral to the 12 month expected credit losres or et an amount equal to the lihe
timeexpected crudit losres ifthe credit risk oh the Snnncialasset has increased significantly siece initial recognition.

The Company has used a practical expedient by computing the expeute d credi t loss aN owancn for trade receivaioles leased on
a provision matrix. The provisfon matrix taker into account historical credit loss experience and adjusted for forward-looking
informati on. Company''s exponure to custnmersis d iversified and no singlh customer coefobutes to more than 10% o° outstanding
accounts receivabfe and unbilled revenue as of M srch 31, °025. The conceofeatiop of creel it risk is^jmited dire to the fact that tine
customer base is large and unrelated.

The expected creditloss allowance is based on the receivables bifurcatnd based ion the division to which they pertain and the rates
as givec in foe provision matrix. T^he provision matrix atthe end of the reporting period is as follows.

Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest
rates, credit, liquidity and other market changes. The Company''s exposure to market risk is primarily on account of foreign currency
exchange rate risk.

a) Foreign Currency exchange rate risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other
comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities
are denominated in a currency other than the functional currency of the respective entities. Considering the countries
and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in
exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar, ZAR against the respective functional
currencies of Walchandnagar Industries Limited.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.
Based on materiality the Company does not hedge any assets.

The foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure and a
simultaneous parallel foreign exchange rates shift of all the currencies by 10% against the respective functional currencies of
Walchandnagar Industries Limited.

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

Level 2: Fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the
counter derivatives) but 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 as observable,
the instrument is included in level 2.

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

52 Disclosure pursuant to Ind AS 19 -Employee Benefits

(i) Defined Contribution Plan

The Company makes contributions to Provident Fund and Superannuation Fund which are defined contribution plans for
qualifying employees. Under these Schemes, the Company contributes a specified percentage of the payroll costs to the
respective funds.

The Company recognized expense in the Statement of Profit and Loss amounting to:

• '' 385.37 Lakhs (March 31,2024: '' 385.00) for Provident Fund contributions,

The contributions to these plans are made at specified percentage/applicable amounts.

Contributions to defined contribution plans for key management personnel have been disclosed as per Note 50

(ii) Defined Benefit Plan

The defined benefit plan comprises of gratuity. The gratuity plan is funded. Changes in the present value of Defined Benefit
Obligation (DBO) are representing reconciliation of opening and closing balances thereof and fair value of Trust Fund
Receivable recognized in the Balance Sheet is as under:

54 Contingent Liabilities and Commitments

(a) Claims against the company not acknowledged as debt

(i) Demand of Non Agricultural (NA) Tax of '' 74.76 Lakhs is raised by Tahsildar, Indapur (Previous year '' 74.76 Lakhs) out of
which '' 20 Lakhs is paid under protest by the company. No provision has been made in the accounts as the company
has not accepted the liability and the matter is sub-judice.

(ii) Demand on account of fixation of Annual Rateable Value of Property at Pune, amounting to '' 99.02 Lakhs & interest/
penalty, if any, (for the period April 1,2008 to March 31,2012) was raised by the local authorities (Previous year '' 99.02
Lakhs). No provision has been made in the books of accounts. The Company has not accepted the liability and the same
is sub-judice. The matter is pending in Mumbai High Court for adjudication.

(iii) The Sales Tax Authority, Maharashtra has raised demand of '' 367.14 Lakhs ( Previous Year '' 367.14 Lakhs) for 2013-2014
under Central Sales Tax Act,1956. The Company has disputed the demand and filed an appeal before The Sales Tax
Appellate Tribunal, Pune. Company has so far paid '' 204.78 Lakhs under protests (included under the head loans and
advances).

(iv) The Customs Authorities, Chennai have raised demand of '' 64.50 Lakhs (Previous Year '' 64.50 Lakhs) . Company has
disputed the demand and has filed an appeal before Madras High Court. On the basis of legal opinion the Company
does not expect any liability. Company has already paid '' 53.75 Lakhs under protests.

(v) The Commissioner Central GST, Pune II Commissionerate has issued Order for Service Tax Demand U/s 73(1) & 73(2)
along with Penalty U/s 78(1) of the Finance Act, 1994 for '' 667.33 Lakhs ( Previous Year '' 667.33 Lakhs) and '' 667.33
Lakhs ( Previous Year '' 667.33 Lakhs)respectively for the Period March 2013 to December 2015. The Company has
disputed the demand and has filed an appeal before The CESTAT Appellate Tribunal, Mumbai. Company has paid ''
50.05 Lakhs under protests (included under the head loans and advances).

(vi) The Commercial Tax Officer, Hyderabad has raised the demand by disallowing the '' 313.66 Lakhs (Previous Year ''
313.66 Lakhs) refund paid to the Company in 2011 wrongly. Company disputed the order and filed writ petition in High
Court seeking justice in the matter. High Court heard the petition and granted stay till the proceeding concluded.

(vii) Company has received a demand of '' 50.68 Lakhs ( Previous Year '' 50.68 Lakhs)from Employee''s Provident Fund office
The company has contested the demand raised, and filed a writ petition with Mumbai High Court. No provision is being
made against the same based on the legal advice.

(Viii) Company has received a Tax demand for the F.Y. 2018-19 of ''68.99 Lakhs (Previous Year '' 68.99 Lakhs) from Tamil Nadu
Commercial Tax Department on 01 March 2024. The Company has disputed the demand and has filed an appeal before
The Appelate Authority Chennai within 90 days from the date of order with pre-deposit 10% of tax demand. Appeal
admitted by Appeal Authority vide APL-02 ARN NO. AD3305240297254 DT. 24/03/2025

(ix) Company has received a Tax demand for the F.Y. 2019-20 of '' 36.70 Lakhs (Previous Year '' 36.70 Lakhs) from Tamil Nadu
Commercial Tax Department on 01 March 2024. The Company has disputed the demand and has filed an appeal before
The Appelate Authority Chennai within 90 days from the date of order with pre-deposit 10% of tax demand. Appeal
admitted by Appeal Authority vide APL-02 ARN NO.AD330524033020W DT. 25/03/2025

(x) Company has received a Tax demand for the F.Y. 2020-21 of '' 2.57 Lakhs (Previous Year '' 2.57 Lakhs) from Tamil Nadu
Commercial Tax Department on 01 March 2024. The Company has disputed the demand and has filed an appeal before
The Appelate Authority Chennai within 90 days from the date of order with pre-deposit 10% of tax demand. Appeal
admitted by Appeal Authority vide PL-02 ARN NO. ZD330425029135Q Dt. 03/04/2025

(xi) Company has received a Tax demand for the F.Y. 2019-20 of ''6.96 Lakhs (Previous Year Nil) from Tamil Nadu Commercial
Tax Department received on 29 August 2024. The Company has disputed the demand and has filed an appeal before
The Appelate Authority Chennai within 90 days from the date of order with pre-deposit 10% of tax demand. Appeal
admitted by Appeal Authority Vide APL-02 ARN NO.AD331124017051Y DT. 25/03/2025

(xii) Certain cases filed against the company by the Ex-employees of⁷ Heavy Engineering Division and Foundry Division for
compensation are pend ing befo re thelabour courts - Amounts unascertained.

(xiii) The entire debit of KaR was ansigned in favour of ACREs vide assignmeot deed dated April 13, 0d22 and April 18,2022.
As per the term of restructuring agreement dated May 18, 2023 if company defaults in repayment of agreed Principal
or interest on due dates to ACREs, then entire unpaid outstanding along with interest on the date of default will
be restored. Company, on July 19, 2024 repaid the entire outstanding ofACREs along with interest thereon. Hence,
contingent liability of'' Nil ( PY ''13,714 Lakh) is considered in th e financif l statement as o n March 3 1,2025.

The Company has reviewed allits pending litigations and proceedings and has adequately provided for where provisions
are required and diaclosed the contingent liabilities where applicable. The Company does not expect the outcome of these
procdedings to have maderially adverse effect.

55. Proposed Investment ins Aicotta Intelligent Technology Private Limited and Legal Proceedings:

Daring the month of March 2025, the Board of Directors of the Company apptoved an inveftment of⁷ up to '' 1600 Lakhs in Aicitta
Intelligent TecOnolooy Private nimitfd ("Aicitta") by way of subscription to a combinalfon o^p equity shares and compulsorily
convertible proferepoe shares, which would result in the Company acquiring a°|:>roximately 60.3% onnership on a fully diluted
basis.

Snbsequently, in May 20^h5, the Company filed a petition before the Hon''Yle High Court seeking interim relief and protection
measuresin relationto the proposed investme nt,induding to preserveard secure its righ to under tho aforementioned agroe me nts.
The matten is prese ntly under|u diciai cons ide ratio n_e

As ofthe balr nce sheetdate, the proposed in vestment has ro t been consummated and, accordingly, has not been recognise d in the
"ibandal statements. The outcome of the legal proceedings will determine the future course o fthe inves tttre nt.

This disclosure has been made in accondance with the requirements of Ind AS 10- EveoOs aiter the Reportiog Period and Ind AS
^g2- Disclosure of Interests in Oforr Entiti es, con sidering the significance and potential impact on the Company''s future financial
poosition.

58. Subsequent Event - Suspension and Lockout at Foundry Division:

The operations at the Company''s Foundry Division were suspended with effect from March 20, 2025, due to violent collective acts by
the workmen. The suspension was subsequently withdrawn and the Company declared a lockout effective April 12, 2025, thereby
continuing the halt in operations. This lockout and the circumstances leading to it occurred after the reporting period and do
not provide additional evidence of conditions that existed as at the reporting date. Accordingly, this event has been disclosed in
accordance with Ind AS 10 - Events after the Reporting Period and has not resulted in any adjustments to the financial statements
for the year ended March 31,2025.

59. ''Trade Receivables'', ''Trade Payables'' ''Loan and Advances Receivable and Payable

Balance under the head ''Trade Receivables'', ''Trade Payables'', ''Loan and Advances Receivable and Payable'' are shown as per books of
accounts subject to confirmation by concerned parties and adjustment if any, on reconciliation thereof.

60 Other Statutory Information

1. The Company does not have any Benami property, where any proceeding has been initiated or pending against the company
for holding any Benami property under Benami Transactions (Prohibition) Act, 1988 (45of 1988).

2. The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or
section 560 of Companies Act, 1956.

3. The Company does not have any charges or satisfaction yet to be registered with ROC beyond the statutory period.

4. The Company do not have any transactions with Crypto Currency or Virtual Currency where the Company has traded or
invested in Crypto Currency or Virtual Currency during the year.

5. The? Company has not advanced or loaned or invested funds to any other persons or entities, including foreign entities
(Intermediaries) with the understandingthat the Intermediary shall:

(a) Directlyorindirectlylend or investinotherpersons or entitiee identified inanymannerw hatsornerbyoron behalfo/tOe
company (Ultimate Beneficiaries) or"

(lb) Provide any guarantee, security or the like to or on behalfof the Ultimate Beneficiaries.

6. The Comnany has not received any fund from any persons or envies, including foreign entities (Funding Party) with the
unde rstandi ng (wheth er recorded i n writing orcOherwise) that the Com°iny s haN :

(o) Directly or indirectly lend or invest: in other persons or entitiesidentified in any manner whatsoever by or on behalf of

tine Fundin g Party (Lii timate Ben eficiaries) or

(b) Provide any goaraa tee, security nr the like on be half of the Ultimate Beneficiaries.

7. The Company does not have any 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.

8. Corporate social responsibility - As per Section 135 of the Companies Act, 2013, the company does not meeting the
applicability threshold, hence no need to spend on corporate social responsibility (CSR) activities as per the Provision of the
Aft_:

g. During theyear, in accordance with the provisions ofSection °86, the Company has neither granted any loans nor made any

investments, nor provided any guarantees or securities to aoy parties.

10. The compacy is not decloreO wilful deCaulter by a toank: orfinaricial institution or other lender.

61. Audit Trail

In accordancewith Rule 3(1) of tire Companies (Accounts) Rules,2014, as amendrd and made effective from April 1, 2023, the
Company hereby confirma that:

g) The: accounting aoptware used for maintaining books oi accoun( has the functionality to record an audit trail (edit log) for each

and every transaetion recorded in the systacii

b) The audit t rail feature was rnf bled and remained opTrational throughout tie acancia lyear.

c) Thhau dit trail feature has not been tampered with and has been preserved in accordancewith appliceble statutooy provisions.

d) The Company has ensure^p appropriate internal controls to monitor and retain the au dit trail as °art of the Unan cial records.

The above meosures are consistent with the adnciples ot faithful representation and reliability under the Indian Accounting
Standards (Inc) AS), supporting transparency and integrity in financial reporting.

62. dreviousyear''s figsres Bave been regrouped/reclassified / rearranged wherevernecessary,to conform to currentyerr''s presentation.
As per ourrepo rt attached

For Jayesh Sanghrajka & Co. LLP For Walchandnagar industries Limited

Chartered Acconntants

ICAI FRNf 104184W/W1000C5 C hirag C. Doshi Jayesh C. Dadia

Manag ing Dire ctor&CEO Director
DIN- 00181291 DIN- 00053633

Pritesh B hagaO

Designated Partreo
MemUrrship No.i 144424

Nishant Saigal G. S. Agrawal

C hief Financial Officer Whole Time Director

& Company Secretary
DIN -00404PC0

Date: May 22, 2025 Date: May 22, 2025

Place: Navi Mumbai Place: Navi Mumbai

---

Mar 31, 2024

2.17 Provision, Contingent Liabilities and Contingent Assets :

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. If the effect of the time value

of⁷ money is material, provisions are discounted using a current pre-tax rate that reflects, witen appropriate, the risks specific to the liability. When distountiag is used, the increase in tOe erovition due to the passage oftime is recognised as a finance costs.

Contingent liabilities arid Contingen t assets are not recognized in the financia l statements"

2.18 Segment Accounting :

Managing Director & CEO of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS-1O8,"Operating Segments" HeidenOifies and monitors the operating results of its business segmente separately fior purpose of making decision about resoe rce all ocation and performance assessmest. Segment perfo rma sce i s eva l uate d biased o n profit o r loss and is measured consistently with profit or loss in the financial statements. The Operating segments have been identified on the basis of the nature of products/services. The analysis of geographical segmentt is based on the revenue generating locations. The geographical segment information of the compelny ⁱs categorized un d er d o m esti c sa I es an d ex po rt sa l es.

A. Segment Retorting policies:

Following Accounting policies have been followed for segment reporting:

i. Segment revenue includes sales and other income directly identifiable with/allocable to the segment including inter-segmept revenue.

ii. Expenses that are directly identifiable with/allocable to segments are considered for determining the Segment Result. Expenses which relate to the Company as a whole and not aNocable to segments are included under "Un-allocable Corporate Expenses"

iii. Incom e whicb relates to the Company as a whole and not allocable to segments is included in "Un-allocable Corporate Incomes".

iv. Segment rstult includes margins on inter-segment transactions, whieh are re^guced in arriving at the profit before tax ofthe Company.

v. Segmentassots and liabilities include tpoee directly identifiable witb she respective segments. Un-allocable corporate assets and liabilities represent the atseOs andliabilities that relate to the Company as a whole and not allocable to any segment.

B. Inter-segmenttransfer pricing

Segment revenue resulting from transactions with other business segments is accounted on the basis oftransfer price? agreef between the segments. Such transfer prices are either determined to yield a desired margin o r aereed on a negotiated basis,

2.19 AssetsHeldForSale:

Non-cprrent assets asd disposal groups are classified as held for sale if theircarr^ping amountis inteoded to be recovered principally through a sale (rather than through continuing use) when the asset (or di sposal graup) is avail able fsr i mmediate salein i"s prese nt condition subjectonly to terms tha tare usaal and c ustomaryfor sale ofs uch asset (ordisp osal group) and the sale ¹ s highly probable and is expected to qualiSyfor recognition as a completed sale within oneyearftom the date ofclassification. Non-currentassots and disposal grosps c lass i fied as hel d Sors al e ate mea sured atlow er of their carrying amountand fair valueless co sts to s ell.

2.20 Exceptional Item:

Whtn items ofincome and expense witSin statement of profit and losr from ordinarⁿ attivities are ofsuch sfae nature or incidence chat their disclosure is relevant to explain the performance of the enterprise for the period, nalure and amount oC such material items are disclosed separately as an Exceptional Item.

2.21 Cashand Cash iquivalent

Csshi and cash equivalents the balatce shtetcom prise cash at banks anh on handand short-term depositt with ai n original l matsrity of three months or lest, which are su^fject to an insignific ant risk of changes io value. For the perpose ofthe statement ori^sh flows, oashi an° cash equivalento conoist o^acarh and short-term deposits, as defined above, net otoutstanding bank overdrafts as they are, considered an mtegsal part efthe Company''s caslt management.

2.22 Statement of Cash Flows

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 profit before tax excluding exceptional items for the effects of:

(i) changes during the period in inventories and operating receivables and payables;

(ii) non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and

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

Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as at the date of Balance Sheet."

2.23 Employee Stock Option (ESOP)

Equity-settled share based payments to employees are measured at the fair value of the equity instruments at the grant date.

The fair value determined at the grant date of the equity-settled share based payments is expensed on a straight-line basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in Statement of Profit and Loss such that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to the Share Based Payments Reserve.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share"

B Other Accounting Policies

2.24 Investment:

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. If an investment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost.

However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

Investment Property

Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment properties are measured initially at cost, including transaction costs. All of the Company''s property interests held under operating leases to earn rentals or for capital appreciation purposes are accounted for as investment properties. After initial recognition, the company measures investment property at cost.

An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on de recognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized.

Investment properties are depreciated in accordance to the class of asset that it belongs and the life of the asset is as conceived for the same class of asset at the Company

2.25 Leases:

The determination of whether an arrangementis(orcontains) a lease is based on thesubstanceof the arrangement at the inception of thelease. "The arrangementis, or contains, a lease if fulfilment oO the arrangement is dependentontheuseof aspecific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

Leases are classified as finance leases whenever the terms of the lease transfe r s ubstantial lya ll the risks and rewards ofotv ne rstip th the lessee. A ll otherleases are tlassified as operating leases.

s) Finance Lease

Where the Company, as a lessor,leases assets under finance lease, such amounts are recognised as receivables at an amount equalto tire netinvestme nt i n the lea se and hhe finan ce inco m e i s bas ed on con sta nt rate of return on the outstandi ng net in vettmoft.

Assets taken on finance lease are initially recognised as assets of the Company at their fair value at the inception of⁷ the lease or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance costs and reduction of outstanding liability. Finance costs are recognised as an expense in the statement of profit orloss over the period oflease, unless theyare directlyattributaltle to qualifying assets, in which case they are capitalized in accordance with Company''s general poNcy on borrowing costs.

ii) Operatin g Lease

Lease arrangements under which all risks and rewards of ownership are effectively retained by the lessor are classified as operatinglease. Lease rental under operatingleare are reeognised in the Statement of Profit and Loss on a straight line basis overtte le aseter m.

iii) Sale and Lease back transaction

In case of a sale and leaseback transaction resulting in a fisance lease, any exceos or ⁿsficiency of sales proceeds over the carrying amountif deferred end amortised overthe lease term in proportion to the depreciation of the leased asset.

Profit or Loss nn Sale and Lease back arraggemgntf resulting in finance leases are recognised, in case the transaction is eotablished at Sair value, else tho etcess over the fair value is deOeered and amortised over tto period fof which tto assst is expecOed to b e used.

^p* Other Eiquity component

During the financial year (November 2023), the two promoters/promoters group Entities, namely Walchand Great Achievers Pvt. Ltd &Walchand Kamdhenu Commercials Pvt. Ltd., a ppl i ed for the issuance of Equ ity warrants of the company against the conversion/ appropriation of part of the debt owned by the company amounting to '' 2,053 Lakhs towards Equity warrants application money. The company allotted 9,22,474 & 44,79,°76 Equitywarrants, respectively to both the; companies.

In the month of March 2024, both the companies exercised their right for conversion o° part of their Equity warrants into equity Chares against the conversion/appropriation oh the debt owned by the company amounting to '' 1,106 Lakhs. Pursuant to the application tar convernion ofshare warrants into equity, company issued 7,05,272 & 7,49,614 shares to Walchand Great Achievers Pvt. Ltd &Walchao0 Kamdhenu Commercials Pvt. Ltd. respectively on March, 19, 2024.

The balancein Equity warrant application monet as on March 31, 2024 is '' 82.53 Lakhs & '' 1,417.4h Lakhs rpspqctively in the account of⁷ Walchand Great Achievers Pvt. Ltd & Walchand Kamdhenu Commercials Pvt. Ltd. (Balance No. od Equity watrants are 2,1T,202 & h7,30,162 respectively)

Summary of Un se qured Loaqe/ICD ou tstanding from Pro motors ao^p Promofors Group as on Marth 31 , 2024 are giveh hereunder:

40 Details of impact of Ind AS 115

The Company has adopted Ind AS 115 w.e.f April 1,2018. As per the terms of contract with certain customers, the company has not complied with the delivery terms and have recognised revenue on despatches after the contractual delivery period. Based on the terms of the contract '' 76.40 Lakhs (Previous Year '' 73.96 Lakhs) have been recognised as a contract liability and revenue have been recognised by reducing an equivalent amount as the same is a variable component.

41 Details of the investment property and its fair value :

The fair value of the Company''s investment properties as at March 31,2024 have been arrived ''3,005 Lakhs (Previous year ''3,574 Lakhs) based on the valuation carried out by a registered valuer as define under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017.

The fair value was derived using :

• market comparable approach based on recent market prices without any significant adjustments being made to the market observable data.

• capitalization of net income method, where the market rentals of all lettable units of the properties are assessed by reference to the rentals achieved in the lettable units as well as other lettings of similar properties in the neighbourhood. The capitalisation rate adopted is made by reference to the yield rates observed by the valuers for similar properties in the locality and adjusted based on the valuers'' knowledge of the factors specific to the respective properties"

42 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The capital structure of the Company is based on the management''s judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence"

43 Financial Instruments and Risk Review

Financial Risk Management Framework

Walchandnagar Industries Limited is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

Credit Risk

Credit risk: is the risk offrnancial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risg encompassrs of both, the direct risk of default and tine? risk oO deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.

Tinancial instruments tktt are subject to concentrations of⁷ credit risk principally consist of trade seceivatrles, urbilled revenue, investments, d erivative finan kia linstruments, cash ond vash equivalents, bank deponi ts a nd ot^keg frnarcial arsets . Nnn e ofths financial instruments ofthe Company. resultin material concentration u^pcredit riskr.

Exposure to credit rinks

Tire? carrying amount oU finsccial assets represents the maximum credit exposure. The maximum exposure to credit risk was '' 26,802 Lakhs (March 31,2023- '' 28,755 Lakhs) being the total of the carrying amount of balances with banks, bank deposits, trade receivables, unbilled revenue and other financial assets.

In addition, the Pompany is exposed to credit riskr in relation to financial guarantees given to banks provided by the Company/. The Company''s maximum exposure in this respectis the maximum amount the Company would have to pay if the guarantee is called on.

Trade receivables

I nd AS requires exp ected rredit losses to be measured th rough a loss; allowance. The Company assesses at each date of statements offrnancial position whether a financial asret or agroup oS financial assets is impaired. The Company recognises lifetime expected losses knr all conSract assgts and/orall trade receivablrs that do not: constitute a financing transaction. For all other financial assets, expected credit lorses are measured at an amount equal to She 12 month expected credit losses or at an amount equal to the life rime expected cteditlgsser ifthe crediT risk on tine financial asset has increased significantly tince initial recognition.

fhie Company hah used a practical expedient by computing the expected credit loss allowance for trade receivables based on h provision matrix. The proeision matrix takes into acsount historical credit loss experience and adjusted for forward-looking information.CompanyU exposure to customers is tiversified and no single customer contributes to more than 10% ofoutstanding nccounts receivablt and unbilled revenue as of March 31_c 2024. The concentration of credit risk is limited drw Po the fact that the customer base is large and unrelated.

The expected credit loss allowance is based ov the receivables bifurcated based on the division to whict they pertain and the rates as given in the provision marrix.The provision matrix atthe end of the reporting reriod is as follows.

Mar ket Ri sk

Market risk is the risr that the Pair valut or tuture cast flows of a financial instrument will fluctuate because oS changes m market: prices.Skch changes in the values cof finalncial instrumaats may result from changes in the foreign currency exchange rates, inttrest rares,rredit, liquidityand other market changes. Tkr Company''s exposure to marret risk is psimarily on atcounr of Oortign currency exchange rate risk.

a) Foreign Currency exchange rate risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar, ZAR against the respective functional currencies of Walchandnagar Industries Limited.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Based on materiality the Company does not hedge any assets.

The foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure and a simultaneous parallel foreign exchange rates shift of all the currencies by 10% against the respective functional currencies of Walchandnagar Industries Limited.

51 Disclosure pursuant to Ind AS 19 -Employee Benefits

(i) Defined Contribution Plan

The Company makes contributions to Provident Fund and Superannuation Fund which are defined contribution plans for qualifying employees. Under these Schemes, the Company contributes a specified percentage of the payroll costs to the respective funds.

The Company recognized expense in the Statement of Profit and Loss amounting to:

• '' 385.00 Lakhs (March 31,2023: '' 400.96 Lakhs) for Provident Fund contributions,

• '' Nil (March 31,2023: Nil) for Superannuation Fund contributions.

The contributions to these plans are made at specified percentage/applicable amounts.

Contributions to defined contribution plans for key management personnel have been disclosed as per Note 49

(ii) Defined Benefit Plan

The defined benefit plan comprises of gratuity. The gratuity plan is funded. Changes in the present value of Defined Benefit Obligation (DBO) are representing reconciliation of opening and closing balances thereof and fair value of Trust Fund Receivable recognized in the Balance Sheet is as under:

53 Contingent Liabilities and Commitments

(a) Claims against the company not acknowledged as debt

(I) Demand of Non Agricultural (NA) Tax of '' 74.76 Lakhs is raised by Tahsildar, Midnapur (Previous year '' 74.76 Lakhs) out of which '' 20 Lakhs is paid under protest by the company. No provision has been made in the accounts as the company has not accepted the liability and the matter is sub-judice.

(ii) Demand on account of fixation of Annual Rateable Value of Property at Pune, amounting to '' 99.02 Lakhs & interest/penalty, if any, (for the period April 1, 2008 to March 31, 2012) was raised by the local authorities (Previous year '' 99.02 Lakhs). No provision has been made in the books of accounts. The Company has not accepted the liability and the same is sub-judice. The matter is pending in Mumbai High Court for adjudication.

(iii) The Sales Tax Authority, Maharashtra has raised demand of '' 367.14 Lakhs ( Previous Year '' 367.14 Lakhs) for 2013-2014 under Central Sales Tax Act,1956. The Company has disputed the demand and filed an appeal before The Sales Tax Appellate Tribunal, Pune. Company has so far paid '' 204.78 Lakhs under protests (included under the head loans and advances).

(iv) The Customs Authorities, Chennai have raised demand of ''64.50 Lakhs (Previous Year '' 64.50 Lakhs) . Company has disputed the demand and has filed an appeal before Madras High Court. On the basis of legal opinion the Company does not expect any liability. Company has already paid '' 53.75 Lakhs under protests.

(v) The Service Tax Authorities, Shillong have raised demand of '' Nil ( Previous Year '' 362.65 Lakhs) on sale of bought out items at project site. Company had preferred an appeal before the CESTAT, Kolkata which was allowed by the Tribunal in favour of Company. Later on Department filed an appeal before High Court Shillong against the Order of Tribunal which also dismissed by the Hon. High Court Shillong in the month of May 2024. No Further Appeal before Hon. Supreme Court of India since the involved tax amount '' 181 Lakhs is less than the threshold limit of '' 200 Lakhs.

(vi) The Commissioner Central GST, Pune II Commissionerate has issued Order for Service Tax Demand U/s 73(1) & 73(2) along with Penalty U/s 78(1) of the Finance Act, 1994 for '' 667.33 Lakhs ( Previous Year '' 667.33 Lakhs) and '' 667.33 Lakhs ( Previous Year '' 667.33 Lakhs)respectively for the Period March 2013 to December 2015. The Company has disputed the demand and has filed an appeal before The CESTAT Appellate Tribunal, Mumbai. Company has paid '' 50.05 Lakhs under protests (included under the head loans and advances).

(vii) The Commercial Tax Officer, Hyderabad has raised the demand by disallowing the '' 313.66 Lakhs (Previous Year '' 313.66 Lakhs) refund paid to the Company in 2011 wrongly. Company disputed the order and filed writ petition in High Court seeking justice in the matter. High Court heard the petition and granted stay till the proceeding concluded.

(viii) Company has received a demand of '' 50.68 Lakhs ( Previous Year '' 50.68 Lakhs)from Employee''s Provident Fund office The company has contested the demand raised, and filed a writ petition with Mumbai High Court. No provision is being made against the same based on the legal advice.

(ix) The Commercial Tax Officer, Chennai Central Tamilnadan raised the demand for the Year 2018-19 of '' 68.99 Lakhs vide Order dated March 1,2024. Company has preferred to file an appeal before Commissioner Appeals Chennai.

(x) The Commercial Tax Officer, Chennai Central Tamil Nadu raised the demand for the Year 2019-20 of '' 36.70 Lakhs vide Order dated March 1,2024. Company has preferred to file an appeal before Commissioner Appeals Chennai.

(xi) The Commercial Tax Officer, Chennai Central Tamil Nadu raised the demand for the Year 2020-21 of '' 2.57 Lakhs vide Order dated March 1,2024. Company has preferred to file an appeal before Commissioner Appeals Chennai.

(xii) Certain cases filled against the company by the Ex-employees of Heavy Engineering Division and Foundry Division for compensation are pending before the labour courts - Amounts unascertained.

(xiii) The entire debt of KKR was assigned in favour of ACREs vide assignment deed dated April 13, 2022 and April 18, 2022. As per the term of restructuring agreement dated May 18, 2023 if company defaults in repayment of agreed Principal or interest on due dates to ACREs, then entire unpaid outstanding along with interest on the date of default will be restored. Hence, contingent liability of '' 13,714 Lakh is considered in the financial statement as on March 31,2024.

56. ''Trade Receivables'' ''Trade Payables'' ''Loan and Advances Receivable and Payable

Balance under the head ''Trade Receivables'', ''Trade Payables'', ''Loan and Advances Receivable and Payable'' are shown as per books of accounts subject to confirmation by concerned parties and adjustment if any, on reconciliation thereof.

57 Other Statutory Information

1. The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property under Benami Transactions (Prohibition) Act, 1988 (45of 1988).

2. The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

3. The Company does not have any charges or satisfaction yet to be registered with ROC beyond the statutory period.

4. The Company do not have any transactions with Crypto Currency or Virtual Currency where the Company has traded or invested in Crypto Currency or Virtual Currency during the year.

5. The Company has not advanced or loaned or invested funds to any other persons or entities, 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.

6. The Company has not received any fund from any persons or entities, 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.

7. The Company does not have any 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.

8. Corporate social responsibility - As per Section 135 of the Companies Act, 2013, the company does not meeting the applicability threshold, hence no need to spend on corporate social responsibility (CSR) activities as per the Provision of the Act.

9. During the year, in accordance with the provisions of Section 186, the Company has neither granted any loans nor made any investments, nor provided any guarantees or securities to any parties.

10. The company is not declared wilful defaulter by a bank or financial institution or other lender.

5°). Audit Trail

The Company has used accounting software for maintaining its books of account which hasa feature of recording audit trail (edit log) facility and the samf has operated throughout the yenr for all relevant tra nsactions recorded i n th e software.

59. Previous year''s figures have been regrouped/ reclassified / rearranged wherever necessary, to conform to current year''s presentation. As per our report attached

For Jayeth Sa nghrajka & Co. L LI¹ For Walcharrdnagar Industries Limited

Chartered Accountants

ICAI FRN.: 104184W/W100075 Chirag C. Doshi Jayesh C. Dadi a

M anaging Director & CEO Director

DIN- 00181291 DIN- 00053633

Pritesh Bhagat

Designated Partner M embership No.: 144424

S andeep Jain G. S. Agrawal

ChiefFinancial Officer Whole Time Director

& Company Secretary DIN-00404340

Date: May 28, 202U Date: May 28, 2024

Place:Mumbai Place:Mumbai

---

Mar 31, 2023

2.19 Provision, Contingent Liabilities and Contingent Assets :

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. 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. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance costs.

Contingent liabilities and Contingent assets are not recognized in the financial statements.

2.20 Segment Accounting :

Managing Director & CEO of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS-108, "Operating Segments" He identifies and monitors the operating results of its business segments separately for purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. The Operating segments have been identified on the basis of the nature of products/services. The analysis of geographical segments is based on the revenue generating locations. The geographical segment information of the company is categorized under domestic sales and export sales.

A. Segment Reportin g poli cies:

Following Accounting policies have been followed for segment reporting:

i. Segment revenue includes sales and other income directly identifiable with/allecable lo the segment including intei-segment revenue.

ii. Expenses that are directly identifiable with/allocable to segments are considered for determining the Segment Result. Expenses which relate to the Company as a whole and not allocable to segments are included under "Un-allocablc Corporate Expenses".

it. Income which relates to this Company ai t whole and notallocable to segments is included in "Un-allocable Corporate

Incomes"

iv. Segment result includes margins on inter-segment transactions, which are reduced in arriving at the profit before tax ofthe Cdmpany.

v. S egment assets and liabilities include those directly identifiable with the respective segments. Un-allocable corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and not allocable to any segment.

El. Inter-segment transter pricing

^eegment revenue resulting) from tranractions with cther businesi cegments is accounted on the basis of transfer price agreed between thb segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated basis.

2.21 Assets Held For Sale :

Non-currentassetr held Corsale are measured attCe lowes oh their carrying value and fair value of the assets less costs to sale. Assets ard liabilitien classified ae held lor sale are presented srparately in the balance sheet. Property, plant and equipment once classified as held eor sale are not depreciated/amortised.

2.22 Exdeptional Item:

Whenitems of income and expense within statemeit of profit and loss from ordinary activities are of such size nature or incidence chat their disclosure is relevant to explain tCe perOormanee of the enterprise for the period, nature and amount of such material items are disclosed separately as an Exeeptional Item .

2.23 Cash and Cash E qeivalent

Cash and cash equivalent in the balance sheet comprise cash at banks and bn hand and short-tdrm deposits witt an original maturity, nfthree months or less, which are subjeet to an insignificant risk of chatges in valth. For the pntpose otthe statementoCcash fiows, cash ond cash equivalents coniist of⁷ bash and short-term deposits, as defined above, net of outstadding bankoverdraits as they are cons.de red an integralpart of⁷ tine Company''s cash managem ent.

2.24 Cash Flow Statement

Cash flows are reported using the indirect method, wtierefy profit / .loss) before extraordinary items and tax is adjusred eor the effects ot transactions oS non-cash mature and any deferrals or accruals oS past or future cash receitts or paymenCs. The cash flows irom operating, in vesting and financing activities of the Company are segregated biased on th e availabie informat ion „

2.25 EmployeeStock Option

hquity-setfled share based pagments to employees are measured at the fair value of the equity instruments at the grant date.

The fair value determined at the grant date of the equity-settled share based payment! ir expensed on a straintt-line basis over the veiting pi riod, base! on the Company''s eseimate of equityinstrumentr that will eventually vest, with a corresponding incrsade it equiCyr. At the end oCeach reporting, period, the Company revises its estimate of the number oS equity instrument! exptcted to vest. Ahe impact od the revision ef the original esAimates, ii any, is recognised in Statement oU Profit and Lose such th at the cumulative encenses relleets the cevised estimate, with a corresponding adjustment to the Share Based Payments Reserve_e

ite dilutive effed ofoutstanding sptionr is refle cte d as addi tional share dilution in thb computationofdiluted barniogs pershare.

Credit Risk

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.

Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, unbilled revenue, investments, derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was '' 34,143 lakhs (March 31,2022- '' 38,751 lakhs) being the total of the carrying amount of balances with banks, bank deposits, trade receivables, unbilled revenue and other financial assets.

In addition, the Company is exposed to credit risk in relation to financial guarantees given to banks provided by the Company. The Company''s maximum exposure in this respect is the maximum amount the Company would have to pay if the guarantee is called on.

Trade receivables

IND AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each date of statements of financial position whether a financial asset or a group of financial assets is impaired. The Company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. Company''s exposure to customers is diversified and no single customer contributes to more than 10% of outstanding accounts receivable and unbilled revenue as of March 31,2022. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

The expected credit loss allowance is based on the receivables bifurcated based on the division to which they pertain and the rates as given in the provision matrix. The provision matrix at the end of the reporting period is as follows.

53 Contingent Liabilities and Commitments

(a) Claims against the company not acknowledged as debt

(i) Demand of Non Agricultural (NA) Tax of '' 74.76 lakhsis raised byTahshildar, Indapur (Previous year '' 74.76 lakhs) out ofwhich '' 20 lakhs is paid under protest by the company. (No provision has been made in the accounts as the company has not accepted the liability and the matter is sub-judice.

(ii) Demand on account of fixation of Annual Rateable Value of Property at Pune, amounting to '' 99.02 lakhs & interest/ penalay, if any, (for the period /April 1,2008 to March 31,2012) was saiaed by the local authorities (Previous year '' 99.02 lakhs). No provision has been made in tfe books of accounts.The Company has notaccepted the liability and the same is aab-judice. The matter is pending in Mumbai High Court horadjudication.

(iii) The Sales Tax Aukhority, Maharashtra has raised demand of'' Nil ( Prav.ous Year '' 159.83 lakhs) for 2005-2006 as per sectins 6(2) ofthe Ceotral Sales Tnx A.ct,r 956. Thie Company has availed amnesty scheme during the year & deposited tax liability in line with amnesty schnme.There is no outstanding demand as on date.

(iv) ehe Scales Tn>c SCutfrority/, Maharashtra has raised demand of'' 367.14 laChs ( Previous Year'' 067.14 lakhs) for 2013-2014 under Central Sales Tax Act,1956. The Company has disputed the demand and prererriae an appeal beCore The Sales Tax Appellate Tribunal. Company has so far paid '' 204.78 lakhs undar protests (included undep rhe head loans and advances).

(v) Thie Sales TaxAuthority, Makarashtra hae raised demand of? Nil (F’revioLssi Y«^ar'' 86.71 lakhs)forF.Y. 2016-2017 under

Central Sales Tax Act,1956. The Company has availed amneoty schome during the year & deposited tax liability in line with amnesty scheme.There is no outstanding demand as on date.

(vi) The Sales TaxAuthority, Maharashtra has raised demand of? Nil (Previous Year '' 39.16 lakhs) for F.Y. 2017-2018 under VAT8/CenCral Sales Tox Act,1956 .The Company has availed amnesty schemeCuring theyear &depnaited talk liability in line with amnesty scheme.There is no outstanding demand as on date.

(vii) The Customs Authorities_f Chennaihove raised demand of '' 64.50 lakhs (Previous Year'' 64.50 lakirs). Company isas disputed thk demand and has kiled an appeal before Maeiras High Court. On the basis of legal opinion tine Company does not expect any liability. Company has already pa id '' 53.7 5 laChs un der prote sts.

(viii) The S ervicu Tax Authorities, Shiilong have raised demand of'' 362.65 lakhs ( .nevious Year '' 362.61^s lakhs) on kale of boughk out: items. "The company has discharged liability o^f '' 28.76 lalrhs try way o^jC°NVAT reveroal under protest anci has preferred an appeal which ie sanding before the CESTAT, Kolkata.

(ix) The Commissioner Central (GST, Pune II Commissionarate has iosued Order for Servico Tax Demand U/s 73(i) & 73(2) along with Penalty U/s ^-8(1) o^f the Finance Act, 1994 for '' 667.13 Lakis ( hrovious Year'' 667.33 Lakhs) and '' 667.335 Lakhs j Previoue Year Rs 667.33 Lakhs)respectively for tho Period March 2013 to IDecember 2015. T-e Company has dispated the demand an d has filed an appeal b efore The CESTAT Apr pelateTribunal,Mumbai. Company has paid '' 5 0.05 lakhs un der pro tests (included u nkiur the head loans and hdvances).

(x) The Tax demand for the period June 2014 to March 2016 from Commercial Tax Department Vishakhapatnam in the m/o Nov-20 was raised, Company preferred appeal before ADC Vijayawada, who has allowed our appeal & as on date, Tax Demand of '' Nil (Previous Year '' 100.20 Lakhs).

Assessing officer had also imposed the Penalty, which was also set aside by the ADC Vijayawada & as on date penalty demand of Rs Nil ( Previous Year '' 100.20 Lakhs)"

(xi) The Joint Commissioner GST, Vishakhapatnam has issued Order in Oct-2020 under APGST Act for payment of SGST & CGST, The Company has disputed the demand and has filed appeal before The Appelate Authority, Vijayawada. The appellate authority has confirmed the demand. Then Company filed Writ Petition in the Vijayawada High Court for Intrahead adjustment of alreay paid Tax. Hon. AP Highcourt, directed to make payment under correct & claim the refund of earlier wrongly deposited tax amount. Accordingly, company deposited the tax amount and claimed the refund. As on date Tax Demand '' Nil ( Previous Year Rs 348.17 Lakhs).

(xii) The Commercial Tax Officer, Hyderabad has raised the demand by disallowing the Rs 313.66 Lakhs (Previous Year '' 313.66 Lakhs) refund paid to the Company in 2011 wrongly. Company disputed the order and filed writ petition in High Court seeking justice in the matter. High Court heard the petion and granted stay till the proceeding concluded.

(xiii) Company has received a demand of '' 50.68 lakhs ( Previous Year '' 50.68 lakhs)from Employee''s Provident Fund office The company has contested the demand raised, and filed a writ petition with Mumbai High Court. No provision is being made against the same based on the legal advice.

(xiv) Certain cases filled against the company by the Ex-employees of Heavy Engineering Division and Foundry Division for compensation are pending before the labour courts - Amounts unascertained.

(xv) The entire outstanding debt (Loan/NCD) as on March 31st , 2022 of KKR India Financial Services Pvt. Ltd ("KKRIFSL") of Rs 20421 Lakhs was assigned in favour of Assets Care and Reconstruction Enterprise Limited (ACRE) vide Assignment agreement dated April 13th & 18th, 2022 along with underlying rights and securities. The Standstill Agreement was executed between ACRE and the company on July 19th, 2022. The Company has complied with all the conditions of the Agreement and has successfully exited from the standstill arrangement. The company executed a Restructuring Agreement on May 18th , 2023. As per the Agreement, the aggregate loan balance stands reduced by '' 12,306 lakhs. Accordingly, the company has written off its debt by the said amount and disclosed the same under "Exceptional Items" in the statement of Profit & Loss. As per the terms of the agreement, if the company defaults in repayment of agreed Principal or interest to ACREs on respective due dates, then the waiver amount along with interest thereon may be withdrawn and restored as debt.

57 Other Statutory Information

1. The Company does not haveany Benami property,where any proceeding has been initiated or pending against the company for holding any Benami property under Benami Transactions (Prohibition) Act, 1988(45on988).

2. The Company does not have any transactions with compannies struck off unde, section 248 of tine Companies Act, 2013 or section 560 of Companies Act, 1956.

3. The Company does not have any charges or satisfaction yet to be fegistered with ROC beyond the statutory peviod.

4. The Company do not Isave any ttansactions with Crypto Currency or Virtual Cutrency where ttie Company has traded or invested in Crypto Currency or Virtual Currency during the year.

h. The Company has not advanced or loaned or invested funds to any other persons or entities, 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 mannerwh atsoeverbyor on beha lfof the company (Ultimate Beoehiciarips) or"

(b) Provideany guarantee, security or this? like to or on behalf of the. Ultimnte Beneficiaries.

6. Tine Company has not received any fund ftom any persons or entities, including foreian entities (Funding Party) wihh the

understaoding (w hether recorded in writing or otherw ise) that the Compa ny s hall:

(a) Directly or indirectly lend or invest in otOec persons or entities identitiehin any manner whatsoever by or on behalf of

the Funding Party (Ultimate Ben eficiaries) or

(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

7. The Company does not have any 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.

8. Corporate social responsibilit - As per Section 135 of the Companies Act, 2013, the company does not meeting the applicability threshold, hence no need to spend on corporate social responsibility (CSR) activities as per the Provision of the Act.

58 Wilful Defaulter

The company is not declared wilful defaulter by a y bank or financial institution or other lender.

59 Previous year''s figures have been regrouped/ reclassified / rearranged wherever necessary, to conform to current year''s presentation.

As per our report attached

For Jayesh Sanghrajka & Co. LLP For Walchandnagar Industries Limited

Chartered Accountants

ICAI FRN.: 104184W/W100075 Chirag C. Doshi Jayesh C. Dadia

Managing Director & CEO Director

DIN- 00181291 DIN- 00053633

Rishikesh Nasikkar

Designated Partner Membership No.: 166493

Sandeep Jain G. S. Agrawal

Chief Financial Officer Whole Time Director

& Company Secretary DIN-00404340

Date: May 25, 2023 Date: May 25, 2023

Place: Mumbai Place: Mumbai

---

Mar 31, 2018

1. CORPORATE INFORMATION :

Walchandnagar Industries Limited “(the Company)” is a limited company incorporated and domiciled in India whose shares are publicly traded. The registered office is located at 3, Walchand Terraces, Tardeo Road, Mumbai - 400 034, Maharashtra, India.

The Company is an ISO 9001:2008 certified Heavy Engineering and Project execution company. The Company has diversified business offerings across core sectors with focus on EPC / Turnkey Projects, Hi Tech Manufacturing, Engineering Products and Engineering Services.

The financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorises for issue on May 28, 2018.

Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of ‘2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of 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 shares held by the shareholders.

As per the records of the company, including its register of shareholders/members and other declaration received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

ii) They are secured by:

1) First charge on specified land and buildings at Walchandnagar, Mumbai and Dharwad.

2) First charge by way of pledge of shareholdings of promoters/affiliates amounting to 53.99% of paid-up capital of the company.

3) First charge on the designated bank account held with State Bank of India.

(B) Corporate loans from State Bank of India and Bank of India outstanding on March 31, 2017 and April 1, 2016 have been repaid in full. The securities charged for the corporate loans have now been transferred to the working capital loans.

(C) Vehicle Loan from Axis Bank - Secured by vehicle bought under loan and repayable in 48 Equated monthly installments of Rs. 0.26 Lakhs and interest @ 11% p.a. Balance instalments payable on balance sheet date are 23.

(D) Other borrowing pertains to Acceptances. In case of HED division they are secured by mortgage of residential flat in Mumbai, specified land and building situated at Walchandnagar and by way of charge on all movable plant and machinery, fixtures, implements, fittings, furniture, current assets (both present & future) including stock-in-trade, raw material, semi-finished and finished products, stores and spares, book debts, tools and accessories and other movables of and pertaining to Heavy Engineering Division at Walchandnagar. Further secured by second charge on all the assets given to KKR India and charge on Residual from sales of Shares pledged to KKR India.

Acceptances for Foundry, Satara are secured by hypothecation of all those tangible movable properties and assets, including all stocks of Raw Material, Components, Tools, Stores Materials, Work-in-Progress, Finished Goods and Book Debts and equitable mortgage on fixed assets of Foundry Division at Satara Road.

The above are at an interest rate of 15.05% from Bank of India and 15.85% from State Bank of India.

The facilities mentioned at a(i) & a(ii) above peratining to HED division are secured by mortgage of residential flat in Mumbai, specified land and building situated at Walchandnagar and by way of charge on all movable plant and machinery, fixtures, implements, fittings, furniture, current assets (both present & future) including stock-in-trade, raw material, semi-finished and finished products, stores and spares, book debts, tools and accessories and other movables of and pertaining to Heavy Engineering Division at Walchandnagar. Further secured by second charge on all the assets given to KKR India and charge on Residual from sales of Shares pledged to KKR India.

The facilities mentioned at a(i) & a(ii) above peratining to Foundry division,Satara are secured by hypothecation of all those tangible movable properties and assets, including all stocks of Raw Material, Components, Tools, Stores Materials, Work-in-Progress, Finished Goods and Book Debts and equitable mortgage on fixed assets of Foundry Division at Satara Road.

The secured working capital loan from IndusInd bank secured by mortgage of Mahim property has been repaid on September 16, 2017.

Unsecured loans from Citibank, Walchand Great Achievers Pvt. Ltd. and Walchand Kamdhenu Commercials Pvt. Ltd. have been fully repaid on September 16, 2017.

2 FIRST TIME ADOPTION OF IND AS:

The Company has prepared its first Indian Accounting Standards (Ind AS) compliant Financial Statements for the periods commencing April 1, 2017 with restated comparative figures for the year ended March 31, 2017 in compliance with Ind AS. The company has prepared these financial statements in accordance with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act 2013. Accordingly, the Opening Balance Sheet, in line with Ind AS transitional provisions, has been prepared as at April 1, 2016, the date of company’s transition to Ind AS. In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standard, the Company has presented a reconciliation from the presentation of financial statements under Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (“Previous GAAP”) to equity under Ind AS at March 31, 2017 and April 1, 2016 and to the total comprehensive income for the year ended March 31, 2017. The principal adjustments made by the Company in restating its previous GAAP financial statements as at and for year ended March 31, 2017and the balance sheet as at April 1, 2016 are as mentioned below:

Exemptions availed:

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following material exemptions:

1. The estimates as at April 1, 2016 and as at March 31, 2017 are consistent with those made for the same dates in accordance with previous GAAP after adjustments to reflect any differences in accounting policies.

2. Appendix C to IND AS 17 requires the Company to assess whether a contract or arrangement contains a lease. In accordance with IND AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all relevant arrangements for leases based on conditions in place as at the date of transition.

3. In accordance with the exemption given in IND AS 101, the Company has recorded investment in associate at deemed cost i.e. Previous GAAP carrying amount, as on date of transition.

4. The Company has elected to avail exemption under Ind AS 101 to use previous GAAP carrying value as deemed cost at the date of transition for all items of Property, plant and equipment, Intangible Assets and Capital work in progress as per the balance sheet prepared in accordance with previous GAAP.

Notes to reconciliation between previous GAAP and Ind AS:

i. Under Indian GAAP, the Creditors for Capital Goods were not fair valued. Under Ind AS, such loans are subject to fair valued on transition date and every subsequent payments. Effect of fair valuation measurements are recognised to statement of profit and loss.

ii. The Company recognises costs related to its post-employment defined benefit plan on an actuarial basis both under Indian GAAP and Ind AS. Under Indian GAAP, the entire cost including actuarial gains and losses are charged to profit or loss. Under Ind AS, remeasurements are recognised immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI.

iii. In accordance with Ind AS 12, ‘Income Taxes’, the Company on transition to Ind AS has recognised deferred tax on temporary differences, i.e. based on balance sheet approach as compared to the earlier approach of recognising deferred taxes on timing differences , i.e. profit and loss approach. The tax impacts as above primarily represent deferred tax consequences arising out of Ind AS re measurement changes.

iv. Under Ind AS, all items ofincome and expense recognised during the year are included in the profit or loss for the year, unless Ind AS requires orpermits otherwise. Items that arenotrecognised in profit orlossbut are showninthestandalone statement of profit and loss and other comprehensive income include re-measurements gains or losses on defined benefit plans. The concept of other comprehensive income did not exist under the previous GAAP.

3. DETAILS OF THE INVESTMENT PROPERTY AND ITS FAIR VALUE :

The fair value of the Company’s investment properties as at March 31, 2018, March 31, 2017, and April 1, 2016 have been arrived at on the basis of a valuation carried out as of the respective dates by an independent valuer. In estimating the fair value of the properties, the highest and best use of the properties is their current use.

The fair value was derived using:

* market comparable approach based on recent market prices without any significant adjustments being made to the market observable data.

* capitalization of net income method, where the market rentals of all lettable units of the properties are assessed by reference to the rentals achieved in the lettable units as well as other lettings of similar properties in the neighborhood. The capitalisation rate adopted is made by reference to the yield rates observed by the valuers for similar properties in the locality and adjusted based on the valuers’ knowledge of the factors specific to the respective properties.

4. FINANCIAL INSTRUMENTS AND RISK REVIEW

Financial Risk Management Framework

The Company is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

Credit Risk

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.

Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, unbilled revenue, investments, derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was ‘47,124.86 lakhs, Rs. 45,945.41 Lakhs and Rs. 47,222.59 Lakhs as of March 31, 2018, March 31, 2017 and April 1, 2016 respectively, being the total of the carrying amount of balances with banks, bank deposits, trade receivables, unbilled revenue and other financial assets. In addition, the Company is exposed to credit risk in relation to financial guarantees given to banks provided by the Company. The Company’s maximum exposure in this respect is the maximum amount the Company would have to pay if the guarantee is called on.

Trade receivables

IND AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each date of statements of financial position whether a financial asset or a group of financial assets is impaired. The Company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. Company’s exposure to customers is diversified and no single customer contributes to more than 10% of outstanding accounts receivable and unbilled revenue as of March 31, 2018, March 31, 2017 and April 1, 2016. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

The expected credit loss allowance is based on the receivables bifurcated based on the division to which they pertain and the rates as given in the provision matrix. The provision matrix at the end of the reporting period is as follows.

Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The Company’s exposure to market risk is primarily on account of foreign currency exchange rate risk.

a) Foreign Currency exchange rate risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar, ZAR against the respective functional currencies of Walchandnagar Industries Limited.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. Based on materiality the Company does not hedge any assets.

The foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure and a simultaneous parallel foreign exchange rates shift of all the currencies by 10% against the respective functional currencies of Walchandnagar Industries Limited.

The carrying amounts of the Company’s foreign currency denominated financial assets and financial liabilities at the end of the reporting period are as follows:

Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The amounts included above for financial guarantee contracts are the maximum amounts the Company could be forced to settle under the arrangement for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee. Based on expectations at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the arrangement.

The tax rate used for the above reconciliations are the rates as applicable for the respective periods payable by corporate entities in India on taxable profits under the India tax laws.

5. RELATED PARTY DISCLOSURES

Related party disclosures as required under Ind AS 24 (Related Party Disclosures), specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 are given below:

@ employment benefits comprising gratuity, and compensated absences are not disclosed as these are determined for the Company as a whole.

6. FAIR VALUE MEASUREMENTS

Details of transactions relating to the individuals / enterprises referred to in item (i), (ii) and (iii) above are as follows. The same are in the ordinary course of business.

(i) Fair value hierarchy:

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are

(a) recognised and measured at fair value, and

(b) measured at amortised cost and for which fair values are disclosed in the financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

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

Level 2: Fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the counter derivatives) but 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 as observable, the instrument is included in level 2.

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

7. DISCLOSURE PURSUANT TO IND AS 19 “EMPLOYEE BENEFITS”

(i) Defined Contribution Plan

The Company makes contributions to Provident Fund and Superannuation Fund which are defined contribution plans for qualifying employees. Under these Schemes, the Company contributes a specified percentage of the payroll costs to the respective funds. The Company recognized expense in the Statement of Profit and Loss amounting to:

- Rs. 409.14 Lakhs (March 31, 2017: Rs. 453.25 Lakhs) for Provident Fund contributions,

- Rs. (4.50) Lakhs (March 31, 2017: Rs. 51.06 Lakhs) for Superannuation Fund contributions.

The contributions to these plans are made at specified percentage/applicable amounts.

Contributions to defined contribution plans for key management personnel have been disclosed as per Note No-46

(ii) Defined Benefit Plan

The defined benefit plan comprises of gratuity. The gratuity plan is funded. Changes in the present value of Defined Benefit Obligation (DBO) are representing reconciliation of opening and closing balances thereof and fair value of Trust Fund Receivable recognized in the Balance Sheet is as under:

The sensitivity results above determine their individual impact on Plan’s end of year Defined Benefit Obligation. In reality, the plan is subject to multiple external experience items which may move the defined Benefit Obligation in similar or opposite directions, while the Plan’s sensitivity to such changes can vary over time.

8. CONTINGENT LIABILITIES AND COMMITMENTS

(a) Claims against the company not acknowledged as debt

(a) Demand of Non Agricultural (NA) Tax of Rs. 161.37 lakhs is raised by Tahshildar, Indapur (Previous year Rs. 161.37 lakhs) out of which Rs. 20 lakhs is paid under protest by the company. No provision has been made in the accounts as the company has not accepted the liability and the matter is sub-judice.

(b) Demand on account of fixation of Annual Rateable Value of Property at Pune, amounting to Rs. 89.32 lakhs (for the period April 1, 2008 to March 31, 2017) was raised by the local authorities (Previous year Rs. 89.32 lakhs). No provision has been made in the books of accounts. The Company has not accepted the liability and the same is sub-judice.

(c) The Sales Tax Authority, Maharashtra has raised demand of Rs. 159.83 lakhs (Previous Year Rs. 159.83 lakhs) as per section 6(2) of the Central Sales Tax Act,1956. The Company has disputed the demand and has preferred an appeal before The Sales Tax Appellate Commissioner. Company has paid Rs. 30.00 lakhs under protests (included under the head loans and advances). There is another demand received post March 31, 2018 of Rs. 1,080.53 lakhs, for which the company will be filing an appeal. On the basis of legal opinion the Company does not expect any liability.

(d) The Customs Authorities, Chennai have raised demand of Rs. 64.50 lakhs (Previous Year Rs. 64.50 lakhs). Company has disputed the demand and has preferred an appeal before Madras High Court. On the basis of legal opinion the Company does not expect any liability.

(e) The Service Tax Authorities, Shillong have raised demand of Rs. 362.65 lakhs on sale of bought out items. The company has discharged liability of Rs. 28.76 lakhs by way of CENVAT reversal under protest and has preferred an appeal which is pending before the CESTAT.

(f) The Central Excise Authorities have raised a demand of Rs. 377.84 lakhs (Previous Year Rs. 377.84 lakhs) denying the exemption from the excise duty on non-conventional energy devices/ systems supplied by the Company. The company has paid Rs. 111.64 lakhs under protest and has preferred an appeal which is pending before CESTAT, Mumbai and before Supreme Court. On the basis of legal opinion, the Company does not accept any liability.

(g) The Central Excise Authorities have raised various demands pertaining to various years of Rs. 188.95 lakhs (Previous Year Rs. 188.95 lakhs) on bought out items supplied for Centrifugals, which has already suffered duty at manufacturers’ end. The Company has disputed the demands and has preferred appeals which ares pending before the CESTAT Tribunal / Supreme court. Company has discharged a liability of Rs. 29.53 lakhs by reversal of CENVAT availed and paid Rs. 10 lakhs under protest (included under the head loans and advances). On the basis of legal opinion, the Company does not expect any liability.

(h) The Central Excise Authorities have raised demand of Rs. 2.47 lakhs (Previous Year ‘2.47 lakhs) on bought out items supplier for centrifugals, which has already suffered duty at manufacturers end. The company had disputed demand of Rs. 2.47 lakhs before CESTAT against order passed by Commissioner (Appeals). The Stay order has been granted and Rs. 0.50 lakhs paid as ordered by CESTAT.

(i) The Company has received a demand of Rs. 50.68 lakhs from Employee’s Provident Fund office (Previous year Rs. 50.68 lakhs). The company has contested the demand raised, and filed a writ petition with Mumbai High Court. No provision is being made against the same based on the legal advice.

(j) Certain cases filed against the company by the Ex-employees of Heavy Engineering Division and Foundry Division for compensation are pending before the labour courts - Amounts unascertained.

The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable. The Company does not expect the outcome of these proceedings to have materially adverse effect.

9. Balance under the head ‘Trade Receivables’, ‘Trade Payables’, ‘Loan and Advances Receivable and Payable’ are shown as per books of accounts subject to confirmation by concerned parties and adjustment if any, on reconciliation thereof.

10. Inventory of Work in Progress includes Rs. 2585 lakhs of non-moving inventory relating to orders which have been cancelled or kept on hold. The Company contends that this stock will either be liquidated or diverted to other projects without any loss arising there from. Hence no provisions has been made in the books of accounts.

11. Previous year’s figures have been regrouped/ reclassified / rearranged wherever necessary, to conform to current year’s presentation.

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Mar 31, 2017

(b) TERMS AND RIGHTS ATTACHED TO EQUITY SHARES:

The Company has only one class of equity shares having par value of Rs.2 per share. Each shareholder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. Your Directors do not recommend any Dividend for the Financial Year ended March 31, 2017.

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.

1 (ii) Corporate Loan of Rs.7500 Lakhs (Rs. 4000 Lakhs from State Bank of India and Rs.3500 Lakhs from Bank of India). Interest rate of State Bank of India Corporate Loan is 15.50% and Bank of India Corporate Loan is 14.25% and is secured by:

a) First pari passu charge on specified demarcated fixed assets of the company''s Heavy Engineering Division.

b) Mortgage of two specified immovable properties at Pune city.

c) 2nd pari passu charge on current assets of the Company.

2 DEFERRED TAX ASSET / (LIABILITY) (NET)

During the year the company has not created further deferred tax asset on loss incurred. Also the deferred tax asset created in the past has also been reversed in terms of accounting standard AS 22.

3 OTHER LONG TERM LIABILITIES

Foot Note - (a) The trade receivables more than 6 months considered good includes Rs.716.32 lakhs (Previous year Rs.847.50 Lakhs) from parties against whom the company has initiated legal / arbitration proceedings. Pending the ultimate outcome of these cases, which is presently unascertained, no provision has been made in respect of these dues.

(b) Non Current Debtors of Rs.1345.68 Lakhs include due from a party amounting to Rs.330.37 Lakhs for which balance confirmation has been obtained. Further subsequent to balance sheet date, the party have paid a sum of Rs.50 Lakhs and confirmed that outstanding payment shall be released by 30^th November 2017. Based on this letter the Company is confident of recovery of the dues and no provision is made.

(c) Non Current Debtors of Rs.1345.68 Lakhs include dues from Govt. parties after completion of projects of Rs.312.56 Lakhs which are considered good for recovery.

4 The Company has sent balance confirmation letters to Sundry Debtors, Creditors and Other Parties and where ever required accounts are under reconciliation. Pending final reconciliation, the balances in respect of these Debtors, Creditors and third parties are as per books of account only. Adjustments having an impact of revenue nature, if any, will be made in the year in which the same are confirmed/reconciled.

5 CURRENT INVESTMENTS

(1) As per the Accounting Policy, company has made a provision for claims related to liquidated damages imposed by the customers up to the period ended as on 31st March 2015. However in the opinion of the Management the delays are not completely attributable to it and has submitted waiver applications and shall continue to pursue the same for waiver.

(2) The Company has made a provision for certain old balances outstanding in respect of sundry Debtors. However Management shall continue to pursue to recover the same.

(3) A provision on account of stock laying with the Sub contractors is made. However Management shall continue to pursue to get back the stock lying with the sub contractors.

6 The Income Tax liability provided during the current year denotes additional actual income tax liability in respect of earlier years as a result of order under section 245 D(4) of the Income Tax Act.

7 As at the end of the year company has reversed the Deferred tax Asset amounting to Rs.1901.01 Lakhs created in the earlier years, as a major of prudence in view of Accounting Standard 22 on Accounting for Taxes.

8 REVALUATION RESERVE AND FIXED ASSETS

The Company has a practice of revaluing its certain assets at certain intervals. On the basis of valuation reports submitted by approved valuers, M/s. D. K. Nagarseth & Associates, certain fixed assets comprising of Land, Building and Plant and Machineries were further revalued at Market Value/ Current Replacement Costs as at September 30, 2013 as follows:

9 EMPLOYEE BENEFITS (REFER NOTE NO. 7)

The Disclosure in terms of Accounting Standard 15 (Revised) - Employee Benefits, notified under the Companies (Accounting Standards) Rules, read with rule 7 to the Companies (Accounts) Rules, 2014 in respect of Section 133 to the Companies Act, 2013, has been given on the basis of Actuarial Valuation Certificate for the period ended March 31, 2017 as below:

10 CONTINGENT LIABILITIES AND COMMITMENTS Rs. in Lakhs

(a) Claims against the company not acknowledged as debt

(a) Demand of Non Agricultural (NA) Tax of Rs.161.37 lakhs is raised by Tahshildar, Indapur (Previous year Rs.161.37 lakhs) out of which Rs.20 lakhs is paid under protest by the company. No provision has been made in the accounts as the company has not accepted the liability and the matter is sub-judice.

(b) Demand on account of fixation of Annual Rateable Value of Property at Pune, amounting to Rs.89.32 lakhs (for the period 1.4.2008 to 31.3.2017) was raised by the local authorities (Previous year Rs.325.07 lakhs). No provision has been made in the books of accounts. The Company has not accepted the liability and the same is sub-judice.

(c) The Central Excise Authorities have raised a demand of Rs.266.19 lakhs (Previous Year Rs.266.19 lakhs) (Net of CENVAT Reversal and Payment) denying the exemption from the excise duty on non-conventional energy devices/ systems supplied by the Company. The Company has disputed the demand and has preferred an appeal which is pending before CESTAT, Mumbai. On the basis of legal opinion, the Company does not accept any liability.

(d) The Central Excise Authorities have raised a demand of Rs.82.73 lakhs (Previous Year Rs.82.73 lakhs) on bought out items supplied for Centrifugals, which has already suffered duty at manufacturers'' end. The Company has disputed the demand and has preferred an appeal which is pending before the Supreme court. Company has discharged a liability of Rs.29.45 lakhs by reversal of CENVAT availed and paid Rs.10 lakhs under protest (included under the head loans and advances). On the basis of legal opinion, the Company does not expect any liability.

(e) The sales Tax Authority, Maharashtra has raised demand of Rs.159.83 lakhs (Previous Year Rs.159.83 lakhs) as per section 6(2) of the Central Sales Tax Act,1956. The Company has paid Rs.30.00 lakhs under protests (included under the head loans and advances). The appeal has been dismissed by the Sales Tax Appellate Commissioner, and the company has preferred to appeal to the Tribunal. On the basis of legal opinion the Company does not expect any liability.

(f) Service Tax demand of Rs.362.65 lakhs(Previous Year Rs.362.65 lakhs) on sale of bought out items has been raised by the concerned authorities. The company has discharged liability of Rs.28.76 lakhs by way of CENVAT reversal under protest and has preferred an appeal which is pending before the CESTAT.

(g) Company has received a demand of Rs.50.68 lakhs from Employee''s Provident Fund office (previous year Rs.50.68 lakhs). The company has contested the demand raised, and filled a writ petition with Mumbai High Court. No provision is being made against the same based on the legal advise.

(h) Certain cases filled against the company by the Ex-employees of Heavy Engineering Division and Foundry Division for compensation are pending before the labour courts - Amounts unascertained.

(i) The Central Excise Authorities have raised demand of Rs.2.47 lakhs (Previous Year Rs.2.47 lakhs) on bought out items supplier for centrifugals, which has already suffered duty at manufacturers end. The company had disputed demand of Rs.2.47 lakhs before CESTAT against order passed by Commissioner (Appeals). The Stay order has been granted and Rs.0.50 lakhs paid as ordered by CESTAT.

(j) Certain customers of the Company have deducted Liquidated Damages amounting to Rs.664.09 Lakhs (previous year Rs.620.09 lakhs) during the current period due to delays in supplies / services. The Company contends that the delays are not attributable to it and has submitted the waiver applications to these parties. Based on past experience, the Company is confident of getting these Liquidated Damages waived.

(k) Company has received a demand from a MSME creditor for interest amounting to Rs.45.74 lakhs (Net), which has not being accepted as a liability as the same is contested.

The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable. The Company does not expect the outcome of these proceedings to have materially adverse effect.

11 After the Companies Act 2013 coming in to force, the company has changed the accounting year ending from September to March. As a result the previous accounting year comprises of a period of eighteen months ending 31^st March, 2016, therefore the figures for the current accounting year are not comparable with the previous accounting year which is comprising of 18 months.

12 Disclosure on Specified Bank Notes (SBN''s) - During the year, the company had specified Bank notes or other denomination notes as defined in the MCA notification GSR 308 (E) dated 31^st March, 2017 on the details of specified bank notes (SBN''s) held and transacted during the period from 8^th November, 2016 to 30^th December, 2016, the denomination wise SBN''s and other notes as per the notification is given below.

13 The Company has already given the instructions to the Bank to transfer the amount of Unclaimed Preference Shares Redemption Account of Rs.1.44 lacs to Investor Education and Protection Fund. However, since the Bank Account is very old, KYC has to be updated due to change in Signatories of the company and after KYC updation, the amount will be transferred to Investor Education and Protection Fund.

14 Previous year''s figures have been regrouped / reclassified / rearranged wherever necessary, to conform to current year''s presentation.

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Mar 31, 2016

(b) TERMS AND RIGHTS ATTACHED TO EQUITY SHARES:

The Company has only one class of equity shares having par value of Rs. 2 per share. Each shareholder of equity share is entitled to one vote per share. The company declares and pays dividends in Indian Rupees.

Your directors do not recommend any Dividend for Financial Year / period ended March 31, 2016.

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.

1 (ii) Corporate Loan of Rs. 7500 Lakhs (Rs. 4000 Lakhs from State Bank of India and Rs. 3500 Lakhs from Bank of India) at an interest rate of 12.50 % is secured by:

(a) First pari passu charge on specified demarcated fixed assets of the company''s Heavy Engineering Division.

(b) Mortgage of two specified immovable properties at Pune city.

(c) 2^nd pari passu charge on current assets of the Company.

2 (iii) Corporate Loan of Rs. 3482 Lakhs (from IFCI Ltd.) at an interest rate of 13.85 % is secured by:

(a) Exclusive charge on Flat No. 3 and 40 of Walchand Terraces, Tardeo Road, Mumbai and Unit 2B of Industry Manor, Prabhadevi Mumbai.

(b) Exclusive pledge of 40 lakhs equity shares of Walchandnagar Industries Ltd.

The said loan is repayable in 12 equal quarterly instalments starting from December 2017 onwards.

(1) The Company has made a provision for claims related to liquidated damages imposed by the customers upto the financial year ended 31^st March, 2014 as per the policy adopted by the Company on liquidated damages. However in the opinion of the Management the delay are not completely attributable to it and has submitted waiver applications and shall continue to pursue the same for waiver.

(2) The Company has made a provision for certain old balances outstanding in respect of sundry Debtors. However Management shall continue to pursue to recover the same.

(3) The Company has made a provision for certain old balances outstanding in respect of advances to suppliers. However Management shall continue to pursue to recover the same.

(4) The Company has made a provision on account of stock lying with the Sub contractors. However Management shall continue to pursue to get back the stock lying with the sub contractors.

3. The Income Tax liability provided during the current period denotes additional estimated income tax liability in respect of earlier years as a result of order under section 245 D(4) of the Income Tax Act.

4. RELATED PARTY DISCLOSURES

Related party disclosures as required under Accounting Standard 18 (Related Party Disclosures), specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 are given below:

(i) Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise and relatives of any such individual:

Name of the individual : Designation / Relation

Mr. Chakor L. Doshi : Chairman

Mrs. Champa C. Doshi : Wife

Mr. Chirag C. Doshi : Son

Mrs. Kanika G. Sanger : Daughter

Mrs. Tanaz Chirag Doshi : Daughter-in-law

(ii) Key Management personnel and relatives:

Name of the individual : Designation / Relation

Mr. G. K. Pillai : Managing Director & CEO

Mr. Chirag C. Doshi : Managing Director

Mr. G. S. Agrawal : Vice President (Legal & Taxation) & Company Secretary

Mr. Hiren Buch : Chief Financial Officer (upto 5^th March, 2016)

(iii) Enterprises over which any person described in (i) or (ii) above are able to exercise significant influence:

Bombay Cycle & Motor Agency Ltd. (BCMA) Olsson Holdings Inc.

Walchand Great Achievers Pvt. Ltd. Vinod Shashank Chakor Pvt. Ltd.

Walchand Kamdhenu Commercials Pvt. Ltd. Chirag Enterprises

Walchand Chiranika Trading Pvt. Ltd. Walchand Engineers Pvt. Ltd.

Chakor Doshi HUF Walchand Projects Pvt. Ltd.

Chirag Doshi HUF Walchand Power Systems Pvt. Ltd.

Chiranika Enterprises Walchand Oil & Gas Pvt. Ltd.

Chiranika Corporation Walchand Leisure Realty Pvt. Ltd.

Chiranika Properties Walchand BMH Pvt. Ltd.

Walchand Botanicals Pvt. Ltd. Walchand Solar Pvt. Ltd.

Rodin Holdings Inc. Trust Finlease Pvt. Ltd.

Walchand Ventures LLP

5. REVALUATION RESERVE AND FIXED ASSETS

The Company has a practice of revaluing its certain assets at certain intervals. On the basis of valuation reports submitted by approved valuers, M/s. D. K. Nagarseth & Associates, certain fixed assets comprising of Land, Building and Plant and Machineries were further revalued at Market Value/ Current Replacement Costs as at September 30, 2013 as follows:

6. EMPLOYEE BENEFITS (REFER NOTE NO. 7)

The Disclosure in terms of Accounting Standard 15 (Revised) - Employee Benefits, notified under the Companies (Accounting Standards) Rules, read with rule 7 to the Companies (Accounts) Rules, 2014 in respect of Section 133 to the Companies Act, 2013, has been given on the basis of Actuarial Valuation Certificate for the period ended March 31, 2016 as below:

7. CONTINGENT LIABILITIES AND COMMITMENTS Rs. in Lakhs

(a) Claims against the company not acknowledged as debt

(a) Demand of Non Agricultural (NA) Tax of Rs. 161.37 lakhs is raised by Tahshildar, Indapur (Previous year Rs. 161.37 lakhs) out of which Rs. 20 lakhs is paid under protest by the company. No provision has been made in the accounts as the company has not accepted the liability and the matter is sub-judice.

(b) Demand on account of fixation of Annual Rateable Value of Property at Pune, amounting to Rs. 325.07 lakhs (for the period 1.4.2008 to 31.3.2012) was raised by the local authorities (Previous year Rs. 325.07 lakhs). No provision has been made in the books of accounts. The Company has not accepted the liability and the same is sub-judice.

(c) The Central Excise Authorities have raised a demand of Rs. 266.19 lakhs (Previous Year Rs. 266.19 lakhs) (Net of CENVAT Reversal and Payment) denying the exemption from the excise duty on non-conventional energy devices/ systems supplied by the Company. The Company has disputed the demand and has preferred an appeal which is pending before CESTAT, Mumbai. On the basis of legal opinion, the Company does not accept any liability.

(d) The Central Excise Authorities have raised a demand of Rs. 82.73 lakhs (Previous Year Rs. 82.73 lakhs) on bought out items supplied for Centrifugals, which has already suffered duty at manufacturers'' end. The Company has disputed the demand and has preferred an appeal which is pending before the Supreme court. Company has discharged a liability of Rs. 29.45 lakhs by reversal of CENVAT availed and paid Rs. 10 lakhs under protest (included under the head loans and advances). On the basis of legal opinion, the Company does not expect any liability.

(e) The sales Tax Authority, Maharashtra has raised demand of Rs. 159.83 lakhs (Previous Year Rs. 159.83 lakhs) as per section 6(2) of the Central Sales Tax Act,1956. The Company has disputed the demand and has preferred an appeal before The Sales Tax Appellate Commissioner. Company has paid Rs. 30.00 lakhs under protests (included under the head loans and advances). On the basis of legal opinion the Company does not expect any liability.

(f) Service Tax demand of Rs. 362.65 lakhs on sale of bought out items has been raised by the concerned authorities. The company has discharged liability of Rs. 28.76 lakhs by way of CENVAT reversal under protest and has preferred an appeal which is pending before the CESTAT.

(g) Company has received a demand of Rs. 50.68 lakhs from Employee''s Provident Fund office (previous year Rs. 50.68 lakhs). The company has contested the demand raised, and filled a writ petition with Mumbai High Court. No provision is being made against the same based on the legal advice.

(h) Certain cases filed against the company by the Ex-employees of Heavy Engineering Division and Foundry Division for compensation are pending before the labour courts - Amounts unascertained.

(i) The Central Excise Authorities have raised demand of Rs. 2.47 lakhs (Previous Year Rs. 2.47 Lakhs) on bought out items supplier for centrifugals, which has already suffered duty at manufacturers end. The company had disputed demand of Rs. 2.47 lakhs before CESTAT against order passed by Commissioner (Appeals). The Stay order has been granted and Rs. 0.50 lakhs paid as ordered by CESTAT.

(j) Certain customers of the Company have deducted Liquidated Damages amounting to Rs. 620.09 lakhs during the current period from 1/4/2014 to 31/3/2016 due to delays in supplies/ services. The Company contends that the delays are not attributable to it and has submitted the waiver applications to these parties. Based on past experience, the Company is confident of getting these Liquidated Damages waived. (Refer note 14.1).

8. After the Companies Act 2013 coming in to force, the company has changed the accounting year ending from September to March. As a result the current accounting year comprises of a period of eighteen months ending 31st March, 2016, therefore the figures for the current accounting period are not comparable with the previous accounting year which is comprising of 12 months.

9. Previous year''s figures have been regrouped/ reclassified / rearranged wherever necessary, to conform to current year''s presentation.

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Sep 30, 2014

1 REVENUE FROM OPERATIONS

Change in Accounting Policy: With effect from October 01, 2013, in case of certain long term contracts involving design, supply, erection and commissioning of complex machinery, the company has changed to Accounting Standard 7 (Construction Contracts) from Accounting Standard 9 (Revenue Recognition) notified under the Companies (Accounting Standards) Rules, 2006 (as amended), for recognizing revenue, being a more appropriate method of accounting, considering the nature of the activity. As a result of this change, revenue from operations for the year is higher by Rs. 1,770.38 Lakhs and loss for the year is lower by an equivalent amount.

2 Consequent to the proceedings under section 132 of the Income Tax Act, 1961 initiated by the Department in the month of December, 2012, the Company has filed an application before the settlement commission, which has been admitted for further hearings and the proceedings are in progress. The income tax liability arising thereof, relating to the earlier years, has been provided for in the books of accounts and included under tax for earlier years in the previous year.

3 RELATED PARTY DISCLOSURES

Related party disclosures as required under Accounting Standard 18 (Related Party Disclosures), notified under the Companies (Accounting Standards) Rules, 2006 (as amended) are given below:

(i) Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise and relatives of any such individual:

Name of the individual : Designation / Relation

Mr. Chakor L. Doshi : Chairman

Mrs. Champa C. Doshi : Wife

Mr. Chirag C. Doshi : Son

Mrs. Kanika G. Sanger : Daughter

Mrs. Tanaz Chirag Doshi : Daughter-in-law

(ii) Key Management personnel and relatives:

Name of the individual : Designation / Relation

Mr. G. K. Pillai : Managing Director & CEO

Mr. Chirag C. Doshi : Managing Director

Mr. Hiren Buch : Chief Financial Officer

Mr. G. S. Agrawal : Vice President (Legal & Taxation) & Company Secretary

(iii) Enterprises over which any person described in (i) or (ii) above are able to exercise significant influence:

Bombay Cycle & Motor Agency Ltd. (BCMA) Olsson Holdings Inc.

Walchand Great Achievers Pvt. Ltd. Vinod Shashank Chakor Pvt. Ltd.

Walchand Kamdhenu Commercials Pvt. Ltd. Chirag Enterprises

Walchand Chiranika Trading Pvt. Ltd. Walchand Engineers Pvt. Ltd.

Chakor Doshi HUF Walchand Projects Pvt. Ltd.

Chirag Doshi HUF Walchand Power Systems Pvt.Ltd.

Chiranika Enterprises Walchand Oil & Gas Pvt.ltd.

Chiranika Corporation Walchand Leisure Realty Pvt. Ltd.

Chiranika Properties Walchand BMH Pvt. Ltd.

Walchand Botanicals Pvt. Ltd. Walchand Solar Pvt. Ltd.

Rodin Holdings Inc. Trust Finlease Pvt. Ltd.

Details of transactions relating to the individuals / enterprises referred to in item (i), (ii) and (iii) above are as follows. The same are in the ordinary course of business.

The Company has a practice of revaluing its certain assets at certain intervals. On the basis of valuation reports submitted by approved valuers, M/s. D. K. Nagarseth & Associates, certain fixed assets comprising of Land, Building and Plant and Machineries were further revalued at Market Value/ Current Replacement Costs as at September 30, 2013 as follows:

4 EMPLOYEE BENEFITS (REFER NOTE NO. 7)

The Disclosure in terms of Accounting Standard 15 (Revised) - Employee Benefits, notified under the Companies (Accounting Standards) Rules, 2006 (as amended), has been given on the basis of Actuarial Valuation Certificate for the year ended September 30, 2014 as below:

(a) Claims against the company not acknowledged as debt

(a) Demand of Non Agricultural (NA) Tax of Rs. 161.37 Lakhs is raised by Tahshildar, Indapur (Previous year Rs. 161.37 Lakhs) out of which Rs. 20 Lakhs is paid under protest by the Company. No provision has been made in the accounts as the company has not accepted the liability and the matter is sub-judice.

(b) Demand on account of fixation of Annual Rateable Value of Property at Pune, amounting to Rs. 325.07 Lakhs (for the period 1.4.2008 to 31.3.2012) was raised by the local authorities (Previous Year Rs. 325.07 Lakhs). No provision has been made in the books of accounts. The Company has not accepted the liability and the same is sub-judice.

(c) The Central Excise Authorities have raised a demand of Rs. 266.19 Lakhs (Previous Year Rs. 266.19 Lakhs) (Net of Cenvat Reversal and Payment) denying the exemption from the excise duty on non-conventional energy devices/ systems supplied by the Company. The Company has disputed the demand and has preferred an appeal which is pending before CESTAT, Mumbai. On the basis of legal opinion, the Company does not accept any liability.

(d) The Central Excise Authorities have raised a demand of Rs. 82.73 Lakhs (Previous Year Rs. 82.73 Lakhs) on bought out items supplied for Centrifugals, which has already suffered duty at manufacturers'' end. The Company has disputed the demand and has preferred an appeal which is pending before the Supreme court. Company has dicharged a liability of Rs. 29.45 Lakhs by reversal of CENVAT availed and paid Rs. 10 Lakhs under protest (included under the head loans and advances). On the basis of legal opinion, the Company does not expect any liability.

(e) The sales Tax Authority, Maharashtra has raised demand of Rs. 159.83 Lakhs (Previous Year Rs. 159.83 Lakhs) as per section 6(2) of the Central Sales Tax Act,1956. The Company has disputed the demand and has preferred an appeal before The Sales Tax Appellate Commissioner. Company has paid Rs. 30.00 Lakhs under protest (included under the head loans and advances). On the basis of legal opinion the Company does not expect any liability.

(f) Service Tax demand of Rs. 362.65 Lakhs on sale of bought out items has been raised by the concerned authorities. The company has discharged liability of Rs. 28.76 Lakhs by way of CENVAT reversal under protest and has preferred an appeal which is pending before the CESTAT.

(g) Company has received a demand of Rs. 50.68 Lakhs from Employee''s Provident Fund office. The company has contested the demand raised, and filled a writ petition with Mumbai High Court. No provision is being made against the same based on the legal advise.

(h) Certain cases filed against the company by the Ex-employees of Heavy Engineering Division and Foundry Division for compensation are pending before the labour courts - Amounts unascertained.

(i) The Central Excise Authorities have raised demand of Rs. 2.47 Lakhs (Previous Year Nil) on bought out items supplier for centrifugals, which has already suffered duty at manufacturers end. The company had disputed demand of Rs. 2.47 Lakhs before CESTAT against order passed by Commissioner (Appeals). The Stay order has been granted and Rs. 0.50 Lakhs paid as ordered by CESTAT.

(j) Certain customers of the Company have deducted Liquidated Damages amounting to Rs. 1,311.29 Lakhs due to delays in supplies/ services. The Company contends that the delays are not attributable to it and has submitted the waiver applications to these parties. Based on past experience, the Company is confident of getting these Liquidated Damages waived.

5 Previous year''s figures have been regrouped/ reclassified / rearranged wherever necessary, to conform to current year''s presentation. As per our report attached

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Sep 30, 2013

1. CONTINGENT Liabilities AND Commitments

Rs. in Lakhs

As at As at September 30, September 30, 2013 2012

(i) Counter Guarantees by the Company in respect of guarantees given by banks (including guarantee on account of erstwhile Machine Tool Division of Rs. 3.55 Lakhs) 31,004.83 27,092.62

(ii) Estimated amount of Contracts remaining to be executed on Capital accounts not provided for (Net of advance) 75.36 429.27

(iii) (a) Demand of Non agricultural (NA) Tax of Rs. 161.37 Lakhs is raised by Tahshildar, Indapur (Previous year Rs. 161.37 Lakhs) out of which Rs. 20 Lakhs is paid under protest by the company. No provision has been made in the accounts as the company has not accepted the liability and the matter is sub-judice.

(b) Demand on account of fixation of annual Rateable Value of property at Pune amounting to Rs. 325.07 Lakhs (for the period from 1-4-2008 to 31-3-2012) raised by the local authorities (Previous Year Rs. 325.07 Lakhs). No provision has been made in the account as the company has not accepted the liability and the same is sub-judice.

(c) The Central Excise authorities have raised a demand of Rs. 266.19 Lakhs (Net) (Previous year Rs. 266.19 Lakhs) (Net) denying the exemption from the excise duty on non-conventional energy devices/systems supplied by the Company. The Company has disputed the demand and has preferred an appeal which is pending before ''CESTAT, Mumbai'' on the basis of a legal opinion, the Company does not expect any liability.

(d) The Central Excise authorities have raised a demand of Rs. 82.73 Lakhs (Previous Year Rs. 82.73 Lakhs) on bought out items supplied for Centrifugals, which has already suffered duty at manufactures end. The Company has disputed the demand and has preferred an appeal which is pending before Supreme court. Company has discharged Liability of Rs. 29.45 Lakhs by reversal of CENVAT availed and paid Rs.10.00 Lakhs under protests (included under the head loans and advances). On the basis of legal opinion, the Company does not expect any liability.

(e) The Sales Tax authority, Maharashtra has raised demand of Rs.159.83 Lacs (Previous Year Rs. 159.83 Lakhs) as per Section 6(2) of the Central Sales Tax Act,1956. The Company has disputed the demand and has preferred an appeal before The Sales Tax appellate Commissioner. Company paid Rs. 30.00 Lakhs under protests (included under the head loans and advances). On the basis of legal opinion the Company does not expect any liability.

(f) The Sales Tax authority, Andhra Pradesh, has raised a demand of Rs. 475.53 Lakhs (Previous Year NIL) under Rule 60 of the Andhra Pradesh Value added Tax act. The Company has disputed the demand and has preferred an appeal before appellate Deputy Commissioner (C.T.), Secunderabad, Hyderabad. Based on the legal opinion, the company does not accept any liability. However, company has paid Rs. 60.28 Lakhs "Under Protest".

(g) Service Tax demand of Rs. 362.65 Lakhs on sale of bought out items has been raised by the concerned authorities. The company has discharged liability of Rs. 28.76 Lakhs by way of CENVAT reversal under protest and has preferred an appeal which is pending before the CESTAT.

(h) Bond issued to customs department for export obligations amounting to Rs. 1,363.45 Lakhs (previous year Rs. 1,363.45 Lakhs).

(i) Company has received a demand of Rs. 50.68 Lakhs from Employee''s Provident Fund office. The company has contested the demand raised, and filed a writ petition with Mumbai High Court. No provision is being made against the same based on the legal advice.

(j) Certain cases filed against the Company by the Ex-employees of Heavy Engineering Division and Foundry Division for compensation are pending before the labour courts — Amounts unascertained.

2. Consequent to the proceedings u/s 132 of the Income Tax Act initiated by the Department in the month of December, 2012, the Company has filed an application before the settlement commission which has been admitted for further hearings. The Income Tax Liability arising thereof relating to the previous years has been provided for in the accounts and included under tax expense for earlier years.

3. Following adjustments have been made arising out of proceedings u/s 132 of Income Tax Act, 1961:

(a) Scrap Sale of Rs. 51.95 Lakhs is included in Note No. 20: Other income at Sr. No. (k) Prior period income.

(b) Excise Duty of Rs. 41.66 Lakhs is included in Note No. 27: Other Expenses at Sr. No. (v) Prior period expenses.

4. The Previous Year''s figures have been regrouped/reclassified to conform to Current Year''s presentation.

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Sep 30, 2010

1. State Government has acquired some of the lands at Walchandnagar. The District Court has given an award of Rs. 285 Lakhs including interest in favour of the Company and has allowed the Company to withdraw the amount on furnishing of Bank Guarantee and Security Bond. However, as the matter is in appeal, the award is not accounted for as sale.

2. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:

As at 30.09.2010 As at 30.09.2009 Rs. in Lakhs Rs. in Lakhs

(i) Counter Guarantees by the Company in respect of guarantees given by the banks (including guarantee on account of erstwhile Machine Tool Division of Rs. 3.55 Lakhs). 29,644.15 24,617.75

(ii) Estimated amount of Contracts remaining to be executed on Capital Accounts & not provided for (Net of Advance). 95.20 1,020.20

(iii) During the year, a customer has invoked Bank Guarantee of Rs. 700 Lakhs (shown under Loans & Advances) on the grounds of alleged non performance of the Contract. The Company has disputed this claim since the subject Bank Guarantee was conditional and in the opinion of the Company, the condition precedent for it to become operative was not fulfilled. The Company has invoked Arbitration Proceedings as per the provision of the Contract, which has already commenced, for recovery of this amount together with the contractual dues of Rs. 744 lakhs owed by the customer, shown under the head Sundry Debtors in the Financial Statements. Based on the facts of the case the Company is of the opinion that it has a good case on merits.

The matter is sub-judice and the Company has been legally advised that it has a case worth pursuing. In view of the forgoing, no provision is considered necessary at this stage.

(iv) (a) Demand of NA Tax of Rs. 86.61 lakhs is raised by Tahshildar, Indapur (Previous year Rs. 86.61 Lakhs) out of which Rs. 20 lakhs is paid under protest by the Company. No provision has been made in the accounts as the Company has not accepted the liability and the matter is sub-judice.

(b) The Central Excise Authorities have raised a demand of Rs. 266.19 Lakhs (Net of CENVAT reversal and payment) denying the exemption from the excise duty on non-conventional energy devices/ systems supplied by the Company. The Company has disputed the demand and has preferred an appeal which is pending before ‘CESTAT, Mumbai. On the basis of legal opinion, the Company does not expect any liability.

(c) The Central Excise Authorities have raised a demand of Rs. 79.98 Lakhs (Previous year Rs. 61.36 Lakhs) on bought out items supplied for Centrifugals, which has already suffered duty at manufacturers end. The Company has disputed the demand and has preferred an appeal which is pending before ‘CESTAT, Mumbai. On the basis of legal opinion, the Company does not expect any liability.

3. During the year, the Company reached an out of Court Settlement with Projects & Equipment Corporation of India Ltd. (PEC) on all their disputes pertaining to the Cement Project at Padang Indonesia, which were long pending before the Honble High Courts of Bombay (Suit filed by Company) and Delhi (Suit filed by PEC). Consequent to the said settlement, both the suits stand withdrawn. Accordingly, the Company has after adjusting the contingency reserve created specifically against the same charged off the net amount of settlement to the Profit & Loss Account. Consequently, the deferred tax liability of Rs. 545 Lakhs, provided earlier has been reversed.

4. Pursuant to the approval of the shareholders at the Extra Ordinary General Meeting held on 23.11.2006 and in accordance with SEBI (DIP) Guidelines, the Company had issued 80,00,000 fully paid up Equity shares to the promoters on preferential Basis, post conversion of 8,00,000 convertible warrants and received the total amount of Rs. 5,072 lakhs. Out of these Rs. 1,272 lakhs (Previous year Rs. 1,184 lakhs) has been utilized for capital expenditure, Rs. 2,780 lakhs (Previous Year Rs. 2,780 lakhs) for working capital and the balance amount of Rs. 1,020 lakhs (Previous year Rs. 1,108 lakhs) is invested in Mutual Funds.

5. The figures for the Previous year are regrouped wherever necessary.

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Sep 30, 2009

1. The Company has a practice of revaluing its certain assets at certain intervals. On the basis of valuation reports submitted by the approved valuers, certain fixed assets comprising Land, Building, Plant & Machinery, Roads, Water Works, etc., were revalued at Market Value/Current Replacement cost as at 01 -10-2007 as follows:

The depreciation for the year ended 30-09-2009 on Revalued Assets has been calculated on Straight Line Method on their residual technical life assessed by the Valuers. However, the amount of Depreciation charged to Profit & Loss Account is as per Schedule XIV to the Companies Act, 1956, on the cost of the assets.

2. State Government has acquired some of the lands at Walchandnagar. The District Court has given an award of Rs. 285 Lakhs including interest in favour of the Company and has allowed the Company to withdraw the amount on furnishing of Bank Guarantee and Security Bond. However, as the matter is in appeal, the award is not accounted for as sale.

3. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:

As at 30.09.2009 As at 30.09.2008 Rupees Rupees in Lakhs in Lakhs

(i) Counter Guarantees by the Company in respect of guarantees given by the banks (including guarantee on account of erstwhile Machine Tool Division of Rs. 3.55 Lakhs). 24,617.75 16,961.98

(ii) Estimated amount of Contracts remaining to be executed on Capital Accounts & not provided for. 1,020.20 507.60

(iii) (a) Bank Guarantees amounting to Rs. 12.50 Lakhs (Previous year Rs. 12.50 Lakhs) were invoked in 1998, for which no provision has been made in the accounts as the Company has not accepted the liability and the matter is sub-judice.

(b) The Performance and Retention Bank Guarantees (BG) of Rs. 588.64 Lakhs relating to Padang (Indonesia) Project, were invoked during the year 1986 by Project and Equipment Corporation of India Ltd. (PEC). As per the Supreme Court order and Undertaking given by PEC, the Consortium Banks have paid Rs. 400 Lakhs against the invoked BG. The principal amount and interest aggregating to Rs. 2,002.21 Lakhs is already paid to Banks and the same is shown as receivable from PEC under the head Loans and Advances. The matter is sub judice and liability is denied by Company based on legal opinion.

(c) Even though Company has not accepted the liability as stated above, as a measure of abundant prudence, Contingency Reserve of Rs. 2,085.48 Lakhs is created to take care of the contingent liability.

(d) Demand of NA Tax of Rs. 86.61 Lakhs is raised by Tahshildar, Indapur (Previous year Rs. 86.61 Lakhs) out of which Rs. 20 Lakhs is paid under protest by the Company. No provision has been made in the accounts as the Company has not accepted the liability and the matter is sub-judice.

(iv) (a) The Central Excise Authorities have raised a demand of Rs. 266.19 Lakhs (Net of CENVAT reversal and payment) denying the exemption from the excise duty on non-conventional energy devices/systems supplied by the Company. The Company has disputed the demand and has preferred an appeal which is pending before CESTAT, Mumbai. On the basis of legal opinion, the Company does not expect any liability.

(b) The Central Excise Authorities have raised a demand of Rs. 61.36 Lakhs (Previous year Rs. 49.38 Lakhs) on bought out items supplied for centrifugals, which has already suffered duty at manufacturers end. The Company has disputed the demand and has preferred an appeal which is pending before CESTAT, Mumbai. On the basis of legal opinion the Company does not expect any liability.

4. Pursuant to the approval of the shareholders at the Extra Ordinary General Meeting held on 23.11.2006 and in accordance with SEBI (DIP) Guidelines, the Company had issued 80,00,000 fully paid up Equity shares to the promoters on preferential Basis, post conversion of 8,00,000 convertible warrants and received the total amount of Rs. 5,072 Lakhs. Out of these Rs. 1,184 Lakhs (Previous year Rs. 77 Lakhs) has been utilized for capital expenditure, Rs. 2,780 Lakhs (Previous year Rs. 1,004 Lakhs) for working capital and the balance amount of Rs. 1,108 Lakhs (Previous year Rs. 3,991 Lakhs) is invested in Mutual Funds.

5. Pursuant to the Resolution passed at the Annual General Meeting held on 29-01-2009 Company has allotted 25145 equity shares at Rs. 2 per share to the permanent employees under Employees Stock Purchase Scheme, 2008 as per SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines 1999.

(ii) the lease agreements provide for an option to the Company to renew the lease period on mutually agreeable terms. There are no exceptional/restrictive covenants in the lease agreements.

(iii) The nature of products under Heavy Engineering Division is such that it is not possible to evaluate the quantitative data in exact terms.

6. The figures for the Previous year are regrouped wherever necessary.

Additional information pursuant to provision of paragraph 3,4C and 4D of part II of Schedule VI to the Companies Act 1956 as certified by the Management.