3.12 Provision

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

Provisions are measured at the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

3.13 Employee benefits:

Employee benefits include salaries, wages, contribution to provident fund, gratuity, leave encashment towards unavailed leave, post-retirement medical benefits and bonus.

Short-terms Employee Benefits:

Employee benefits such as salaries, wages, cost of bonus, ex-gratia and performance linked rewards falling due wholly within twelve months of rendering the service are classified as short-term employee benefits and are expensed in the period in which the employee renders the related service. The obligations are presented as current liability in the balance sheet if the entity does not have an unconditional right to defer the settlement for atleast 12 months after reporting date.

Post-employment benefits:

• Defined contribution plan

The Company's state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service.

• Defined benefit plan

Defined benefit plans comprising of gratuity are recognized based on the present value of defined benefit obligations which is computed using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. These are accounted either as current employee cost or, included in cost of assets as permitted in para 121 of Ind AS 19.

The Projected Unit Credit method (PUC) is used to assess the plan's present value of obligation (liabilities) and the related current service cost, and where applicable past service cost.

The obligation is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit obligations at the Balance Sheet date.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss. Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in Other Comprehensive Income and is reflected in Retained earnings and the same is not eligible to be reclassified to Profit or Loss.

• Other Employee benefit obligations

Other Employee benefit comprises of leave encashment towards un-availed leave and compensated absences. These are accounted as current employee cost as these are payable by the company within subsequent 12 months.

Re-measurements of leave encashment towards un-availed leave are recognized in the Statement of profit or loss except those included in cost of assets as permitted in the period in which they occur. Accumulated leaves are not allowed to be carried forward beyond 12 months.

3.14 Cash and cash equivalents

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

3.15 Segment information

Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Company to make decisions for performance assessment and resource allocation.

The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole. Common allocable costs, wherever allocated, are allocated to each segment on an appropriate basis.

3.16 Earnings per Share

The Company presents basic and diluted earnings per share ("EPS") data for its ordinary shares.

Basic earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders after tax by the weighted average number of equity shares outstanding during the period.

Diluted earnings per share

Diluted earnings per share is computed by dividing the profit after tax after considering the effect of interest and other financing costs or income (net of attributable taxes) associated with dilutive potential equity shares by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares including the treasury shares held by the Company to satisfy the exercise of the share options by the employees.

3.17 Events after the reporting period

Events after the reporting period are those events, favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are approved by the Board of Directors in case of a company, and, by the corresponding approving authority in case of any other entity for issue.

Two types of events can be identified;

• those that provide evidence of conditions that existed at the end of the reporting period (adjusting events after the reporting period); and

• those that are indicative of conditions that arose after the reporting period (non-adjusting events after the reporting period)

3.18 Contingent Liabilities and Contingent assets A contingent liability is;

• a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or

• a present obligation that is not recognised because, it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.

A contingent asset is not recognised unless it becomes virtually certain that an inflow of economic benefits will arise. When an inflow of economic benefits is probable, contingent assets are disclosed in the financial statements.

Contingent liabilities and contingent assets are reviewed at each balance sheet date.

3.19 Financial instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through Statement of Profit and Loss (FVTPL)) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in Statement of Profit and Loss. However, trade receivables that do not contain a significant financing component are measured at transaction price.

I. Financial assets

On initial recognition, a financial asset is classified as measured at:

- amortised cost

- FVTOCI - Debt Investment

- FVTOCI - Equity Investment or

- FVTPL

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

a. Subsequent Measurement

i. Financial asset measured at Amortised cost:

Financial assets are subsequently measured at amortised cost, using the EIR method less impairment, if any, if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The amortization of EIR and loss arising from impairment, if any is recognised in the Statement of Profit and Loss

ii. Financial assets measured at Fair Value Through Other Comprehensive Income (FVTOCI)

Financial asset is, except trade receivables and contract assets that are measured at transaction price, measured at FVTOCI if it is held within a business model whose objective is achieved by both, selling financial assets and collecting contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that represents solely payments of principal and interest on the principal amount outstanding.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognised in the Other Comprehensive Income (OCI). However, the Company recognises interest income, impairment losses & reversals and foreign exchange gain or loss in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to Statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method

iii. Financial assets measured at Fair Value Through Profit or Loss (FVTPL)

Financial asset which is not classified in any of the above categories are measured at FVTPL. Financial assets are reclassified

subsequent to their recognition, if the Company changes its business model for managing those financial assets. Changes in business model are made and applied prospectively from the reclassification date which is the first day of immediately next reporting period following the changes in business model in accordance with principles laid down under Ind AS 109 - Financial Instruments.

iv. Other Equity investment

All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in 'Other Comprehensive Income'. However, dividend on such equity investments are recognised in Statement of Profit and loss when the Company's right to receive payment is established.

b. Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company's balance sheet) when:

The rights to receive cash flows from the asset have expired, or

The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material lay to a third party under a 'pass-through' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company's continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

c. Impairment of financial assets

In accordance with Ind AS 109, the Company uses 'Expected Credit Loss' (ECL) model, for evaluating impairment of Financial Assets other than those measured at Fair Value Through Profit and Loss (FVTPL).

Expected Credit Losses are measured through a loss allowance at an amount equal to:

• The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date), if the credit risk on a financial instrument has not increased significantly; or

• Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument),if the credit risk on a financial instrument has increased significantly.

For trade receivables the Company applies 'simplified approach' which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward-looking estimates are analysed. Trade Receivables are considered to be good and there are neither been any past instances of default and also management doesn't expect any default in case of Company receivables.

For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.

A financial asset is 'credit- impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit- impaired includes the following observable data:

• significant financial difficulty of the borrower or issuer;

• a breach of contract such as a default or being past due for 90 days or more;

• the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

II. Financial liabilities

a. Subsequent Measurement

Financial liabilities are classified as measured at Amortised cost or 'FVTPL.

Financial Liability - FVTPL

A Financial Liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative (that does not meet hedge accounting requirements) or it is designated as such on initial recognition

A financial liability is classified as held for trading if:

• i t has been incurred principally for the purpose of repurchasing it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a hedging instrument.

A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;

• the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed, and its performance is evaluated on a fair value basis, in accordance with the Company's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and IND AS 109 permits the entire combined contract to be designated as at FVTPL in accordance with IND AS 109

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in Statement of Profit and Loss. The net gain or loss recognised in Statement of Profit and Loss incorporates any interest paid on the financial liability and is included

item in the Statement of Profit and Loss. For liabilities designated as FVTPL, fair value gains/losses attributable to changes in own credit risk are recognised in OCI.

Other financial liabilities:

Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method.

b. Derecognition of financial liabilities:

The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or have expired. An exchange with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted

for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognised in profit or loss.

III. Offsetting financial instrument

Financial assets and liabilities are offset, and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle financial asset and liability on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

3.20 Recent Accounting Pronouncement

Ministry of Corporate Affairs has not made any amendments to the Ind AS which are effective from 1^st April 2024.

Secured Cash Credit Loans:

First Pari Pasu Charge of entire current assets (present and future) of the company including raw material, stock in process, finished goods, receivables.

First Pari Pasu Charge on all Fixed Assets of the Company (Present and Future) including Plant and Machinery.

First Pair Pasu Mortgage Charge on NA Land Gat No. 231/2/B, 230/2/B/2, 233/2/B and 230/2/A/2 situated at Chincholi Kati, Tal Mohol, Dist. Solapur owned by Mr. Purushotham Eaga along-with Industrial Land and Building at Plot No. A-27 situated at Chincholi Industrial Area, Solapur owned by the Company and Industrial Land and Building situated at Gat No. 273 and 274 Akkalkot Road, MIDC Solapur owned by the Company.

Hypothecation of entire Fixed Assets of the company created out of Axis Bank Finance both present and future on exclusive basis.

Inventories and Trade Recivables have been hypothecated under 1^st Pari Pasu Charge with State Bank of India and Axis Bank against Cash Credit Limits of Rs. 1500 Lakhs and Rs. 500 Lakhs respectively, as sanctioned.

Deferred Sales Tax Loan is interest free and payable in yearly in 5 installment of each financial year after completion of 10 years and the final installment was due and on 25.04.2023.

Current Maturities on Long Term Borrowings pertain Axis Bank Car Loan availed by the company in relation to purchase of Motor Vehicle that has been hypothicated with the bank and Term Loan facility availed by the company from Axis Bank towards renovation of Factory Building and Installation of Machinery against Hypothecation of entire Fixed Assets of the company created out of Axis Bank Finance both present and future on exclusive basis together with hypothecation of entire Current Assets both present and future on First Pari Pasu basis with SBI

Defined Benefit Plan Gratuity

The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act, 1972. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to gratuity payable on termination of his employment at the rate of fifteen days wages for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee concerned.

The gratuity plan is administered by a single gratuity fund that is legally separated from the Company. The board of the gratuity fund is required by law to act in the best interests of the plan participants and is responsible for setting certain policies (e.g. investment, contribution and indexation policies) of the fund. The gratuity plan is fully funded by the Company. The funding requirements are based on the gratuity fund's actuarial measurement framework set out in the funding policies of the plan. During the year the company has obtained actuarial valuation for its gratuity benefit plan.

e. There is 1 major customer (previous year 1 major customers) to whom more than 10% of the sales are effected and the total sales effected to such customer is INR 1453.74 lakhs, (previous year INR 2761.51 lakhs)

Note No. 46 Additional Regulatory Information

a. The company has not revalued its Property, Plant and Equipment, Leasehold Land and Intangible assets and right of use assets during the year under consideration.

b. No Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person by the company.

c. No proceeding has been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

d. The Company is not a declared wilful defaulter by any bank or financial institution or other lender in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India. The Company has been paying the due installments on time and has not defaulted on any installments

e. 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.

f. The company has no subsidiaries and accordingly the company is not required to comply with the provisions governing the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

g. There is no such transaction which is not recorded in the books of accounts and that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

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

i. The Company does not have any charge that needs to be registered with Registrar of Companies beyond the statutory period. During the year, the company has additional charge registered with Registrar of Companies in relation to the Term Loan and Working Capital Facilities availed from Axis Bank Limited aggregating to Rs. 1700 Lakhs comprising of Cash Credit facility of Rs. 500 Lakhs and Term Loan Facility of Rs. 1200 Lakhs after 1200 lakhs add : The term loan availed from Axis Bank has been utilized for the purpose for which it has been borrowed being, renovation of Factory Building and Installation of Machinery.

j. The company has availed and outstanding Cash Credit Facilities from State Bank of India and Axis Bank Ltd. The quarterly returns in the form of statement of Current Assets filed by the company with the said banks are in agreement with the books of account without any significant discrepancies that has impact on its drawing power limits. As per the consistent policies followed over the years, Trade receivables and trade payables have been reported gross of advances received.

k. The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall;

i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries;

l. The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall;

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes in to account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 116, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurements in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

The management assessed that cash and cash equivalents, other bank balances, trade receivables, trade payables, bank borrowings and other current liabilities are same as their carrying amounts largely due to the short-term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

The fair values of non-current investments FVTOCI financial assets are derived from net asset value attributable to shared held by the company as extracted from the latest available financial statement of the investee company and has been categorized as Level 3 Financial Instrument.

The company has neither entered into any derivative transactions nor hedging transaction nor forward transaction relating to Foreign Current or underlying asset.

Financial risk management objectives and policies

The Company's principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations and to provide guarantees to support its operations. The Company's principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTOCI investments and has not entered into derivative transaction.

The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the management of these risks. Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

a. Financial risk management

The risk management policies are established to ensure timely identification and evaluation of risks, setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the Company's activities to provide reliable information to the Management and the Board to evaluate the adequacy of the risk management framework in relation to the risk faced by the Company.

b. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the market prices. The Company is exposed in the ordinary course of its business to risks related to changes in

• foreign currency exchange rates,

• commodity prices and

• interest rates

c. Foreign currency risk management

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

Adverse movements in the exchange rate between the Rupee and any relevant foreign currency result's in increase in the Company's overall debt position in Rupee terms without the Company having incurred additional debt and favourable movements in the exchange rates will conversely result in reduction in the Company's receivables in foreign currency.

In order to hedge exchange rate risk, the Company has a policy to hedge cash flows up to a specific tenure with its cash inflows. All hedging activities are carried out in accordance with the Company's internal risk management policies, as approved by the Board of Directors, and in accordance with the applicable regulations where the Company operates. The company has not entered into any derivative contracts during the year under consideration.

d. Commodity price risk:

The Company's revenue is exposed to the market risk of price fluctuations related to the sale of its products. Market forces generally determine prices for the products sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its products. The Company primarily purchases its raw materials in the open market from third parties The Company is therefore subject to fluctuations in prices for the purchase of raw material inputs.

The Company aims to sell the products at prevailing market prices. Similarly the Company procures key raw materials based on prevailing market rates as the selling prices and the prices of input raw materials move in the same direction. The company has not entered into any derivative contracts during the year under consideration.

e. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. The floating interest rates are based on bank rate and are indirectly governed by RBI's monetary policy. The borrowings of the Company are in Indian Rupees. The company has maintained a mix of interest free borrowings, fixed interest rate borrowings and floating rate borrowings.

f. Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults

Company's credit risk arises principally from the trade receivables, loans, investments in securities, cash & cash equivalents. Based on the historical data available with the management, the management has not encountered situations wherein the trade receivables have been considered as loss assets or credit has been impaired.

Trade receivables

Customer credit risk is managed centrally by the Company and subject to established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits defined in accordance with the assessment.

Credit risk on receivables is also mitigated by securing the same against letters of credit of reputed nationalised and private sector banks. Trade receivables consist of a large number of customers spread across diverse industries and geographical areas with no significant concentration of credit risk. Only 1 customer during the year (PY 2 customers) account for 10.0% or more of revenue effected during the year under consideration. The outstanding trade receivables are regularly monitored, and appropriate action is taken for collection of overdue receivables. The history of trade receivables shows no allowance for bad and doubtful debts. Also refer Note no. 10

Cash and cash equivalents and Other Bank Balances

Credit risks from balances with banks and financial institutions are managed in accordance with the Company policy. Also refer Note no. 11 and 12.

g. Liquidity risk management

Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as for long term capital expenditure growth projects. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and short-term investments provide liquidity in the shortterm and long-term.

The Company has established an appropriate liquidity risk management framework for the management of the Company's short, medium and long-term funding and liquidity management 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 following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods and its non-derivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

Collateral

The Company has hypothecated part of its trade receivables, inventories other bank balances and mortgaged its immovable properties in order to fulfill certain collateral requirements for the banking facilities extended to the Company. There is obligation to return the securities to the Company once these banking facilities are surrendered. (Refer note 9, 10, 17 and 21)

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 maximise the shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total equity. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit 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. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2024 and 31 March 2023

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

Note No 48: Audit Trail

The company is using TallyPrime accounting software and easyERP Business operations software for maintaining its books of accounts for the year ended March 31, 2024. The audit trail (edit log) functionality was enabled in TallyPrime with effect from August 21, 2023 through migration of data to Edit log version of Tallyprime. As per the official statement of Tally Solutions Private Limited on its website, the dit log feature is enabled by default, without an option to disable it, in the "TallyPrime Edit Log" version. Accordingly, post migration to TallyPrime Edit Log, the audit trail (edit log) functionality has operated through-out the year for all relevant transactions recorded in the Tally software and there is not any instance of the audit trail feature being tampered with.

The company has commissioned EasyERP software in February 2023 that facilities streamlining of business operations and processes that include procurement, inventory, logistics execution, product development, manufacturing and sales. The software has gone live on April 1, 2023.The EasyERP software does not allow edit or delete option at the transactions level and that the said audit trail (edit log) feature once enabled in the software cannot be disabled as effected at the application level of the software. ERP Database is not directly accessible to regular system users. The ERP has stringent access controls and security measures to restrict database access to vendor's authorized personnel who are responsbile for maintaining the integrity and security of the data. The software product owners have confirmed that there is no audit trail enabled for database level changes. However, the authorized personnel of vendor undergo rigorous authentication processes and adhere to strict protocols to ensure that database records remain confidential and tamper- proof.

The accompanying Notes are an integral part of the financial statements.

For: Gokhale & Sathe, For & on behalf of Board of Directors

Chartered Accountants,

FRN: 103264W Eaga Purushotham Eaga Swapnil

Managing Director Joint Managing Director & CFO

DIN: 00033583 DIN : 01241535

CA Kaustubh Deshpande

Partner Urvashi Khanna

ICAI Membership No. 121011 Company Secretary & Compliance Officer

UDIN: 24121011BKAAOQ8180 Place : Solapur Date : May 6, 2024