j. Provisions, contingent liabilities, and contingent assets

Provisions are recognized when:

(i) The Company has a present obligation (legal or constructive) as a result of a past event,

(ii) 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 obligation.

When the Company expects some or all of a provision to be reimbursed, for example, under an
insurance contract, the reimbursement is recognized as a separate asset, but only when the

reimbursement is certain. The expense relating to a provision is presented in the statement of
profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. Where discounting is used, the increase in
the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities and contingent assets

Contingent liability is disclosed for,

(i) Possible obligations that will be confirmed only by future events not wholly within the control
of the Company, or

(ii) Present obligations arise from past events where it is not probable that an outflow of
resources will be required to settle the obligation or a reliable estimate of the amount of the
obligation cannot be made.

Contingent assets are not recognized in the financial statements. A contingent asset is disclosed
where an inflow of economic benefits is probable. Contingent assets are assessed continually
and, if it is virtually certain that an inflow of economic benefits will arise, the asset and related
income are recognized in the period in which the change occurs.

k. Employee Benefits

(a) Defined Contribution Plans

The company’s contribution to the defined contribution plan paid/payable for the year is charged
to the Standalone Statement of Profit and loss.

(b) Defined Benefit Plans

• The Company has gratuity as a defined benefit plan where the amount that an employee will
receive on retirement is defined by reference to the employee’s length of service and final salary.
The cost of providing benefits under the defined benefit plan is determined based on actuarial
valuation using the projected unit credit method. The gratuity fund is administered through the
Life Insurance Corporation of India.

• The liability in respect of defined benefit plans is calculated using the projected unit credit
method (PUCM) with actuarial valuations being carried out at the end of each annual reporting
period.

• The current service cost of the defined benefit plan, recognised in the statement of profit and
loss as employee benefits expense, reflects the increase in the defined benefit obligation resulting
from employee service in the current year, benefit changes, curtailments and settlements.

• The Net Interest Cost on Defined Benefit Obligations is also included in the Statement of
Profit and Loss under the Head “Employees Benefit Expenses”.

• Actuarial gains and losses arising from experience adjustments and changes in actuarial
assumptions are charged or credited to OCI in the period in which they arise and are reflected
immediately in retained earnings and is not reclassified to profit or loss.

l. Taxes on Income
(a) Tax expense

• Tax expense consists of current and deferred tax. Income tax expense is recognized in the
profit or loss except to the extent that it relates to items recognized in OCI or directly in equity
as in that case it is recognized in OCI or directly in equity respectively. Current tax is the
expected tax payable on the taxable profit for the year, using tax rates enacted or substantively
enacted by the end of the reporting period, and any adjustment to tax payable in respect of
previous years. Current tax assets and tax liabilities are offset where the Company has a legally
enforceable right to offset and intends either to settle on a net basis or to realize the asset and
settle the liability simultaneously.

• Deferred tax resulting from “timing differences” between taxable and accounting income that
originate in one period and are capable of being reversed in one or more subsequent period is
accounted for using the tax rates and laws that are enacted or substantively enacted as on the
Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent
that there is a reasonable certainty that the assets can be realized in future. However, where there
is unabsorbed capital expenditure or carry forward losses under taxation laws, deferred tax assets
are recognized only if there is virtual certainty of realisation of such assets. Deferred tax assets
are reviewed as at each Balance Sheet date.

m. Exceptional Items

Exceptional items refer to items of income or expense,including tax items, within the statement
of profit and loss from ordinary activities which are non-recurring and are of such size, nature or
incidence that their separate disclosure is considered necessary to explain the performance of the
Company.

n. Leases

The Company assesses at contract inception whether a contract is, or contains, a lease. That is,
if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration.

The Company applies the short-term lease recognition exemption to its short-term leases (i.e.,
those leases that have a lease term of 12 months or less from the commencement date and do not
contain a purchase option). It also applies the lease of low-value assets recognition exemption to
leases that are considered to be low value. Lease payments on short-term leases and leases of
low-value assets are recognised as expense on a straight-line basis over the lease term.

o. Revenue Recognition

The Company recognizes revenue when the same can be reliably measured, it is probable that
future economic benefits will flow to the Company and specific criteria have been met for each
of the Company’s activities as described below. Revenue is measured at the value of the
consideration received or receivable, considering defined terms of payment and excluding taxes
or duties collected on behalf of the government. Amounts disclosed as revenue are exclusive of
GST and net of returns, trade allowances, rebates, discounts, and amounts collected on behalf of
third parties.

i) Sale of goods

Sales are recognized when substantial risk and rewards of ownership are transferred to customer,
in case of domestic customers, sales generally take place when goods are dispatched or delivery
is handed over to the transporter. In case of export customers, sales generally take place when
goods are shipped on-board based on bill of lading.

ii) Interest & Other Indirect Income

a) Interest income is recognized on time proportion basis considering the amount invested and
rate of interest.

b) Revenue in respect of other claims is recognized on an accrual basis to the extent the ultimate
realization is reasonably certain.

p. Impairment

(i) Financial Assets

The company’s financial asset is assessed at each reporting date to determine whether there is
any objective evidence that it is impaired. A financial asset is considered to be impaired, if
objective evidence indicates that one or more events have had a negative effect on the estimated
future cash flows of the asset.

(ii) Non-Financial Assets

The carrying amounts of the Company’s non-financial assets are reviewed at each reporting date
to determine whether there is any indication of impairment. If any such indication exists, then
the asset’s recoverable amount is estimated in order to determine the extent of the impairment
loss, if any.

An impairment loss is recognized in the Statement of Profit or Loss if the estimated recoverable
amount of an asset or its cash generating unit is lower than its carrying amount.

q. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.

Financial Assets

Initial recognition and measurement:

Financial assets are classified into the following categories upon initial recognition:

(a) those measured at amortised cost

(b) those to be measured subsequently at fair value through Statement of Profit & Loss.

The classification depends on the entity’s business model for managing the financial assets and
the terms of cash flows. For assets measured at fair value, gains and losses will either be recorded
in profit or loss or other comprehensive income as the case may be.

All financial assets are initially recognized at fair value. Transaction costs of acquisition of
financial assets carried at fair value through profit and loss are expensed in the Statement of
Profit and Loss.

Amortized cost: Assets that are held for collection of contractual cash flows where those cash
flows represent solely payments of principal and interest are measured subsequently at amortized
cost. Interest income from these financial assets is included in Other income as per interest
received/receivable from Financial Institutions.

The Company derecognizes a financial asset only when the contractual rights to the cash flows
from the asset expires or it transfers the financial asset and substantially all the risks and rewards
of ownership of the asset.

Financial liabilities

Initial recognition and measurement:

All financial liabilities are recognized initially at fair value. The Company’s financial liabilities
majorly comprises trade and other payables.

Financial liabilities are classified as ‘FVTPL’ if they are held for trading or if they are designated
as financial liabilities upon initial recognition at fair value through profit or loss. Financial
liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in
the near term.

The Company classifies all financial liabilities as subsequently measured at amortized cost,
except for financial liabilities at fair value through profit and loss.

A financial liability is derecognized when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
creditor on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the derecognition of the original liability
and the recognition of a new liability. The difference in the respective carrying amounts is
recognized in the statement of profit or loss.

Fair Value Measurement

The fair value of an asset or a liability is measured using the assumptions that the market
participants would use when pricing the asset or liability.

The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.

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

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair
value measurement is directly or indirectly observable.

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by re¬
assessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting year.

r. Investment in Subsidiary

The Company records the Investment in equity instrument of Subsidiary at cost less accumulated
impairment losses, if any. Where an indication of impairment exists, the carrying amount of the
investment is assessed and written down immediately to its recoverable amount. On disposal of
investment in subsidiary, the difference between net disposal proceeds and the carrying amounts
are recognised in the standalone statement of profit and loss.

s. Use of Judgment’s, Estimates and Assumptions

The preparation of the Company’s financial statements requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities and the accompanying disclosures and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets or liabilities affected in future periods.
Difference between actual results and estimates are recognised in the periods in which the results
are known / materialise. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under the circumstances
existing when the financial statements were prepared. The estimates and underlying assumptions
are reviewed on an ongoing basis. Revision to accounting estimates is recognised in the year in
which the estimates are revised.

Judgements

In the process of applying the Company’s accounting policies, management has made the
following judgements which have a significant effect on the amounts recognised in the financial
statements:

> Defined benefit plans (Gratuity and Leave encashment benefits)

The cost of the defined benefit gratuity plan and other post-employment benefits and the present
value of the gratuity obligation and Leave encashment are determined using actuarial valuations.
An actuarial valuation involves making various assumptions that may differ from actual
developments in the future. These include the determination of the discount rate, future salary
increases and mortality rates. Due to the complexities involved in the valuation and its long-term
nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.

> Useful life of Property, plant and equipment

The Company reviews the useful life of Property, plant and equipment at the end of each
reporting period. This reassessment may result in change in depreciation expenses in the future
years.

*As on 31st March 2025, the Company is in possession of cheques amounting to Rs1050.00
Lakhs (Rupees Ten Crores Fifty Lakhs only), received towards settlement of trade receivables.
The management confirms that the cheques represent valid receivables, and there is no known
risk of non-realisation as on the date of signing the financial statements. Accordingly, the said
amount has been classified as Cheque in Hand under Cash and Bank Balances, in line with the
Company’s accounting policy and relevant guidance under Schedule III of the Companies Act,
2013. The Company has taken adequate internal controls to ensure realization of the said
cheques in the normal course of business.

a. Vehicle Loans are secured by hypothecation of vehicles in favor of the Bank. Similarly,
machinery term loans are secured by hypothecation of machinery in favor of the Bank.

b. Cash Credit, Term Loan, Pre-shipment, Post Shipment, FLC, PSL, PCFC and BG are secured
by hypothecation of all types of stocks and other material at factory/godown or at other places
as approved by the bank from time to time including goods in transit and receivables, i.e. stock
and book debts; hypothecation of plant and machinery and FDR margin.

c. All the Loans and Advances from the bank, including Working Capital limits and other credit
facilities from the Bank are collaterally secured by Equitable mortgage of the following
properties:

i. Industrial Property bearing killa no. 152/5 (6-17), 152 (8-0), Khewat Khatoni No. 368/435,
581/761, Rakba 14K, 17M situated at Nag Kalan Amritsar, owned by Mr. Ramesh Arora and
Mr. Ajay Arora, directors of the Company

ii. Industrial Property at Wakia 6 Mile Stone Village Nag Kalan, Majitha Road, Amritsar -
143001 owned by the Company.

iii. Industrial Property at Plot No. 1A, Raja Ka Bagh, Kangra, Himachal Pradesh on long term
lease from government of Himachal Pradesh.

iv. Industrial property at Hadbast No. 334, Situated at Rakba Village Nag-2, Tehsil Majitha,
Near Kwality Pharmaceuticals, Amritsar, Punjab, 143601.

v. Residential Property situated at House No. 32, Opposite Police line, R.B. Parkash Chand
Road, Amritsar, Panjab owned by Mr. Ramesh Arora and Mr. Ajay Arora.

vi. Immovable property at Bal kalan, Majitha Road, Amritsar, Panjab-143001.

(i) Details of security for the secured short-term borrowings:

Cash Credit, Pre-shipment, Post Shipment, FLC, PSL, PCFC and BG are secured by
hypothecation of all types of stocks and other material at factory/godown or at other places as
approved by the bank from time to time including goods in transit and receivables, i.e., stock and
book debts; hypothecation of plant and machinery and FDR margin and collaterally secured by
equitable mortgage of the properties.

> Pending Litigations

According to the information and explanations given to us, details of Income tax, Goods and
Service tax, Customs Duty, Excise Duty and Value Added Tax, the amounts that may be
required to be deposited on account of show cause notice or demands raised by the following
departments during the financial year 2024-2025. The Details are as under:

1. As informed to us and based on the records examined, an order bearing No.
14/GST/ADC/JAL/2024-2025 has been received by the Company under Section 74(9) of
the Central Goods and Services Tax Act, 2017, read with Section 20 of the Integrated
Goods and Services Tax Act, 2017, raising a demand of ^3,15,02,758/- towards alleged
erroneous refund of IGST for the financial years 2017-18 to 2022-23. Further, a penalty
of an equivalent amount of ^3,15,02,758/- has also been levied under the same provisions.
Interest under Section 74(9) read with Section 50 of the CGST Act, 2017 and Section 20
of the IGST Act, 2017 has also been levied, though not quantified in the said order.

As represented to us, the Company has filed an appeal before the appropriate appellate
authority under CGST Act, 2017 challenging the said order. Accordingly, the total disputed
amount of ?6,30,05,516/- (comprising tax and penalty) is under litigation and remains
pending as on the reporting date.

2. The Company has received a Show Cause Notice bearing no. AE/51/2024-25 for the

financial years 2017-18 to 2022-23 under Section 74& 122 of the Central Goods and
Services Tax Act, 2017. The notice alleges wrongful availment and utilization of Input Tax
Credit (ITC) amounting to ^15,13,03,420/- (Rupees Fifteen Crores Thirteen Lakhs Three
Thousand Four Hundred Twenty only). Further, a penalty of ^15,13,03,420/- has been
proposed under Section 74(1) read with Section 122(2)(b). Accordingly, the total disputed
amount proposed in the Show Cause Notice is Rs. 30,26,06,840/- (Demand &Penalty)

The company has filed a civil writ petition in the Punjab and Haryana high court bearing
no CWP-34165-2024 against the said show cause notice. Hon’ble Punjab and Haryana high
court has stayed the passing of adjudication order in pursuance to the show cause notice
and the show cause notice is thus under litigation and remains pending as on the reporting
date.

3. As per the information and explanations given to us and based on the records examined, the
Company has received orders dated 30/12/2024 in Form DRC-07 from the Goods and Services
Tax (GST) Department under Section 74 of the Central Goods and Services Tax Act, 2017, in
respect of wrongly availed and passed on Input Tax Credit (ITC). The summary of the
demands raised is as follows:

• For the financial year 2017-18, no tax was levied; however, a penalty of ?2,80,695 /-was
imposed.

• For the financial year 2019-20, a demand of ?6,74,856 /-each towards tax and penalty was
raised.

• For the financial year 2020-21, a demand of ?12,62,160/- towards tax and ?12,70,485/-
towards penalty was raised.

The Company has filed appeals before the appropriate appellate authority under the GST
Commissionerate in all the above cases, and the proceedings are pending as on the date of
this report. The matter is currently under dispute and remains pending as on the reporting
date.

36. Financial Risk Management:

The Company’s activities expose it to a variety of financial risks, including market risk, credit
risk and liquidity risk. The Company’s risk management assessment and policies and processes
are established to identify and analyse the risks faced by the Company, to set appropriate risk
limits and controls, and to monitor such risks and compliance with the same. Risk assessment
and management policies and processes are reviewed regularly to reflect changes in market
conditions and the Company’s activities.

Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally from the Company’s
receivables from customers, loans and investments. Credit risk is managed through credit
approvals, establishing credit limits and continuously monitoring the creditworthiness of
counterparty to which the Company grants credit terms in the normal course of business.

It is evident from the Note No. 10 of Notes forming Part of Standalone Financial Statements that
company is managing its credit risk efficiently.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as
they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it
will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.
The Current ratio of the company calculated later in the report is the true indicator of the
management of the Liquidity risk by the company.

Foreign Exchange Risk

The Company’s foreign exchange risk arises from its foreign operations, foreign currency
revenues and expenses.

In the Current year, Company has charged Income due to Foreign Exchange Fluctuations of Rs
7.73 whereas there was loss of Rs. 3.62 Lacs in the previous year.

a) Defined Contribution Plans

The Company is regular in making contributions to Recognised Provident Fund (RPF),
Employees State Insurance Scheme (ESIC) and other funds including Labour Welfare Fund for
all regular employees or workers.

The amount of contributions to these funds are recognised as expense under the head “Employee
Benefit Expenses” in the Statement of Profit and Loss as under:

b) Defined Benefit Plans
Gratuity

The company made contributions to Life insurance Company in respect of the Gratuity. Under
Gratuity Act, Employees are entitled to specific benefit at the time of retirement or termination
of the employment on completion of five years or death while in employment.

Gratuity is classified as Defined Benefit plan as enterprise's obligation is to provide agreed
benefits, subject to minimum benefits as subscribed by the Payment of Gratuity Act, to plan
members. Actuarial & Investment risks are borne by the enterprise.

The Net Defined Benefit Liability/(Asset) is the Net (Surplus)/Deficit in the plan netted off by
effect of Asset Ceiling, if any. It is arrived by deducting Fair Value of Plan Assets from the
Defined Benefit Obligation as on the date of valuation.

As required under Para 67 of Ind AS 19 actuarial valuation is done using Projected Unit Credit
Method. Under this method, only benefits accrued till the date of valuation (i.e. based on service
upto date of valuation) are to be considered for valuation. Present value of Defined Benefit
Obligation is calculated by projecting salaries, exits due to death, resignation and other
decrements, if any, and project the benefit till the time of retirement of each active member using
assumed rates of salary escalation, mortality & employee turnover rates. The expected benefit

40.ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III
OF COMPANIES ACT, 2013:

a) The Company has complied with the number of layers prescribed under the Companies Act,
2013.

b) Details of Benami Property held - 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.

c) There has been no income surrendered or disclosed as income during the current or previous
year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the
books of account.

d) Utilisation of Borrowed funds: 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 (11) provide any guarantee, security or the like to or on
behalf of the Ultimate Beneficiaries.

e) Willful Defaulter - The Company is not declared willful defaulter by any bank or financial
Institution or other lender during the year.

f) Registration of charges or satisfaction with Registrar of Companies - During the year, the
Company has complied with the requirements for registration of charges on the assets of the
company with the Registrar of Companies.

** Promoting Education & Healthcare, Eradication of Hunger & Poverty, Special education
and enhancing skills among differently abled children and Promoting Education of Poor
Children, protection of flora & fauna, animal welfare and skill development & enhancing
employment.

h) The Company does not have any transactions with struck-off companies.

i) The Company has not traded or invested in crypto-currency or virtual currency during the
current or previous year.

j) The previous year s figures have been regrouped wherever necessary to make them
comparable to the current year's figures.

For VIJAY MEHRA & CO. For and on behalf of the Board of

directors

Chartered Accountants
(Firm’s Registration No. 001051N)

Sd/- Sd/- Sd/-

CA AMIT HANDA Ramesh Arora Ajay Kumar Arora

Partner Managing director Whole time

director

M. No: 502400 DIN:00462656 DIN:00462664

UDIN:- 25502400BMLEFT6298

Place: Amritsar Sd/- Sd/-

Date:19.05.2025 Gurpreet Kaur Aditya Arora

Company Secretary Whole time

Director

&CFO

DIN:07320410