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