r. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized if. as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. 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 usec_; the increase in the provision due to the passage of tune is recognized as a finance cost.

Contingent Liabilities

A contingent liability exists when there is a possible obligation, or a present obligation that may, but probably will not require an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote.

Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an Inflow of economic benefits to the entity. Contingent assets are recognized when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.

A contingent asset is disclosed where an inflow of economic benefits is probable.

s. Commitments

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each reporting date.

t IndAS 116 - Leases

The Company does not have any finance leases. There are no instances in which the company is a lessor.

Hence there is no impact on adoption of Itul AS 116.

• The Term Loan from Union Bank of India of Rs. 222.93 Lakhs (Previous Year of Rs . 438.87 Lakhs) is secured by way of Pari- Passu charge over immovable assets.'' current assets of the Company and equitable mortgage of factory land & building situated at Village Aaspur Ka and Abdulpur Munnu. Nagina Road. Bijnor and property at East Patel N'agar, New Delhi. Term Loan of Rs. 222.93 Lakhs include UGCEL oi'Rs. 376.00 Lakhs, which has been sanctioned during the time frame of Covid pandemic, for the working capital assistance and has been repaid ofr to the extent.

• The loan is further secured by way of personal guarantee of promoters 'dircctors of the company.

• Rate of Interest of Term Loan from UB1 is EBLR -2.75 %. charges on monthly rest, further in case of UGECI- rate of interest is 7.5() %, to lie charger! on monthly test.

• Current Maturity of Term Loan amounting to Rs. 190.45 Lakhs, has been shown under the head other current liabilities.

• The company does not have any continuing defaults in repayment of any of the loans and interest thereon, as at the reporting date.

leim Loan from Yes Bank

• The Term Loan from Yes Bank of 2,874.96 Lakhs (Previous Year 1.047.63 Lakhs) is secured by way of Pari- Passu charge over all the current assets/ immovable assets of the Company and equitable mortgage of factory land & building situated at Village Aaspur Ka and Abdulpur Munna. Nagina Road. Bijnor and property at Last Patel N'agar. New Delhi.

• The loan is further secuied by way of personal guarantee of proinoteis-'direetois of the company.

• Rate o(Interest ol'Term Loan from UBI is Repo Rate ' 3.45 %. charges on monthly rest

• Current Maturity of Term Loan is Rs 195.59 Lakhs, has been shown under the head other current liabilities

• The company does not have any continuing defaults in repayment of any of the loans and interest thereon, as at the repotting date.

Vehicle Loan font Union Bank <?f India

• The Term Loan from Yes Bank of 13.13 Lakhs is secured by way of hypothecation of Vehicle & personal guarantee of directors.

• Rate of Interest of Vehicle Loan from UB1 is (8.05 to 9.80) %. charges on mo nthly rest.

• Current Maturity of Term Loan is 7.32 Lakhs, has been shown under the head other current liabilities

• The company does not have any continuing defaults in repayment of any of the loans and interest thereon, as at the reporting date.

Vehicle Loan from HDFC Bank

• The Term loan from MDFC Bank of 70.23 Lakhs is secured by way of hypothecation of Vehicle & personal guarantee of directors.

• Rate of Interest of Vehicle Loan from IIDFC is (7.50 to 8.51) %, charges on monthly rest.

• Current Maturity of Term Loan is 26.73 Lakhs, has been shown under the head other current liabilities

• The company does not have any continuing defaults in repayment of any of the loans and interest thereon, as at the reporting date.

LiP.m .t'ftfgi .V.Bitf'i .LHuik.ui' ladia

• Union Bank of India has sanctioned a CC Limit of Ks. 2300.00 Lakhs, which is secured against

hypothecation of Stocks & book debts of the company and collateral security of land, building & entire fixed assets of the company.

• The loan is further secured by way of personal guarantee of promoter s/diteetors of the company.

• Kale of Interest of Cash Credit Limit from IJBI is KBl.R *0.65 "^/o. charges on monthly rest.

• The company does not have any continuing defaults in repayment of any of the loans and interest thereon, as at the reporting date.

Cosh Credit Limit from Yes Bank

• Yes Bank has sanctioned a CC Limit of Rs. 1.000.00 Lakhs, which is secured against hypothecation of

Stocks & book debts of the company and collateral security of land, building & entire fixed assets of the

company.

• The loan is further secured by way of personal guarantee of promoters.'directors of the company.

• Kate of Interest of Cash Credit Limit from Yes Bank is Repo Rate *3.35 %, charges on monthly rest

• The company docs not have any continuing defaults in repayment of any of the loans and interest thereon, as at the reporting date.

Ifrmand Loan, from Yes. Bank..,

• Yes Bank has sanctioned a working capital demand loan of Rs 750 00 Lakhs, which is sub-limit of Cash Credit Limit, which is secured against hypothecation of Stocks & book debts of the company and collateral security of land, building entire fixed assets of the company.

• I lie loan is further secured by way of second charge by way of personal guarantee of promotcrsAlircctors of the company.

• Kate of Interest of Cash Credit Limit from Yes Bank is Repo Rate '3.10 %. charges on monthly rest

• I he company does not have any continuing defaults in repayment of any of the loans and interest thereon, as at the reporting date

Cash C'ledit l imit from HDFC Bank

• HDFC Bank has sanctioned a CC Limit of Rs. 1.500.00 Lakhs, which is secured against hypothecation of Stocks & book debts of the company and collateral security of law), building & entire fixed assets of the company.

• The loan is further secuted by way of personal guarantee of promotersAlilectors of the company.

• Rate of Interest of Cash Credit Limit from Yes Bank is 3M MCLR '0.35%, charges on monthly rest.

• The company docs not have any continuing defaults in repayment of any of the loans and interest thereon, as at the reporting date.

IX-Miiaml Loan from HDFC Bank

• HDFC Bank has sanctioned a working capital demand loan of Rs. 1.500.00 Lakhs, which is sub-limit of Cosh Credit Limit, which is secured against hypothecation of Stocks & book debts of the company and collateral security of land, building & enure fixed assets of the company.

• The loan is further secured by way of second charge by way of personal guarantee of promotens'dircctors of the company.

• Rate of Interest of Cash Credit Limit from HDFC Bank is l M T-Bill charges on monthly icttt.

• The company docs not have any continuing defaults in repayment of any of the loans and interest thereon, as at the reporting date.

The Company does not have any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

i) Risk management framework

The Company's board of directors has overall responsibility for the establishment and oversight of the company's risk management framework. The Company's risk management policies are established to identify and analyze the risks laced by the company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the company’s activities.

Tlie Company's audit committee oversees how management monitors compliance with the company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the company, t he audit committee is assisted in its oversight role by internal audit Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

ii) Credit Risk

Credit risk is the risk of financial loss to live company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the company"s receivables from customers and loans. The carrying amounts of financial assets represent the maximum credit risk exposure.

lii) Trade receivables

The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the payment and delivery terms and conditions are offered. The Company's review includes external ratings, if they are available, financial statements, credit agency information, industry information and business intelligence. The Company evaluates the customer credentials carefully from trade sources before appointment of any distributor and only financially sound parties are appointed as distributors. The Company secures adequate deposits from its distributor and hence risk of bad debt is limited. The credit outstanding is sought to be limited to the sum of advances'deposits and credit limit determined by the company.

The following table gives details in respect of percentage of revenues generated from top customer and top five customers:

The Company based on internal assessment which is driven by the historical experience.'current facts available in relation to default and delays in collection thereof, the credit risk for trade receivables is considered low. I he Company estimates its allowance for trade receivable using lifetime expected credit loss. Individual receivables which are known to be uncollectible are written off by reducing the carrying amount of trade receivable and the amount of the loss is recognised in the Statement of Profit and Loss within other expenses.

Concentration of significant e red it risk

The ageing of outstanding balance of receivables having more than 10% concentration of credit is within 30 days, and the transactions with them are at arm"s length. There is no risk of credit concentration as far as transactions with them are concerned.

The following table provides information about the exposure to credit risk and expected credit loss for trade receivables:

iv) Cash and cash equivalents

The company holds cash and cash equivalents of Sal 3.12 lakhs at 31 March 2024 (31 March 2023:?s5.34 lakhs). The cash and cash equivalents are held with bank and cash on hand

iv) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset fhe Company"? approach to manage liquidity is to have sufficient liquidity to meet its liabilities when they arc due. under both normal and stressed circumstances, without incurring losses or risking damage to the Company' s reputation

Management manages the liquidity risk by monitoring cash How forecasts on a periodic basis and maturity profiles of financial assets and liabilities This monitoring takes into account the accessibility of cash and cash equivalents and additional undrawn financing facilities.

Market risk is the nsk that changes in market prices such as foreign exchange rates anil interest ratcA will allect the coinpany"s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures w ithin acceptable parameters, while optimizing there turn

vn) Foreign Currency Risk

The company 's policy is to ensure that the time gap between executing the transaction for import export ami the date for making payment receiving payment is restricted to less than a week so that foreign exchange currency risk is mitigated I he carrying amounts of the company's foreign exchange monetary items as at the end of reporting period is nil and previous year w as also nil

b- Defined contribution plan

The Company"* provident fund scheme and employee"* state insurance (ESI) fund scheme are defined contribution plans. The Company has recorded expenses of' 22.47 lakhs (31.03.2022:' 17.92 lakhs) under provident fund scheme and ' 8.73 lakhs (31.03.2022:' 7.63 lakhs) under ESI scheme. These have been included in note 25 employees" benefits expenses, in the Statement of Profit and Loss.

e. Defined plan

Gratuity (funded)

The employees" gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The Company made annual contributions to the L1C of India.

The above defined benefit plan exposes the Company to following risks Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, live defined benefit obligation will tend to increase.

Salary inflation risk:

Higher than expected increase in salary will increase the defined benefit obligation.

Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdraw als because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

The Company actively monitors how the duration and the expected yield of the investments arc matching the expected cash outflows arising from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous periods. I he funds arc managed by specialized team of Life Insurance Corporation of India.

Funding

Gratuity is a funded benefit plan for qualify ing employees. 35% of the plan assets are managed by LIC and balance managed by the management The assets managed are highly liquid in nature and the Company does not expect any significant liquidity risks.

The following table sets out the status of the defined benefit plan as required under Ind-AS 19 - Employee Benefits:

F. Additional disclosure ''regulatory Information as required by notification tio. CiSR 207(E) dated 24.03.2022 which are not covered in any of the notes above:

(i) Loan or advances granted to the promoters, directors and KMPs and the related parties:

No loon or advances in the nature ofloans have been granted to the promoters, directors, key managerial persons and the related parties (as defined under the Companies Act. 2013). either severally or jointly with any other person that are:

(a) repayable on demand or

(b) without specifying any terms or period of repayment

(iil No proceedings have been initiated or pending against the company for holding any benami property under henami property under the Benami Transactions (Prohibition) Act. 1988 (45 of 1988) and the rules made thereunder.

(iii) Willful Defaulter

No bank has declared the company as “willful defaulter".

(iv) Relationship with Struck oft'Companies:

There arc no transaction with the companies whose name is struck off under section 248 of the Companies Act. 2013 or section 560 of Companies Act. 1956 during the year ended 31 March 2022 and the year ended 31 March 2023.

(V) Registration of charges or satisfaction with Registrar of Companies:

All applicable cases where registration of charges or satisfaction is required with Registrar of Companies have been done.

No registration or satisfaction is pending at end of financial year 2023-2024.

(vi) Compliance with number of layers of companies

No layers of companies has been established beyond the limit prescribed as per above said section/ rules.

(vii) Compliance with approved Scheme(s) of Arrangements

No scheme of arrangements has been approved by the competent authority in terms of Section 230 to 237 of the Companies Act. 2013.

G. The outbreak of C'oronavirus (Covid-19) globally and in India has impacted business and economic activities in general. The Company’s sale during the year ended March 2022 was impacted significantly by the pandemic and consequently capacity utilization of the plant was lower and is gradually moving towards normal capacity. As regards the recoverability of assets, the Company expects to fully recover the carrying amounts of the assets. The Company is closely monitoring any material changes to future economic conditions.

H. The previous year figures arc regrouped / reclassified wherever required to make them comparable to current year figures.

As per our report of even dale attached

Fer PANKAJ k CiOYAL A: CO For and on behalf <>1'the Hoard of Directors

Chartered Accountant*

Registration No.: 0U6885C

CA PANKAJ KUMAR GOYAL Sam deep Jain ApjuJain Shivam Sharnia A K Dixit

(Partner)

(Managing Director) (Director) (Company Secretary) (Chief Financial Officer)

Membership No.: 075828 Place. Muza flam a$ai Date: 2#* May. 2024

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