Notes to Accounts of Kataria Industries Ltd.

Mar 31, 2025

1.12 Provisions for Contingencies

A provision is recognised when the company has a present
obligation as a result of past events and it is probable that
an outflow of resources will be required to settle the
obligation in respect of which a reliable estimate can be
made. Provisions (excluding retirement benefits) are not
discounted to their present value and are determined based
on the best estimates required to settle the obligation at
the Balance Sheet date. These are reviewed at each Balance
Sheet date and adjusted to reflect the current best
estimate. Contingent liabilities are not recognised but are
disclosed in the financial statements. Contingent assets are
neither recognised nor disclosed in the financial statements.

1.13 Segment Reporting

The Company is engaged in the business of manufacturing
and selling of LRPC & Un Gi Wire and Cable & Conductor.
Therefore the operation of the company are carried out in
two segment. The accounting policies adopted for segment
reporting are in line with the accounting policies of the
company. Segment revenue, segment result, segment
assets and segment liabilities have been identified to
segment on their relationship to the operating activities of
the segments.

1.14 Cash Flow Statement

Cash Flow Statement using indirect method as set out in
Accounting Standard (AS) - 3 "Cash Flow Statement",
whereby profit/(loss) before extraordinary items and tax is
adjusted for the effect of transactions of non-cash nature
and any deferral or accurals of past or future cash receipts
or payment. The cash flow from operating, investing and
financial activities of the company are segregated based on
available information.

1.15 Operating Cycle

Based on the nature of product / activities of the Company
and the normal time between acquisition of assets and their
realisation in cash or cash equivalents, the company has
determined its operating cycle as 12 months for the
purpose of classification of its assets and liabilities as
current and non-current.

1.16 Government Grants (Industrial Incentive)

The Company recognises Government Grants only when
their is resalable assurance that the conditions attached to
them will be complied with and the Grants will be received.
When the grants relates to an assets, the company
deductes such grants amount from the carrying amount of
that assets. The Company having made substantial

investment by way of expansion/ diversification hence it is
entitled to get Industrial Incentive under Industrial Policy,
2014 announced by the Govt. of Madhya Pradesh. The
amount of subsidy receivable under the policy is accounted
for on accrual basis based on amount sanction by Madhya
Pradesh Industrial Development Corporation.

1.17 Lease Rent

Lease under which the Company assumed substantially all
the risk and rewards of ownership are classified as finance
leases. Such assets acquired are capitalized at fair value of
the asse or present value of the minimum lease payment at
the inception of the lease, whichever is lower. Lease
payments under operating leases are recognized as an
expense on straight line basis in the statement of profit and
loss over the lease term.

The Rights Attaching to Each Class of Shares :

The company has one class of equity shares having a par
value of 10 per share. Each holder of equity share is entitled
to one vote per share. The company declare and pay
dividend in Indian rupees. The dividend in case it proposed
by the Board of Directors is subject to the approval by the
shareholders of the company in the ensuing Annual General
Meeting. In the event of liquidation of the company, The
holders of the equity shares will be entitled to receive any of
the remaining assets of the company, after distribution of all
preferential amount. The distribution will be in proportion to
the number of equity share held by the share holders.

Aggregate number and class of shares allotted as
fully paid-up by way of bonus shares -

The Board of Directors in its meeting held on 25th Oct 2023
recommended issue of bonus equity shares in the ratio of
five equity share of Rs.10 each for every one equity shares
of Rs.10 each which was approved by the members of the
Company on 14th November 2023. Pursuant to this the
company has issued and allotted 13205695 bonus equity
shares fully paid up on 6th December 2023.

Terms and Conditions of Borrowings

1. Cash Credit Limit of Rs. 12.39 Crores from ICICI bank is
secured by first charge on stock of raw material, stock in
process, finished goods, consumables stores and spares,
book debts, equitable mortgage. of factory land, P & M
existing and future and further the loan is personal
guarantee by all directors of the company Mr Sunil
Kataria, Anoop Kataria & Smt Sushila Devi Kataria. The
interest rate is floating rate which was repo rate ( 6.25
%) spread (2.85 %).

2. Cash Credit Limit of Rs. 38.50 Crores from HDFC bank is
secured by first charge on stock of raw material, stock in
process, finished goods, consumables stores and spares,
book debts, equitable mortgage. of factory land, P & M
existing and future and further the loan is personal

guarantee by all directors of the company and Mr Sunil
Kataria, Anoop Kataria & Smt Sushila Devi Kataria.the
Interest on the loan is payable @ 8.50 % per annum.

3. Letter of Credit Limit of Rs. 17.00 Crores from ICICI bank
is secured by first charge on stock of raw material, stock
in process, finished goods, consumables stores and
spares, book debts, equitable mortgage. of factory land,
P & M existing and future and further the loan is personal
guarantee by all directors of the company and Mr Sunil
Kataria, Anoop Kataria & Smt Sushila Devi Kataria.

4. All Above Loans Guaranteed by Directors & Others

5. Unsecured Loans and advances - Repayable on Demand

Notes to Accounts:

29.

The company owns wind generated mill (wind mill) located
at Dewas, M.P. The power generated from wind mill are
transferred to power GRID of Electricity Board but the
credit of power generated is being transferred in favour of
the company from 01.07.2023 after NOC on leasehold land
given by Forest Department on which windmill is installed
based on the agreement executed with Electricity Board.

30.

The Company has made substantial investment for
expanded capacity of production. Therefore it is entitled to
get Industrial Incentive under Industrial Policy, 2014
announced by the Govt. of Madhya Pradesh.

The amount of subsidy has been sanctioned Vide Letter No
176/MPIDC/Fiscal inventive /2020/5673 dated 05.09.2020
at Rs. 12.10 Cr. which will be receivable in 7 yearly
installment commencing from F.Y. 2019-20 onwards & vide
letter No dated 1302/MPIDC/F.I./IPA/6078 dated
27.08.2021 at Rs 2.075 crore & vide letter No
214/MPIDC/F.I./2023/4511 dated 31.05.2023 at Rs 6.41
crore in 7 Installment commencing from F.Y. 2022-23
onwards. Such amount of subsidy has been sanctioned
against investment in Plant & Machinery and Factory Sheed.
The amount receivable has been shown under the head
short term loans & Advances (Note No. 12) and credited in
respective assets as required by Accounting Standard-12
and ICDS-7.

32.

In the opinion of the Board of Directors of the Company, the
Current Assets, Loans and Advances have a value realizable
in the ordinary course of business at least equal to the
amount at which they are stated and provisions for all
known liabilities are adequate and not in excess of the
amount reasonably necessary.

33.Leases

The Company has taken factory land on non cancellable
Operating Lease. Amount of Lease Premium paid is being
amortised every year.

c. The Company has not revalued its property, plant and
equipment

d. No proceedings have been initiated or pending against
the company for holding any benami property under the
Benami Transactions (Prohibitions) Act, 1988 (45 of 1988)
and the Rules made thereunder

e. The Company has not been declared willful defaulter by
any bank or financial institution or other lender.

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

g. The Company has complied the number of layers
prescribed under clause (87) of section 2 of the Act read
with Companies (Restriction on number of Layers) Rules,
2017

h. No Scheme of Arrangements has been approved by the
Competent Authority in terms of sections 230 to 237 of
the Companies Act, 2013 during the current as well as the
previous year.

i. (i) The company has not advanced or loaned or invested

funds (either borrowed funds or share premium or any
other source 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,

(ii) 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 to or on behalf of the Ultimate
Beneficiaries,

j. The Company does not have any transaction 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 (such as,
search or survey or any other relevant provisions of the
Income Tax Act, 1961)

k. The Company has not traded or invested in Crypto
Currency or Virtual Currency during the financial year as
well as in the previous financial year.

l. The Company has not made any contribution to any
political party during the current financial year as well as
in the previous financial year.

m. There are no intangible assets under development

Reason and Reconciliation of Difference

’Difference in Book Debts is mainly due to non-adjustment of credit balances appearing in separate accounts of same debtors
before submission of quarterly statement to the banks.

q. All the charges or satisfaction have been registered by the company with the Registrar of companies, except for the
following cases

42.

The company had acquired property plant and equipments owned by M/s. Ratlam Wires Pvt. Ltd, as a going concern at its
written down value along with other current assets as well current liabilities on slum sale basis as per agreement executed on
22.10.2024 against sale consideration of Rs.3060 Lakh . Such consideration includes the factory shed of M/s. Ratlam Wires
Pvt. Ltd at its fair market value of Rs.337 Lakh. On the date of final take-over of aforesaid assets with liabilities the company
was required to pay further amount of Rs.277 Lakh due to change in current assets and liabilities hence total consideration
was paid at Rs.3062.77 Lakh.

43. Previous year figures have been regrouped / reclassified, wherever considered necessary

For Ashok Kumar Agrawal & Associates For and on behalf of Board

Chartered Accountants Kataria Industries Limited

FRN 022522C

CA. Ashok Kumar Agrawal Arun Kataria Anoop Kataria Shanu Patwa

Proprietor Managing Director CFO & Whole-Time Director Company Secretary

M.NO. 071274 DIN: 00088999 DIN: 06527758

Place: Ratlam Place: Ratlam

Date: 28-05-2025 Date: 28-05-2025

UDIN: 25071274BMMJZQ8317

---

Mar 31, 2024

1.12.Provisions for contingencies

A provision is recognised when the company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. Contingent liabilities are not recognigsed but are disclosed in the financial statements. Contingent assets are neither recognised nor disclosed in the financial statements.

1.13.Segment Reporting

The Company is engaged in the business of manufacturing and selling of LRPC & Un Gi Wire and Cable & Conductor. Therefore, the operation of the company is carried out in two segment. The accounting policies adopted for segment reporting are in line with the accounting policies of the company. segment revenue, segment result, segment assets and segment liabilities have been identified to segment on their relationship to the operating activities of the segments.

1.14.Cash Flow Statement

Cash Flow Statement using indirect method as set out in Accounting Standard (AS) - 3 "Cash Flow Statement", whereby profit/(loss) before extraordinary items and tax is adjusted for the effect of transactions of non-cash nature and any deferral or accurals of past or future cash receipts or payment. The cash flow from operating, investing and financial activities of the company are segregated based on available information.

1.15.Operating Cycle

Based on the nature of product / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the company has determined its operating cycle as 12 months for the purpose of classification of its assts and liabilities as current and non-current.

1.16. Government Grants (Industrial Incentive)

The Company recognises Government Grants only when there is resalable assurance that the conditions attached to them will be complied with and the Grants will be received. When the grants relate to an asset, the company deductes such grants amount from the carrying amount of that assets. The Company having made substantial investment by way of expansion/ diversification hence it is entitled to get Industrial Incentive under Industrial Policy, 2014 announced by the Govt. of Madhya Pradesh. The amount of subsidy receivable under the policy is accounted for on accrual basis based on amount sanction by Madhya Pradesh Industrial Development Corporation.

1.17. Lease Rent

Lease under which the Company assumed substantially all the risk and rewards of ownership are classified as finance leases. Such assets acquired are capitalized at fair value of the asse or present value of the minimum lease payment at the inception of the lease, whichever is lower. Lease payments under operating leases are recognized as an expense on straight line basis in the statement of profit and loss over the lease term.

Terms and Conditions of Borrowings

1. Cash Credit Limit of INR 17.50 Crores from HDFC bank is secured by first charge on stock of raw material, stock in process, finished goods,

consumables stores and spares, book debts, equitable mortgage. of factory land, P & M existing and future and further the loan is personal

guarantee by all directors of the company and Mr Sunil Kataria, Anoop Kataria & Smt Sushila Devi Kataria. The Interest on the loan is payable @ 10.15 % p.a.

2. Cash Credit Limit of INR 17.50 Crores from HDFC bank is secured by first charge on stock of raw material, stock in process, finished goods, consumables stores and spares, book debts, equitable mortgage. of factory land, P & M existing and future and further the loan is personal guarantee by all directors of the company and Mr Sunil Kataria, Anoop Kataria & Smt Sushila Devi Kataria. The Interest on the loan is payable @ 10.15 % p.a.

3. Letter of Credit Limit of INR 21.00 Crores from HDFC bank is secured by first charge on stock of raw material, stock in process, finished goods,

consumables stores and spares, book debts, equitable mortgage. of factory land, P & M existing and future and further the loan is personal

guarantee by all directors of the company and Mr Sunil Kataria, Anoop Kataria & Smt Sushila Devi Kataria.

4. Letter of Credit Limit of INR 17.00 Crores from ICICI bank is secured by first charge on stock of raw material, stock in process, finished goods, consumables stores and spares, book debts, equitable mortgage. of factory land, P & M existing and future and further the loan is personal guarantee by all directors of the company and Mr Sunil Kataria, Anoop Kataria & Smt Sushila Devi Kataria.

5. working capital demand loan (WCDL) Limit of INR 7 crore from ICICI bank is secured by first charge on stock of raw material, stock in process, finished goods, consumables stores and spares, book debts, equitable mortgage. of factory land, P & M existing and future and further the loan is personal guarantee by all directors of the company and Mr Sunil Kataria, Anoop Kataria & Smt Sushila Devi Kataria.

6. Channel Finance availed from Tata Capital is against purchase of wire rod from ESLSteel Ltd & JSPL. which is against personal guarantee by all directors of the company and corporate guarantee of Ratlam wire Pvt Ltd.

7. All Above Loans Guaranteed by Directors & Others

8. Unsecured Loans and advances - Repayable on Demand

The company owns wind generated mill (wind mill) located at Dewas, M.P. The power generated from wind mill are transferred to power GRID of Electricity Board but the credit of power generated is being transferred in favour of the company from 01.07.2023 after NOC on leasehold land given by Forest Department on which windmill is installed based on the agreement executed with Electricity Board.

Note 30:

The Company has made substantial investment for expanded capacity of production. Therefore, it is entitled to get Industrial Incentive under Industrial Policy, 2014 announced by the Govt. of Madhya Pradesh. The amount of subsidy has been sanctioned Vide Letter No 176/MPIDC/Fiscal inventive /2020/5673 dated 05.09.2020 at INR 12.10 Cr. which will be receivable in 7 yearly installments commencing from F.Y. 2019-20 onwards & vide letter No dated 1302/MPIDC/F.I./IPA/6078 dated 27.08.2021 at INR 2.075 crore & vide letter No 214/MPIDC/F.I./2023/4511 dated 31.05.2023 at INR 6.41 crore in 7 Installment commencing from F.Y. 2022-23 onwards. Such amount of subsidy has been sanctioned against investment in Plant & Machinery and Factory Sheed. The amount receivable has been shown under the head short term loans & Advances (Note No. 12) and credited in respective assets as required by Accounting Standard-12 and ICDS-7.

Note 32:

In the opinion of the Board of Directors of the Company, the Current Assets, Loans and Advances have a value realizable in the ordinary course of business at least equal to the amount at which they are stated and provisions for all known liabilities are adequate and not in excess of the amount reasonably necessary.

Note 33:

Balances in respect of creditors, debtors and advance (Secured and Unsecured) and deposits are subject to confirmation.

Note 34: Micro, Small and Medium Enterprises Development Act, 2006:

Under the Micro, Small and Medium Enterprises Development Act,2006 which came into force from 2nd October 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company is in the process of compiling relative information from it''s suppliers about their coverage under the said act since the relevant information is not readily available, no disclosures have been made in the accounts. However, the Management is of the view that, the impact of interest, if any, that may be payable in accordance with the provisions of this act is not expected to be material.

Note 35: Leases

The Company has taken factory land on non-cancellable Operating Lease. Amount of Lease Premium paid is being amortized every year.

Note 36: Employee Benefit Option

a) The Company has taken Group Gratuity Policy issued by the Kotak Mahindra Old Mutual Fund Life Insurance Ltd., Which is a defined benefit Plan.

a) In the opinion of the Board, all assets other than Property, Plant and Equipment, intangible assets and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

b) No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions

(Prohibitions) Act, 1988 (45 of 1988) and the Rules made thereunder.

c) The Company has not been declared willful defaulter by any bank or financial institution or other lender.

d) The Company does not have any transactions with any company struck off under section 248 of the Companies Act, 2013 or section 560 of

the Companies Act, 1956.

e) The Company has complied the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

f) No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013 during the current as well as the previous year.

g) (i) The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other source 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.

(ii) 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 to or on behalf of the Ultimate Beneficiaries.

h) The Company does not have any transaction 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 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

i) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year as well as in the previous financial year.

j) The Company has not made any contribution to any political party during the current financial year as well as in the previous financial year.

k) Loans or Advances - additional disclosures

(i) 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;

- repayable on demand

Previous year figures have been regrouped / reclassified, wherever considered necessary.

Significant accounting policies & notes farming part of financial statements (I & II) For and on behalf of Board

As per our report of even date attached. For, Kataria Industries Limited

FOR P. D. Nagar & Co Chartered Accountants FRN 001231C

Arun Kataria Anoop Kataria

Managing Director Whole-Time Director & CFO (CA. P.D. Nagar) DIN: 00088999 DIN: 06527758

Proprietor M.NO. 8627

UDIN: 24008627BKELTU3090

Place: Ratlam Priyanka Bakhtyarpuri

Place: Indore Date: 21-05-2024 Date: 21-05-2024 Company Secretary