Notes to Accounts of Kross Ltd.

Mar 31, 2025

3.12 Provisions and contingencies

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

If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision due
to the passage of time is recognized as a finance cost.

Disclosure for contingent liabilities is made when there is a
possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non¬
occurrence of one or more uncertain future events not wholly
within the control of the Company or a present obligation
that arises from past events where it is either not probable
that an outflow of resources embodying economic benefits
will be required to settle or a reliable estimate of the amount
cannot be made.

3.13 Inventories

Raw materials, work-in-progress and finished products
are valued at lower of cost and net realizable value after
providing for obsolescence and other losses, where
considered necessary. Cost includes purchase price, non¬
refundable taxes and duties and other directly attributable
costs incurred in bringing the goods to the point of sale.
Work-in- progress and finished goods include appropriate
proportion of overheads.

Stores and spares and consumables are valued at cost

comprising of purchase price, non-refundable taxes and
duties and other directly attributable costs after providing for
obsolescence and other losses, where considered necessary.

3.14 Cash and short-term deposits

Cash and short-term deposits in the statement of financial
position comprise cash at banks and on hand and short-term
highly liquid deposits with a maturity of three months or
less, that are readily convertible to a known amount of cash
and subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and
cash equivalents consist of cash and short-term deposits, as
defined above.

3.15 Employee benefits
Short-term employee benefits

Liabilities for short-term employee benefits that are
expected to be settled wholly within 12 months after the
end of the period in which the employees render the related
service are recognized in respect of employees’ services up
to the end of the reporting period and are measured at the
amounts expected to be paid when the liabilities are settled.
The liabilities are presented as current employee related
liabilities under other financial liabilities in balance sheet.

Post - employment benefits

The liability or asset recognized in the Balance Sheet
in respect of defined benefit plans is the present value of
the defined benefit obligation at the end of the reporting
period less the fair value of plan assets. The defined benefit
obligation is calculated annually at year end by actuaries
using the projected unit credit method.

The present value of the defined benefit obligation is
determined by discounting the estimated future cash
outflows by reference to market yields at the end of the
reporting period on government bonds that have terms
approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount
rate to the net balance of the defined benefit obligation and the
fair value of plan assets. This cost is included in ‘Employee
Benefits Expense’ in the Statement of Profit and Loss.

Remeasurement gains and losses arising from experience
adjustments and changes in actuarial assumptions are
recognized in the period in which they occur, directly in
other comprehensive income. These are included in the
Statement of Changes in Equity and in the Balance Sheet.

Changes in the present value of the defined benefit obligations
resulting from plan amendments or curtailments are
recognized immediately in profit or loss as past service cost.

Defined contribution plan

The Company pays provident fund contributions to publicly
administered provident fund as per local regulations.
The Company has no further payment obligations once
the contributions have been paid. The contributions
are accounted for as defined contribution plans and the
contributions are recognized as employee benefit expense
when they are due. Prepaid contributions are recognized as
an asset to the extent that a cash refund or a reduction in the
future payments is available.

3.16 Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

• the profit attributable to owners of the Parent

• by the weighted average number of equity shares
outstanding during the financial year

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in
the determination of basic earnings per share to take
into account:

• the after income tax effect of interest and other
financing costs associated with dilutive potential
equity shares, and

• the weighted average number of additional
equity shares that would have been outstanding
assuming the conversion of all dilutive potential
equity shares.

3.17 Contributed equity

Equity shares are classified as equity. Incremental cost
directly attributable to the issue of new shares or options are
shown in equity as reduction, net of tax from the proceeds.

3.18 Cash dividend

The Company recognizes a liability to pay a dividend
when the distribution is authorized, and the distribution
is no longer at the discretion of the Company. As per the
corporate laws of India, a distribution is authorized when it
is approved by the shareholders. A corresponding amount is
recognized directly in equity.

3.19 Segment reporting

Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision maker (''CODM'').

The CODM is responsible for allocating resources and
assessing performance of the operating segments and has
been identified as the Board of Directors of the Parent.

(d) Rights, preferences and restrictions attached to shares
Equity shares

The Company has one class of equity shares having a par value of INR 5.00 per share. Each shareholder is entitled for one vote
per share held. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual
general meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are entitled to receive the
remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by
the shareholders.

*The company completed an initial public offer (IPO) of 2,08,33,332 equity shares at the face value of INR 5 each at an issue price
of INR 240/- per equity share. Comprising offer for sale of 1,04,16,666 shares by selling shareholder and a fresh issue of 1,04,16,666
shares aggregating INR 500 Mn. The equity shares of the company where listed on the Bombay stock exchange limited (BSE) and
National Stock Exchange of India Lmited (NSE) on September 16, 2024.

(e) Equity share movement during the period of 5 years immediately preceeding the reporting date.

During the FY 2023-24 the company had issued bonus share in the ratio 1 : 1 to its existing equity shareholder vide their board
resolution dated November 26, 2023 by way of capitalization of its security premium & general reserve

The Company has not bought back share during the last 5 years immediately preceeding March 31, 2025.

(iii) Long-term security deposits are repayable on closure of contracts i.e., repayable on demand and accordingly carrying amount reflect
its fair values. The same can be categorized as Level 3 fair value.

(iv) Long-term borrowings carries both fixed and variable rate of interest. For variable interest rate borrowings, carrying amounts are
considered to represent fair value of such borrowings. For fixed rate borrowings fair values have been determined using discounted
cash flow approach using the current interest rates. The fair values of the borrowings can be categorized as Level 2 fair values.

Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized
and measured at fair value and (b) measured at amortized cost and for which fair values are disclosed in the financial statements. To
provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments
into the three levels prescribed under the accounting standard.

(a) Level 1 - Quoted prices in an active market:

This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for
identical assets or liabilities.

(b) Level 2 - Fair values determined using valuation techniques with observable inputs:

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which
maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required
to fair value an instrument are observable, the instrument is included in level 2.

(c) Level 3 - Fair values determined using valuation techniques with unobservable inputs:

This level of hierarchy includes financial assets and financial liabilities measured using inputs that are not based on observable
market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that
are neither supported by prices from observable current market transactions in the same instrument nor are they based on available
market data.

NOTE 37: CAPITAL MANAGEMENT
Risk Management

The Company’s objectives when managing capital are to:

(a) Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for
other stakeholders, and

(b) Maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the Company consists of debt, cash and cash equivalents and equity attributable to equity shareholders of the
Company which comprises issued share capital and accumulated reserves disclosed in the Statement of Changes in Equity and debts
appearing as part of the borrowings.

The capital structure of the Company is based on management’s judgement of the appropriate balance of key elements in order to
meet its strategic and day-to-day needs. The Company manages its capital structure and makes adjustments in light of changes in
economic conditions and the requirements of the financial covenants. The funding requirement is met through a mixture of equity,
long term borrowings and short term borrowings.

NOTE 39: FINANCIAL RISK MANAGEMENT

In the course of its business, the Company is exposed primarily to fluctuations in interest rates, liquidity and credit risk, which may
adversely impact the fair value of its financial instruments. In order to minimize any adverse effects on the financial performance of the
Company, the Company has risk management policies as described below:

(a) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a
financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) including deposits
with banks and financial institutions, foreign exchange transactions, other financial instruments carried at amortized cost.

Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, cash and cash
equivalents and other bank balances held by the Company. Trade receivables, cash and cash equivalents and other bank balances of
the Company result in material concentration of credit risk.

The carrying value of financial assets represent the maximum credit risk. The maximum exposure to credit risk being the total
carrying value of trade receivables, balances with bank, bank deposits, and other financial assets are as follows-

Trade receivables

Customer credit risk is managed by the Company through established policy and procedures and control relating to customer credit
risk management. Trade receivables are non-interest bearing and are generally carrying 30 to 60 days credit terms. The Company
has a detailed review mechanism of overdue customer receivables at various levels within the organization to ensure proper attention
and focus for realization. The Company periodically assesses the financial reliability of customers, taking into account the financial
condition, current economic trends and ageing of accounts receivable.

Financial assets are considered to be of good quality and there is no significant increase in credit risk.

c) Market Risk

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt
obligations with floating interest rates.

The Company’s fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk, since neither
the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

The requirement for impairment is analyzed at each reporting date. The Company’ receivables turnover is quick and historically,
there was no significant defaults on account of those customer in the past. Ind AS requires an entity to recognize in profit or loss, the
amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is
required to be recognized in accordance with Ind AS 109, Financial Instruments. Expected credit losses are measured at an amount
equal to the life time expected credit losses. The Company has used a practical expedient by computing the expected credit loss
allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience
and adjusted for forward-looking information. The outstanding receivables are regularly monitored to minimize the credit risk.

The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several
jurisdictions and industries and operate in largely independent markets. Of the trade receivables balance, INR 1021.77 Mn in
aggregate (INR 553.75 Mn as at March 31, 2024) is due from the Company’s customers individually representing more than 5% of
the total trade receivables balance and accounted for approximately % 66.06% as at March 31, 2025, 49.81% as at March 31, 2024
of all the receivables outstanding.

Other financial instruments and bank deposits

Credit risk from balances with banks is managed by the Company’s finance department in accordance with the Company’s policy.
Counterparty credit limits are reviewed by the Parent Company’s Board of Directors on an annual basis, and may be updated
throughout the year subject to approval of the Company’s Board of Directors. The limits are set to minimize the concentration of
risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

Balances with banks and deposits are placed only with highly rated banks/financial institution.

(b) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are
settled by delivering cash or another financial asset.

Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected
cash flows. This is generally performed in accordance with practice and limits set by the Company.

Maturities of financial liabilities

The tables below analyse the Company’s financial liabilities into relevant maturity based on their contractual maturities.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying
balances as the impact of discounting is not significant.

As per section 135(5) of the Companies Act, 2013, Inter alia, in every financial year, at least two per cent of the average net profits of
the Company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy.
The Company has computed the CSR amount required to spend Financial Year 2023 - 2024 and Financial Year 2024 - 2025 and is in the
process of identifying the necessary projects and approval.

NOTE 42: DETAILS OF BENAMI PROPERTY

There have been no proceedings 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.

NOTE 43: TITLE DEED OF IMMOVABLE PROPERTY NOT HELD IN THE NAME OF THE COMPANY

The title deed of the immovable properties (other than properties where company is the lessee and the lease agreement are duly executed
in favour of leasee), to the financial statements, are held in the name of the Company.

NOTE 44: STRUCK OFF COMPANIES

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

NOTE 45: SEGMENT DISCLOSURES

The Company is engaged in manufacturing of critical components for commercial vehicles and Tractors. The performance of the Company
is assessed and reviewed by the Chief Operating Decision Maker (CODM) as a single operating segment and accordingly logistics and
allied services is the only operating segment.

The Company is domiciled in India, and also provides services in India. The amount of its revenue from external customers split by
location of the customers is shown in the table below.

NOTE 46: WILFUL DEFAULTER

The company is not declared wilful defaulter by any bank or financial institution or other lender in accordance with the guidelines on wilful
defaulters issued by the Reserve Bank of India.

NOTE 47: REGISTRATION OF CHARGES

There are no charges or satisfaction which are yet to be registered with Registrar of Companies beyond the statutory period.

NOTE 48: UNDISCLOSED INCOME

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

NOTE 49: COMPLIANCE WITH APPROVAL SCHEME AND ARRANGEMENT

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

NOTE 50: UTILIZATION OF BORROWINGS AVAILED FROM BANKS AND FINANCIAL INSTITUTIONS

The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken during the
current or previous financial year.

NOTE 55: COMPLIANCE WITH NUMBER OF LAYERS OF COMPANIES

The Company doesn’t have any downstream subsidiary Companies hence complied with the number of layers prescribed under clause (87)
of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017 is not applicable.

NOTE 56:

The Code on Wages, 2019 and Code of Social Security, 2020 (“the Codes”) relating to employee compensation and post-employment
benefits had received Presidential assent but the related rules thereof for quantifying the financial impact have not been notified. The
Company will assess the impact of the Codes when the rules are notified and will record any related impact in the period the Codes become
effective.

NOTE 57:

The dividend paid by the Company is based on the profit available for distribution as reported in the financial statement. The company had
not declared or paid any dividend during the year, therefore compliance with section 123 of the Companies Act, 2013 is not applicable.

NOTE 58: IMPACT OF THE COVID-19

The Company has considered internal and external sources of information up to the date of approval of these financial statements in evaluating
the possible effects that may result from the pandemic relating to COVID-19 on the carrying amounts of trade receivables. The Company has
applied prudence in arriving at the estimates and assumptions. The Company is confident about the recoverability of these assets.

NOTE 59: RECLASSIFICATION

Previous year figures have been regrouped/ rearranged/ reclassified wherever necessary. Further, there are no material regrouping/
reclassifications during the year.

NOTE 60: UTILIZATION OF BORROWED FUND OR SHARE PREMIUM

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds)
by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall, whether, 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 provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries. No funds have been received by the Company from any person(s) or entity(ies), including
foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether,
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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

NOTE 61: LOAN AND ADVANCE TO SPECIFIED PERSON

There are no loans and advances which are given to specified person as defined in Companies Act 2013.

NOTE 62: DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY

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

NOTE 63: VALUATION OF PP&E, RIGHT-OF-USE ASSETS, INTANGIBLE ASSET AND INVESTMENT PROPERTY

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the
current or previous financial year.

NOTE 64: APPROVAL OF FINANCIAL STATEMENTS

The financial statements has been approved for issue by the resolution of the board of directors dated May 16, 2025
As per our report of even date attached

For S K Naredi & Co. For and on behalf of the Board of Directors

Chartered Accountants KROSS LIMITED

ICAI Firm Regn Number : 003333C CIN : L29100JH1991PLC004465

Rahul Naredi Sudhir Rai Anita Rai

Partner Chairman & Managing Director Whole Time Director

M No: 302632 DIN: 00512423 DIN: 00513329

Kunal Rai Debolina Karmakar

Jamshedpur, India Whole Time Director & CFO Company Secretary

May 16, 2025 DIN: 06863533 M No: ACS62738

---

Mar 31, 2024

(d) Rights, preferences and restrictions attached to shares Equity shares

The Company has one class of equity shares having a par value of Rs. 5.00 per share. Each shareholder is entitled for one vote per share held. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the shareholders.

(c) Rights, preferences and restrictions attached to shares

During the year, the company had issued bonus share in the ratio 1 :1 to its existing equity shareholder vide their board resolution dated October. 26th 2023 by way of capitalization of its security premium. Company has also split its shares by reducing its per equity share face value by subdivided from Rs. 10 each to Rs. 5 each Pursuant to Shareholder''s resolution passed at the Extraordinary General Meeting held on October, 26th 2023.

(0 Rights, preferences and restrictions attached to shares

The Company has not bought back share during the last 5 years immediately proceeding March 31.2024.

(a) Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to reserves, dividends or other distributions paid to shareholders. Retained eamings is a free reserve available to the Company and eligible for distribution to shareholder, in case where it is having positive balance representing net earning til! date

(b) General Reserve

The general reserve is used front time to time to transfer profits from retained eamings for appropriation purposes As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

(c) Security'' Premium

Share premium used to record premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2023.

32.1 The company has issued and allotted 13.523.189 equity bonus shares in ratio of 1 (one) fully paid up bonus share of the face value ofRs. 10 each for every existing 1 (one) fully-paid equity share of face value of Rs. 10 each held as approved by the members at the annual general meeting held on October 26. 2023 In terms of IND AS 33. impact of the same has been considered in the calculation of Basic and Diluted EPS for the year ended March 31. 2(124 and for the year ended March 31.2023 retrospectively.

32.2 Pursuant to Shareholder''s resolution passed at the Extraordinary General Meeting held on October 26, 2023. the face value per equity share of the company was subdivided from Rs. 10 each to Rs 5 each. Accordingly, the calculation above reflects the effect of share split retrospectively tor all the periods presented.

Note 34: Contingencies and Commitments
(a) Contingent liabilities	As at	As at
	March 31,2024	March 31,2023
(i) Excise duty and service tax matters in dispute relating to applicability and classification	27.67	-
(ti) Sales tax/ GST in dispute relating to issues of applicability and classification	3.47	1.25
(iii) Income tax matters in dispute	16 99	25 28
(iv) Bills Discounted with Kotak Mahindra Bank''*”	315 50	342.00
It is not practicable for the Company to estimate the timings of the cash outflows, if any. pending resolution of the respective proceedings The Company does not expect any reimbursements in respect of the same *"** Bills Discounted with recourse to the company with Kotak Mahindra Bank
(b) Commitments	As at	As at
	March 31, 2024	March 31,2023
(i) Capital Commitment Estimated amount of contracts remaining to be executed on capital account and not provided for tn the books of account	99 ! 7	30 81
(it) Other Commitment	-	-

Vole 35: Employer Benefits

Employers Defined Cnntrtbiitiun Plans - Provident Fund

The Company provides Providem Fund facility lo its eligible employees The fund is managed bv Commissioner of Ihe Provident Fund The contributions are expensed as they are incurred in line with the treatment of wages and salaries The liability of the Company is limned to the contribution deducted from the salary of the employee and the Company''s share During the year ended March 31. 2024. the Company made contribution plans amounting to Rs 13 43 Millions t for the year ended March 31. 2023 Rs 12 26 Millions) and same has been recognised as an expense in the Statement of Profit and loss F.mploycr Defined Benefit Plans - Gratuity |funded]

The Company provides lor gratuity for employees as per the Pat mem of Gratuity Acl 1972 Employees who are in continuous service foi a period of 5 years aie eligible for gratuity The amount of giatuity payable on retirement, termination of the employees Iasi drawn basic salary per month computed proportionately for 15 dav s salon multiplied by the number of years of service The giaumv plan is a funded plan The Company does not fully fund the liability and make the payments as and when they become due from us own funds

The sensitiyity analysis have been determined based on reasonably possible changes of the lespective assumptions occurring ai ihe end of the reporting period, while holding all other assumptions constant

Tile sensitivity analysis presented above may not be representative of die actual change in the projected benefit obligation as *t is unlikely that the change in assumptions would occur in isolation of one another as

some of the assumptions may be correlated

Furthermore, in presenting the above sensitivity anahsis. the present value of the projected benefit obligation has been calculated using die proiecied unit credit method at the end of the reporting penod. which is the same method as applied m calculating the proiecied benefit obligation as recognised in the balance sheet There was no change in the methods and assumpuons used in preparing ihe sensitivity analysis from pnor years (v> Risk exposure

Through ns defined benefit plans ihe Company is exposed in a number of risks the most significant of which arc detailed below Actuarial Risk:

Adverse Salary Growth Experience Salary hikes that arc higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected

Variability in withdrawal rates It actual withdrawal rates are higher than assumed withdrawal rale assumption dien die Gratuity Benefits will be paid earlier dun expected The impact of this will depend on whether

the benefits arc vested as ai the resignation date

Variability immortality tales It actual mortality rates are highei than assumed moiialm oie assumption ihen the Graiu i tv Benefits will be paid earhei than expected Since there is no condition of vesting on the death

benefit, the acceleration of cash flow w ill lead to an actuarial loss or gam depending on the relative v alues of the assumed salary growth and discount rate

Investment Risk:

For funded plans lhai reK on insurers for managing Ihe assets, die value of assets certified by the insurer nun not be the larr value of instruments backing the liability In such cases the present value of the assets is independent of die future discount rate Tins can result m wide tlucluauons m die net liability or the funded siatus if there are significant changes m die discount rate during the mter-valuauon period

Discount rate risk:

Liquidity nsk:

Employees with high salaries and long durations or those higher in hierarchs accumulate significant lei el of benefits If some of such emplovees resign/retire from the company there can be strain on the cash flows Market Risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets One aciuanal assumption that has a material effect is the discount rate The discount rate reflects the time value of money An increase in discount rate leads 10 decrease in Defined Benefit Ohligauon of the plan benefits & vice versa This assumption depends on the vields on the corporate/gov eminent bonds and hence the valuation of liability is esposed to fluctuations in die vields as at the valuation date

Regulatory Risk:

Gratuilv Benefit must comply with the requirement of the Payment of Gratuity Act. 1**72 (as amended up-to-date! There is a nsk of change m the regulations requiring higher gratuity payments (e g raising the present ceiling of Rs 2 Millions, raising accrual rale from 15 26 etc )

During the v ear ended March 31. 21)24 and March 31. 2023 there vv ere no amendment, curtailments and settlements in the gratuity plan and post retirement pension plans (vi) Other disclosures

a F.vpected contribution for ne\t vear 112 months! 2*»23-24 Rs 51 AI Millions

b. Weighted average duration of the defined benefit obligation is X 7ii years (Maich 31. 2023 x ‘>3 years!

c. Estimated Cash Flows I Undiscounted) in subsequent years

(i) The earning amounts of current financial assets and liabilities earned at amortised cost closely approximate to their lair values as the impact of discounting on such financial assets or liabilities is not significant considering the instruments matures in a very short time

(ii) Unsecured loans from related parties are repayable on demand and accordingly represents its fair value

(iit) Long-term security deposits are repayable on closure of contracts i c . repayable on demand and accordingly carrying amount reflect its fair values The same can be categorised as Level 3 fair value

(iv) Long-term borrowings carries both fixed and variable rate of interest For variable interest rate borrowings, carrying amounts are considered to represent fair value of such borrowings For fixed rate borrowings fair values have been determined using discounted cash flow approach using the current interest rates The fair values of the borrowings can be categorised as Level 2 fair v alues

Fair value hierarchy

This section explains the judgements and estimates made in determining Ihe fair values of the financial instruments that are |a> recognised and measured at fair value and (bi measured at amortised cost and for which fair values are disclosed in the financial statements To prov ide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard

(a) Level I - Quoted prices in an active market:

This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities

(b) Level 2- Fair values determined using valuation techniques with observable inputs:

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates If all significant inputs requited to fair value an instrument are observable, the instrument is included in level 2

(c) Level 3- Fair values determined using valuation techniques with significant unobservable inputs:

This level of hierarchy includes financial assets and financial liabilities measured using inputs that are not based on observable market data ( unobservable inputs). Fair values are determined in whole or in pan. using a valuation model based on assumptions dial are neither supponed by prices from observable current market transactions in the same instrument nor are Ihev based on available market data

The following table summarises the financial assets and liabilities measured at lair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (bul fair value disclosure are required)

Note 37: Capital management Rj.sk management

The Company ''s objectives when managing capital ate to

(at safeguard then ability to continue as a soma concern so that they can continue to provide icturns for shareholders and benefits Tor other stakeholders and Eb i Maintain an opiunal capital stiuctutc to icducc the cost ot capital

The capital structure of die Contpam consists of debt cash and cash equivalents and cquilv attributable to cquitv shareholders ufthc Com pans which comprises issued share capital and accumulated reserves disclosed in the Statement nr Changes in Equm and debts appearing as pan of the bonon mas

The capital suucturc ol the Companv is based on management > ludgcmem of the appropriate balance of key elements in order to meet ns strategic and day-to-day needs The Company manages its capital structure and makes adjustments in tight ol changes in economic conditions and the requirements of the financial covenants The funding requirement is met thtough a mixture of equity, long icrm borrowings and short term boriowmgs

Note 3‘J: Financial risk manancmcni

In the course of ns business the Companv is exposed primarily 10 fluctuations in interest rales liquidio and credit risk which mav adv erseh impact the fan value of its financial instruments In older to minimise any adverse effects on the financial performance ol die Companv the Coin pant has risk manage mem policies as dcscnhcd bcl

(A) Credit risk

Credit risk is the risk that counterparty will not meet its obligations undci a financial instrument or cuslonici contract leading lo a financial loss The Companv is exposed to cicdil risk front US operating activities tprimarth trade receivables! including deposits with hanks and financial institutions foreign exchange transactions other ftnan.ul instnimciiLs earned at amoiused cost

Financial instruments that ate subject to credit risk and concentration thereof principalis consist of trade receivables cash and cash equivalents and other bank balances held by the Companv Trade receivables, cash anil cash equivalents and uliiei bank balances of the Companv lesuil in material con-.edU a lion of credit risk

Trade receivables

Customci credit risk is managed by the Company thtough established policy and procedures and conuol relating to customer credit risk management Trade icceivabks arc non-tnlcicst beating and are generally carrying 30 to fat days ticdil terms Hie Companv has a detailed rev »C" mechanism of overdue custnmet receivables ai various levels u ithin the -u eamialmn lo ensure proper attention and locus t« realisation The Company periodical^- assesses the financial reliability or customers taking into account the financial condition current economic trends and ageing of accoums receivable

Financial assets arc considered 10 be of good qualilv and ihcrc is no sientlicaril increase in credit risk

The icquncmcm tor unpanmcni is analvscd at each reporting dale The Companv receivables turnover is quick and historically there was no significant defaults on account ol those customer in the past Ind AS requires an emits to recognise in profit or loss the amount of expected credit losses ux reversal l that is required lo adjust the kiss allowance at the repotting date 10 the amount that is required to be recognised m accordance with Ind AS IW. Financial Instruments Expected credit losses arc measured at an amount equal lo the life time expected credit losses The Company has used a practical expedient by computing die expected credit loss allowance for trade receivables based on a provision maim The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information The outstanding receivables aie regular Iv monitored to minimise the credit risk

The Company evaluates the concentration of risk w tth respect to liade receivables as low. as its customers arc located in SC''era! Jill isdicuons and industries and operate in largely independent markets Of the bade receivables balance Rs >53 75 Millions in aggregate iRs 251 *17 Millions as at March 31 20231 is due from the Company''s customers individually representing more than ^{«of the total trade receivables balance and accounted for appro vunatcfv % 4V Hi*-., as at Mai eh 31. 2024 41 *¦« as at Match 31 2023 ol all the receivables outstanding.}

Other financial instruments anil hank deposits

Credit risk fioni balances with banks is managed hv the Companv s finance department in accordance with die Companv s policy Counterparty credit limits arc reviewed by the Pareni Companv v Board of Directors on an annual basis and mav he updated throughout the vcai vubicct to appioval of the Company s Board of Duecinis The limits ate set to minimise the concentration of risks and therefore mitigate financial loss through counterpart! < potential fwlutC Ul make payments Balances with banks and deposits aie placed only with highh rated banks financial institution

(B) Liquidity rivk

Liquidity risk* is the risk that an emus w ill encounter difficulty m meeting obligations associated with financial liabilities that aie settled Iw delivering cash or another financial asset

Management monitors foiling forecasts of ihe Companv s liquidity position and cash and cash equivalents on the basis of expected cash (lows This is generally perfoimcd in accordance with practice and limns sci by the Companv

Maturities of financial liabilities

The tables below analyse the Company''s financial liabilities into relevant maturity based on then contractual maturities

The amounts disclosed in the table are the contractual utidiscoumcd cash flows Balances due within 12 months equal their earning balances as the impact of discounting is not significant

<0 Market Hi»h

Inlrrcit rale risk

Interest rate nsl> is the risk that the fair value or fuluic cash Aims of a financial instrument will fluctuate because of changes in market interest rates The Comparts s exposure to the risk of changes in market interest rates relates primanh to the Com pain » debt obligations with floating interest tales

The Conipam s fixed rate borrowings arc earned al amortised tost Tlicv aie therefore not subiccl to interest rale risk since neither the earning amount Bor the future cash flows Will fluctuate because of a change in market interest rates

Note 5|: Utilitulinn of hummed fund or share premium

No funds hate been advanced or loaned or invested (either from borrowed funds or share premium or ant other sources or kind of funds I by the Com pan'' to or in ant other person! s) or cnlilylicst. including foreign entities ! Inter Tiled lanes ’). with the understanding, whclhei recorded in writing or otherwise, dial ihc Intermediary shall whether, dirccth'' or indirectly laid or invrst in other persons or entities identified m am manner tt hatsoct cr bt Or on behalf of the Company ("Ultimate Beneficiaries''^-) or provide ant guarantee securitt or the like on behalf of the Ultimate Beneficiaries

No funds hate been received bt the Com pant from ant person! si or aiLiltiicsl including foreign entities I Funding Parlies'') with the understanding whether recorded in writing Of otherwise that the Com pant shall, whether, directly or indirectly, lend or invest m other persons or entities identified m ant manner w hatsoet er by or on behalf ol the funding Pant I Ultimate Beneficiaries") nr prot ide any guarantee, security 01 the like on behalf of the Ultimate Beneficiaries Note 52: L ndiM.lmct] Income

There is no uicomc surrendered or disclosed as income during the cuircut or pret ious tear in the tax assessments under Income Tax \cl I ‘hi I ihai has n.11 been recorded in the books of accounts

Note 53: Compliance with approval scheme and arrannenirni

The Comparn has not entered into am Scheme Ol arrangement «Inch has an accuuntnu: impact on current or previous linanciai tear

Note 54: Loan and advance to specified person

There are no loans and advances which are given to specified person as defined in Companies Act 2

N«tc 55: Detail* of cry pm currency nr virtual currency

The Company has not traded or invested in Crypto currency or Virtual CuIrenet during the current and previous financial tear

Nine 54: V a lu a (hi n uf PPAE, ri"ht-uf-usc assets, intangible asset and investment property

The Cotnpant has not ret alued its properly plant and equipment (including nght-of-use assets I or intangible assets or both during the current or pret tout financial year

Note 57: Utilisation of burrow ings availed from hanks and financial inslitulinns

The Cesmpant has not used die borrowings from bonks and financial mtmucrons for die specific purpose f>x which « vs as taken during the current nr pret wus financial year N''utc 5K: Compliance with number nf laser* of ( a nip a mo

The Company docsn l hate ant downstream subsidiary Companies hence complied with the number ol lot ers piesenhed under clause i X71 of section 2 ol the Act read with the Companies 1 Restriction on number ol Layers) Rules. 2017 is not applicable

Note 59 The Code on Wages 2019 and Code of Social Security 2020 < the Codes i relating to cmpkjtcc compensation and posi-cmplovmctu benefits had rocciv cd Presidential assent but the rotated rules thereof for quantifying the financial impact have not been notified The Crun pant will assess the impact of the Codes w hen the rules arc notified and w ill record am related impact in the period the Codes become cITccut c

Mule 6(1 The dn idend paid by die Company is based on the profit available for distribution as reported in the financial Statement Tlic company had not declared or paid ant dividend during the year therefore compliance with section 123 of the Companies Act 2013 is not applicable Note 61: Impact of the Covtd-19

The Company has considered 1mem.1l and external sources of information up to the date of approval of these financial statements in evaluating the possible effects that mat result from the pandemic relating to C0VFD-I9 on the earning amounts of trade receivables The Ccwi pain has applied prudence m arm mg at ihc estimates and assumptions The C nnipam is confident aboui the recovcrabilitt of these assets

Noli: 62: Reclassification

Previous tear figures have been regrouped rc.viangcd reclassified wherever ncccssart further there arc no material regrouping reclassifications during the tear Note 63: Appnnal nf financial itatcnit-nls

The financial statements has been apprm ed lor issue bt the resolution ol the board of directors dated Mat 15. 2"24