Notes to Accounts of Megatherm Induction Ltd.

Mar 31, 2025

2.16 Contingent Liability, Provisions and
Contingent Asset

"The Company creates a provision when there is
present obligation as a result of a past event that

probably requires an outflow of resources and a reliable
estimate can be made of the amount of obligation.
The Company records a provision for decommissioning,
restoration and similar liabilities that are recognized as
costofproperty,plantandequipment.Decommissioning
costs are provided at the present value of expected
costs to settle the obligation using estimated cash
flows and are recognized as part of the cost of the
particular asset. The cash flows are discounted at a
current pre-tax rate that reflects the risks specific
to the decommissioning liability. The unwinding of
the discount is expensed as incurred and recognized
in the statement of profit and loss as a finance cost.
A disclosure for a contingent liability is made when
there is a possible obligation or a present obligation that
probablywill not require anoutflowofresourcesorwhere
a reliable estimate of the obligation cannot be made.
Contingent assets are neither recorded nor disclosed
in the financial statements."

2.17 Earnings Per Share

"Basic earnings per share are calculated by dividing
the net profit or loss for the period attributable to
equity shareholders (after deducting preference
dividends and attributable taxes) by the weighted
average number of equity shares outstanding during
the period. Partly paid equity shares are treated as
a fraction of an equity share to the extent that they
are entitled to participate in dividends relative to a
fully paid equity share during the reporting period.
The weighted average numbers of equity shares
are adjusted for events such as bonus issue, bonus
element in the rights issue, share split and reverse
share split (consolidation of shares) that have
changed the number of equity shares outstanding,
without corresponding change in resources.
For the purpose of calculating diluted earnings per
share, the net profit or loss for the year attributable
to equity shareholders and the weighted average
number of shares outstanding during the period
are adjusted for the effects of all dilutive potential
equity shares."

2.18 Government Grants and Subsidies

"Grants and subsidies from the government are
recognized when there is reasonable assurance that (i)
the Company will comply with the conditions attached
to them, and (ii) the grant/subsidy will be received.
When the grant or subsidy related to revenue, it is
recognized as income on a systematic basis in the
Statement of Profit and Loss over the periods necessary
to match them with the related costs, which they are
intended to compensate. Where the grant is related to
an asset, it is adjusted with the gross value of assets.

When the Company receives non-monetary grants,
the asset is accounted for on the basis of its acquisition
cost. In case a non-monetary asset is given free of
cost, it is recognized at a nominal value."

2.19 Segment Reporting

"The accounting policies adopted for segment
reporting are in conformity with the accounting
policies adopted for the Company. The Company''s
operating businesses are organized and managed
separately according to the nature of products and
services provided, with each segment representing a
strategic business unit that offers different products
and serves different markets. The analysis of
geographical segments is based on the areas in which

major operating divisions of the Company operate.
Further, inter-segment revenue have been accounted
for based on the transaction price agreed to
between segments which is primarily market based.
Unallocated items include general corporate income
and expense items, which are not allocated to any
business segment."

2.20 Rounding off

All amounts disclosed in the financial statements and
notes have been rounded off to the nearest lakhs as
per the requirements of Schedule III of the Act unless
otherwise stated.

b. Rights, preferences and restrictions attached to equity shares

"The company has only one class of equity shares having par value of '' 10 per share. Each shareholder is entitled
to one vote per share held. The company declares and pays dividends in Indian rupees. The dividend proposed
by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets
of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of
equity shares held by the shareholders."

c. Pursuant to the approval of the shareholders in Extra-Ordinary General Meeting held on August 08, 2023, the company
has allotted 46,16,243 equity shares of ? 10 each as fully paid-up bonus shares in the ratio of 1 (One) equity share
for every 2 (two) equity share outstanding on the record date i.e. August 09, 2023 by capitalization of securities
premium. Further, The company has neither issued any shares for consideration other than cash nor bought back any
shares during the period of five years immediately preceding the reporting date (31 March 2024 : nil)"

d. During the previous FY, on 05 February 2024, the company has issued 49,92,000 Equity Shares under SME IPO, which
got listed on NSE Emerge Platform on 05 February 2024 having NSE Scrip Code "MEGATHERM". The transaction Costs
pertaining to the issue have been debited to the share premium account.

*Pursuant to the approval of the shareholders in Extra-Ordinary General Meeting held on August 08, 2023, the Company
has allotted 46,16,243 equity shares of ? 10 each as fully paid-up bonus shares in the ratio of 1 (One) equity share for
every 2 (two) equity share outstanding on the record date i.e. August 09, 2023 by capitalization of securities premium.

** During the previous FY, on 05 February 2024, the Company has issued 49,92,000 Equity Shares under SME IPO, which
got listed on NSE Emerge Platform on 05 February 2024 having NSE Scrip Code "MEGATHERM". The transaction Costs
pertaining to the issue have been debited to the share premium account.

(B) Details of security

The term loan is secured as under:

Primary :

i) Hypothecation of all Stocks, book-debts & other current asset and Plant & Machinery.

Collateral :

i) Equitable mortgage of 10 acres of leasehold land and factory thereon at Vidyasagar Industrial Park.

ii) Equitable Mortgage of Office Space Unit No 6F/2 on the 6" Floor of the building at Plot No L1,

Block EP, & GP, in Sector - V, PS - Electronics Complex, Bidhannagar, Salt lake, Kolkata - 700091.

iii) Equitable Mortgage Office Space Unit No 5F/3 & 5F/4 on the Sth Floor of the building at Plot No LI,
Block EP, & GP,in Sector - V, PS - Electronics Complex,Bidhannagar, Salt lake, Kolkata - 700091

iv) Pledge of FDR 327.25 Lacs
Guarantee :

Personal Guarantee of Sri Shesadri Bhusan Chanda, Sri Satadri Chanda and Smt. Ayati Chanda

(C) Details of security of Vehicle Loan

Nature of Security

Loan from Axis Bank is secured by hypothecation of the Vehicle Financed.

ii) Leave Benefits

The Company provides for accumulation of leave by its employees. The employees can carry forward
a portion of the unutilised leave balances and utilise it in future periods or receive cash in lieu thereof
as per the Company''s policy. The Company records a provision for leave benefits in the period in
which the employee renders the services that increases this entitlement. This is an unfunded plan.
The total provision recorded by the Company towards these benefits as at year end was '' 22.04 Lacs (March 31,
2024: 13.15 Lacs ).

Note 35 - Information in accordance with the requirements of Accounting Standard 18 on Related
Party Disclosures

(i) List of related party and relationship where control exists

(a) Enterprises having control over the Company with which transaction has taken place during the year and
previous year.

Megatherm Electronics Private Limited - Immediate holding company

(b) Fellow Subsidiaries (with whom transactions have taken place during the year and previous year):

EMT Megatherm Private Limited

(ii) Names of the other related parties with whom transactions have taken place during the year
(a) Key Managerial Personnel

Mr. Shesadri Bhusan Chanda, Chairman and Managing Director

Mr. Satadri Chanda, Director

Mrs. Christina Paulchowdhury

Mr. Siddhartha Sen (resigned on 05-01-2025)

Mr. Ankit Rathi (appointed on 16-09-2023)

Mr. Shravan Manjaya Shetty (appointed on 20-12-2024)

Mrs Abanti Saha Basu , C.S (appointed on 15-09-2023)

Note: Out of the total approved CSR expenditure, an amount of '' 26.35 Lac was spent during the year. The remaining
unspent amount of '' 10.06 Lac has been transferred to a separate earmarked bank account with Indian Bank within the
time stiplulated under Section 135(6) of the Companies Act, 2013, for payments towards ongoing CSR projects pertaining
to FY 2024-25, within end of FY 2028.

Note - 43 Utilisation of IPO Funds

During the FY 23-24 , the company has completed the initial public offer(IPO) pursuant to which 49,92,000 Equity shares
of 10 each were allotted, at an issue price of '' 108.00 per Equity Share under SME IPO, which got listed on NSE Emerge
Platform on 05 February 2024 having NSE Scrip Code "MEGATHERM". The gross proceeds from the IPO aggregated to
'' 5,391.36 lacs and the corresponding issue related expenses paid amounted to '' 491.88 lacs. The company has utilised
'' 2,709.95 Lacs for the objects i.e to meet its procurement of fixed asset, working capital requirements and general
corporate purpose , as mentioned in the Prospectus and the unutilized amount of '' 2,681.41 Lacs are held in current bank
account/FDR of the Company.

Note - 44 Utilisation of Borrowed funds and share premium:

(i) The Company has not advanced or loaned or invested funds in current year or previous year to any other person(s)
or entity(ies), 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

(ii) The Company has not received any fund in current year or previous year 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:

(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,"

Note 45 - Undisclosed income

The Company does not have any undisclosed income which is not recorded in the books of account that has been
surrendered or disclosed as income during the current year or previous 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.

Note 46 - Audit Trail

The Company is using accounting software, SAP Business One, for maintaining its books of account which has a feature
of recording audit trail (edit log) facility, except that the audit trail feature was not enabled in the accounting software
throughout the year.

Note 47- Details of Crypto Currency or Virtual Currency

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

Note 48 - Details of Benami Property held

The Company does not have any Benami property in current year or previous year, where any proceeding has been initiated
or pending against the company for holding any Benami property.

Note 49 - Segment information

Primary Segment Information (Business Segment)

Segments have been identified in line with the Accounting Standard 17 - Segment Reporting, taking into account the nature
of products and services, the different risks and returns, the organisational structure and the internal financial reporting
system. The Company is engaged in the business of manufacturing and sale of induction. It has manufacturing location
in India only. Based on the dominant source and nature of risk and returns of the Company, its internal organisation and
management structure and its system of internal financial reporting, business segment has been identified as the primary
segment. The Company has only one business segment.

Note - 51 The Social Security Code, 2020

The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment,
has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the
Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective
date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not
yet issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements
in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

Note - 52

Subsequent events

No Significant Subsequent events have been observed which may require an adjustments to the financial statements

Note - 53

Previous year''s figures have been regrouped / reclassified wherever necessary to conform to current year''s classification/
disclosure.

As per our report of even date

For M S K A & Associates For and on behalf of the Board of Directors of

Chartered Accountants Megatherm Induction Limited

Firm Registration No.:105047W CIN : L31900WB2010PLC154236

Dipak Jaiswal Shesadri Bhusan Chanda Satadri Chanda

Partner Chairman & Managing Director Director & Chief Financial Officer

Membership No 063682 DIN: 00961593 DIN: 02302312

Abanti Saha Basu

Company Secretary
Membership No:- A69276

Place : Kolkata Place : Kolkata

Date: May 24, 2025 Date: May 24, 2025

---

Mar 31, 2024

b. Rights, preferences and restrictions attached to equity shares

The company has only one class of equity shares having par value of ''10 per share. Each shareholder is entitled to one vote per share held. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c. Pursuant to the approval of the shareholders in Extra-Ordinary General Meeting held on August 08, 2023, the company has allotted 46,16,243 equity shares of ? 10 each as fully paid-up bonus shares in the ratio of 1 (One) equity share for every 2 (two) equity share outstanding on the record date i.e. August 09, 2023 by capitalization of securities premium. Further, The company has neither issued any shares for consideration other than cash nor bought back any shares during the period of five years immediately preceding the reporting date (31 March 2023 : nil).

d. During the year, on 05 February 2024, the company has issued 49,92,000 Equity Shares under SME IPO, which got listed on NSE Emerge Platform on 05 February 2024 having NSE Scrip Code “MEGATHERM”. The transaction Costs pertaining to the issue have been debited to the share premium account.

*Pursuant to the approval of the shareholders in Extra-Ordinary General Meeting held on August 08, 2023, the company has allotted 46,16,243 equity shares of ? 10 each as fully paid-up bonus shares in the ratio of 1 (One) equity share for every 2 (two) equity share outstanding on the record date i.e. August 09, 2023 by capitalization of securities premium.

** During the year, on 05 February 2024, the company has issued 49,92,000 Equity Shares under SME IPO, which got listed on NSE Emerge Platform on 05 February 2024 having NSE Scrip Code “MEGATHERM”. The transaction Costs pertaining to the issue have been debited to the share premium account.

(B) Details of security

The term loan and covid loans are secured as under:

Primary:

i) Equitable mortgage of 10 acres of leasehold land and factory under construction thereon at Vidyasagar Industrial Park.

ii) Equitable Mortgage of Factory Building and other structure built on 10 Acres of Factory Land allotted by WBSIDC for 99 years and Factory Construction thereon.

iii) Exclusive First charge on Plant & Machinery and Other Fixed asset acquired through the Term loan.

Collateral:

i) Equitable mortgage of 5 acres of leasehold land at Vidasagar Industrial Park.

ii) Equitable Mortgage of Residential Plot at premises No. 05-0685, Plot no. 2128, Block lIC, Rajarhat , New town in the joint name of Mr. S.B. Chanda & Smt. Ayati Chanda

iii) Equitable Mortgage of Residential Flat at premises No. UDITA Tower Tritiya, Flat no 402, 1050/1, Survey Park Kolkata-700075 in the joint name of Mr. S.B. Chanda & Smt. Ayati Chanda

iv) Equitable Mortgage of Residential Flat at premises No. 1E Baikunth, 114 NSC Bose Road Kolkata - 700040 in the name of Smt. Ayati Chanda

v) Equitable Mortgage of Residential Flat at premises No. UDITA Tower Tritiya, Flat no 401/1050/1, Survey Park Kolkata-700075.

vi) Equitable Mortgage of Commercial Premises at 123 SDF Building Sector-V Salt Lake City Kolkata-700091.

vii) Pledge of FDR 327.25 Lacs

viii) Pledge of Share held by Megatherm Electronics Private Ltd (MEPL) (Holding Co.) in the name of Megatherm Induction Limited (MIL) to the extent of 30% of Paid Up Capital of MIL with the Bank.

Guarantee:

Personal Guarantee of Sri Shesadri Bhusan Chanda, Sri Satadri Chanda and Smt. Ayati Chanda (C) Details of security of Vehicle Loan

Nature of Security

Loan from Axis Bank is secured by hypothecation of the Vehicle Financed.

Loan from Punjab National Bank is secured by hypothecation of the Vehicle Financed and personal guarantee of Mr.

Satadri Chanda

Note : The secured rupee loans from banks are repayable on demand and other loans are repayable on maturity.

Details of security Primary Securities :

Bank Borrowings for working capital are secured by first charge over the company''s stock of materials, receivables and other current assets, both present & future.

(b) The amount of interest paid by the buyer in terms of section 16 of the MSMED Act, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year.

(c) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED Act.

(d) The amount of interest accrued and remaining unpaid at the end of each accounting year.

(e) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance of a deductible expenditure under Section 23 of the MSMED Act.

NOTE 29: CONTINGENT LIABILITIES AND COMMITMENTS

(to the extent not provided for]

a) Contingent Liabilities:

31 March 2024		31 March 2023
(i) Guarantee Issued By Bank	611.34	187.11
(ii) Letter of Credit By Bank	2,414.20	2,708.61

NOTE 33: Leases

Operating lease: Company as lessee

The Company has entered into commercial leases on certain motor vehicles, Office Building and items of machinery. These leases have an average life of between three and five years with no renewal option included in the contracts. There are no restrictions placed upon the Company by entering into these leases

NOTE 34: EMPLOYEE BENEFITS: i) Post employment benefit plans

1. Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund and Superannuation Fund, which are defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Discount rate is based on the prevailing market yield of Indian Government securities as at the year end for the estimated term of the obligation.

Assumptions regarding future mortality are based on published statistics and mortality tables. The calculation of the defined benefit obligation is sensitive to the mortality assumptions.

ii) Leave Benefits

The Company provides for accumulation of leave by its employees. The employees can carry forward a portion of the unutilised leave balances and utilise it in future periods or receive cash in lieu thereof as per the Company''s policy. The Company records a provision for leave benefits in the period in which the employee renders the services that increases this entitlement. This is an unfunded plan.

The total provision recorded by the Company towards these benefits as at year end was ''13.15 Lacs (March 31, 2023: Nil).

NOTE 35: INFORMATION IN ACCORDANCE WITH THE REQUIREMENTS OF ACCOUNTING STANDARD 18 ON RELATED pARTY DISCLOSuRES

(i) List of related party and relationship where control exists

(a) Enterprises having control over the Company with which transaction has taken place during the year and previous year.

Megatherm Electronics Private Limited - Immediate holding company

(b) Fellow Subsidiaries (with whom transactions have taken place during the year and previous year):

EMT Megatherm Private Limited

(c) Enterprises over which Key Managerial Personnel are able to exercise significant influence.

SC Aqua Vitae Private Limited

NOTE 38: WILFUL DEFAULTER

The Company has not been declared as a wilful defaulter by any bank or financial institutions in the current year or previous year.

NOTE 39: RELATIONSHIP WITH STRUCK OFF COMPANIES UNDER SECTION 248 OF THE COMPANIES ACT, 2013 Or SECTION 560 OF COMpANIES ACT, 1956

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, in the current year or previous year.

NOTE 40: REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMpANIES

The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period in the current year or previous year.

NOTE: 43 UTILISATION OF IPO FUNDS

During the year , the company has completed the initial public offer (IPO) pursuant to which 49,92,000 Equity shares of 10 each were allotted, at an issue price of ''108.00 per Equity Share under SME IPO, which got listed on NSE Emerge Platform on 05 February 2024 having NSE Scrip Code "MEGATHERM". The gross proceeds from the IPO aggregated to ''5,391.36 Lacs and the corresponding issue related expenses paid amounted to ''491.88 Lacs. The Company has utilised ''1,946.99 Lacs for the objects i.e. to met its procurement of fixed asset, working capital requirements and general corporate purpose, as mentioned in the Prospectus and the unutilized amount of ''2,952.49 Lacs are held in current bank account of the Company.

NOTE: 44 UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM:

(i) The Company has not advanced or loaned or invested funds in current year or previous year to any other person(s) or entity(ies), 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

(ii) The Company has not received any fund in current year or previous year 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:

(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,

NOTE 45: UNDISCLOSED INCOME

The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the current year or previous 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).

NOTE 46: AUDIT TRIAL

The Company is using accounting software, SAP Business One, for maintaining its books of account which has a feature of recording audit trail (edit log) facility, except that the audit trail feature was not enabled in the accounting software throughout the year.

NOTE 47: DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY

The Company has not traded or invested in Crypto currency or Virtual Currency during the current year or previous year. NOTE 48: DETAILS OF BENAMI PROPERTY HELD

The Company does not have any Benami property in current year or previous year, where any proceeding has been initiated or pending against the company for holding any Benami property.

NOTE 49: SEGMENT INFORMATION

primary Segment Information (Business Segment)

Segments have been identified in line with the Accounting Standard 17 - Segment Reporting, taking into account the nature of products and services, the different risks and returns, the organisational structure and the internal financial reporting system. The Company is engaged in the business of manufacturing and sale of induction. It has manufacturing location in India only. Based on the dominant source and nature of risk and returns of the Company, its internal organisation and management structure and its system of internal financial reporting, business segment has been identified as the primary segment. The Company has only one business segment.

NOTE: 51 THE SOCIAL SECURITY CODE, 2020

The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

NOTE: 52 SUBSEQUENT EVENTS

No Significant Subsequent events have been observed which may require an adjustments to the financial statements

NoTE: 53

Previous year''s figures have been regrouped / reclassified wherever necessary to conform to current year''s classification/ disclosure.