Notes to Accounts of Rossell Techsys Ltd.

Mar 31, 2025

z. Provisions and Contingent Liabilities

Provisions are recognized when the Company has a
present obligation (legal or constructive) as a result of
a past event, it is probable that the Company will be

required to settle the obligation and a reliable estimate
can be made of the amount of the obligation.

The amount recognized as a provision is the best
estimate of the consideration required to settle the
present obligation at the end of the reporting period,
taking in to account the risks and uncertainties
surrounding the obligation.

Contingent liabilities are possible obligations whose
existence will only be confirmed by future events not
wholly within the control of the Company or present
obligations where it is not probable that an outflow
of resources will be required or the amount of the
obligation cannot be measured with sufficient reliability.

Contingent liabilities are not recognized in the financial
statements but are disclosed unless the possibility of an
outflow of economic resources is considered remote.

aa. Operating Segments

Operating segments are reported in a manner
consistent with the internal reporting provided to
the chief operating decision maker. The company
operates in only one segment - Engineering and
Manufacturing in Aerospace and Defense.

b) i) Rights and preferences attached to equity shares:

The company has one class of equity shares having a par value of Rs.2 per share each share holder is eligible for one
vote per share held. In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the
company after distribution of all preferential amounts, in proportion to their shareholding. The dividend proposed by the
board of directors is subject to the approval of shareholders in the ensuing AGM except in case of interim dividend.

c) Reconciliation of equity shares at the beginning and end of the reporting period

The Company operates defined contribution scheme for payment of pension for certain eligible employees. Under the
scheme, contributions are made by the Company, based on current salaries, to the recognized Superannuation Fund
maintained by the Company. The Company is also contributing to the Government’s administered Provident Funds in
respect of all the qualifying employees.

An amount of 181.81 Lakhs has been charged to the Statement of Profit and Loss on account of defined contribution
schemes.

Defined Benefit Plans

The Company also operates defined benefit scheme in respect of gratuity benefit towards its employees. This scheme
offers specified benefits to the employees on retirement, death, disability or cessation of employment. The liability arising
for the Defined Benefit Scheme is determined in accordance with the advice of independent, professionally qualified
actuary, using the Projected Unit Credit (PUC) actuarial method as at year end. The Company makes regular contribution
for this Employee Benefit Plan to a recognized Gratuity Fund. This Fund is administered through approved Trust, which
operate in accordance with the Trust Deed and Rules.

Gratuity - The company has Funded it’s Gratuity liability

D. Risk Management

The above benefit plans expose the company to actuarial risks such as follows:

(i) Interest rate risk: The defined benefit obligation calculated uses a discount rate based on government bonds. If bond
yields fall, the defined benefit obligation will tend to increase.

(ii) Salary inflation risk: Higher than expected increases in salary will increase the defined benefit obligation.

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

Note 32: Financial risk management objectives

The Company’s business activities expose it to certain financial risks—market risk, liquidity risk, and credit risk. In order to
minimize these risks, the Company has implemented risk management policies and procedures that are adopted by management
after due evaluation of the key risks facing the business of the company.

a) Market Risk

Market risk is the risk that the fair value of future cashflows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risks interest rate and currency risk.

i. Foreign Currency Risk

The Company undertakes significant transactions denominated in foreign currency with it customers in relation
to Exports by 100% EOU. This results in wide exposure to exchange rate fluctuations. Such exchange rate risk
primarily arises from transactions made in foreign exchange and reinstatement risks arising from recognized assets
and liabilities, which are not in the Company’s functional currency (Indian Rupees). A significant portion of these
transactions are in US Dollar, Euro, British Pound Sterling etc. The Company, as Risk Management Policy, hedges
its exposure in foreign exchange whenever considered appropriate based on their perception about such market
and reviews periodically its exposure therein to ensure that results from fluctuating currency exchange rate are
appropriately managed.

ii. Interest Rate Risk

Interest rate risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The objectives of the Company’s interest rate risk management
processes are to lessen the impact of adverse interest rate movements on its earnings and cash flows and to
minimize counter party risks.

The Company is exposed to interest rate volatilities primarily with respect to its borrowings from Banks. Such
volatilities primarily arise due to changes in the Lending rates of Banks, which in turn are linked with Repo Rates as
announced by RBI from time to time as well as other economic parameters of the Country. The Company manages
such risk by operating with Banks having strong fundaments with comparatively lower Lending Rates in the Market.

Interest rate sensitivity

Since the significant amount of borrowings of the Company are short term in nature, the possible volatility in the
interest rate is minimal.

b) Liquidity Risk

Liquidity risk is the risk that the Company may encounter difficulty, in meeting its obligations due to shortage of liquid
assets.

The Company mitigates its liquidity risks by ensuring timely collections of its trade receivables, close monitoring of its
credit cycle,ensuring optimal movements of its inventories and avoid blockage of working capital in non-productive
current assets. The remaining contractual maturities of significant financial liabilities payable within one year (other than
borrowings from the Banks) as at 31st March, 2025 and 31st March, 2024 are as under:

c) Credit Risk

Credit risk is the risk that counter party will not meet its obligations leading to a financial loss to the Company. The
Company has its policy to limit its exposure to credit risk arising from outstanding receivables. Management regularly
assesses the credit quality of its customer’s based on which, the terms of payment are decided. Credit limits are set for
each customer, which are reviewed at periodic intervals. The credit risk of the Company is low The exports are made
mostly to worldwide reputed Corporates and otherwise backed by letter of credit or on advance basis.

Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:

Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.

Level 2: 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.

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The management consider that the carrying amounts of financial assets (other than those measured at fair values) and liabilities
recognized in the financial statements approximate their fair value as on the reporting date.

There were no transfers between Level 1, Level 2 and Level 3 during the year.

The following table presents the fair value hierarchy of assets and liabilities measured at fair value on a recurring basis.

Note 35: Capital Management

(a) Risk Management

The Company’s objectives in regard to managing capital are:

• Safeguard its status as a going concern

• To ensure returns to shareholders

• To ensure benefits to stakeholders

In order to maintain optimum capital structure, the board may:

• Increase the capital by fresh issue of shares or

• Reduce the same by return to equity holders

• Vary the equity by increasing or reducing the quantum of dividend

Consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio:
Net debt divided by total equity

Gearing ratio refers to the level of a company’s debt compared to its total equity.

Note: 37 Other Statutory Information

(a) Transactions and balances with companies which have been removed from register of Companies [struck off companies
under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.] as at the above reporting
periods is Nil.

(b) The Company has not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign entities
(Intermediaries) with the understanding that the:

(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.

(c) The Company has not received any fund from any person(s) or entity(is), 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 on behalf of the Ultimate Beneficiaries.

(d) The Company does not have any transaction which is not recorded in the books of accounts; and which has been
surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961.

(e) The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related
parties (as defined under Companies Act, 2013), either severally or jointly with any other person.

Note: 38 Events after the Reporting Period

The Board of Directors have recommended dividend of Rs.0.2/- per fully paid up equity share of Rs.2/- each for the financial
year 2024-25.

Note: 39 The company operates in only one segment - Engineering and Manufacturing in Aerospace and Defence

Note: 40 Previous Year’s figures have been regrouped / rearranged wherever considered appropriate to make them comparable
with this period.

As per our report annexed

for and on behalf of the Board of Directors for Raghavan, Chaudhuri & Narayanan

Chartered Accountants
Firm Regn. No.007761S

Sd/- Sd/- Sd/- Sd/-

Rishab Mohan Gupta Digant Parikh Jayanth V V Sathyanarayanan

Managing Director Non-Executive Director Chief Financial Officer Partner

DIN:05259454 DIN: 00212589 PAN: AIHPJ2244A Membership No.:027716

Place : Dubai, UAE Place : Mumbai Place : Bengaluru Place: Bengaluru

Date: May 27, 2025 Date: May 27, 2025 Date: May 27, 2025 Date: May 27, 2025

UDIN: 25027716BMIIMZ6626