Research and Development :

Direct expenses incurred on R&D during the year for the development of products are treated as deferred revenue expediture. The amount shall be amortized against the revenues to be earned over a period of time, to be determined at the time of product launch. Products under development capitalized as deferred revenue expenses to the extent ofRs.249.01 lacs has been written off as impairment loss per the decision of management and Board, due to the market conditions, technology changes, cost escalations due to electonic components shortage, could not convert into commercial orders.

Note

(a) : Term Loan carry carry an interest rate of 8.00% to 10.40% p.a. This is primarily secured by way of hypothecation of plant & machinery and other fixed assets created out of bank finance. Personal gurantee of Mr.Raju dandu and corporate gurantee of M/S. Danlaw Systems India ltd. is given.Loan is

GECL carry an interest rate of 7.40% to 9.25% p.a. This is primarily secured by way of hypothecation of plant & machinery and other fixed assets created out of bank finance. Personal gurantee of Mr.Raju dandu and corporate gurantee of M/S. Danlaw Systems India ltd. is given.Loan is taken.

(b) : Working capital demand loan/cash credit facilities carry an interest rate of 8.45% to 10.40% p.a.. They are primarily secured by exisiting as well as future inventories, goods in transit, outstanding moneys, book debts,receviables,etc. Personal gurantee of Mr.Raju dandu and corporate guranteeof M/S. Danlaw Systems India ltd. is given.Loan is taken for business purpose and is repayable on demand.

(c) . The company, has taken taken external commercial borrowing from Danlaw Inc, amounting to USD 2,500,000 $. The borrowing rate forthe loans is 4.5% 6m LIBOR. The term of the loan is 5 years. The repayment of the Principal amount is scheduled at the end of Year 5 i.e. the end of the loan period and interest amount is to be paid quarterly.

31 Capital and Financial risk management objectives and policies

A. Capital Management

The Company's objective for capital management is to maximise shareholders value, safeguard business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through equity, operating cash flows generated and loans from institutions.

B. Financial Risk Management Framework

The Company's principal financial liabilities, comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The value of a financial instrument may change as a result of changes in the foreign currency exchange rates and interest rates. Future specific market movements cannot be normally predicted with reasonable accuracy.

Foreign currency risk

The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to US$, Euros and GBPs . Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the company is to minimize the volatility of the INR cash flows of highly probable forecast transactions.

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 short-term debt obligations with floating interest rates.

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. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, cash and cash equivalents, bank deposits and other financial assets.

Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The table below summarises the maturity profile of the Company's financial liabilities based on contractual undiscounted payments.

(ii) Defined Benefit Plan (a) Gratuity

The Company provides its employees with benefits under a defined benefit plan, referred to as the "Gratuity Plan". The Gratuity Plan entitles an employee, who has rendered at least five years of continuous service, to receive 15 days salary for each year of completed service (service of six months and above is rounded off as one year) at the time of retirement/exit, restricted to a sum of ^ 2,000,000.

33. Lease Liabilities

The Company has adopted Ind AS 116 "Leases" with the inception of the lease being April 1, 2019 and has discounted lease payments using the incremental borrowing rate for measuring the lease liability.

The weighted average incremental borrowing rate applied to lease liabilities is 10.7%

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

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

The carrying values of the current financial assets and current financial liabilities are taken as fair values because of their short term nature The fair of non current financial assets is determined by using the discounted cash flow method by the management

35. Note of Amalgamation

During the year (NCLT order dated 01st November, 2022) subsidiary of Danlaw Technologies India Limited (DTIL) "M/s.Danalaw Electronic Assembly Limited" has been amalgamated with DTIL. While preparing the financial statements, previous years figures were also restated since the appointed date being 01st April, 2020.

36 Other Statutory Information

1 There are no proceedings initiated or pending against the company as at March 31, 2023, under Prohibition of Benami Property Transaction Act, 1988 (As amended in 2016)

2 The Company do not have any transactions with companies struck off as per Section 248 of the Companies Act, 2013 and Section 560 of the Companies Act, 1956

3 No immovable property is held by the Company except building which is constructed on leased land and lease agreements are duly executed in favour of the company.

4 The Company has been sanctioned working capital limits (non-fund based) in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets. The quarterly returns or statements filed by the Company with such banks are in agreement with the books of account of the Company and found no material discrepancies.

5 The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

6 CSR provisions as per sec. 135 of the Companies Act, 2013 are not applicable to the company.

7 The Company has not declared/paid any dividend during the year

8 The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority

9 The Company have not any such transaction which is 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.

10 The Company have 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:

(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

11 The Company have not advanced or loaned or invested funds 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