3.9 Provisions, Contingent liabilities and contingent assets:

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are determined by discounting the expected future cash
flows (representing the best estimate of the expenditure required to settle the present obligation at
the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value
of money and the risks specific to the liability. The unwinding of the discount is recognised as finance
cost.

Litigations: Provision in respect of loss contingencies relating to claims, litigation, assessment, fines,
penalties, etc. are recognised when it is probable that a liability has been incurred and the amount can
be estimated reliably.

When the Company expects some or all of a provision to be reimbursed, the reimbursement is
recognised as a separate asset, but only when the reimbursement is virtually certain.

The expense relating to a provision is presented in the statement of profit and loss, net of any
reimbursement. 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. The unwinding of
discount is recognised in the statement of profit and loss as a finance cost.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best
estimate. If it is no longer probable that an outflow of resources would be required to settle the
obligation, the provision is reversed.

Contingent liabilities are disclosed 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 with in 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 will be required to settle or a
reliable estimate of the amount cannot be made.

Contingent assets are neither recognised nor disclosed. However,when realisation of income is virtually
certain, related asset is recognised.

Provision, contingent liabilities and contingent assets are reviewed at each balance sheet date and
adjusted where necessary to reflect the current best estimate of obligation or asset.

3.10 Financial instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity. Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual provisions of the instruments.

(a) Financial Assets

Initial Recognition and Classification

Classification of financial assets depends on the nature and purpose of the financial assets and is
determined at the time of initial recognition. A financial asset is initially recognised at fair value.
In case of financial assets which are recognised at fair value through profit and loss (FVTPL), its
transaction cost are recognised in the statement of profit and loss. In other cases, the transaction
cost are attributed to the acquisition value of the financial asset.

Subsequent measurement

Financial assets are subsequently classified and measured at

• amortised cost

• fair value through other comprehensive income (FVTOCI)

• fair value through profit and loss (FVTPL)

Financial assets are not reclassified subsequent to their initial recognition, except if and in the
period the Company changes its business model for managing financial assets.

(i) Financial Asset carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business
model whose objective is to hold the asset in order to collect contractual cash flows and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.

(ii) Financial Asset at fair value through other comprehensive income (FVTOCI)

A financial asset is subsequently measured at fair value through other comprehensive income
if it is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling financial assets and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.

(iii) Financial Asset at fair value through profit and loss (FVTPL)

A financial asset which is not classified in any of the above categories are subsequently fair
valued through profit or loss.

Investments in associate and joint venture

The investment in associates and Joint venture are carried at cost as per IND AS 27. Investments
representing equity interest in associate and joint ventures are carried at cost less any
provision for impairment. Investments are reviewed for impairment if events or changes in
circumstances indicate that the carrying amount may not be recoverable.

Investments in subsidiaries

As per Ind AS 27, there is an option to measure investments in subsidiaries at cost or in
accordance with Ind 109 at either: (a) Fair value on date of transition; or (b) previous GAAP
carrying values. The Company has recognised the investment in subsidiary at Cost as per Ind
AS 27

Impairment of financial assets

In accordance with IND AS 109, the Company applies expected credit losses( ECL) model for
measurement and recognition of impairment loss on the following financial asset and credit
risk exposure:

• Financial assets measured at amortized cost;

• Financial assets measured at fair value through other comprehensive income(FVTOCI);

• Trade receivables or any contractual right to receive cash or another financial asset that
result from transactions that are within the scope of Ind AS 115

The Company follows “simplified approach” for recognition of impairment loss allowance on
Trade receivables or contract revenue receivables.

Under the simplified approach, the Company does not track changes in credit risk. Rather, it
recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its
initial recognition. The Company uses a provision matrix to determine impairment loss allowance
on the portfolio of trade receivables. The provision matrix is based on its historically observed
default rates over the expected life of trade receivable and is adjusted for forward looking
estimates. At every reporting date, the historical observed default rates are updated and changes
in the forward looking estimates are analysed.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/
expense in the statement of profit and loss. This amount is reflected under the head ‘other
expenses’ in the statement of profit and loss.

Write-off: The gross carrying amount of a financial asset is written off when the Company has no
reasonable expectations of recovering the financial asset in its entirety or a portion thereof.

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset) is primarily derecognised (i.e.
removed from the Company’s Balance Sheet) when: (i) The contractual rights to receive cash flows
from the asset has expired, or (ii) The Company has transferred its contractual rights to receive
cash flows from the financial asset or has assumed an obligation to pay the received cash flows in
full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the
Company has transferred substantially all the risks and rewards of the asset, or (b) the Company
has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.

(b) Financial liabilities and equity instruments

Classification of Debt and Equity

Debt or equity instruments issued by the Company are classified as either financial liabilities or as
equity in accordance with the substance of the contractual arrangements and in accordance with
Ind AS 109 "Financial Instruments" read with Ind AS 32 "Financial Instruments Presentation".

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity
after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the
proceeds received. Transaction costs of an equity transaction shall be accounted as a dedcution
from equity

Financial Liability- Initial recognition and measurement

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs. The Company financial liabilities
include trade payables, trade deposits, liabilities towards services, sales incentive and other
payables. The Company do not have any loans & borrowings as at reporting date

Subsequent Measurement

For purposes of subsequent measurement, financial liabilities are classified in two categories:

• Financial liabilities at amortised cost

• Financial liabilities at fair value through profit and loss (FVTPL)

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and financial liabilities designated upon initial recognition as at fair value through profit or
loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term.

Gains or losses on liabilities held for trading are recognized in the statement of profit and loss.
Financial liabilities at amortised cost (Loans and borrowings)

After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in
the statement of profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs
in the statement of profit and loss.

Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company's obligations
are discharged, cancelled or have expired. When an existing financial liability is replaced by
another from the same lender on substantially different terms or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the de-recognition of
the original liability and the recognition of a new liability. The difference (if any) in the respective
carrying amounts is recognised in the statement of profit and loss.

(c) Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance
sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an
intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

3.11 Income Taxes:

The income tax expense or credit for the period is the tax payable on the current period’s taxable income
based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses, if any. Income tax expense represents
the sum of current tax and deferred tax. The Management periodically reviews and evaluates the
positions taken in the tax returns with respect to situations in which applicable tax regulations are
subject to interpretation & establishes provision where appropriate.

Current tax

Current income tax, assets and liabilities are measured at the amount expected to be paid to or
recovered from the taxation authorities in accordance with the Income Tax Act, 1961 and the Income
Computation and Disclosure Standards (ICDS) enacted in India by using tax rates and the tax laws that
are enacted at the reporting date.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profits. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax
assets are recognised for all deductible temporary differences and incurred tax losses to the extent that
it is probable that taxable profits will be available against which those deductible temporary differences
can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference
arises from the initial recognition (other than in a business combination) of assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period
in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow
from the manner in which the Company expects, at the end of the reporting period, to recover or settle
the carrying amount of its assets and liabilities.

Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in which case, the income taxes are
also recognised in other comprehensive income or directly in equity respectively.

3.12 Operating segment:

An operating segment is a component of the Company that engages in business activities from which it
may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the Company’s other components, and for which discrete financial information is available. All operating
segments’ operating results are reviewed regularly by the Company’s CODM to make decisions about
resources to be allocated to the segments and assess their performance.

The operations of the Company falls under manufacturing & trading of auto component parts, which is
considered to be the only reportable segment by the Company’s CODM.

3.13 Asset held for sale and discontinued operations

The Company classifies non-current assets as held for sale if their carrying amounts will be recovered
principally through a sale rather than through continuing use. Actions required to complete the sale
should indicate that it is unlikely that significant changes to the sale will be made and management
must be committed to the sale expected within one year from the date of classification.

The criteria for held for sale classification is regarded met only when the assets is available for
immediate sale in its present condition, subject only to terms that are usual and customary for sales
of such assets, its sale is highly probable; and it will genuinely be sold, not abandoned. The Company
treats sale of the asset to be highly probable when:

• The appropriate level of management is committed to a plan to sell the asset,

• An active programme to locate a buyer and complete the plan has been initiated (if applicable),

• The asset is being actively marketed for sale at a price that is reasonable in relation to its current
fair value,

• The sale is expected to qualify for recognition as a completed sale within one year from the date of
classification, and

• Actions required to complete the plan indicate that it is unlikely that significant changes to the
plan will be made or that the plan will be withdrawn.

Non-current assets held for sale are measured at the lower of their carrying amount and the fair value
less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset,
excluding finance costs and income tax expense. Assets and liabilities classified as held for sale are
presented separately in the balance sheet.

Property, plant and equipment and intangible assets once classified as held for sale are not depreciated
or amortised.

As mandated by Ind AS 105, assets and liabilities has not been reclassified or re-presented for prior
period

3.14 Cash and cash equivalents:

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term
deposits with an original 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 presentation in the statement of cash flows, cash and cash equivalents include cash
in hand, demand deposits held with banks, other short-term highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities in the balance sheet.

3.15 Dividends:

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

3.16 Earnings per share (EPS):

Basic earnings per share are calculated by dividing the net profit/ (loss) for the year attributable to
equity shareholders by the weighted average number of equity shares outstanding during the year.
Diluted earning per share is computed using the weighted average number of equity and dilutive equity
equivalent shares outstanding during the year end, except where the results would be anti-dilutive.

3.17 Impairment of Non financials assets:

The carrying amounts of the Company’s non-financial assets, other than deferred tax assets, are reviewed
at the end of each reporting period to determine whether there is any indication of impairment. If any
such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of
an asset or cashgenerating unit (‘CGU’) is the greater of its value in use or its fair value less costs to sell.
In assessing value in use, the estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested
individually are grouped together into the smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of other assets or groups of assets
(‘CGU’). An impairment loss is recognised, if the carrying amount of an asset or its CGU exceeds its
estimated recoverable amount and is recognised in a statement of profit and loss. Impairment losses
recognised in prior periods are assessed at end of each reporting period for any indications that the
loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in
the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.

3.18 Exceptional assets:

When items of income and expense within a statement of profit and loss from ordinary activities
are of such size, nature or incidence that their disclosure is relevant to explain the performance of
the Company for the year, the nature and amount of such material items are disclosed separately as
exceptional items.

3.19 Statement of Cash flows-

The statement of cash flows have been prepared under indirect method, whereby profit or loss is
adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future
operating cash receipts or payments and items of income or expense associated with investing or
financing cash flows.

3.20 Borrowing costs:

Borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised
as part of cost of asset. All other borrowings costs are expensed in the period in which they occur.
Borrowing costs also includes exchange differences to the extent regarded as on adjustment to the
borrowings costs

*Number of Shares are given in absolute numbers

b) The company has only one class of equity shares having a par value of ? 2 per share. Each shareholder is
entitled to one vote per share. The company declares and pays dividends in Indian rupees. Dividend of ?
32.50 per equity share was proposed by the Board of Directors for the year ended March 31, 2025 (March
31, 2024: ? 9.92 per equity share). In the event of liquidation of the company, the holders of equity shares
will be entitled to receive any of the 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) Aggregate numbers of shares bought back during the period of five years immediately preceding
the Balance sheet date:

The shareholders approved the proposal of buy back of equity shares recommended by its Board
of Directors by way of e-voting/postal ballot, the results of which were declared on 24 May 2024. The
buyback was offered to all equity shareholders/ beneficial owners of the company (including the
Promoters, members of the Promoter Group of the company). During this buy back period, the company
purchased and extinguished 10,27,777 equity shares at a buy back price of ? 1,800 per equity share
comprising 3.46% of the pre buy back paid-up equity share capital of the company. The buyback resulted
in a cash outflow of ? 18,684.72 lakh (including transaction costs of ? 205.29 lakh towards buy back). The
company funded the buy back from its free reserves. In accordance with section 69 of the Companies
Act, 2013, the company has created ‘Capital redemption reserve’ of ? 20.56 lakh equal to the nominal
value of the shares bought back as an appropriation from retained earnings. The company has also paid
corresponding tax on buy-back of ' 4,306.49 lakh which is offset from the retained earnings

c) Trade Receivables, Contract Balances

For Trade Receivables, Refer note no. 13.

Further, the Company has no contracts where the period between the transfer of the promised goods or
services to the customer and payment terms by the customer exceeds one year. In light of above;

- it does not adjust any of the transaction prices for the time value of money, and

- there is no unbilled revenue As at March 31, 2025.

Further, the company doesn't have any contract liabilities As at March 31, 2025 and March 31, 2024

d) Unsatisfied performance obligations:

Information about the Company’s performance obligations are summarised below:

Sale of products: Performance obligation in respect of sale of goods is satisfied when control of the goods
is transferred to the customer, the delivery of the goods and payment is generally due as per the terms of
contract with customers.

Sales of services: The performance obligation in respect of maintenance services is satisfied over a period
of time and acceptance of the customer. In respect of these services, payment is generally due upon
completion of service based on time elapsed and acceptance of the customer.

The contribution payable to these schemes by the Company are at the rates specified in the rules of the
schemes.

b) Defined benefit plans

In accordance with Ind AS 19 "Employee benefits", an actuarial valuation on the basis of "Projected Unit
Credit Method" was carried out, through which the Company is able to determine the present value of
obligations. "Projected Unit Credit Method” recognizes each period of service as giving rise to additional
unit of employees benefit entitlement and measures each unit separately to built up the final obligation.

i) Gratuity scheme

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has
completed five years of service is entitled to specific benefit. The level of benefits provided depends
on the member’s length of service and salary at retirement age. The employee's gratuity fund scheme
managed by Life Insurance Corporation is a defined benefit funded plan. The present value of
obligation is determined based on actuarial valuation using the projected unit credit method, which
recognizes each period of services as giving rise to additional unit of employees benefit entitlement
and measures each unit separately to built up the final obligation.

c) Compensated absences

The Company operates compensated absences plan wherein every employee is entitled to the
benefit equivalent to 15 days leave salary for every completed year of service subject to maximum 10
accumulations every year with total accumulation of 45 leaves. The salary for calculation of earned leave
is last drawn salary. The same is payable during the service, early retirement, withdrawal of scheme,
resignation by employee and upon death of employee. Short term compensated absences are recognised
in the standalone statement of profit and loss on the basis of actual liability and long term compensated
absences are recognised on the basis of actuary valuation which is an unfunded defined benefit plan.

These plans typically expose the Company to actuarial risks such as: Investment risk, interest rate
risk, longevity risk and salary risk.

Investment Risk

The probability or likelihood of occurrence of losses relative to the expected return on any particular
investment.

Interest Risk

The plan expose the Company to the risk of fall in interest rates. A fall in interest rates will result in an
increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value
of the liability.

Longevity Risk

The present value of defined benefit plan liability is calculated by reference to the best estimate of the
mortality of plan participants both during and after employment. An increase in the life expectancy of the
plan participants will increase the plan's liability.

Salary Risk

The present value of defined benefit plan is calculated with the assumption of salary increase rate of
plan participants in future. Deviation in the rate of increase of salary in future for plan participants from
the rate of increase in salary used to determine the present value of obligation will have a bearing on the
plan's liability.

d) The following tables summarize the components of net benefit expense (Gratuity) recognised in the
Statement of profit and loss and the funded status and amounts recognised in the standalone balance
sheet

2. Major Customer: Revenue from 2 Customers (March 31, 2024: 2 Customers) of the company's manufacturing
& trading business are ? 210,929.21 lakh (March 31, 2024: ? 198,188.61 lakh) which is more than 10%
of the company's total revenue. No other single customer contributed 10% or more to the company's
revenue for both March 31, 2025 and March 31, 2024.

Note 43 : Fair value measurements

I Financial instruments

a) Financial instruments by category

Except Investment in bond and investment in mutual funds which are measured at fair value through
profit or loss, all other financial assets and liabilities viz. trade receivables, security deposits, cash
and cash equivalents, other bank balances, interest receivable, other receivables, trade payables,
employee related liabilities and advances, are measured at amortised cost.

b) Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial
instruments that are (a) recognised and measured at fair value and (b) measured at amortised
cost and for which fair values are disclosed in the standalone 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.
An explanation of each level follows underneath the table.

The following table shows the carrying amounts and fair values of financial assets and financials
liabilities, including their levels of in the fair value hierarchy:

c) The company has an established control framework with respect to the measurement of fair values.
The finance and accounts team that has overall responsibility for overseeing all significant fair value
measurements and reports directly to the board of directors. The team regularly reviews significant
unobservable inputs and valuation adjustments. If third party information, such as broker quotes or
pricing services, is used to measure fair values, then the team assesses the evidence obtained from the
third parties to support the conclusion that these valuations meet the requirements of Ind AS, including
the level in the fair value hierarchy in which the valuations should be classified. Significant valuation
issues are reported to the company’s board of directors.

d) Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the
valuation techniques as follows.

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in 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 asset or liability that are not based on observable market data (unobservable
inputs).

There have been no transfers in either direction for the year ended 31 March 2025 and 31 March 2024.

*Discount rate used in determining fair value

The interest rate used to discount estimated future cash flows, where applicable, are based on the
incremental borrowing rate of borrower which in case of financial liabilities is average market cost of
borrowings of the company and in case of financial asset is the average market rate of similar credit
rated instrument. The company maintains policies and procedures to value financial assets or financial
liabilities using the best and most relevant data available.

Note 44 : Capital Management

Equity share capital and other equity are considered for the purpose of company's capital management.

The company manages its capital so as to safeguard its ability to continue as a going concern and to optimise
returns to shareholders and benefits for other stakeholders. The capital structure of the company is based on
management's judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain
investor, creditors and market confidence.

The management and the Board of Directors monitor the return on capital as well as the level of dividends
to shareholders. The company may take appropriate steps in order to maintain, or if necessary adjust, its
capital structure. During the year, Company had paid ? 9.92 per equity share as final dividend pertaining to
year ended March 31, 2024. In addition to this, subsequent to year end the Directors have recommended the
payment of a final dividend of ? 32.50 per equity share (March 31, 2024: ? 9.92) per equity share. The proposed
dividend is subject to the approval of share holders in the ensuing annual general meeting.

The company's policy is to maintain a strong capital base so as to maintain confidence of investors, bankers,
customers and vendors and to sustain future development of the business. The management monitors the
return on capital and also monitors capital using a a gearing ratio, which is net debt divided by total capital
plus net debt. Net debt comprises of total lease liaibility less cash and cash equivalents.Equity includes equity
share capital and reserves that are managed as capital. The gearing ratio at the end of reporting periods were
as follows:

Note 45 : Financial Risk Management objectives and policies

The company’s principal financial liabilities comprises trade and other payables, employees related payables,
interest accrued, unpaid dividend, security deposit, capital creditors and others. The main purpose of these
financial liabilities is to finance the company’s operations and to provide guarantees to support its operations.

The company’s principal financial assets includes Investment in mutual funds, security deposits, trade
receivables, cash and cash equivalents, deposits with banks, interest accrued in deposits, receivables from
related and other parties and interest accrued thereon.

The company has exposure to the following risks arising from financial instruments:

- Credit risk

- Liquidity risk

- Market risk

The company's senior level management assess these risks and is supported by Treasury department that
advises on the appropriate financial risk governance framework.

A. Credit Risk

Credit risk is the risk that counterparty will default on its contractual obligations resulting in finance loss
to the company. Credit risk arise from Cash and cash equivalents, deposit with banks, trade receivables
and other financial assets measure at amortised cost. The company continuously monitors defaults of
customers and other counterparties and incorporate this information into its credit risk control.

(i) Trade Receivables

The company's exposure to credit risk is influenced mainly by the individual characteristics of each
customer. The credit risk is managed by the company based on credit approvals, establishing credit
limits and continuosly monitoring the credit worthiness of the customers, to whom the company
grants credit period in the normal course of business inlcuding taking credit insurance against export
receivables. The company uses expected credit loss model to assess the impairement loss in trade
receivables and makes an allowance of doubtful trade receivables using this model.

(ii) Other Financial Assets: The company maintains exposure in cash & cash equivalents, term deposits
with banks, investments, advances and security deposits etc. Credit risk from balances with banks
and investment in mutual funds is managed by the Company’s treasury department in accordance
with the company’s policy. Investments of surplus funds are made only with approved counterparties
and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the
Company’s Board of Directors on an annual basis, and may be updated throughout the year subject
to approval of the company’s finance committee. The company's maximum exposure to the credit
risk as at March 31, 2025 and March 31, 2024 is the carrying value of each class of financial assets.

B. Liquidity risk

Liquidity risk is the risk that the company may not be able to meet its present and future cash and
collateral obligations without incurring unacceptable losses.

The company’s objective is to, maintain optimum levels of liquidity to meet its cash and collateral
requirements. The company closely monitors its liquidity position and deploys a robust cash
management system.

C. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will
affect the company's income. The value of a financial instrument may change as a result of changes in the
interest rates, foreign currency exchange rates, equity prices and other market changes that affect market
risk sensitive instruments. The objective of market risk management is to manage and control market
risk exposures withing acceptables parameters, while optimising the return. The Board of Directors is
responsible for setting up the policies and procedures to manage risks of the company.

i) Foreign Currency risk

The company is exposed to foreign currency risk on certain transactions that are denominated in
a currency other than entity's funactional currency, hence exposure to exchange rate fluctuations
arises. The risk is that the functional currency value of cash flows will vary as a result of movements
in exchange rates. The following tables demonstrate the sensitivity (strengthening or weakening
of Indian Rupee) to a reasonably possible change in exchange rates, with all other variables held
constant.

Note 50:

Pursuant to transfer pricing legislations under the Income-tax Act, 1961, the company is required to use
specified methods for computing arm’s length price in relation to specified international transactions with its
associated enterprises. Further, the company is required to maintain prescribed information and documents
in relation to such transactions. The appropriate method to be adopted will depend on the nature of
transactions/ class of transactions, class of associated persons, functions performed and other factors, which
have been prescribed.The company is in the process of updating its transfer pricing documentation for the
current financial year. Based on the preliminary assessment, the management is of the view that the update
would not have a material impact on the tax expense recorded in these financial statements. Accordingly,
these financial statements do not include any adjustments for the transfer pricing implications, if any.

Note 51:

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 or entity, including foreign entity

(“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary
shall lend or invest in party identified by or on behalf of the company (Ultimate Beneficiaries).

The company has not received any fund from any party (Funding Party) with the understanding that the
company shall whether, directly or indirectly lend or invest in other persons or entity identified by or on
behalf of the company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of
the Ultimate Beneficiaries.

Note 52: Disclosure of transactions with struck off companies

The company did not have any material transactions with companies struck off under Section 248 of the
Companies Act, 2013 or section 560 of Companies Act, 1956 during the financial year.

Note 53: Assets classified as held for sale

(a) The company has entered into an agreement dated February 22, 2025 for sale / transfer of lease hold
rights along with building pertaining to its Haridwar unit. The transaction is expected to be completed by
end of FY 2025-26. The company has also received non-refundable advance of Rs. 700 lakhs during the
year pursuant to the transaction. (Refer note-21)

(c) Registration of charges or satisfaction with Registrar of Companies

(d) Relating to borrowed funds:

i) Wilful defaulter

ii) Utilisation of borrowed funds & share premium

iii) Borrowings obtained on the basis of security of current assets

iv) Discrepancy in utilisation of borrowings

Note 55: Audit Trail

The company is maintaining its books of account in electronic mode and the back-up of books of account has
been kept on a daily basis from the applicability date of the Companies (Accounts) Rules, 2014, as amended
i.e. August 05, 2022 onwards. The company has used an accounting software for maintaining its books of
account for the financial year ended March 31, 2025 which has a feature of recording audit trail (edit log)
facility and the same has operated throughout the year for all relevant transactions recorded in the software.
Further, there is no known instance of audit trail feature being tempered with in respect of the accounting
software used by the company and the audit trail has been preserved by the company as per the statutory
requirements for record retention.

Note 56:

Figures have been rounded of to the nearest Lakhs upto two decimal palaces except otherwise stated.

For & on behalf of Board of Directors of
Sharda Motor Industries Limited

(Kishan N Parikh) (Ajay Relan) (Aashim Relan)

Chairperson Managing Director Chief Executive Officer

DIN 00453209 DIN 00257584

Date : May 24, 2025 (Ghan Shyam Dass) (Nitin Vishnoi)

Place: New Delhi Chief Financial Officer Executive Director & Company Secretary

M.No. F3632