Terms/rights attached to Equity Share:

The Company has only one class of issued Equity Shares having a par value of Rs. 5/- per share. Each Shareholder of Equity Shares is entitled to one vote per share and each equity share carries an equal right of dividend. The dividend (if any) proposed by the Board of Directors and approved by the shareholders in the Annual General Meeting, except in case of Interim Dividend, is paid in Indian rupees. 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.

Nature and purpose of Other Reserves

i) Securities Premium

Securities Premium represents the premium collected on issue of shares to shareholders at price more than face value. The reserve is utilized in accordance with the provisions of the Companies Act.

ii) Capital Reserve

Reserve is primarily created on amalgamation as per statutory requirement. This reserve is utilized in accordance with the specific provisions of the Companies Act 2013.

iii) Investment Revaluation Reserve

Reserve is primarily created on account of Income Tax Act. This reserve is utilized in accordance with the specific provisions of the Companies Act.

iv) Capital Revaluation Reserve

Reserve is primarily created on revaluation of its assets. Reserve is utilized in accordance with the specific provisions of the Companies Act 2013.

v) General Reserve

General Reserve is created out of profits earned by the Company by way of transfer from surplus in the statement of profit and loss. The Company can use this reserve for payment of dividend and issue of fully paid-up shares. As General Reserve is created by transfer of one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be subsequently reclassified to statement of profit and loss.

Nature of Security

The borrowings from the Punjab National Bank restructured on 09-09-2021 and part of the working capital facilities have been converted into working capital term loan.

Working Capital Term Loan and FITL have been secured by mortgage of the immoveable property at Ludhiana and leasehold rights of the Company land at Jamshedpur and charge by hypothecation of all fixed assets of the company and personal guarantees by the four directors of the company. GECL loan shall rank second charge with the existing credit facilities in terms of cash flows (including repayments) and security, with charge on the assets financed under the Scheme.

WCTL Rs 7.25 crore (Bal. Rs.4.75 crore) shall be repaid in 60 equal monthly installment starting July,2023.

WCTL Rs 3.50 crore (Bal. Rs.3.11 crore) shall be repaid in 84 ballooning monthly installments starting July 2023.

FITL Rs 2.15 crore (Bal. Rs.0.36 crore) and shall be repaid in 24 equal monthly installments starting from July 2023.

GECL Loan of Rs 5.45 crore (Bal. Rs 0.61 crore) shall be repaid in 36 installments starting from Aug 22.

GECL Loan of Rs.2.72 crore (Bal. Rs.1.75 crore) shall be repaid in 36 installment starting March 2024.

Vehicle Loan from bank is secured by hypothecation of vehicles financed from bank and repayable in 60 equal monthly installments starting April, 2024.

Cash credit from bank is secured against hypothecation of stocks of semi-finished and finished goods, raw materials, work-in-progress, consumable stores and spares, book debts etc. of the company and mortgage of the immoveable property at G S Estate, G T Road, Ludhiana and leasehold rights of the Company land at Jamshedpur and charge by hypothecation of all fixed assets of the company. The facility is also guaranteed by the four directors of the company. Cash credit is repayable on demand.

Facility from National Small Industries Corporation Ltd. under Raw Material Assistance Scheme secured by Bank guarantee from Punjab National Bank.

Ind AS 115 ‘Revenue from Contracts with customers' outlines a single comprehensive control based model for revenue recognition The Company had not applied any significant judgements in applying the revenue recognition criteria. The disclosure requirements as per IndAs 115 that the company's revenue is only from sale of Auto Components

Note-36—GRATUITY-DEFINED BENEFIT PLANS

As per Ind AS 19 “Employee Benefits”, the disclosures of employee benefits as defined in the Indian Accounting Standard are:

- Defined Contribution Plan: The Company's Contribution to provident fund and pension fund is considered as Defined Contribution Plan and is recognized as expenses for the year.

- Defined Benefit Plan: The Company operates a Defined Benefit Gratuity plan with approved Gratuity Fund and contributions are made to a separately administered approved Gratuity Fund. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The fund is subject to risk such as asset volatility, changes in assets yields, and assets liability mismatch risk, risk due to adverse salary growth/variability in morality and withdrawals rate, risk due to significant changes in discounting rate during the inter valuation period, risk on account of employees resignations/retirement from the company, resulting into strain on the cash flow, risk related to changes and fluctuations in the financial markets and assumptions depend on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yield as at valuation date, risk in the increase in the plan liabilities or reduction in plan assets due to changes in legislation or due to overall liquidity position of the company. The obligation for leave encashment is recognized as expense for the year.

Gratuity: The benefits are governed by the Payment of Gratuity Act, 1972. The key features are: -Benefits offered : 15 days' terminal salary for each completed years of service

Salary definition : Last drawn qualifying Salary

Benefit ceiling : Rs. 20.00 lakhs (Rs Twenty Lakh)

Vesting conditions : 5 years of continuous service (Not applicable in case of death / disability)

Benefit eligibility : Upon death or disability or retirement

Retirement age : 58 years

The leave encashment benefits are governed by the Company's leave policy.

The above sensitivity analysis is based on a change in assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of defined benefit obligation calculated with the Projected Unit Credit Method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet. The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous periods.

The Company’s appeal with ITAT Chandigarh was allowed on 08-11-2024 for the A.Y 2008-09 and income tax liability is nil. The company has filed appeal for waiver of penalty under section 271(1)(c) for Ay 2012-13 in view of the appeal already allowed by Hon’ble ITAT order dated 21-05-2024 and expect to be decided in our favour.

*The company has received notices as Guarantor u/s 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI Act) and Possession notice for taking symbolic possession of mortgaged immovable properties under Rule 8(1) of the said Act as the accounts of the borrowing group companies have become NPAs. The borrowing group companies and its directors are taking up with the lenders for settlement of the debt and have sufficient assets/resources to settle the dues. Our company will also take legal remedial measures to safe guard its interest.

*PNB has filed OA in Debts Recovery Tribunal-III, Chandigarh for recovery of the debts against G.S. Consumer Products Limited (the borrowing Company)for Rs 87.15 lakh and issued notice to the company as guarantor. The borrowing company and its directors are taking up with PNB for settlement of the debts. Our company has also taken legal remedial measures to safe guard its interest.

Note-38-CAPITAL AND OTHER COMMITMENTS

Estimated value of contracts remaining to be executed on Capital Accounts (net of advances), not provided for Rs.NIL (Previous year Rs. NIL).

Guarantees given by Company’s Bankers on behalf of the Company against Letters of Credits were Rs.532.48 Lakhs (previous year Rs.487.49 Lakhs) are secured by extension of pari-passu charges by way of hypothecation of stock-in trade, raw material etc and margin of Rs81.45 lacs as FDRs for 15% margin against sanctioned LCs and Guarantees Limits of Rs 543 lakhs from PNB and NSIC. Material received under LCs and Guarantees has been included in Trade Payables (Note No 22)

Note-39-Other Borrowing cost Note No.31 under the heading “Finance Cost” includes Bank Charges/Commission, Interest to others & hire charges.

Note-40-The Company is primarily engaged in the business of “Auto Components” for commercial vehicles and Agricultural Equipment, which are governed by same set of risks and returns and hence there is only one segment.

Note-41- In cases where letters of confirmation have been received from parties, book balances have been generally reconciled and adjusted, if required. In other cases, balance in accounts of sundry debtors, sundry creditors and advances or deposits have been taken as per books of accounts.

Note-42- No amount is considered as doubtful from the total debtors.

Note-43- No amount is due, as on balance sheet date, from directors or other officers or any of them either severally or jointly with any other persons, nor any debts due by firms or private companies in the form of loans and advances in the nature of loans given to subsidiary and associates and firms/companies in which any of the directors are interested except at Note No.44.

Sales to and purchases from related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2025, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31,2024: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Note - 45: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIESOverview:

The Company's Risk Management framework encompasses practices relating to the identification, analysis, evaluation, treatment, mitigation and monitoring of the strategic, external and operational controls risks. It seeks to minimize the adverse impact of these risks, thus enabling the Company to leverage market opportunities effectively and enhance its long-term competitive advantage. The focus of risk management is to assess risks and deploy mitigation measures.

The Company's activities expose it to variety of financial risks namely market risk, credit risk and liquidity risk. The Company's overall risk management procedures are to minimize the potential adverse effects of financial market on the Company's performance. The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The Board provides principles for overall risk management, as well as policies covering specific risk areas.

(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) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

Exposure to credit risk

The gross carrying amount of financial assets, net of any impairment losses recognized represents the maximum credit exposure. The maximum exposure to credit risk as at March 31 2025 & March 31,2024 was as follows: -

Financial assets that are past due but not impaired

Long term loan, short term loan, Trade Receivables, Cash and cash equivalents and other assets are neither past due nor impaired.

(i) Trade Receivables:-

Customer's credit risk is managed by each business unit subject to the Company's established policy, procedures and control relating to customer credit risk management. The Company extends credits to customers in normal course of the business. The Company considers the factors such as credit track record in the market of each customer and past dealings for extension of credit to the customers. Credit quality of a customer is assessed based on individual credit limits and risk of potential default based on defined risk parameters. The Company monitors the payment track record of each customer and outstanding customer receivables are regularly monitored. The Company also takes advances and security deposits from customers which mitigate the credit risk to an extent.

An impairment analysis is performed at each reporting date on an individual basis for major clients. The calculation is based on losses as per historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in the respective notes. The average credit period taken on sales of goods is 45 to 90 days. Generally, no interest has been charged on the receivables. The Company does not hold any collateral or other credit enhancements over any of its trade receivables nor does it have a legal right of offset against any amounts owed by the Company to the counterparty.

(ii) Financial Instruments and bank deposits: -

The Company considers factors such as track record, size of institution, market reputation and service standard to select the banks with which deposits are maintained. The Company only maintain deposits with banks to cover the margin for non-fund limits with the bank as security. Credit risk on cash and cash equivalents is limited as these are generally held or invested in deposits with banks and financial institutions with good credit ratings. The Company's maximum exposure to credit risk for bank balances and deposits as at March 31 ,2025 and March 31 ,2024 is the carrying amounts as disclosed on the respective Notes.

(B) Liquidity Risk:-

The Company manages liquidity risk by maintaining adequate reserves, banking facilities/borrowings and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company's objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital and operating cash flows to meet its needs for funds.

The table below provides undiscounted cash flows towards non-derivative financial assets/ (liabilities) into relevant maturity based on the remaining period at the Balance Sheet date to the contractual maturity date.

Market Risk:

Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rates and other market changes that affect market risk sensitive instruments. The objective of the market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

(I) Interest Rate Risk:

The Company's exposure to the risk of changes in market interest rates relates primarily to long term and working capital debts having floating rate of interest. Its objective in managing its interest rate risk is to ensure that it always maintains sufficient headroom to cover interest payment from anticipated cash flows which are regularly reviewed by the Board. However, the risk is receding due to major repayment of its long term liability and declining interest rates by lenders on account of reduction in Repo Rates in RBI Monetary Policy and softening of inflation.

The Company's long term borrowings from banks and financial institutions are Rs. 1083.53 Lakhs as at March 31,2025 Rs. 1647.21 Lakhs as at March 31,2024.

Other non-current financial liabilities are non-interest bearing where the risk of change in the interest rates does not arise. Interest Rate sensitivity:

The sensitivity analysis below have been determined based on the exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating variable rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 100 basis point increase or decrease is used for the purpose of sensitivity analysis.

If interest rates had been 100 basis points higher/lower and all other variables held constant, the Company's profit for the year ended 31 March, 2025 would decrease/increase by Rs.25.90lakhs (Previous years Rs 31.80 lakhs). This is mainly attributable to the Company's exposure to interest rate on its variable rate borrowings. The amounts included above for variable interest rate instruments for both non-derivative financial liabilities is subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period

(ii) Commodity Risk:

The Company is exposed to the movement in the price of key raw materials and other consumables, which are quite volatile in the domestic and international markets. The Company has in place policies to manage exposure to fluctuation in prices of key raw materials used in operations. The Company enters into contracts for procurement of raw materials and other materials. Most of the transactions are short term fixed price contracts. The company mitigates this risk while passing on the increase in the prices of raw material to customers from time to time.

(iii) Foreign Currency Risk:

Foreign currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not the company's functional currency. Foreign exchange risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign currency rates.

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates and arises where transactions are done in foreign currencies. It arises mainly where receivables and payables exist due to transactions entered in foreign currencies. The Company does not enter into financial instrument transactions for trading or speculative purpose. The Company transacts business primarily in Indian Rupees, USD and Euro and the exports of the company are not significant in the total turnover of the company. The company has foreign currency current receivables of lower durations and is therefore, exposed to foreign exchange risk exist to that extent only. The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

This is mainly attributable to the exposure outstanding on foreign currency receivables in the Company at the end of each reporting period.

Capital Management

The Company's objective for capital management is to manage its capital to be able to continue as a going concern and to maximize shareholders value, safeguarding business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating Plans and Other strategic investment plans. The Funding requirements are met through short term loans, long term loans and operating cash flow generated. No Changes were made in the objectives, policies or processes during the years ended March 31, 2025 and March 31, 2024. Capital represents equity attributable to equity holders of the Company.

The capital structure consists of debt which includes the borrowings, cash and cash equivalents and current investments and equity attributable to equity holders of the Company, comprising issued share capital, reserves and retained earnings. For the purpose of calculating gearing ratio, debt is defined as non-current and current. Equity includes all capital and reserves of the Company attributable to equity holders of the Company. The Company is not subject to externally imposed capital requirements. The Board reviews the capital structure and cost of capital on an annual basis but has not set specific targets for gearing ratios. The risks associated with each class of capital are also considered as part of the risk reviews presented to the audit committee and the Board of Directors. Due to continuous improvement in the bottom line of the company in the last 2 years and repayment of its long term debts, the risk is receding. The interest rates started declining by lenders in the current year and in next year on account of RBI monetary policy and stance on inflation decrease. The Board of Directors of the Company is taking all the necessary steps in to oversee the liquidity tightness with the overall improvement in the business of the Company.

The management assessed that fair value of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Company determines fair values of financial assets or liabilities by discounting the contractual cash inflows / outflows using prevailing interest rates of financial instruments with similar terms. The initial measurement of financial assets and financial liabilities is at fair value.

46.1 Fair Value Hierarchy

All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair value measurements as a whole. Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Valuation techniques for which the lowest level inputs that has a significant effect on the fair value measurement are observable, either directly or indirectly.

Level 3: Valuation techniques for which the lowest level input which has a significant effect on fair value measurement is not based on observable market data.

Investment as on 31-03-2025Rs NIL (Previous Year Nil)

47. Figures in brackets indicate deductions except otherwise stated.

48. Disclosure under Section 186(4) of Companies Act, 2013

During the year, the Company has not given any loans or guarantees or made investments in contravention of the provisions of the Section 186 of the Companies Act, 2013.

49. Leases:

Operating leases: Company as lessee

The Company had taken land at Jamshedpur on operating lease. The tenure of such lease is 30 years at the time of agreement. Lease rental are charged to the statement of profit and loss for the year. There is no sub-lease. The lease is renewable on mutual agreement between both the parties. At the expiry of the lease term, the company has an option to terminate the agreement or extend the term by giving the notice in writing.

Company as lessee

(a) Interest on Lease Liability of Rs. 1.30 Lakh (Previous year Rs 1.35 lakh) on the leased land has been shown in Note no. 31 ‘Finance Cost’ in the statement of Profit and Loss.

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when these fall due.

Company as lessor

The company has entered into operating leases for its land and building that are renewable on a periodic basis. The lease rentals incomes booked in the statement of Profit and Loss for the year is Rs. Nil Lakhs (Previous year was Rs. Nil Lakhs).

50. The company's borrowings from the banks has been restructured and sanctioned on 09-09-2021. Part of the working capital has been converted into WCTL. The company existing long term loans under GECL have also been restructured as per RBI Guidelines. Please refer to note no. 17 & 21

51. The Company has used 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.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1,2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is applicable for the financial year.

52. Intangible Assets comprises of Acquisition of computer Software &Video Advertisement have been amortized @ 25% on Straight line basis, as the useful life thereof has been estimated to be not more than four years.

54. The Company has in-house Research & Development Cell which continuously working on development of new products as well working for improvement in processes to reduce cost and increase efficiency. The following expenditure has been incurred during the year, included under the relevant heads in the profit and loss account.

58. Rental income includes Rs. 0.69 lakhs (previous year Rs 1.29 lakhs) from group companies as per Note No.44 above.

59. The company has aligned grouping of other non-current liabilities and other financial liabilities based on their repayment period.

60. Previous period figures have been regrouped, re-classified and re-arranged wherever considered necessary to confirm to the current year's classification.