2.14 Provisions and Contingencies:

Provisions involving a substantial degree of estimation in measurement are recognized when there is a
present obligation as a result of past events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the accounts by way of a note. Contingent assets
are neither recognized nor disclosed in the financial statements contingencies are recorded when it is
probable that a liability will be incurred and the amounts can reasonably be estimated.

Differences between the actual results and estimates are recognized in the year in which the results are
known materialized.

2.15 Financial Instruments

A financial instrument is a 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 recognized when the
Company becomes a party to the contractual provisions of the relevant instrument and are initially measured
at fair value.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to
or deducted from the fair value of the financial assets or financial liabilities at fair value through profit or loss
are recognized immediately in profit or loss.

2.16 Financial Asset

i) Financial assets comprise of investments in Equity, Trade Receivables, Cash and Cash Equivalents and
Other Financial Assets.

ii) Depending on the business model (i.e) nature of transactions for managing those financial assets and its
contractual cash flow characteristics, the financial assets are initially measured at fair value and
subsequently measured and classified at:

a) Amortized cost; or

b) Fair value through Other Comprehensive Income (FVTOCI); or

c) Fair value through Profit or Loss (FVTPL)

d) Amortized cost represents carrying amount on initial recognition at fair value plus or minus transaction

cost.

iv) The company derecognises a financial asset when the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of
the asset to another party. On de-recognition of a financial asset or part thereof, the difference between
the carrying amount measured at the date of recognition and the consideration received including any
new asset obtained less any new liability assumed shall be recognized in the statement of profit and Loss.

v) The company assesses at each balance sheet date whether the financial asset or group of financial assets

is impaired. IND AS 109 requires expected credit losses to be measured through a loss allowance. The
company recognizes lifetime expected losses for trade receivables that do not constitute a financing
transaction. For all other financial assets, expected credit losses are measured at an amount equal to 12
month expected credit losses or at an amount equal to lifetime expected losses, if the credit risk on the
financial asset has increased significantly since initial recognition.

2.17 Financial Liability

i) Financial liabilities comprise of Borrowings from Banks, Trade payables, Derivative financial instruments,
financial guarantee obligation and other financial liabilities.

iii) Financial liabilities are derecognised when and only when it is extinguished (i.e.) when the
obligation specified in the contract is discharged or cancelled or expired.

iv) Upon de-recognition of its financial liabilities or part thereof, the difference between the carrying amount
of a financial liability that has been extinguished or transferred to another party and the consideration
paid including any non-cash assets transferred or liabilities assumed is recognized in the Statement of
Profit and Loss.

2.18 Fair value measurement

i) Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.

ii) The fair value of an asset or a liability is measured / disclosed using the assumptions that the market

participants would use when pricing the asset or liability, assuming that the market participants act in the
economic best interest.

iii) All assets and liabilities for which fair value is measured are disclosed in the financial statements are
categorised within fair value hierarchy based on the lowest level input that is significant to the fair value
measurement as a whole. The fair value hierarchy is described as below:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2: Valuation techniques for which the lowest level inputs that are significant to the fair value
measurement is directly or indirectly observable.

Level 3: Valuation techniques for which the lowest level inputs that are significant to the fair value
measurement is unobservable.

iv) For assets and liabilities that are recognised in the Balance sheet on a recurring basis, the company
determines whether transfers have occurred between levels in the hierarchy by reassessing
categorisation at the end of each reporting period (i.e) based on the lowest level input that is significant
to the fair value measurement as a whole.

v) For the purpose of fair value disclosures, the company has determined the classes of assets and liabilities
based on the nature, characteristics and risks of the assets or liabilities and the level of the fair value
hierarchy as explained above.

vi) The basis for fair value determination for measurement and / or disclosure purposes is detailed below:

a. Investments in Equity

The fair value is determined by reference to their quoted prices at the reporting date. In the absence of
the quoted price, the fair value of the equity is measured using generally accepted valuation techniques.

b. Forward exchange contracts

The fair value of forward exchange contracts is based on the quoted price if available; otherwise, it is
estimated by discounting the difference between contractual forward price and current forward price for
the residual maturity of the contract using government bond rates.

c. Non-derivative financial liabilities

The fair value of non-derivative financial liabilities viz, borrowings are determined for disclosure purposes
calculated based on the present value of future principal and interest cash flows, discounted at the market
rate of interest at the reporting date.

Notes:

(a) Movement of shares

Authorised Capital, Issued, Subscribed and fully paid up capital:

There is no movement of shares outstanding at the beginning and at the end of the reporting period

(b) Terms / rights attached to equity shares

The company has only one class of equity shares having a par value of Rs 10/- per share. Each holder of
equity share is entitled to one vote per share

Note No 23: Additional Information to the Financial Statements

(i) Contingent liability not provided for:

- Counter Guarantees furnished to the bank Rs.5,99,825/- (Previous year Rs.5,99,825 /-)

- Towards outstanding Letter of Credit Nil (Previous year Nil) on account of import of raw materials.

(ii) Claims against the Company not acknowledged as Debt Rs. Nil. Estimated amount of contracts remaining
to be executed on capital account and not provided for Rs. Nil. Contingent liabilities not provided for: Nil

(iii) Employee Benefits:

a) Defined Contribution plan:

Contribution to defined contribution plan recognized as expenses for the year 2023-24 accordingly an
amount of Rs.1,99,106/- (previous year Rs.1,89,014/-) is debited towards contribution to PF & ESI.

b) Defined Benefit plan:

As per the explanations given by the management of the company except for gratuity there are no other
plans for the employees of the company. The present value of gratuity obligation is determined during the
year based on actuarial valuation using projected unit credit method. Accordingly, provision of Rs. NIL has
been made.

(iv) Company has sought confirmation of balance letters to/from sundry debtors & advance parties / sundry
creditors. In the absence of negation, the balances appearing the books are taken as confirmed.

(v) CIF Value of Imports: Nil (Previous year: Rs. Nil)

(vi) Earnings in Foreign Currency Rs. Nil (Previous year Rs. Nil)

(vii) Expenditure in Foreign Currency Rs. Nil (Previous year Nil)

(viii) The Company has opted for payment of income-tax under Section 115BAA of the Income-tax Act, 1961,
which provides for taxation at lower rates upon foregoing certain deductions. The tax for the current year
has been calculated accordingly.

(ix) RELATED PARTY DISCLOSURES

Details of related parties including summary of transactions entered into by the Branch during the year

ended March 31, 2025 are summarized below:

(x) The Company do not have any parent company and accordingly, compliance with the number of layers
prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of
Layers) Rules, 2017 is not applicable for the year under consideration.

(xi) Financial Ratios: As per the Attachment

(xii) Previous year figures:

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

As per books of accounts produced

For S.K GULECHA & ASSOCIATES For Chennai Ferrous Industries Limited

Chartered Accountants
FRN 013340S

R. Natarajan N. Ramakrishnan

Chairman & Managing Director Director

SANDEEP KUMAR GULECHA
(MNR: 226263)

PLACE: Chennai

Date: 28.05.2025 K. Karthikeyan M. Balamurugan

UDIN No: 25226263BMHXGJ8917 Chief Financial Officer Company Secretary