2.19 Provision and Contingent Liabilities

Provisions are recognized for liabilities that can be
measured only by using substantial degree of estimation,
if

a. the company has a present obligation as a result of
past event,

b. a probable outflow of resources is expected to
settle the obligation; and

c. the amount of the obligation can be reliably
estimated.

Contingent liability is disclosed in case of

i. a present obligation arising from past events, when
it is not probable that an outflow of resources will be
required to settle the obligation;

ii. a present obligation arising from past events, when no
reliable estimate is possible; and

iii. a possible obligation arising from past events where the
probability of outflow of resources is not remote.

Provisions and contingent liabilities are reviewed at each
Balance Sheet date.

2.20 Cash Flow Statement

Standalone Cash flows are reported using the indirect
method, whereby Profit before tax is adjusted for the
effects of transactions of a non-cash nature and any
deferrals or accruals of past or future cash receipts
or payments. The cash flows from regular revenue
generating, financing and investing activities of the
company are segregated.

2.21 Segment reporting

The Company’s business activity primarily falls within a
single segment i.e. Process and Product Engineering.
The geographical segments considered are “within
India” and “outside India”. The analysis of geographical
segments is based on geographical location of the
customers.

2.22 Recent accounting pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. For the year ended March
31, 2025, MCA has notified Ind AS - 117 Insurance
Contracts and amendments to Ind AS 116 - Leases,
relating to sale and leaseback transactions, applicable
to the Company w.e.f. April 1, 2024. The Company
has reviewed the new pronouncements and based on
its evaluation has determined that it does not have any
significant impact in its financial statements.

15.2 The Company has only one class of shares referred to as Equity shares having par value of ' 2/-. The holder of
Equity Share is entitled to one vote per share.

15.3 In the event of liquidation of the Company, the residual interest in the company’s net assets shall be distributed to
the shareholders in the proportion to the equity shares held.

15.4 (a) ‘During the year, the parent company has paid a final dividend of '1.00 per share for FY 23-24 and an

interim dividend of '1.20 per share for FY 24-25 which resulted in a cash outflow of '1,267.29 lakhs
(previous year ' 806.46 lakhs).

(b) ‘The Board of Directors, in its meeting held on 29th May, 2025 has proposed a final dividend of '1.50
per equity share for the financial year ended 31st March 2025. The proposal is subject to the approval of
shareholders at the Annual General Meeting and if approved would result in cash outflow of approximately
' 864.06 lakhs.

Foreign Currency Loan of ' 576.58 Lakhs (Previous Year ' 1066.07 Lakhs) from Indian Bank are secured by First
pari-passu charge with DBS Bank by way of Hypothecation of entire present and future current assets and movable
fixed assets (other than those exclusively charged to term lender) and First and exclusive charge on company’s
Factory Leasehold Land and Building situated at 16-18, New Electronics Complex, Chambaghat, Solan, H.P

Foreign Currency Loan of ' 938.90 Lakhs (Previous Year ' 236.02 Lakhs ) and Rupee Loan of ' Nil (Previous Year
' 291.76) from DBS Bank is secured by First pari-passu charge with Indian Bank on entire present and future current
assets and movable fixed assets (other than those exclusively charged to term lender) and First and exclusive charge
by way of Equitable Mortgage of factory land and building situated at Kather, Chambaghat, Solan, H.P

41. Leases

The Company’s significant operating lease arrangements are in respect of premises (residential, offices, godown
etc.). These leasing arrangements, which are cancellable, range from 11 months to 9 years (11 months during
previous year) generally and are usually renewable by mutual agreeable terms. The aggregate lease rentals payable
are charged as expenses. Rental payments under such leases amounting to ' 153.01 lakhs (Previous Year ' 137.14
lakhs) have been included under “Rent, Rates and Taxes” expense in note 34.

42. The Company’s activities involve predominantly one operating segment i.e. Process and product Engineering,
which are considered to be within a single operating segment since these are subject to similar risks and returns.
Accordingly, Process and Product Engineering comprise the primary basis of segmental information as set out in
these financial statements, which therefore reflect the information required by Ind AS 108- Segment Reporting has
been disclosed as below.

44.2 Financial Risk Management

The Company’s activities expose it to market risk, liquidity risk, Foreign Currency Risk and credit risk. The Company’s
primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects
on its financial performance. Risk management policies and systems are reviewed regularly to reflect changes in
the market conditions and the Company’s activities to provide reliable information to the Management and the
Board to evaluate the adequacy of the risk management framework in relation to the risk faced by the company. The
Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk
management framework.

44.3 Credit risk

Credit risk is the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
company. Credit risk encompasses both, direct risk of default and the risk of deterioration of creditworthiness.

a) Credit risk management

The Company assesses and manages credit risk based on internal credit rating system, continuously monitoring
defaults of customers and other counterparties, identified either individually or by the company, and incorporates
this information into its credit risk controls. The company has a policy of only dealing with credit worthy parties
and obtain sufficient collateral where appropriate as a means of mitigating the risk of financial loss from defaults.

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated
banks and diversifying bank deposits and accounts in different banks across the country.

Trade receivables

The Company closely monitors the credit-worthiness of the debtors through internal systems that are configured
to define credit limits of customers, thereby, limiting the credit risk to pre-calculated amounts. The Company
assesses increase in credit risk on an ongoing basis for amounts receivable that become past due.

Other financial assets measured at amortised cost

Other financial assets measured at amortized cost includes loans and advances to employees, security deposits
and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of
such amounts continuously, while at the same time internal control system in place ensure the amounts are
within defined limits.

b) Expected credit losses

The Company provides for expected credit losses based on the following:

The company recognizes lifetime expected credit losses on trade receivables using a simplified approach,
wherein Company has defined percentage of provision by ‘analysing historical trend of default based on the
criteria defined above. And such provision percentage determined have been ‘considered to recognise life time
expected credit losses on trade receivables.

44.4 Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of
funding through an adequate amount of committed credit facilities to meet obligations when due.
Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the
basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.
In addition, the Company’s liquidity management measures involves projecting cash flows in major currencies and
considering the level of liquid assets necessary to meet these obligations.

Maturities of financial liabilities

The tables below analyses the Company’s financial liabilities into relevant maturity based on their contractual
maturities for all non-derivative financial liabilities.

Outstanding amount of Letters of Credit ,”LCs”, established by Bank in favour of Suppliers , as on balance Sheet
date, aggregate to '1,267.43 lakhs (Previous year ' 1,191 lakhs) towards import of materials. As and when materials
relating thereto are received, the payment against the same shall be made resulting into maturing of respective
LCs.

44.5 Market Risk

The company is exposed in the ordinary course of its business to risks related to changes in foreign currency
exchange rates, commodity prices and interest rates. The company seeks to minimize the effects of these risks by
minutely observing the variation and fluctuation on regular basis. Compliance of exposure volume is reviewed by the
management on real time basis and taking corrective measures as and when required.

44.6 Foreign currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect
to the US Dollar and Euro. The exchange rate between the Indian rupees and foreign currencies has changed
substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company’s
operations are adversely affected as the rupee appreciates/depreciates against the currencies. Foreign exchange
risk arises from recognised assets and liabilities denominated in a currency that is not the functional currency of the
Company.

44.7 Interest rate risk

i) Liabilities

Interest rate risk is the risk that the fair value or future cash flows of a financial Assets/Liabilities because of
changes in market interest rates. The company is exposed to interest rate risk because funds are borrowed at
both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes
in variable interest rate. The borrowings of the company are principally denominated in rupees, US dollars and
Euros with a mix of fixed and floating rates of interest. The Company has exposure to interest rate risk, arising
principally on changes in marginal cost of fund based Repo rates and SOFR Rates.

44.8 Commodity Price Risk

The Company has managed the Commodity Price Risk by having back to back contracts with customers.

45. Capital Management

The Company’s capital management objectives are;

- to maintain healthy Credit rating, Capital Ratios and Leverage.

- to maximise return to the Shareholders.

Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure
while avoiding excessive leverage. This takes into account the subordination levels of the Company’s various classes
of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets. The Principal source of funding of the company has
been, and is expected to continue to be, cash generated from its operations supplemented by funding from bank
borrowings.

46. Additional regulatory information not disclosed elsewhere in the Standalone
Financial Statements

(a) The Company does not have any Benami property, further no proceeding has been initiated or pending against
the company for holding any Benami Property.

(b) The Title deeds of all Immovable Properties (other than the properties where the Company is the lessee and the
lease agreements are duly executed in favour of the company) are held in the name of the Company.

(c) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.

(d) The Company has not traded or invested in Crypto Currency or Virtual Currency during the respective financial
year period.

(e) 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(s) or entity(ies), including foreign entities
(“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(s) (Funding Party) with the understanding that the Company shall
whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company
(“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(f) The Company has not revalued its Property, Plant and Equipment, Investment Property & Intangible Assets.

(g) The company does not have any transactions 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).

(h) The company has not been declared willful defaulter by any bank or financial Institution or other lender.

(i) No Scheme of Arrangements which have been approved by the Competent Authority in terms of Sections 230
to 237 of the Act in relation to the Company.

(j) The Company has complied with the number of layers prescribed under of section 2(87) of the Act read with
the companies (Restriction on number of layers) Rules, 2017.

(k) The Company has not granted 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,
that are:

(a) repayable on demand or

(b) without specifying any terms or period of repayment.”

(l) The Company has duly filed monthly statements with the banks for the sanctioned working capital facilities
against security of current assets, which are in agreement with the books of account

47. Previous year’s figures have been regrouped/ reclassified wherever necessary, the impact of such reclassification/

regrouping is not material to the financial results.