1.12.Provisions for contingencies

A provision is recognised when the company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. Contingent liabilities are not recognigsed but are disclosed in the financial statements. Contingent assets are neither recognised nor disclosed in the financial statements.

1.13.Segment Reporting

The Company is engaged in the business of manufacturing and selling of LRPC & Un Gi Wire and Cable & Conductor. Therefore, the operation of the company is carried out in two segment. The accounting policies adopted for segment reporting are in line with the accounting policies of the company. segment revenue, segment result, segment assets and segment liabilities have been identified to segment on their relationship to the operating activities of the segments.

1.14.Cash Flow Statement

Cash Flow Statement using indirect method as set out in Accounting Standard (AS) - 3 "Cash Flow Statement", whereby profit/(loss) before extraordinary items and tax is adjusted for the effect of transactions of non-cash nature and any deferral or accurals of past or future cash receipts or payment. The cash flow from operating, investing and financial activities of the company are segregated based on available information.

1.15.Operating Cycle

Based on the nature of product / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the company has determined its operating cycle as 12 months for the purpose of classification of its assts and liabilities as current and non-current.

1.16. Government Grants (Industrial Incentive)

The Company recognises Government Grants only when there is resalable assurance that the conditions attached to them will be complied with and the Grants will be received. When the grants relate to an asset, the company deductes such grants amount from the carrying amount of that assets. The Company having made substantial investment by way of expansion/ diversification hence it is entitled to get Industrial Incentive under Industrial Policy, 2014 announced by the Govt. of Madhya Pradesh. The amount of subsidy receivable under the policy is accounted for on accrual basis based on amount sanction by Madhya Pradesh Industrial Development Corporation.

1.17. Lease Rent

Lease under which the Company assumed substantially all the risk and rewards of ownership are classified as finance leases. Such assets acquired are capitalized at fair value of the asse or present value of the minimum lease payment at the inception of the lease, whichever is lower. Lease payments under operating leases are recognized as an expense on straight line basis in the statement of profit and loss over the lease term.

Terms and Conditions of Borrowings

1. Cash Credit Limit of INR 17.50 Crores from HDFC bank is secured by first charge on stock of raw material, stock in process, finished goods,

consumables stores and spares, book debts, equitable mortgage. of factory land, P & M existing and future and further the loan is personal

guarantee by all directors of the company and Mr Sunil Kataria, Anoop Kataria & Smt Sushila Devi Kataria. The Interest on the loan is payable @ 10.15 % p.a.

2. Cash Credit Limit of INR 17.50 Crores from HDFC bank is secured by first charge on stock of raw material, stock in process, finished goods, consumables stores and spares, book debts, equitable mortgage. of factory land, P & M existing and future and further the loan is personal guarantee by all directors of the company and Mr Sunil Kataria, Anoop Kataria & Smt Sushila Devi Kataria. The Interest on the loan is payable @ 10.15 % p.a.

3. Letter of Credit Limit of INR 21.00 Crores from HDFC bank is secured by first charge on stock of raw material, stock in process, finished goods,

consumables stores and spares, book debts, equitable mortgage. of factory land, P & M existing and future and further the loan is personal

guarantee by all directors of the company and Mr Sunil Kataria, Anoop Kataria & Smt Sushila Devi Kataria.

4. Letter of Credit Limit of INR 17.00 Crores from ICICI bank is secured by first charge on stock of raw material, stock in process, finished goods, consumables stores and spares, book debts, equitable mortgage. of factory land, P & M existing and future and further the loan is personal guarantee by all directors of the company and Mr Sunil Kataria, Anoop Kataria & Smt Sushila Devi Kataria.

5. working capital demand loan (WCDL) Limit of INR 7 crore from ICICI bank is secured by first charge on stock of raw material, stock in process, finished goods, consumables stores and spares, book debts, equitable mortgage. of factory land, P & M existing and future and further the loan is personal guarantee by all directors of the company and Mr Sunil Kataria, Anoop Kataria & Smt Sushila Devi Kataria.

6. Channel Finance availed from Tata Capital is against purchase of wire rod from ESLSteel Ltd & JSPL. which is against personal guarantee by all directors of the company and corporate guarantee of Ratlam wire Pvt Ltd.

7. All Above Loans Guaranteed by Directors & Others

8. Unsecured Loans and advances - Repayable on Demand

The company owns wind generated mill (wind mill) located at Dewas, M.P. The power generated from wind mill are transferred to power GRID of Electricity Board but the credit of power generated is being transferred in favour of the company from 01.07.2023 after NOC on leasehold land given by Forest Department on which windmill is installed based on the agreement executed with Electricity Board.

Note 30:

The Company has made substantial investment for expanded capacity of production. Therefore, it is entitled to get Industrial Incentive under Industrial Policy, 2014 announced by the Govt. of Madhya Pradesh. The amount of subsidy has been sanctioned Vide Letter No 176/MPIDC/Fiscal inventive /2020/5673 dated 05.09.2020 at INR 12.10 Cr. which will be receivable in 7 yearly installments commencing from F.Y. 2019-20 onwards & vide letter No dated 1302/MPIDC/F.I./IPA/6078 dated 27.08.2021 at INR 2.075 crore & vide letter No 214/MPIDC/F.I./2023/4511 dated 31.05.2023 at INR 6.41 crore in 7 Installment commencing from F.Y. 2022-23 onwards. Such amount of subsidy has been sanctioned against investment in Plant & Machinery and Factory Sheed. The amount receivable has been shown under the head short term loans & Advances (Note No. 12) and credited in respective assets as required by Accounting Standard-12 and ICDS-7.

Note 32:

In the opinion of the Board of Directors of the Company, the Current Assets, Loans and Advances have a value realizable in the ordinary course of business at least equal to the amount at which they are stated and provisions for all known liabilities are adequate and not in excess of the amount reasonably necessary.

Note 33:

Balances in respect of creditors, debtors and advance (Secured and Unsecured) and deposits are subject to confirmation.

Note 34: Micro, Small and Medium Enterprises Development Act, 2006:

Under the Micro, Small and Medium Enterprises Development Act,2006 which came into force from 2nd October 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company is in the process of compiling relative information from it's suppliers about their coverage under the said act since the relevant information is not readily available, no disclosures have been made in the accounts. However, the Management is of the view that, the impact of interest, if any, that may be payable in accordance with the provisions of this act is not expected to be material.

Note 35: Leases

The Company has taken factory land on non-cancellable Operating Lease. Amount of Lease Premium paid is being amortized every year.

Note 36: Employee Benefit Option

a) The Company has taken Group Gratuity Policy issued by the Kotak Mahindra Old Mutual Fund Life Insurance Ltd., Which is a defined benefit Plan.

a) In the opinion of the Board, all assets other than Property, Plant and Equipment, intangible assets and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

b) No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions

(Prohibitions) Act, 1988 (45 of 1988) and the Rules made thereunder.

c) The Company has not been declared willful defaulter by any bank or financial institution or other lender.

d) The Company does not have any transactions with any company struck off under section 248 of the Companies Act, 2013 or section 560 of

the Companies Act, 1956.

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

f) No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013 during the current as well as the previous year.

g) (i) The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other source or kind of

funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ii) The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall: (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

h) The Company does not have any transaction 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).

i) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year as well as in the previous financial year.

j) The Company has not made any contribution to any political party during the current financial year as well as in the previous financial year.

k) Loans or Advances - additional disclosures

(i) Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person;

- repayable on demand

Previous year figures have been regrouped / reclassified, wherever considered necessary.

Significant accounting policies & notes farming part of financial statements (I & II) For and on behalf of Board

As per our report of even date attached. For, Kataria Industries Limited

FOR P. D. Nagar & Co Chartered Accountants FRN 001231C

Arun Kataria Anoop Kataria

Managing Director Whole-Time Director & CFO (CA. P.D. Nagar) DIN: 00088999 DIN: 06527758

Proprietor M.NO. 8627

UDIN: 24008627BKELTU3090

Place: Ratlam Priyanka Bakhtyarpuri

Place: Indore Date: 21-05-2024 Date: 21-05-2024 Company Secretary