31 Financial Risk Management

The company’s activities expose ft variety of financial risks : Market risk. Credit risk and Liquidity risk. The company's focus is to
foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The
Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework.
The Board of Directors has established a risk management policy to identify and analyze the risks faced by the Company, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management systems are reviewed
periodically to reflect changes in market conditions and the Company's activities. The Board of Directors oversee compliance
with the Company's risk management policies and procedures, and reviews the risk management framework.

A) Market risk

The market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. Market risk comprises three types of risk: Foreign currency risk, interest rate risk and other price risk.

I Foreign Currency Risk

Foreign currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in
foreign exchange rate.

The company is not exposed to foreign currency risk as it has no borrowings in foreign currency and also the company doesn't
have any receivable or payable amounts in foreign currency.

II Cash flow and fair value Interest rate risk

Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates.

The Interest risk arises to the company mainly from Long term borrowings, bank overdrafts with variable rates. The company
measures risk through sensitivity analysis.

The company's exposure to interest rate risk due to variable Interest rate borrowings Is as follows:

III Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices (other than those arising from interest rate risk or currency risk).

The company is not exposed to price risk as there are no investments.

E) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are
settled by delivering cash or another financial assets.

Prudent liquidity risk management Implies maintaining sufficient cash and the availability of funding to meet obligations when
due.

Liquidity risk arises in situations where the company has difficulties in obtaining funding

The company manages its liquidity risk by continuously monitoring rolling forecasts of the company's liquidity requirements ,
actual cash flows available and the due date of financial assets and liabilities

The company is exposed to liquidity risk due to bank borrowings, trade payables, other financial liabilities.

C) Credit risk

Credit risk is the risk that a counter party will default on its contractual obligations resulting in financial loss to the company. Credit
Risk encompasses of both .the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks

Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions. as well as credit exposure to Trade
receivables.

The maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial
instruments presented in the financial statements

The company's major class of financial assets are cash and cash equivalents .Security deposits and trade receivables.

For Banks and financial institutions, only high rated banks/Financial institutions are accepted.

Company's Credit Risk arises principally from Trade Receivables.

Trade Receivables:

Trade receivables are primarily short term receivables from customers which arise in the normal course of business.

Credit worthiness of Customers are being assessed before making sales to the customers.

The outstanding Trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables.

Provision for bad and doubtful debts was made in previous years where recoverability from trade receivable was not
considered certain.

(a) Risk management

The company's objectives when managing capital are to safeguard the company's ability to continue as a going concern in
order to provide returns for shareholders . benefits for other stakeholders and to maintain an optimal capital structure to reduce
the cost of capital, in order to maintain or adjust the capital structure , the company may issue new shares or sell assets to
reduce debt

The company periodically reviews and manages its capital structure to ensure optimal capital structure and shareholder returns,
taking into consideration the future capital requirements and capital efficiency of the company , prevailing and projected
profitability . projected operating cash flows, and projected capital expenditures.

In order to maintain or adjust the capital structure. the company may use internal funding to reduce debt.

(b) Dividends

No Dividends have been issued/Proposed by the company during the last 3 financial years(F.Y.2023-24.2022-23, 2021-22)