NOTE ”10.1”

Inventories are valued at cost or net realisable value, whichever is lower. The cost formulas used are FIFO. The cost of inventories comprises all cost of purchase including duties and taxes (other than those subsequently recoverable from the taxing authorities), conversion cost and other costs incurred in purchase including duties and taxes (other than those subsequently recoverable from the taxing authorities), conversion cost and other costs incurred in bringing the inventories to their present location and condition.

NOTE "11.1"

Debts due by directors or other officers of the Company or any of them either severally or jointly with any other persons or debts due by firms or private companies respectively in which any director is a partner or a director or a member as on 31 March 2024 - NIL (31.3.2023 - NIL)

Terms/ Rights attached to equity shares :

The Company has only one class of shares i.e. equity shares with equal rights for dividend and repayment. Each holder of the shares is entitled to one vote per share. Dividend on equity shares whenever proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive reaming assets of the Company, after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Bank of India :

"Cash Credit from Bank of India is sanctioned for ' 250 Lakhs and is secured by hypothecation of all book debts and other chargeable assets (wherever situated) of the company and with a collateral security of Leasehold land & Building at Vadodara. The said cash credit is also personally guaranteed by the directors Mr. Sunil Kumar Choksi, Mrs. Stela Choksi & Mr.Vyangesh Choksi. During the year, the said CC Limit has been taken over by SBI.

State Bank of India :

"Cash Credit from State Bank of India is sanctioned for ' 590 Lakhs and is secured by hypothecation of all book debts and other chargeable assets (wherever situated) of the company and with a collateral security of Equitable Mortgage of Commercial office situated at D- 4145. Obeoroi Garden Estate, Chandivali Farm Road, Off Western Express Highway, Goregoan (East), Mumbai, 400072, in the name of Choksi Laboratories Limited. Commercial Land and Building (Laboratory) bearing Survey Number : S.No. 166, situated at Plot No C-18 and C 20, Phase 1A, Verna Industrial Estate, Goa , admeasuring total area of 2188 Sq. Mtrs in the name of Choksi Laboratories Ltd. Land situated at survey no 4/2 Village Kumedi, Tehsil Sanwer, District Indore in the name of Choksi Laboratories Ltd. Commercial Land and Building (Laboratory) bearing Survey Number : 829, situated at Plot No . 829 GIDC, Makarpura, Vadodara Gujarat admeasuring total area of 8665 Sq. Ft in the name of Choksi Laboratories Ltd. The said cash credit is also personally guaranteed by the directors Mr. Sunil Kumar Choksi, Mrs. Stela Choksi & Mr.Vyangesh Choksi."

There are no defaults as on the Balance Sheet date in repayment of the above loans and interest thereon. The company was not declared willful defaulter by any Bank.

Trade Payable due to directors or other officer of the company or any of them either severally or jointly with any other persons or by firms or private companies in which any director is a partner or director or a member as on 31 st March 2024 ' NIL (31/03/2023 ' NIL)

Note:- Out of the total amount representing the credit balances of debtors i.e. advance payment received from customer as at 31.03.2024, ' 5.78 Lacs (P.Y. ' 7.20 Lacs) represents the balance which is due for more than 180 days and ' 17.24 Lacs (P.Y. ' 12.61 Lacs) represents balance which is due for less than 180 days.

The exceptional item represents the amount of profit of ' NIL (P. Y. ' 282.54 ) towards Sale of Manoramaganj Land being registered office of the company change from Manoramaganj, Indore to Kumedi, Indore. The Income for the same has been attributed in exceptional item. Fixed Assets Discarded includes amount of Loss of ' NIL (P.Y. ' 50.86) towards Building at Manoramaganj, Indore & ' NIL (P.Y. ' 2.38) towards Electrical Installation at Manoramaganj, Indore and ' NIL (P.Y. ' 3.72) towards Furniture & Fixtures at Manoramganj, Indore dismantled and vacated for sale.

NOTE "31.1"

The above figure of total deferred tax expenses recognised in the current year is net off of deferred tax on other comprehensive Income i.e., ' 0.27 Lakhs [ P.Y. ' (0.11 )Lakhs] , thus deferred tax expense is ' 48.64 Lakhs, previous year ' 51.26 Lakhs.

33. Defined Benefit Plan

Gratuity is classified as Defined Benefit Plan as company’s obligation is to provide agreed benefits, subject to minimum benefits as subscribed by the Payment of Gratuity Act to Plan members. The Company’s net obligation is arrived by deducting Fair Value of Plan Assets from the Present value of Defined Benefit obligation as on the date of valuation. Present Value of Defined Benefit Obligation is calculated by projecting the benefit till the time of retirement of each active member using assumed salary escalation rate, mortality & employee turnover rates. The expected benefit payments are then discounted back from the future payment date to the date of valuation using assumed discounting rate.

The Company pays gratuity to the employees whoever has completed 4 years and 240 days of service with the Company at the time of resignation/retirement/superannuation. The gratuity is paid @15 days Plan Salary for every completed year of service (6 months and above shall be considered as 1 year) as per the Payment of Gratuity Act 1972. Maximum Ceiling is ' 20 Lakhs. The Scheme is funded through approved gratuity fund of LIC formed exclusively for gratuity payment to the employees.

As per IND AS 19 "Employee benefits", the detailed disclosures as per the Actuarial Valuation Report dated 25/04/2024 are given below:

Ind AS 19 Disclosures Background

Gratuity is classified as Defined Benefit plan as enterprise's obligation is to provide agreed benefits, subject to minimum benefits as subscribed by the Payment of Gratuity Act, to plan members. Actuarial & Investment risks are borne by the enterprise.

The Net Defined Benefit Liability/ (Asset) is the Net (Surplus) / Deficit in the plan netted offby effect ofAsset Celling, if any. It is arrived by deducting Fair Value of Plan Assets from the Defined Benefit Obligation as on the date of valuation.

As required under Para 67 of Ind AS 19 actuarial valuation is done using Projected Unit Credit Method. Under this method, only benefits accrued till the date of valuation (i.e. based on service up to date of valuation) are to be considered for valuation. Present value of Defined Benefit Obligation is calculated by projecting salaries, exits due to death, resignation and other decrements, if any, and projects the benefit till the time of retirement of each active member using assumed rates of salary escalation, mortality & employee turnover rates. The expected benefit payments are then discounted back from the future date of payment to the date of valuation using the assumed discount rate.

'Service Cost' is calculated separately in respect of benefit accrued during the current period using the same method as described above. However, instead of all accrued benefits, benefit accrued over the current reporting period is considered.

Recognition of Actuarial Gains/Losses

All the re-measurements, comprising of actuarial gains/losses on DBO & Fair value of assets, arising during the reporting period have been recognized in full through outside of Profit & Loss account through Other Comprehensive Income.

Discount Rate

Discount Rate for this valuation is based on Government bonds having similar term to duration of liabilities. Due to lack of a deep & secondary bond market in India, government bond yields are used to arrive at the discount rate.

Risk Posed by the Plan

Gratuity is a multiple of last drawn salary paid at the time of retirement/resignation/death. The actuarial risk i.e. unusual (typically high) salary growth or turnover rate can increase the cost of providing the benefit. It can also alter timing of cash flows. This risk is borne by the employer. Gratuity is paid as lump sum and hence there is no longevity risk involved.

Asset Information

The scheme is funded through an 'Approved Trust'. The Trust has taken a Policy from the Life Insurance Corporation of India (LIC) and the management of the fund is undertaken by the LIC. There has been a fund size of ' 45.38 Lakhs (Previous year ' 49.54 Lakhs) as ofthe valuation date.

Funding Requirements

Currently there are no minimum funding requirements in India. The investments made by the trust are regulated by the Income Tax Act. The enterprise and the trustees should ensure compliance with the provisions ofthe said act.

Special Events

No consideration about any benefit improvements, curtailments & settlements during the inter-valuation period.

36. Financial Instruments

a. Capital management

The Company's objectives when managing capital is to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain financial strength.

For the purpose of Company’s capital management, Capital includes Issued Equity share capital and other equity.Gearing Ratio is ratio of Net debts (total borrowings (long term as well as short term) (net of cash & cash equivalents) divided by total equity capital. Accordingly, the Company has calculated gearing ratio which is as follows:

b. Financial risk management objective and policies:

This section gives an overview of the significance of financial instruments for the Company and provides additional information on the balance sheet. Details of material accounting policies & other accounting policies including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset and financial liability are disclosed in Note No. 1

Financial assets and liabilities: The accounting classification of each category of financial instruments, and their carrying amounts, are set out below:

c. Financial Risk Management:

The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk.

The Company’s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same.

Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities for the year ended March 31,2024.

Financial risk

The Company’s Board of Directors approves financial risk policies comprising liquidity, foreign currency, interest rate and counter party credit risk. The Company does not engage in the speculative treasury activity but seeks to manage risk and optimize interest through proven financial instruments.

a. Credit risk

Credit risk is the risk that a customer or counterparty to a financial instrument fails to meet its contractual obligations causing financial loss to the company.

Credit risk arises mainly from the outstanding receivables from customers.

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of counterparty to which the Company grants credit terms in the normal course of business.

The Company has used expected credit loss (ECL) model for assessing the impairment loss.

For the purpose, the Company uses a provision matrix to compute the expected credit loss amount.

The provision matrix takes into account external and internal risk factors and historical data of credit losses from various customers.

Deposits are with government departments and with lessorso chances of default are very minimal.

For short-term loans and advances, counterparty limits are in place to limit the amount of credit exposure to any counterparty. None of the Company’s cash equivalents are past due or impaired.

b. Liquidity risk

Liquidity risk arises from the Company’s inability to meet its financial obligation as it becomes due.

The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.

The table below provides details regarding the contractual maturities of significant financial liabilities :

c.    Market Risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates and foreign currency exchange rates) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices.

Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long term debt.

The Company is exposed to market risk primarily related to foreign exchange rate risk.

Thus, the Company’s exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

d.    Foreign Currency Risk

The Company’s foreign exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in US Dollars ). As a result, if the value ofthe Indian rupee appreciates relative to these foreign currencies, the Company’s revenues and expenses measured in Indian rupees may decrease or increase and vice-versa. The exchange rate between the Indian rupee and these foreign currencies have changed substantially in recent periods and may continue to fluctuate substantially in the future.

i. Significant foreign currency risk exposure in US Dollars relating to trade receivables, other receivables, cash and cash equivalents and trade payables:

Hedge Accounting:

The Company avails Foreign Currency Loans from State Bank of India to reduce the interest cost.

The Company duly takes forward cover to hedge against the foreign currency risks.

The premium paid for the hedging is charged to the Statement of Profit and Loss.

e. Interest rate Risk:

The Company has loan facilities on floating interest rate, which exposes the Company to risk of changes in interest rates. The Company’s Finance Department monitors the interest rate movement and manages the interest rate risk by evaluating interest rate swaps etc. based on the market / risk perception.

For the year ended March 31, 2024 and March 31, 2023, every 1% increase in interest rate for the above mentioned financial liabilities would decrease the Company’s profit & equity by approximately ' 29.27 Lakhs and decrease the Company’s profit & equity by approximately ' 30.35 Lakhs respectively.

Every 1% decrease in interest rate would lead to an equal but opposite effect.

37. Leases

The Company has adopted Ind AS 116 “Leases” to its leases due to which rental expense is being replaced by depreciation charge on right-of-use asset amounting to ? 45.18 Lakhs which is included under depreciation and amortization expense in statement of profit and loss and finance cost on lease liability amounting to ?13.37 Lakhs. The Company recognizes a lease liability measured at the present value of the remaining lease payments. The right-of-use assets are recognized at cost, which comprises the amount of the measurement of the lease liability adjusted for any lease payments made on or before the inception date of the lease. Accordingly, a right-of-use asset ?122.43Lakhs (previous year ? 167.61 Lakhs)and a corresponding lease liability of ?159.91Lakhs (previous year ?206.41 Lakhs) has been recognized.

38.    Segmental Reporting:

The company is engaged in the sole segment of Analysis and Testing. Therefore, no separate segments within the Company as defined by IndAS-108 (Operating Segments) which needs to be reported separately.

39.    Borrowing cost:

During the year, Borrowing Costs amounting of ? 6.16 Lakhs has been Capitalized to Capital WIP (Previous year ' 1.20 Lakhs)

40.    Indications of impairment: In the opinion of Management, there are no indications, internal or external which could have the effect of impairing the value of assets to any material extent as at the balance sheet date requiring recognition in terms of Ind AS 36.

41.    The Company has no subsidiary, associate or joint venture. Hence requirement of Consolidated Financial Statement is not applicable to the Company.

42.    In the opinion of the Board, Current Assets, Loans & Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for Depreciation and all known liability are adequate. There is no Contingent liability other than stated.

47.    Corporate Social Responsibility:

As per Section 135 of the Companies Act, 2013, the Company is not liable to spend the specified amount on CSR activities as per the norms. Hence, no separate reporting is required for the same.

48.    The company has not traded or invested in crypto currency or virtual currency during the financial year 2023-24.

49.    Relationship with struck off Companies :

There are no transactions during the year with struck off Companies as at 31st March, 2024.

50.    The company does not have any such transaction 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

51.    During the year, no proceedings have been initiated or pending against the company for holding any Benami Property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made there under.

52.    The Company has raised working capital funds during the year and the same has been applied for the working capital requirements of the company. Further, the quarterly statements of debtors filed by the company with the banks are in agreement with the books of accounts ofthe company.

53.    The Company is not declared a wilful defaulter by any Bank or Financial Institution or any other lender.

54.    No charges or satisfaction are pending for registration with the Registrar of companies (ROC) except the following:

•    Force Traveller Loan from HDFC Bank : Charge for ? 18.50 Lakhs not yet created from 23-1-2024.

55.    The Company has no long-term contracts including derivative contracts having material foreseeable losses as at 31st March, 2024.

56.    The Company has not granted any loans or advances in the nature of loans to promoters, directors and KMP’s ,either severally or jointly with any other person.

57.    During the year, no scheme of Arrangement has been formulated by the Company/ pending with competent authority.

58.    The Company has no subsidiary. The Company is in compliance with the number of layers as prescribed under clause (87) of section 2 ofthe Companies Act, 2013 read with the Companies (Restriction on Number ofLayers) Rules, 2017.

59.    During the year the company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person or entity 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 person or entities identified in any manner whatsoever by or on behalf of company (ultimate beneficiaries) or (ii) provide any guarantee, security or the like to or behalf ofthe ultimate beneficiaries. The company has not given guarantee or provided security.

60.    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 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) or (iii) provide any guarantee, security or the like to or on behalf ofthe ultimate beneficiaries.

61.    Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of accounts using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company w.e.f. April 1, 2023. Accordingly, the Company have used an accounting software for maintaining its books of accounts 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.

62.    The company has not made any investment whether current or non-current in nature.

Response to percentage change more than 25%

a)    For S.No.1, a major portion of the long term borrowings from bank have been repaid and converted into short term borrowings afresh and moreover the trade payables have also been significantly increased as compared to previous year, which have resulted in the decrease in Current ratio.

b)    For S.No. 4, The profitability of the Company is normal but when compared to previous year , there were exceptional items of income to the tune of ?225.58 Lakhs and therefore with that comparison the Return on equity ratio has been declined.

c)    For S.No. 7, The turnover of the Company has been increased during the year as compared to previous year , however the Current ratio has been declined which has resulted in the change for this ratio.

d)    For S.No. 8,The net profit of the Company is normal but when compared to previous year , there were exceptional items of income to the tune of ?225.58 Lakhs and therefore with that comparison the Net Profit ratio has been declined.

e)    For S.No. 9, The return on capital employed has also been declined due to the reason that last year there were exceptional items of income to the tune of ?225.58 Lakhs and therefore with that comparison the Net Profit ratio has been declined.

64.    The previous year figures have been regrouped/ reclassified, wherever necessary to conform to current year presentation.

65.    The figures have been rounded off to the nearest multiple of a rupee in Lakhs.

66.    Approval of Financial Statements

The financial statements were approved for issue by the Board of Directors in their Board meeting held on 29 May, 2024.