(b) Terms / rights attached to Equity Shares

The Company has issued equity shares. All equity shares issued rank pari-passu in respect of distribution of dividend and repayment of capital. 1,30,32,914 Equity Shares are quoted equity shares with no restriction on transfer of shares. 27,600 Equity Shares are 'A' equity shares, which are transferrable only to permanent employees of the Company. 1,15,748 Equity Shares are Second 'A' equity shares which are transferrable to permanent employees, who have put in five years of service with the Company.

(c) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(d) Shares held by holding/ultimate holding company and/or their subsidiaries/associates

The Company is a subsidiary of Jaya Hind Industries Private Limited, which holds 57.38% (31st March 2023 : 57.38%), 75,59,928 (31st March 2023:75,59,928) shares in the Company.

• Securities Premium : The amount received in excess of face value of the equity shares is recognized in Securities Premium Account.

• General Reserve : General Reserve comprises of transfer of profits from retained earnings for appropriation purposes. The reserve can be distributed / utilised by the Company in accordance with the Companies Act, 2013.

• Retained Earnings: Retained earnings are the profits that the Company has earned fill date, net of transfer to general reserve and dividend distributions made to the shareholders.

• Term Loans are secured by hypothecation, by way of exclusive first charge on specific Plant and Machinery, being movable properties, secured as a continuing security for the repayment of Term Loans together with interest. The term loans are repayable in quarterly instalments over a period upto six years, including moratorium. Term Loans include foreign currency loan.

• Non-Convertible Debentures : The Company has issued 190 (5.85%) Secured unlisted rated redeemable non-convertible debentures of ? 100 lakhs each, total amounting to ? 19,000 lakhs, on 15th February 2021. The debentures are secured by way of first ranking exclusive charge over the specific movable fixed assets. The debentures are redeemable over a period of four years (including moratorium) maturing in February 2025.

• For the block of Financial Years 2022-2024, 25% of incremental borrowing through issue of the debt securities, as per applicable SEBI Circulars, was not raised, since the Company’s profitability and internal accruals improved substantially.

• Working Capital Loans are secured by hypothecation of Company's stock of raw materials, work-in-progress, finished goods, consumable stores, spares, bills receivable and book debts, both present and future. The Fund Based Limits are payable on demand to the Banks.

• Inter corporate deposits from Holding Company are unsecured and are repayable in January 2026.

• The Company has used the borrowed fundsforthe specific purposefor which it was taken as atthe balance sheet date.

• The quarterly returns or statements, of current assets, filed by the Company with Banks or financial institutions are in agreement with the Books of accounts of the Company.

Exceptional Items of previous year ended 31st March, 2023 amounting to ? 20,832 Lakhs consists of (a) Government Incentives of ? 30,831 Lakhs, granted by the Government of Madhya Pradesh as per the Madhya Pradesh Industrial Investment Promotion Assistance Scheme, 2010; being “Exceptional Item” of income and (b) Write off - Intangible Assets under development & Capital Work in progress (net of estimated realisable value) amounting to ? -9,999 Lakhs, being "Exceptional Item" of Expense.

30. EXPENDITURE CAPITALISED

Amount capitalised represents expenditure allocated out of employee cost and other expenses, incurred in connection with capital items and various product development projects undertaken by the Company for the introduction of new products as well as development of engine and existing product variants.

31. CONTINGENT LIABILITIES AND COMMITMENTS _ _

(C) As reported earlier, a foreign company has initiated legal proceedings in a foreign court, in respect of notional and unfounded claims for damages, without there being any enforceable agreement, relating to export business. The Company has obtained opinion from a Senior Counsel, in respect of these alleged claims against the Company. The Company has been advised that such notional / unfounded claims are not as per the applicable law nor these claims, if any, can be enforced in the Court of Law in India. This information is being disclosed as perthe provisions of Schedule III to the Companies Ad, 2013, only to indicate the alleged claims made against the Company and the developments in respect thereof. Moreover, considering the period lapsed since the conclusion of the said legal proceedings, the Company does not expect any impact of this litigation on its financial position.

(d) The Company has initiated arbitration proceedings, against an entity, in relation to an agreement relating to transfer of technology. In the said arbitration, the Company has claimed various reliefs. The Respondent therein has also claimed various reliefs, by way of a counterclaim. The Company denies each and every allegation of such entity including but not limited to the counterclaim and the Company shall deal with / defend the said allegations/counterclaim appropriately.

The Board of Directors is of the opinion thatthe said allegations/counterclaim of the entity can be successfully resisted by the Company.

This note / disclosure is made as a matter of caution and without prejudice to the rights of the Company or without the Company, in any way admitting the said allegations / counterclaim or any part thereof. The information, which is usually required to be disclosed, as per Ind AS 37 (Provisions Contingent Liabilities and Contingent Assets) is not disclosed, as such disclosure may prejudice seriously, the outcome of the litigation (said arbitration proceedings.)

32. DISCLOSURE AS PER THE REQUIREMENT OF SECTION 22 OF THE MICRO, SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ACT, 2006

On the basis of information received as to the status as Micro, Small and Medium Enterprises, from suppliers of the Company along with a copy of the Memorandum filed by the said suppliers, as per the provisions of Section 8 of the Micro, Small and Medium Enterprises Development Act, 2006 (the Act), dues to Micro, Small and Medium Enterprises are as under:

The proceedings initiated by one of the suppliers, claiming to be a small scale enterprise, as per the provisions of Section 18 of the Act, culminated into an award of claim for ? 157 Lakhs with interest. The Company has not accepted the said liability. The Company has a major counter-claim against the said supplier amounting to about ? 906 Lakhs, which being unearned income, is not accounted. The award is challenged by the Company, as per the provisions of the Act and proceedings are pending before the Hon'ble District Judge, Pune, and before the Hon'ble High Court of Judicature at Bombay.

33. FOREIGN EXCHANGE DIFFERENCES

The amount of net exchange differences included in the Profit/Loss for the year on Revenue account is? 649 lakhs Credit (31st March 2023: ? 985 lakhs Debit) and on Capital account is ? 21 lakhs Credit (31st March 2023:? 119 lakhs Debit).

As per the Indian Accounting Standard (Ind AS 38) - Intangible Assets, the Company has recognized Intangible Assets, arising out of in-house Research and Development activities of the Company, by capitalising the revenue expenditure, amounting to ? 4,996 lakhs (31st March 2023 : ^6,561 lakhs).

As the development activity, of few projects, is continued, these assets are considered as Capital Work-in-progress, and will be amortized over the period of their life, afterthe completion of the development phase.

35. LEASES

Operating Leases

As a Lessor

(a) Industrial Shed at Chakan

The Company has entered into a Lease Agreement for Industrial shed at Chakan, Pune, for a period of 10 years. The Lease Agreement provides for a refundable interest free deposit of ? 169 lakhs, clause for escalation of lease rental and a non-terminable lock-in period of 36 months. The Lease income has been recognized in the Statement of Profit and Loss.

(b) Freehold Land

Out of the freehold land at Akurdi, Pune

2700 sq. mtrs. (cost? 1,374) of land is given on lease to Maharashtra State Electricity Distribution Company Limited for99 years, w.e.f. 1st August 1989. Lease rentals are recognized in the Statement of Profit and Loss.

19,000 sq. mtrs. (cost? 9,669) of land is given on lease to Navalmal Firodia Memorial Hospital Trust for 25 years, w.e.f. 12th August 2014. Lease rentals are recognized in the Statement of Profit and Los:

These land given on lease are not considered as investment property considering the insignificant area and cost of that with respect to the total area and cost of freehold land at the respective places.

As a Lessee Leasehold land

The Company has entered into Lease Agreements for Industrial Land, at Pithampur in Madhya Pradesh. The Company, being a Lessee, may surrender the leased area after giving Lessor 3 months notice period in writing. The lease premium is not refundable to Company in case of early termination of agreement by the Company. The Lessor is also entitled to terminate the Lease Agreement, if the Lessee defaults the terms and conditions of the Lease Agreement. The lease expense has been recognized in the Statement of Profit and Loss.

The following methods and assumptions were used to estimate the fair values:

The fair values of Trade Payables, Trade Receivables, Cash and Cash equivalents and Other Bank Balances, are reasonable approximation of fair value due to the short-term maturities of these instruments.

Investment in subsidiary and joint venture are accounted at cost in accordance with Ind AS 27 Separate Financial Statements, accordingly investment in subsidiary and joint venture are not fair valued.

Allowance for credit loss on Trade Receivables, is taken into account, on the basis of credit worthiness of the customer individual.

Borrowings represents ICD, Term Loans from Bank and NCD obtained at market rates of interest available for debt on similar terms, credit risk and remaining maturities. As of reporting date, the fair value of borrowings is measured at amortized cost, which is reasonable approximation of fair value.

The fair values disclosed in level 2 category are calculated using discounted cash flow method. These fair values reasonably approximate to the carrying values of financial assets and liabilities measured at amortized cost.

During the year ended 31 March 2024, there were no transfers between level 1 and level 2 fair value measurements and no transfers into and out of level 3 fair value measurement.

39. FINANCIAL RISK MANAGEMENT

Financial Risk Management Policy and Objectives

The Company’s principal financial liabilities comprise of Borrowings, Trade and Other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include Trade and Other receivables and Cash and Cash equivalents, which are derived directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk.

The management of these risks is overseen by the senior management, which is advised by a team of senior officials. The Risk Management team oversees the policies and systems, on a regular basis to reflect changes in market conditions and Company’s activities and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

(c) Market Risk: Equity Price Risk

Atthe reporting date, the exposure to unquoted equity securities at fair value was ?5 Lakhs.

At the reporting date, the exposure to quoted equity securities at fair value was ? 3,795 Lakhs. A decrease/increase of 15% on the Bank Niffy market index could have an impact of approximately ? 695 Lakhs on the OCI or equity attributable to the Company. These changes would not have an effect on profit or loss.

41. CAPITAL MANAGEMENT

The Company’s capital includes issued Equity Capital, Share Premium and Free Reserves.

The Company’s policy is to meet the financial covenants attached to the interest-bearing borrowings by maintaining a strong capital base. The Company aims to sustain investor, creditor and market confidence so as to leverage such confidence for future capital/debf requirements.

Management monitors the return on capital earned, the capital/debf requirements for various business plans under consideration and determines the level of dividends to equity shareholders.

42. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

All amounts which became due, for transfer to the credit of Investor Education and Protection Fund, as of 31st March 2024, have been transferred to that fund, except a sum of ? 0.60 Lakh (31st March 2023 : ^ 0.60 Lakh) being amount of 5 Nos. (31st March 2023: 5 Nos.) fixed deposits and interest thereon amounting to? 0.25 Lakh (31st March 2023: ?0.25 Lakh). In view of the directives received from the Government Authorities, these amounts are not transferred to the Fund, being involved in an investigation.

44. ADDITIONAL REGULATORY INFORMATION:

(a) Loans and Advances in the nature of Loan to Related Parties:

The Company has not granted any 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 as on 31st March 2024.

(b) Relationship with Struck off Companies:

As per our knowledge, the Company do not have any transactions with struck off companies.

(c) Registration of charges or satisfaction with Registrar of Companies:

The Company has no charges or satisfaction yet to be registered with Registrar of Companies beyond the statutory period.

(d) Compliance with number of layers of companies:

The Company complies with the number of layers prescribed under Clause 87 of Section 2 of the Act, read with the Companies (Restriction on number of layers) Rules, 2017.

(e) Compliance with approved Scheme (s) of Arrangements Accounted as per Scheme & Ind AS

Neither the Company has approached to nor any Competent Authority has approved any scheme of arrangements so as to account for in the books of account of the Company, in orderfo disclose any deviation in that regard.

(f) Loans, Guarantee, Security given by Company to Intermediary and it is giving to others on behalf of Company:

The Company has neither advanced nor loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to anyofherperson(s) or enfify(ies), including foreign entities (Intermediaries).

(g) Crypto Currency or Virtual Currency:

The Company has neither traded nor invested in Crypto currency or Virtual currency during the financial year.

(h) BenamiProperty:

The Company does not have any Benami property, and hence no proceeding has been initiated or pending against the Company for holding any Benami property underfhe Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(i) There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

45. DIVIDEND

The Board of Directors has recommended payment of Dividend of ? 20 perfully paid Equity Shares (31st March 202310). This proposed dividend is subject to the approval of Shareholders in the ensuing Annual General Meeting. This dividend is not recognized in the books of account at the end of the reporting period.

46. The Company is operating in a Single Segment.

47. Previous year’s figures have been re-grouped, re-arranged and re-classified wherever necessary.