a) There are no projects as on each reporting date which have exceeded the cost as compared to its original plan or where completion is overdue.

b) Capital Work-in-Progress As at 31.03.2024 mainly comprises of construction cost of Building and Plant & equipment of the Company. (As at 31.03.23 mainly comprises of construction cost of Building and Plant & equipment of the Company.)

(i) As required under section 186(4) of the Companies Act, 2013,the loan given shall be utilised for repayment of loans of existing lenders and bank debts to ensure encumbrance/pledge on fixed deposits of existing shareholder is released and not for any other purpose as is not permitted under the laws of Kenya.

Based on agreed terms mentioned in loan agreement dated 28th March, 2023, loan to subsidiary carries an interest rate of 9.50% p.a. and loan shall be repayable within five years from the disbursement.

b. Terms & rights attached to equity shares:

The Company has only one class of equity shares having a par value of H 10 per share. Each holder of equity shares is entitled to one vote per share. The holders of Equity Shares are entitled to receive dividends as declared from time to time. 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.

e. Aggregate number of share issued for consideration other than cash:

During the year 2019-20, 16,74,806 shares were issued pursuant to scheme of arrangement.

f. After the Reporting date, the Board of Directors has proposed a dividend of H5.00/- per equity share for the year ended 31st March 2024 (31st March ,2023 - H5.00/- per equity share). The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting and if approved it will lead to cash outflow amounting to H743.61 Lakhs.

g. The Company has neither issued bonus shares nor has bought back any shares during last 5 years.

h. No ordinary shares have been reserved per issue under options and contract/ commitments for the sale of shares/ disinvestment as at the Balance Sheet date.

i No securities convertible into Equity/ Preference shares have been issued by the Company during the year.

j No calls are unpaid by any directors/ officers of the Company during the year.

k. The Company does not have any Holding Company or Ultimate Holding Company.

Description of nature and purpose of each reserve

a. Securities Premium

Securities Premium represents the excess of the amount received over the face value of the shares. This reserve will be utilised in accordance with the provisions of the Companies Act, 2013.

b. General Reserve

General Reserve is created from time to time by way of transfer profits from retained earnings for appropriation purposes. General Reserve is created by a transfer from one component of equity to another and is not an item of other Comprehensive income.

c. Capital Reserve

Capital Reserve represents arisen on business combination on earlier years.

d. Retained Earning

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to investors. This includes remeasurement of defined benefit plans arising due to actuarial valuation of gratuity, that will not be routed through Statement of profit and loss subsequently.

Notes:

a) Working Capital facilities from Banks Sanctioned Limit = H5,000.00 Lakhs (Previous year: Sanctioned Limit = H6,400.00 Lakhs) are secured by first charge on current assets and second charge on moveable fixed assets of the Company and also secured by personal guarantee of Managing Director and Whole Time Director.

b) The Company is filing monthly statement for inventories and debtors with Banks (IDBI Bank, Yes Bank, HDFC Bank and CITI Bank ) for working capital facilities . The below is summary of reconciliation of quarterly statement filed with the banks and books of accounts :

The Quarterly statement submitted with Banks were prepared and filed before the completion of all financial statement closure which led to the above differences between the books of accounts and quarterly statement submitted with Banks based on provisional books of account. It includes mainly inventory and trade receivables reported by the Company to the banks.

A. Nature of goods and services

The Company is primarily engaged in the manufacturing of Writing instruments and stationeries and generates revenue from the sale of Pen and Refill and the same is only the reportable segment of the Company.

b) Defined Benefit Plan :

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Post - retirement benefit plans.

VI. Basis used to determine the Expected Rate of Return on Plan Assets:

The basis used to determine overall expected rate of return on plan assets is based on the current portfolio of assets, investment strategy and market scenario. In order to protect the capital and optimize returns within acceptable risk parameters, the plan assets are well diversified.

VII. Basis of estimates of rate of escalation in salary

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by LIC.

Sensitivities due to mortality and withdrawals rate are not material and hence impact of changes is not calculated.

Sensitivity analysis above have been determine based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

X. Risk Exposure

i) Interest Rate Risk: The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

ii) Salary Inflation Risk : Higher than expected increase in salary will increase the defined benefit obligation.

iii) Demographic Risk: This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to long service employee.

XII. Other Disclosures

1 The Gratuity and Provident Fund Expenses have been recognized under "Contribution to provident and other funds" under Note no. 31.

2 Expected employers' contribution for next year is not available and therefore, not disclosed.

The amounts shown in (b) above represent the best possible estimates arrived at on the basis of available information. The uncertainties and timing of the cash flows are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be estimated accurately.

In the opinion of the management, no provision is considered necessary for the disputes mentioned above on the grounds that there are fair chances of successful outcome of appeals.

The Company does not expect any reimbursements in respect of the above contingent liabilities.

(ii) The Code on Social Security 2020, (the 'code') received Presidential assent on 28th September 2020. However, the date on which the Code will come into effect has not yet been notified. The Company will assess the impact of the Code in the period(s) in which the provisions of the Code become effective.

III) No amount has been written back / written off during the year in respect of due to / from related parties.

IV) The amount due from related parties are good and hence no provision for doubtful debts in respect of dues from such related parties is required.

V) The transactions with related parties have been entered at an amount, which are not materially different from that on normal commercial terms.

VI) The remuneration to the Key Management Personnel and relatives of the Key Management Personnel does not include provision made for Gratuity as it is determined on an actuarial basis for the Company as a whole.

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

Note No. : 42 Financial Risk Management Objectives and Policies

The Company's financial liabilities comprise long term borrowings, short term borrowings, capital creditors, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's financial assets include trade and other receivables, cash and cash equivalents and deposits.

The Company is exposed to market risk and credit risk. The Company has a Risk management policy and its management is supported by a Risk management committee that advises on risks and the appropriate risk governance framework for the Company. The audit committee provides assurance to the Company's management that the Company's risk activities are governed by appropriate policies and procedures and that risks are identified, measured and managed in accordance with the Company's policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

(i) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and other price risk, such as commodity price risk and equity price risk. Financial instruments affected by market risk include trade payables, trade receivables, etc. a. Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities. The Company has a treasury department which monitors the foreign exchange fluctuations on the continuous basis and advises the management of any material adverse effect on the Company.

Foreign Currency Sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in foreign currency exchange rates, with all other variables held constant. The impact on the Company profit before tax is due to changes in the fair value of assets and liabilities.

(ii) Credit Risks

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

Trade Receivables

Customer credit risk is managed by the Company's established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and reconciled. Based on historical trend, industry practice and the business environment in which the company operates, an impairment analysis is performed at each reporting date for trade receivables. Based on above, the company has made provision for expected credit loss of H55.32 Lakhs for the current financial year (Previous Year H96.53 Lakhs).

Other Financial Assets

Credit Risk on cash and cash equivalent, deposits with the banks/financial institutions is generally low as the said deposits have been made with the banks/financial institutions who have been assigned high credit rating by international and domestic rating agencies.

(iii) Liquidity Risk

The Company's objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements at all times. The Company relies on a mix of borrowings and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium/ long term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs.

b. Interest Rate Risk

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

Interest Rate Sensitivity

The Company does not have any outstanding variable rate borrowing as at the reporting date. Hence, interest rate sensitivity has not been disclosed.

Note No. : 43 Segment reporting

There is only one primary business segment i.e. "Writing Instrument and Stationary" and hence no separate segment information is disclosed in this financial.

Note No. : 45 Lease As Lessee

The Company has lease contracts for various items of buildings (including godowns) used in its operations. The Company's obligations under its lease are secured by lessor's title to the leased assets.

The Company also has certain leases of godowns with lease term of twelve months or less with low value. The Company applies the 'short-term lease' and ' lease of low-value assets' recognition exemptions for these leases.

Notes:

(a) Change in Debt Service Coverage Ratio as compared to the preceding year is due to decrease in EBITDA and increase in Lease payments.

Note No. :4 7 Capital Management

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The management monitors the return on capital, as well as the level of dividends to equity shareholders.

The Company's objective when managing capital are to:

(a) to maximise shareholders value and provide benefits to other stakeholders, and

(b) maintain an optimal capital structure to reduce the cost of capital.

In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interestbearing loans and borrowings that define capital structure requirements. The Company has complied with these covenants and there have been no breaches in the financial covenants of any interest-bearing loans and borrowings.

For the purpose of the Company's capital management, capital includes issued equity share capital and other equity reserves attributable to the equity holders.

Note No. :48 The Company had entered into an agreement on 05th April, 2023 for acquisition of 60% shareholding of Gelx Industries Ltd, Kenya for which approval by Competition Authority of Kenya was received during the year. Post completion of the acquisition formalities, Gelx Industries Limited, Kenya has become a subsidiary of the company w.e.f. 3rd October, 2023.

Note No. :49 The Company had incorporated as entity in the name of ""Morris Linc Private Limited on 28th June, 2023. The company entered into a Joint Venture Agreement dated 23 rd October, 2023 with Morris Co. Ltd. ("Morris") via the aforesaid company to carry out manufacture and sale of anti-ink dry marker with automatic air tight sealing mechanism in a Profit Share Ratio of 50.01 : 49.99 for the Company & Morris respectively.

Note No. :50 Other Statutory disclosures:

(i) 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.

(ii) The Company has no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

(iii) No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(iv) The Company has not been declared as a wilful defaulter by any bank or financial institution or government or any government authority.

(v) There has been no charges or satisfaction yet to be registered with ROC beyond the statutory period.

(vi) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year ended 31 March, 2024.

(vii) As per the requirements of rule 3(1) of the Companies (Accounts) Rules 2014, the Company uses only such accounting software for maintaining its books of account that have a feature of recording audit trail of each and every transaction creating an edit log of each change made in the books of account along with the date when such changes were made within such accounting software. This feature of recording audit trail has operated throughout the year and was not disabled, tampered with during the year, except for the database and application layer in payroll software situations where in during the year the audit trail feature was not enabled.

The accompanying notes are an integral part of the Standalone Financial Statements.

As per our report of even date attached.