s) Provisions, Contingent Assets/ Contingent Liabilities

Provisions are recognized when the company has a present obligation (legal or constructive) as a result
of a past event, an outflow of economic benefits will probably be required to settle the obligation, and a
reliable estimate can be made of the amount of the obligation.

Show cause notices issued by Government Authorities where the probability of outflow of economic
resources is remote are not considered obligations. When the demands are raised against show-cause
notices and are disputed by the company, these are treated as disputed obligations along with other
contingent liabilities. Such contingent liabilities are not recognized but are disclosed in the notes.
Contingent Assets are neither recognized nor disclosed in the financial statements.

t) Segment Information:

The company is considered to be a single-segment company engaged in the manufacture of
Automobiles and Electrical and providing related customer support services. Consequently, the
company has in its primary segment only one reportable business segment.

u) Financial Instruments:

Non-derivative financial instruments

Non-derivative financial instruments consist of :

Financial assets, which include cash and cash equivalents, trade receivables, other advances, and
eligible current and non-current assets;

Financial liabilities, which include long and short-term loans and borrowings, trade payables, and
eligible current and non-current liabilities.

Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the recognized amounts and there is an intention to
settle on a net basis, to realize the assets and settle the liabilities simultaneously

Non derivative financial instruments are recognized initially at fair value including any directly
attributable transaction costs. Financial assets are derecognized when substantial risks and rewards of
ownership of the financial asset have been transferred. In cases where substantial risks and rewards of
ownership of the financial assets are neither transferred nor retained, financial assets are derecognized
only when the Company has not retained control over the financial asset.

After initial recognition, non-derivative financial instruments are measured as described below:

Cash and cash equivalents

For the cash flow statement, cash and cash equivalents include cash in hand, at banks and demand
deposits with banks, net of outstanding bank overdrafts, if any, that are repayable on demand and are
considered part of the Company’s cash management system.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They are presented as current assets, except for those maturing later
than 12 months after the reporting date which are presented as non-current assets. Loans and
receivables are initially recognized at fair value plus directly attributable transaction costs and
subsequently measured at amortized cost, less any impairment losses. Loans and receivables
comprise trade receivables and other assets.

The company estimates the un-collectability of accounts receivable by analyzing historical payment
patterns, customer concentrations, customer creditworthiness, and current economic trends. If the
financial condition of a customer deteriorates, additional allowances may be required.

Borrowings

Borrowings are subsequently measured at amortized cost using the EIR method.

Trade and payable

Liabilities are recognized for amounts to be paid in the future for goods or services received, whether
billed by the supplier or not.

v) Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects
of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts
or payments, and items of income or expenses associated with investing or financing cash flows. The
cash flows from operating, investing, and financing activities of the Company are segregated.

w) Events after the reporting period :

Adjusting events are events that provide further evidence of a condition that existed at the end of the
reporting period. The financial statements are adjusted for such events before authorization for the
issue.

x) Prior Period Errors

Errors of the material amount relating to prior period(s) are disclosed by a note with the nature of prior
period errors, the amount of correction of each such prior period presented retrospectively, to the extent
practicable along with change in basic and diluted earnings per share. However, where retrospective
restatement is not practicable for a particular period then the circumstances that lead to the existence
of that condition and the description of how and from where the error is corrected are disclosed in
Notes to Accounts.

P. MADHU PRATAP For P.Lakshmana Rao & Co

(Executive Director & CFO) Chartered Accountants

DIN: 00644254 FRN: 0018265

P. RAVICHANDRA CA HN Deepak Edara

(Technical Director) Partner

DIN : 00627413 MRN: 254076

UDIN : 24254076BKAFFB3705

Place: Tirupathi
Date: 30.05.2024