3.12 Provisions, Contingent Liabilities and Contingent Assets:

Provision is recognized when the Company has a present obligation (legal or constructive)
as a result of past events and it is probable that the outflow of resources will be required to
settle the obligation and in respect of which reliable estimates can be made.

A disclosure for contingent liability is made when there is a possible obligation, that may,
but probably will not require an outflow of resources. When there is a possible obligation or
a present obligation in respect of which the likelihood of outflow of resources is remote, no
provision/ disclosure is made. The Company does not recognize a contingent liability but
discloses its existence in the financial statements.

Contingent assets are not recognized in thefinancial statements. Provisions and contingencies
are reviewed at each balance sheet date and adjusted to reflect the correct management
estimates.

If the effect of the time value of money is material, provisions are discounted using a current
pre-tax rate that reflects, using a current pre-tax rate that reflects, when appropriate, the risks
specific to the liability. Commitments include the amount of purchase order (net of advances)
issued to parties for completion of assets. Provisions, contingent liabilities, contingent assets
and commitments are renewed at each balance sheet date.

3.13 Cash and Cash Equivalents

Cash and cash equivalent comprise cash on hand and demand deposits with banks which
are short-term, highly liquid investments that are readily convertible into known amounts of
cash and which are subject to insignificant risk of changes in value.

3.14 Leases

The determination of whether an arrangement is [or contains] a lease is based on the
substance of the arrangement at the inception of the lease. The arrangement is, or contains,
a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets
and the arrangement conveys a right to use the asset or assets, even if that right is not
explicitly specified in an arrangement.

- A leased asset is depreciated over the useful life of the asset. However, if there is no
reasonable certainty that the Company will obtain ownership by the end of the lease term,
the asset is depreciated over the shorter of the estimated useful life of the asset and the
lease term.

- Lease other than finance lease are operating lease and these leased assets are not
recognized in the company’s statement of financial position but are recognized as an
expense in the statement of profit and loss on a straight-line basis over the lease term.

Leases in which a significant portion of the risks and rewards of ownership are retained by
the lessor are classified as operating leases. The Company is both a lessee and a lessor
under such arrangements. Payments and receipts under such leases are charged or credited
to the Statement of Profit and Loss on a straight-line basis over the primary period of the
lease unless another systematic basis is more representative of the time pattern of the user’s
benefit.

3.15 Exceptional items

Certain occasions, the size, type or incidence of an item of income or expense, pertaining to
the ordinary activities of the Company is such that its disclosure improves the understanding
of the performance of the Company, such income or expense is classified as an exceptional
item and accordingly, disclosed in the notes accompanying to the financial statements.

3.16 Operating Cycle

Based on the nature of products / activities of the Company and the normal time between
acquisition of assets and their realisation in cash or cash equivalents, the Company has
determined its operating cycle as 12 months for the purpose of classification of its assets and
liabilities as current and non current.

(b) Terms / rights attached to equity shares:

The Company has only one class of equity shares having a par value of ? 10 per share.
Each holder of equity shares is entitled to one vote per share. The Company declares and
pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject
to the approval of the shareholders in the ensuing Annual General Meeting. For the year
ended 31st March, 2025, the amount of per share dividend proposed as distribution to equity
shareholders is Nil (31st March, 2024: ? Nil).

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..

Notes:

a. Switching Technologies Gunther Limited (Company) had issued 98,178 (Ninety Eight
Thousand One Hundred and Seventy Eight only) Zero Coupon Redeemable Preference
Shares (Preference Shares) of ? 100/- (Rupees One Hundred only) each totalling to
98,17,800/-(Ninety Eight Lakh Seventeen Thousand and Eight Hundred only) on 14/02/2009
redeemable at par after the expiry of 5 (five) years from the date of allotment.

b. Reserve Bank of India (RBI) had given permission for extension of redemption of 98,178
(Ninety Eight Thousand One Hundred and Seventy Eight only) Preference Shares of ?
100/- (Rupees One Hundred only) each allotted to M/s.Gunther America Inc., having its
registered office at 454 Allwood Road Clifton, N.J.07012 USA (Preference Shareholder) for
7 (seven) years from 14/02/2014 vide its letter No.CHE:FED:FID/7630/25.19.319/2013-14
dated 19/05/2014. The Preference Shareholder had also consented for the said extension of
Preference Shares.

c. The Company had again applied for extension of redemption of Preference Shares for a
further period of 7 (seven) years vide its letter dated 23/01/2021 which was rejected by RBI
but had acceded for the conversion into Equity Shares. However as on date the conversion
is not completed.

Note: In the absence of certainity regarding sufficient future taxable income, the Deferred Tax
Asset on timing differences including the unabsorbed depreciation have not been recognized as
per lndAS12 “Income Taxes". Moreover, the Deferred Tax Liabilities, to the extent of the value of
Deferred Tax Asset which have not been recognized on account of inability to meet the recognition
criteria as per the said IndAS, have also not been recognized.

Note: Exceptional items during FY 2023-24 represents write back of credit balances in respect
of purchase of raw materials, consumables etc payable to Group Companies amounting to INR
561.54 Lakhs. The write back was approved by the Board in its meeting dated May 29, 2023.
Further, the Management confirms that no interest / penal charge is being made by the Group
Company on account of such write back.

30. SEGMENT REPORTING

The Company operates only in one reportable segment, i.e. manufacturing of switching
devices. Hence, no separate segment reporting is applicable.

31. DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND AS) 19
EMPLOYEE BENEFITS

The Company has classified the various benefits provided to employees as under: -

(a) Defined contribution plans

- Provident fund & Employee State Insurance

The Company has recognized the following amounts in the statement of profit and
loss:

Employers’ contribution to provident fund & Employee State Insurance:- Current Year ?
42.10 Lakhs (Previous Year ? 40.26 Lakhs)

(b) Defined benefit plans

- Gratuity

- Compensated absences - Earned leave

In accordance with Indian Accounting Standard 19, actuarial valuation was done in
respect of the aforesaid defined benefit plans based on the following assumptions-

Economic Assumptions

The discount rate and salary increases assumed are the key financial assumptions and
should be considered together; it is the difference or 'gap' between these rates which is
more important than the individual rates in isolation.

Discount Rate

The discounting rate is based on the gross redemption yield on medium to long term risk
free investments. The estimated term of the benefits/obligations works out to zero years.
For the current valuation a discount rate of 6.47% p.a compound has been used.

Salary Escalation Rate

The salary escalation rate usually consists of at least three components, viz. regular
increments, price inflation and promotional increases. In addition to this any commitments
by the management regarding future salary increases and the Company’s philosophy
towards employee remuneration are also to be taken into account. Again a long-term
view as to trend in salary increase rates has to be taken rather than be guided by the
escalation rates experienced in the immediate past, if they have been influenced by
unusual factors.

36. FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE
MEASUREMENTS

The fair values of the financial assets and liabilities are included at the amount at which the
instrument could be exchanged in a current transaction between willing parties, other than in
a forced or liquidation sale.

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

1. Fair values of cash and short term deposits, trade and other short term receivables,
trade payables, other current liabilities, short term loans from banks and other financial
institutions approximate their carrying amounts largely due to short-term maturities of
these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company
based on parameters such as interest rates and individual credit worthiness of the
counterparty. Based on the evaluation, allowances are taken to account for the expected
losses of these receivables.

The company uses the following hierarchy for determining and disclosing the fair values
of financial instruments by valuation technique:

37. MATERIAL UNCERTAINITY RELATED TO GOING CONCERN

There are following factors which create material uncertainty related to going concern of the
company:

i) Continous losses & Negative Net Worth

The company's accumulated losses as at March 31,2025 aggregate to ? 1526.19 Lakhs
resulting in complete erosion of its net worth. Further, as of that date, Company’s current
liabilities exceed its current assets by ? 724.65 Lakhs. These factors casts a signicant
material uncertainty related to Going Concern. The Company's financial statement has
been prepared on going concern basis.

ii) Adverse key financial ratios.

Refer Note 39 - Some key financial ratios of the company are adverse which reflect on
the financial health of the company.

38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company's financial risk management is an integral part of how to plan and execute its
business strategies. The company's financial risk management policy is set by the Managing
Board.

Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may
result from a change in the price of a financial instrument. The value of a financial instrument
may change as a result of changes in the interest rates, foreign currency exchange rates,
equity prices and other market changes that affect market risk sensitive instruments. Market
risk is attributable to all market risk sensitive financial instruments including investments and
deposits, foreign currency receivables, payables and loan borrowings.

The Company manages market risk through a treasury department, which evaluates and
exercises independent control over the entire process of market risk management. The
treasury department recommends risk management objectives and policies, which are
approved by Senior Management and the Audit Committee. The activities of this department
include management of cash resources, implementing hedging strategies for foreign
currency exposures, borrowing strategies, and ensuring compliance with market risk limits
and policies.

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. In order to optimize the company’s
position with regards to the interest income and interest expenses and to manage the interest
rate risk, treasury performs a comprehensive corporate interest rate risk management by
balancing the proportion of fixed rate and floating rate financial instruments in it total portfolio.

The company is not exposed to any interest rate risk as at the specified reporting date.

Foreign currency risk

The Company operates locally, however, the nature of its operations requires it to transact in
in several currencies and consequently the Company is exposed to foreign exchange risk in
various foreign currencies.

The Company evaluates exchange rate exposure arising from foreign currency transactions
and the Company follows established risk management policies.

I. Foreign Currency Exposure

Refer Note 34 for foreign currency exposure as at March 31, 2025 and March 31, 2024
respectively.

Credit risk arises from the possibility that counter party may not be able to settle their
obligations as agreed. To manage this, the Company periodically assesses the financial
reliability of customers, taking into account the financial condition, current economic trends,
and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits
are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether
there has been a significant increase in credit risk on an ongoing basis throughout each
reporting period. To assess whether there is significant increase in credit risk the company
compares the risk of a default occurring an the asset at the reporting date with the risk of
default as the date of initial recognition. It considers reasonable and supportive forwarding¬
looking information such as:

(i) Actual or expected significant adverse changes in business,

(ii) Actual or expected significant changes in the operating results of the counterparty.

(iii) Financial or economic conditions that are expected to cause a significant change to the
counterparty’s ability to meet its obligation,

(iv) Significant increase in credit risk on other financial instruments of the same counterparty.

(v) Significant changes in the value of the collateral supporting the obligation or in the quality
of third-party guarantees or credit enhancements.

Financial assets are written off when there is no reasonable expectation of recovery, such as
a debtor failing to engage in a repayment plan with the Company. The Company categorizes
a loan or receivable for write off when a debtor fails to make contractual payments greater
than 2 years past due. Where loans or receivables have been written off, the Company
continues to engage in enforcement activity to attempt to recover the receivable due. Where
recoveries are made, these are recognized in profit or loss.

IV. Provision for expected credit losses again "II" and "III" above

The company has assets where the counter- parties have sufficient capacity to meet the
obligations and where the risk of default is very low. Hence based on historic default rates,
the Company believes that, no impairment allowance is necessary in respect of above
mentioned financial assets.

Liquidity Risk

Liquidity Risk is defined as the risk that the company will not be able to settle or meet its
obligations on time or at reasonable price. The company's treasury department is responsible
for liquidity, funding as well as settlement management. In addition, processes and policies
related to such risks are overseen by senior management. Management monitors the
company's net liquidity position through rolling forecast on the basis of expected cash flows.

Maturity profile of financial liabilities

The table below provides details regarding the remaining contractual maturities of financial
liabilities at the reporting date based on contractual undiscounted payments.

ii. Other Regulatory Information

(i) The Company does not have any benami property, where any proceeding has been
initiated or pending against the Company for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

(ii) The Company does not have any transactions with companies struck off.

(iii) The Company does not have any charges or satisfaction which are yet to be registered
with ROC beyond the statutory period.

(iv) The Company has not traded or invested in crypto currency or virtual currency during the
financial year.

(v) The Company has not advanced or loaned or invested funds to any other person(s)
or entity(ies), including foreign entities (Intermediaries) with the understanding that the
Intermediary shall:

- directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

- provide any guarantee, security or the like to or on behalf of the Ultimate
Beneficiaries

(vi) 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:

- directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

- provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vii)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 (such as, search or survey or any other
relevant provisions of the Income Tax Act, 1961.

40. PREVIOUS YEAR FIGURES

Figures of the earlier year have been regrouped or reclassified to confirm to Ind AS
presentation requirements.

The accompanying notes are integral part of the financial statement.

As per our report of even date attached

For V V KALE & CO. For and on behalf of the Board

Chartered Accountants
Firm Registration No. 000897N

VIJAY V. KALE C. CHANDRACHUDAN K. MANI

Partner Managing Director Non-Executive Director

Membership Number: 080821 DIN: 0009312268 DIN: 09267134

S. RAMESH Mrs.T.NIRMALA

Company Secretary CFO

PAN : AEMPR9361K PAN : AMTPN4989Q

Place: New Delhi

Date: May 17, 2025

UDIN: 25080821BMGZTA8536