Company has only one class of shares referred to as equity shares having par value of Rs.10 each. Each holder of shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company in proportion to the number of equity shares held by the shareholders, after distribution of all preferential amounts.

Shares held by promoters at the end of the year

The company has no holding company.

No shares have been reserved for issue under options and contracts or commitments for the sale of shares or disinvestment.

No class of shares have been allotted as fully paid up pursuant to contract(s) without payment being received in cash, allotted as fully paid up by way of bonus shares or bought back during the period of 5 years immediately preceding the Balance Sheet date.

iii) 3373 Lakhs & 767 Lakhs Term Loans from Canara Bank

Loan of Rs.3373 Lakhs and subsequent additional facility of Rs.767 Lakhs have been secured by mortgage of 850TPD Cement Plant II, along with mortgage of 35 Acres and 15 Guntas land and building at Plant II (Lokapur plant) owned and maintained by the Company. Fixed deposits of Rs.8 Lakhs are an additional security on the loan along with Rs.8000 Lakhs loan.

iv) 8000 Lakhs Loan from Canara Bank

The loan of Rs.8000 Lakhs is secured by a first charge on the project land of 95 Acres and 6 Guntas at S. No. 241, 242, 243/1, 243/3, 243/2, 244, 246, 250/1, 250/3, 250/4, 250/5, 251,255/1, 255/2, 256/1, 256/2, 256/3, 256/4, 257/1, 257/2, 257/3, 257/4, 258/1, 258/2, 258/3 and 258/4 (located at Bisarhalli Taluka and District Koppal, Karnataka), along with hypothecation on 20MW AC supply unit and associated equipments. Fixed deposits of Rs.8 Lakhs are an additional security on the loan along with Rs.4140 Lakhs loan.

v) 2000 Lakhs Working Capital Term Loan under GECL Scheme

The company has availed working capital term loan from Canara Bank under GECL Scheme 2.0. A secondary charge on the assets which have been offered as security to the bank for the other loans of the company.

vi) 1900 Lakhs Working Capital Term Loan under GECL Scheme

The company has availed working capital term loan from Canara Bank under GECL Scheme 2.0. A secondary charge on the assets which have been offered as security to the bank for the other loans of the company.

vii) 4000 Lakhs Loan from Canara Bank

This loan is secured by a first charge on land & Building (Civil Construction) situated at Bisarhalli of 47 acres 06 gunta owned by the company, bearing S.No. 245, B248/2, 249/1, 249/2, 250/2, 255/3, 255/4, 255/5 and 255/6, along with charge of Plant &

Machinery located at Bisarahalli.

viii) Sales tax Deferment Loan

The company has received three tranches of Interest free SGST loan from State Government of Karnataka granted under SGST promotion scheme. The same has been considered as a Government grant. This is secured by bank guarantees. The loans have a moratorium period of 10 Years and shall be repaid at the end of the moratorium period, maturing in the calendar year 2032 for all the three tranches.

ix) Unsecured Loan from Directors & Other Related Parties

This loan represents unsecured loans received from various directors and individual related parties, carrying an interest rate at the rate of 6% (Classified as Current Borrowings). Long-term loans obtained from Neel Holistic Infra Private Limited (formerly known as Katwa Constructions Company Private Limited) represent unsecured loans carrying an interest rate of 10% on Rs.900 Lakhs obtained on 29th March 2023 and 8% on other balances. However, if the Rs.900 Lakhs loan is prepaid within 1 year from the date of disbursement, the interest rate shall be 8%.

The terms of these loans were amended at the Board Meeting dated 16th March 2023 (and subsequent Extraordinary General Meeting dated 12th April 2023) of the company granting the right to the lenders to get the outstanding unsecured loan (as on 16th March 2023) converted into equity shares of the company at such price and on such date/time as may be determined by the Board after complying with the requisite sections/provisions/rules etc. as may be applicable to the Borrower Company' for such conversion and subject to the approval of Shareholders and such other regulatory authority, as may be applicable from time to time.

As per the same, loans amounting to Rs.2400 Lakhs has been converted into equity shares at the valuation of Rs.125 per equity share, basis the resolution passed by the members in the EGM dated 12th April 2023. Consequently, this portion of the loan has been classified under 'Other Equity' as on 31st March 2023 as per the principals laid down in IND AS 109.

x) Bank Overdraft

This loan is secured by a first charge on mortgage & hypothecation of stock and book debts of the company.

Common Collateral for both Work Capital Loans (Bank Overdrafts) and Term Loan Facilities

All loans (Working Capital & Term loans) have a common collateral - First charge of Mortgage & Hypothecation of Cement Plant I at Kaladgi (Dist. Bagalkot) including Land measuring 14 Acres and 8 Gunta, buildings and machinery at the same location.

Additionally, the loans carry the following guarantees -

Personal Guarantee of Mr. Venkatesh H Katwa (Chairman), Mr. Vilas H Katwa (MD), Mr. Deepak H Katwa (Executive Director & CFO) and Mr. H D Katwa (Chairman Emeritus)

Corporate Guarantee of M/s Katwa Infotech Ltd

The financial instruments are categorised into two levels based on the inputs used to arrive at fair value measurement as described below: Level 1: It includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. The fair value of financial assets and liabilities included in Level 3 is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes of similar instruments.

2) Financial Risk Management Objective and policies:

Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations and to provide guarantees to support its operations. The Company's principal financial assets include Security deposits, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company senior management oversees the management of these risks. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

2.1. 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 of risk interest rate risk. Financial instruments affected by market risk include loans and borrowings and deposits. The sensitivity analyses in the following sections relate to the position as at March 31, 2023 and March 31,2022.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt.

The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and other post retirement obligations; provisions; and the non-financial assets and liabilities.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2023 and March 31, 2022.

2.2 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. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers.

The Company's credit risk is primarily to the amount due from customers and loans. The Company maintains a defined credit policy and monitors the exposures to these credit risks on an ongoing basis. Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with scheduled commercial banks with high credit ratings assigned by domestic credit rating agencies.

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. Trade receivables are unsecured and are derived from revenue earned from customers primarily located in India. The Company does monitor the economic environment in which it operates and the Company manages its Credit risk through credit approvals, establishing credit limits and continuously monitoring credit worthiness of customers to which the Company grants credit terms in the normal course ofbusiness.

On adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade receivable. The management uses a simplified approach (i.e. based on lifetime ECL) for the purpose of impairment loss allowance, the Company estimates amounts based on the business environment in which the Company operates, and management considers that the trade receivables are in default (credit impaired) when counter party fails to make payments as per terms of sale/service agreements. However the Company based upon historical experience determine an impairment allowance for loss on receivables.

When a trade receivable is credit impaired, it is written off against trade receivables and the amount of the loss is recognised in the income statement. Subsequent recoveries of amounts previously written off are credited to the income statement.

The gross carrying amount of trade receivables is Rs.434.63 Lakhs (March 31, 2022: Rs.547.48 Lakhs). Trade receivables are generally realised within the credit period. The Company believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour.

2.3 Liquidity Risk:

Liquidity risk arises from the Company’s inability to meet its cash flow commitments on time. Prudent liquidity risk management implies maintaining sufficient stock of cash and marketable securities.

Company accesses domestic financial markets, Banks and Financial Institutions to meet its liquidity requirements. The company’s liquidity is managed centrally with operating units forecasting their cash and liquidity requirements.

29. CAPITAL MANAGEMENT

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The company's policy is to keep the gearing ratio between 40% and 60%. The gearing ratio of the company during the reporting period (including previous period) is substantially high due to substantial long term debt fund raised for the purpose of expansion of plant capacity and solar power generation plant set up. The management is of the opinion that the new investment will reduce the cost of production and increase the profitability of the company in near future and reduce the debt. The company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations.

For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the Company's capital management is to maximise the shareholder value.

High Gearing ratio is mainly attributed to the significant borrowings for solar power plant at Bisarhalli and cement plant expansion at Lokapur. These expansion project have been completed resulting in depreciation charge and Interest cost to the equity.

30 SEGMENT INFORMATION

The company's operating segments are established on the basis of those components that are evaluated regularly by the Executive Committee (the 'Chief Operating Decision Maker' as defined in Ind AS 108- 'Operating Segments'), in deciding how to allocate resources and in assessing performance. These have been identified taking into account nature of products and services, the deferring risks and returns and internal business reporting systems.

The company has four principal operating segments; viz. 1. Manufacturing and trading in Cements (MTC), 2. Trading in Coal (TC), 3. Dealers of Petrol and Diesel (TPD), and 4. Solar Energy generation and Sale (SP).

The accounting policies adopted for segment reporting are in line with the accounting policy of the Company with following additional policies for segment reporting.

i. Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and Expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as “Unallocable”.

ii. Segment Assets and Segment Liabilities represent Assets and Liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as “Unallocable”.

31 Leases

On adoption of IND AS-116, the Company recognised lease liabilities in relation to leases which had previously been classified as ‘operating leases’ under the principles of IND AS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of 1 April 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on 1 April 2019 was 12.0% p.a.

32 OTHER EXPLANATORY INFORMATION

1 Dues to Micro, Small and Medium enterprises

The Company has Rs. 105.10 Lakhs (PY Rs.165.62 Lakhs) dues to micro and small enterprises as at 31st March 2023. However the same is not outstanding for more than 45 Days. The information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

2 Subsequent events:

The company has converted a portion of the loans obtained from the Promoter Group into Equity Shares vide the Extraordinary General Meeting held on 12th April 2023 (Board Meeting dated 16th March 2023), amounting to Rs.2400 Lakhs at the valuation of Rs.125 per equity share. Additionally, the company has also issued equity shares and share warrants to other investors in the same meeting.

3 All amounts have been rounded off to nearest rupee in lakhs and due to this rounding off, the numbers presented throughout the document may not add up precisely to the totals and percentages may not precisely reflect the absolute figures.

4 The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current requirements.

5 The Company does not have any transactions with companies struck-off under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956.

6 The Company does not have any immovable property (other than properties where the Company is a lessee and the lease agreements are duly executed in the favour of the lessee) whose title deeds are not held in the name of the Company.

7 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

8 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

9 The Company have 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

(a) 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

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

10 The Company have 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

(a) 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

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

11 The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies ("ROC") beyond the statutory period.

12 The Company has not done 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).

13 The Company has not been declared a wilful defaulter by any bank or financial institutions or other lender in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

14 The Company has not used any borrowings from banks and financial institutions for purpose other than for which it was taken.

15 These financial statements were approved for issue by the Board of Directors on May 25, 2023.

35 Disclosure on Government Grants

(a) Sales Tax deferment loan has been considered as a government grant and the difference between the fair value and nominal value as on date is recognized as an income over the life of the grant. Every year, interest expense is accounted based on the fair interest rate used for determining the fair value of the loan on the date of receipt of the loan.

(b) Accordingly, an amount of Rs. 65.12 Lakhs (PY - 19.24 Lakhs) has been accounted as Other Income in respect of the same.

(c) Additionally, an amount of Rs.41.00 Lakhs (PY - 19.24 Lakhs) has been accounted as Interest Expense on account of the changes in the Fair Value.