33.2 Fair Value Hierarchy

(a) This section explains the judgments and estimates made in determining the fair values of the financial
instruments. To provide an indication about the reliability of the inputs used in determining fair value, the
Company has classified its financial instruments into the three levels prescribed under the accounting
standard.

The following table provides an analysis of financial instruments that are measured at fair value and have been
grouped into Level 1, Level 2 & Level 3 as below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed
equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity
instruments which are traded in the stock exchanges is valued using the closing price as at the reporting
period.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using
valuation techniques which maximize 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. This is the case for unlisted equity securities.

There are no transfers between level 1 and level 2 during the year.

(b) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

-the fair value of forward foreign exchange contracts is determined using forward exchange rates at the
balance sheet date

- the fair value of the remaining financial instruments is determined using discounted cash flow
analysis.

All of the resulting fair value estimates are included in level 2 or level 3, where the fair values have
been determined based on present values and the discount rates used were adjusted for
counterparty or own credit risk.

c) Fair value estimation

Estimated fair value disclosures of financial instruments are made in accordance with the requirements
of Ind AS 107 “Financial Instruments: Disclosure”. Fair value is defined as the amount at which the
instrument could be exchanged in a current transaction between knowledgeable willing parties in an
arm’s length transaction, other than in forced or liquidation sale. As no readily available market exists
for a large part of the Company’s financial instruments, judgment is necessary in arriving at fair value,
based on current economic conditions and specific risks attributable to the instrument. The estimates
presented herein are not necessarily indicative of the amounts the Company could realize in a market
exchange from the sale of its full holdings of a particular instrument.

The following summarizes the major methods and assumptions used in estimating the fair values of
financial instruments.

Interest-bearing

borrowings

Fair value is calculated based on discounted expected future principal and interest cash flows. The
carrying amount of the Company’s loans due after one year is also considered as reasonable estimate
of their fair values as the nominal interest rates on the loans due after one year are variable and
considered to be a reasonable approximation of the fair market rate with reference to loans with similar
credit risk level and maturity period at the reporting date.

Trade and other receivables / payables

Receivables / payables typically have a remaining life of less than one year and receivables are adjusted
for impairment losses. Therefore, the carrying amounts for these assets and liabilities are deemed to
approximate their fair values, as the allowance for estimated irrecoverable amounts is considered a
reasonable estimate of the discount required to reflect the impact of credit risk.

Other long term receivables

These receivables are regularly reviewed and adjusted for impairment losses. Therefore, management
considers the carrying amount of these receivables to approximate fair value.

d) Valuation process

The accounts & finance department of the Company includes a team that performs the valuations of
financial assets and liabilities required for financial reporting purposes, including level 3 fair values.

This team reports directly to the chief financial officer (CFO) and the audit committee (AC).

Discussions of valuation processes and results are held between the CFO, AC and the valuation team
at least once every three months, in line with the Company’s quarterly reporting periods.

The main level 3 inputs for unlisted equity securities, contingent considerations and indemnification
asset used by the Company are derived and evaluated as follows:

• Discount rates are determined using a capital asset pricing model to calculate a pre-tax rate that reflects
current market assessments of the time value of money and the risk specific to the asset.

• Risk adjustments specific to the counterparties (including assumptions about credit default rates) are
derived from credit risk grading determined by the Company’s internal credit risk management group.

• Earnings growth factor for unlisted equity securities are estimated based on market information for similar
types of companies.

Changes in level 2 and 3 fair values are analyzed at the end of each reporting period during the quarterly
valuation discussion between the CFO, AC and the valuation team. As part of this discussion the team
presents a report that explains the reason for the fair value movements.

a) Risk management framework

In the ordinary course of business, the Company is exposed to a different extent to a variety of financial
risks: foreign currency risk, interest rate risk, liquidity risk, price risk and credit risk. In order to
minimize any adverse effects on the financial performance of the Company, derivative financial
instruments, such as foreign exchange forward contracts, foreign currency option contracts are
entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging
purposes and not as trading or speculative instruments.

This note explains the sources of risk which the entity is exposed to and how the entity manages the
risk.

a) Credit risk

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 and investments in financial instruments.

The carrying amount of financial assets represents the maximum credit exposure. The Company
monitor credit risk very closely both in domestic and export market. The Management impact analysis
shows credit risk and impact assessment as low.

Trade and other receivables

Credit risk is the risk that a customer may default or not meet its obligations to the company on a
timely basis, leading to financial losses by the Company. The management has an advance collection
/credit policy criteria in place and the exposure to credit risk is monitored on an ongoing basis. Credit
evaluations are performed on all customers requiring credit over a certain amount. Before accepting a
new customer, the Company uses an internal credit system to assess the potential customer’s credit
quality and defines credit limits separately for each individual customer. The gross carrying amount
of trade receivables as at 31st March 2025 aggregates Rs.8595.54 lacs (Previous year ended 31st March
2024 Rs 4524.37 Lacs). The Company reviews for any required allowance for impairment that
represents its expected credit losses in respect of trade receivables.

Investments are reviewed for any fair valuation loss on periodically basis and necessary provision/fair
valuation adjustments has been made based on the valuation carried by the management to the extent
available sources, the management does not expect any investment counterparty to fail to meet its
obligations.

a) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations
associated with its financial liabilities that are settled by delivering cash or another financial asset.
The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have
sufficient liquidity to meet its liabilities when they are fallen due. The Company’s liquidity position is
carefully monitored and managed. The Company has in place a detailed budgeting and cash
forecasting process to help ensure that it has adequate cash available to meet its payment obligations.

Further, the Company continues to maintain enough liquidity buffer to meet additional demands that
may emerge on account of COVID-19 crisis.

The following table provides details of the remaining contractual maturity of the Company’s financial
Liabilities. It has been drawn up based on the undiscounted cash flows and the earliest date on which
the Company can be required to pay. The table includes only principal cash flows.

a) Market Risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in 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 result of changes in interest rates, foreign currency exchange rates,
equity price fluctuations, liquidity and other market changes. Future specific market movements
cannot be normally predicted with reasonable accuracy.

b) Currency Risk

The Company's functional currency in Indian Rupees (INR). The Company undertakes transactions
denominated in the foreign currencies; consequently, exposure to exchange rate fluctuations arise.
Volatility in exchange rates affects the Company’s revenue from export markets and the costs of
imports, primarily in relation to raw material. The Company is exposed to exchange rate risk under
its trade and debt portfolio.

a) 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 is exposed to interest rate
risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is
measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings
of the Company are principally denominated in INR.

NOTE 36: CAPITAL MANAGEMENT

The Company manages its capital to ensure to continue as a going concern while maximizing the return
to the equity holders through optimization of the debt to equity balance. In order to achieve this,
requirement of capital is reviewed periodically with reference to operating and business plans that take
into account capital expenditure and strategic investments. Apart from internal accrual , sourcing of
capitalised one through judicious combination of equity and borrowing , both short term and long term.

Consistent with others in the industry, the Company monitors capital on the basis of the optimum gearing
ratio of Net debt (comprising total liabilities) in proportion to Total Equity.

NOTE 37: CONTINGENT LIABILITIES:

37.01. Contingent Liabilities (Bank Guarantee & Legal cases) :

The company has given counter guarantee to the bankers against guarantees issued by Banks on behalf
of the company amounting to Rs.2559.45 Lacs (Previous Year: Rs. 1434.98 Lacs). The liability may arise
in case of failure in supply of material or malfunctioning of products supplied by the Company.

37.02. Few cases under various laws are pending against the Company at different judiciaries, the
outcome of which may result in certain losses to the Company to the extent of Rs.99.57/-lacs (previous
year Rs.104.81/- lacs.)

NOTE 40: EMPLOYEE BENEFITS PLAN
(A) Defined Contribution Plans

The Company has a defined contribution plan in respect of provident fund. Contributions are made
to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The
contributions are made to registered provident fund administered by the Government. The obligation
of the group is limited to the amount contributed and it has no further contractual nor any
constructive obligation.

(B) Defined Benefit Plans

(a) Description of the employee Benefit Plan

The company has an obligation towards gratuity, unfunded defined benefit retirement plan covering
eligible employees. The plan provides for lump sum payment to vested employees at retirement,
death while in employment or on termination of the employment of an amount equivalent to 15
days/ one month salary, as applicable, payable for each completed year of service or part thereof in
excess of six months in terms of Gratuity scheme of the company or as per payment of Gratuity Act,
whichever is higher. Vesting occurs upon completion of five years of service.

(b) Risk Exposure
Investment Risk

The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated
using a discount risk which is determined by reference to market yields at the end of the reporting
period on government bonds. Currently, for the plan in India, it has relatively balanced mix of
investments in Insurance related products.

Interest Rate Risk

A decrease in the bond interest rate will increase the plan liability; however, this will be partially
offset by an increase in the return on the plan's debt.

Longevity Risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate
of the mortality of plan participants both during and after their employment. An increase in the life
expectancy of the plan participants will increase the plan's liability.

Salary Risk

The present value of the defined plan liability is calculated by reference to the future salaries of plan
participants. As such, an increase in the salary of the plan participants will increase the plan's
liability.

No other post-retirement benefits are provided to the employees.

In respect of the plan in India, the most recent actuarial valuation of the plan assets and the present
value of the defined benefit obligation were carried out as at March 31, 2025 by an actuary.

The company has borrowed from Banks on the basis of security of current assets, the variation in
quarterly returns or statements filed by the Company with Bank are as under:

The Company is not filing any quarterly returns or statement with the Bank. However, the monthly
statements filed by the Company with the Bank are reconciled with the books for each quarter ends
and there are no material difference except as under:

(a) The Company do not have any Benami property, where any proceeding has been initiated or pending
against the Group for holding any Benami property.

(b) The Company do not have any transactions with companies struck off.

(c) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond
the statutory period.

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

(e ) 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:

(i) 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

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

(f) 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:

(i) 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

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

(g) The Company has not 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)

(h) The company has not been declared wilful defaulter by any bank or financial institution or other
lender.

(i) The company has complied with the number of layers prescribed under clause (87) of section 2 of
the Act read with Companies (Restriction on number of Layers) Rules 2017.

(j) The Company didn’t have any long term contracts including derivative contracts for which there
were any foreseeable losses.

(k) The Company has not revalued its Property, Plant and Equipment.

Previous year figures have been re-casted, re-grouped and reclassified, wherever necessary to confirm
to the current year classification.

For Mamraj & Co For Rungta Irrigation Limited

Chartered Accountants
Firm’s Reg. No. 0006396N

Sd/- Sd/- Sd/-

(Mamraj Agrawal) (Mahabir Prasad Rungta) (Shruti Jain)

Partner Chairman Cum Managing Director Whole-Time Director

DIN No. 00235632 DIN No. 00229045

Date: 9.05.2025 Sd/- Sd/-

Place: Delhi (Vinod Kumar Mathuria) (Ayushi Bajaj)

Chief Financial Officer Company Secretary

M. No.: A71268