1.11 Provisions and Contingent Liabilities

A Provision is recognized if, as a result of past event, the Company has a present legal or
constructive obligation that is reasonably estimable, and it is probable that an outflow of economic
benefits will be required to settle the present obligation. Provisions are determined by the best
estimate of the outflow of economic benefits required to settle the obligation at the reporting date.
Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure
for a contingent liability is also made when there is a possible obligation or a present obligation
that may, but probably will not, require an outflow of resources. Where there is a possible obligation
or a present obligation in respect of which the likelihood of outflow of resources is remote, no
provision or disclosure is made.

1.12 Financial Instruments

A financial instrument is any contract that give rise to a financial asset of one entity and a financial
liability or equity of another entity.

Initial Recognition

Financial assets and liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument. Financial assets and liabilities are initially measured at fair value.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets and financial liabilities at fair value through profit
and loss) are added to or deducted from the fair value measured on initial recognition of financial
asset or financial liability.

Subsequent Measurement

Financial assets at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income if these financial
assets are held within a business whose objective is achieved both by collection contractual cash
flows on specified dates to cash flows that are solely payments of principal and interest on the
amount outstanding and selling financial assets.

Financial assets at fair value through Profit and Loss

Financial assets are measured at fair value through profit and loss unless it is measured at amortised
cost or at fair value through other comprehensive income on initial recognition. The transaction
costs that are directly attributable to the acquisition of financial assets and liabilities at fair value
through profit and loss are immediately recognised in statement of profit and loss.

Financial liabilities

Financial liabilities are classified as measured at amortised cost or Fair Value Through Profit and
Loss Account (FVTPL). A financial liability is classified as at FVTPL if it is classified as held for-
trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net gains and losses, including any interest expense, are
recognised in statement of profit and loss. Other financial liabilities are subsequently measured at
amortised cost using the effective interest method. Interest expense and foreign exchange gains
and losses are recognised in statement of profit and loss. Any gain or loss on DE recognition is
also recognised in statement of profit and loss.

De-recognition

The Company derecognises a financial asset when the contractual rights to the cash flows from
the financial asset expire or it transfers the financial asset and the transfer qualifies for DE recognition
as per Ind AS 109. A financial liability (or a part of a financial liability) is derecognised from the
Company's balance sheet when the obligation specified in the contract is discharged or cancelled
or expires.

Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short¬
term deposits with an original maturity of three months or less, which are subject to an insignificant
risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents

consist of cash and short-term deposits, as defined above are considered an integral part of the
Company's cash management."

1.13 Cash flow statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the
effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash
receipts or payments. The cash flows from regular revenue generating, investing and financing
activities of the company are segregated.

For M N Rao and Associates For and on behalf of the Board of Directors

Chartered Accountants Source Industries (India) Limited

Firm's Registration No.005386S/S000195 CIN:L45400TG1984PLC004777

Sd/- Sd/- Sd/-

V. Sreekanth Reddy Naraharisetty Mohan Krishna Sudhir Reddy Posireddy

Partner Wholetime Director Chairman and Managing Director

Membership.No.023408 DIN: 07126524 DIN: 02813098

Sd/- Sd/-

Place: Hyderabad Visweswara Rao Kothapalli Tulika Srivastava

Date : 30-05-2025 Chief Financial Officer Company Secretary