FINANCIAL INSTRUMENTS

25.1 Capital Risk Management

The Company being in a capital intensive industry, its objective is to maintain a strong credit rating, healthy capital ratios and establish a capital structure that would maximise the return to stakeholders through optimum mix of debt and equity.

The Company’s capital requirement is mainly to fund its capacity expansion, repayment of principal and interest on its borrowings. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by funding from bank borrowings and the capital markets.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents,Bank balances other than cash and cash equivalents.

The Company has a Risk Management Committee established by its Board of Directors for overseeing the Risk Management Framework and developing and monitoring the Company’s risk management policies. The risk management policies are established to ensure timely identification and evaluation of risks, setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the Company’s activities to provide reliable information to the Management and the Board to evaluate the adequacy of the risk management framework in relation to the risk faced by the Company.

The risk management policies aims to mitigate the following risks arising from the financial instruments:

- Market risk

- Credit risk and

- Liquidity risk

26.1 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 the market prices. The Company is exposed in the ordinary course of its business to risks related to changes in foreign currency exchange rates, commodity prices and interest rates.

The Company seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company’s policies approved by the Board of Directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the Management and the internal auditors on a continuous basis. The Company does not enter into or trade financial instruments, including derivatives for speculative purposes.

26.1.1 Commodity price risk

The Company’s revenue is exposed to the market risk of price fluctuations related to the sale of its products (Buttons). Market forces generally determine prices for the buttons sold by the Company. These prices may be influenced by factors such as demand and supply, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its products.

The Company primarily procured its raw materials i. e. Resin, Styrene, Pigment & Chemicals etc. in the open market from third parties during the financial year ended 31.03.2026 and is therefore subject to fluctuations in prices.

The Company aims to sell the products at prevailing market prices. Similarly the Company procures key raw materials like Resin, Styrene, Pigment etc. based on prevailing market rates as the selling prices of buttons and the prices of input raw materials move in the same direction.

The Company as a matter of policy has not hedged the comodity risk.

The following table details the Company’s sensitivity to a 5% movement in the input price of Resin, Styrene, Pigments etc. The sensitivity analysis includes only 5% change in commodity prices for quantity sold or consumed during the year, with all other variables held constant. A positive number below indicates an increase

coi isui i led duin ig the y eai , vviui all oti iei vaiiables held cons tai it. ^ pos mve num bei below indicates an ii iciease

in profit where the commodity prices increase by 5%. Foi a 5% reduction in commodity prices, there would be a comparable impact on profit, and the balances below would be negative.

26.1.2 Interest rate risk

Interest rate risk is the risk that the fak value oi future cash flows of a financial instrnment will fluctuate because of changes in maiket interest rates. The Company is exposed to interest rate risk because funds are bomowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity foi changes in variable interest rate. The bonrowings of the Company are principally denominated in rnpees with a mix of fixed and floating rates of interest. The Company has exposure to interest rate risk, arising principally on changes in MCLR rate and LIBOR rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate bonrewings.

If interest rates had been 100 basis points highei / lowei and all othei variables were held constant, the Company’s profit foi the yeai ended 31 Maroh 2026 would decrease / increase by Rs. 29,557/- (foi the yeai ended 31 March 2025: decrease / increase by Rs. 40,903/-). This is mainly attributable to the Company’s exposure to interest rates on its variable rate bomowings.

26.2 Credit risk Management

Credit risk refere to the risk that a counteiparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Company has adopted a policy of only dealing with creditworthy counteiparties.

Customei credit risk is managed centrally by the Company and subject to established policy, procedures and control relating to customei credit risk management. Credit quality of a customei is assessed based on an extensive credit rating scorecaid and individual credit limits defined in accoidance with the assessment.

Credit risk on receivables is also mitigated by securing the same against lettere of credit and guarantees of reputed nationalised and private sectoi banks. Trade receivables consist of a laige numbei of customere spread across diveree industries and geographical areas with no significant concentration of credit risk. No single customei accounted foi 10% oi more of revenue in any of the yeare indicated. The outstanding trade receivables are regulariy monitored and appropriate action is taken foi collection of oveidue receivables.

Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as for long term capital expenditure growth projects. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents provide liquidity in the short-term and long-term. The management of the Company has established an appropriate liquidity risk management framework for Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods and its non-derivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

31.11 Provision

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.

31.12 Earning Per Share

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of
equity shares outstanding during the year. The weighted average number of equity shares outstanding during the
year is adjusted for treasury shares, bonus issue, bonus element in a rights issue to existing shareholders, share
split and reverse share split (consolidation of shares).

Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest
and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity
shares, by the weighted average number of equity shares considered for deriving basic earnings per share and
the weighted average number of equity shares which could have been issued on the conversion of all dilutive
potential equity shares including the treasury shares held by the Company to satisfy the exercise of the share
options by the employees.

32. CRITICAL ESTIMATION AND JUDGEMENTS

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom
equal the actual results. Management also needs to exercise judgement in applying the company’s accounting
policies.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of
items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different
than those originally assessed. Detailed information about each of these estimates and judgements is included in
relevant notes together with information about the basis of calculation for each affected line item in the financial
statements.

The areas involving critical estimates or judgements are:

- Estimation of useful lives of property, plant and equipment - Note 1

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in
respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the
expected residual value at the end of its life. The useful lives and residual values of Company’s assets are
determined by the management at the time the asset is acquired and reviewed periodically, including at each
financial year end. The lives are based on historical experience with similar assets as well as anticipation of
future events, which may impact their life, such as changes in technical or commercial obsolescence arising from
changes or improvements in production or from a change in market demand of the product or service output of
the asset.

- Estimation of Provisions - Note 14

- Estimation of current tax expense and payable - Note 23

The Company’s tax jurisdiction is India. Significant judgements are involved in determining the provision for
income taxes, if any, including amount expected to be paid/recovered for uncertain tax positions. Further,
significant judgement is exercised to ascertain amount of deferred tax asset (DTA) that could be recognised
based on the probability that future taxable profits will be available against which DTA can be utilized and amount
of temporary difference in which DTA can not be recognised on want of probable taxable profits

Estimates and judgements are continually evaluated. They are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the company and that are believed to
be reasonable under the circumstances.

33. The Company uses an accounting software for maintaining its books of account which had a feature of recording
audit trail (edit log) facility. However audit trail feature was operated from 10th August, 2024 for all relevant
transactions recorded in the accounting software.

34. The previous period figures have been regrouped / reclassified / rearranged, wherever necessary to confirm to
the current year presentation.

36. OTHER STATUTORY INFORMATION

a. The Company does not have any benami property, where any proceedings has been initiated or pending against
the Company for holding any benami property;

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

c. 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.

d. 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 to or on behalf of the ultimate beneficiaries.

e. 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)

f. The Company is not declared wilful defaulter by any bank or financial institutions or lender during the year.

g. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the

statutory period

h. Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in
agreement with the books of accounts.

i. The Company has used the borrowings from banks and financial institutions for the specific purpose for which it
was obtained.

j. The title deeds of all the immovable properties disclosed in the financial statements included in property, plant
and equipment and capial work-in-progress are held in the name of the Company as at the balance sheet date.

As per our report of even date attached For & ON BEHALF OF BOARD

For SANJEEV ANAND & ASSOCIATES For NIRAJ ISPAT INDUSTRIES LTD.

Chartered Accountants CIN: L27106DL1985PLC021811

Firm Regn. No. 007171C

SD/- SD/- SD/-

Place: Ghaziabad (S. Agarwal) (Vaishali Chaudhry) (Chaitanya Chaudhry)

Dated: 28.05.2025 FCA Director Director and CEO

M.No. 072907 Din 01719640 Din 06813394

31*11 Provision

Provisions are recognised when the Compeny has a present obligation (legal or constructive) as a result of a past
event ft is probable that an outflow of resources embodying economic benefits will be requited to settle the
obligation and a reliable estimate can be made of the amount of the obligation. *

If the effect of the time value of money Is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting Is used, the increase in the
provision due to the passage of time is recognised as a finance cost

31,12 Earning Par Share

Basic earrings per share is computed by dividing the profit / (loss) after tax by the weighted average number of
equity sbsres outstanding during the year. The weighted average number of equity shares outstanding during tha
yaar is adjusted for treasury shares, bonus issue, bonus element tn a rights Issue to existing shareholders, share
split and reverse shore split (consolidation of shares).

Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend. Interest and
other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares,
by the weighted average number of equity shares considered ter deriving basic earnings per share and the
weighted average number of edulty shares which could have been issued on the conversion of alt dliutfve
potential equity shares fnciudfng the treasury shares held by the Company to satisfy the exercise of the share
options by the employees.

32. CRITICAL ESTIMATION AMD JUDGEMENTS

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom
equal the actual results. Management also needs to exercise judgement In applying the company''s accounting
policies, ¹

This note provides an overview of the areas that involved a higher degree of judgement or complex^ and of
'' Items which are more likely to ba materially adjusted due to estimates end assumptions turning out to be different
than those ortgina&y assessed. Detailed information about each of these estimates and judgements is included In
relevant notes together with information about the basis of calculation for each affected Jine item In the financial
statements.

The areas involving critical estimates or judgements are:

- Estimation of useful lives of property, plant and equipment - Mote 1

Proparly, plant and equipment represent a significant proportion of the asset base of the Company. The charge in
^r respect of periodic depredation Is derived after determining an estimate of an asset''s expected useful life and the
expected residual value at tha end of Hs life. The useful lives and residual values of Company''s assets are
determine*! by the management at the time the asset is acquired and reviewed periodically, Including at each
financial yaar end. The lives are based on historical experience with similar assets as well as anticipation of future
events, which may impact their life, such as changes In technical or commercial obsolescence arising from
changes or improvements In production or from a change in market demand of the product or service output of
the asset

* Estimation of Provisions - Mote 14

- Estimation of current tax expense and payable - Mote 23 ¹

The Company''s tax jurisdiction Is India. Significant judgements are involved in determining the provision tor
Income taxes, if any, including amount expected to ba paldfrecovared for uncertain tax positions. Further,
significant judgement is exercised to ascertain amount of deferred tax asset (DTA) that could be recognised
based on the probability that future taxable profits will be available against which OTA can bo utHlzed and amount
of temperary difference In which DTA can not be recognised on want of probable taxable profits

i

Estimates and judgements are continually evaluated. They are based on historical experience and other factors.
Including expectations of future events that may have a financial impact on the company and that are believed to
be reasonable under the circumstances.

33. The Company uses an accounting software for maintaining Its books of account which did not had a feature of
recording audit trail (edit log) facility and the same was not operated throughout the year tor all relevant
transactions recorded In tha accounting software,

34. The previous period figures have been regrouped / reclassified f rearranged, wherever necessary to confirm to the
current year presentation.

36. OTHER STATUTORY INFORMATION

a. The Company does not have any ber.ami property, where any proceedings has been initiated or pending against
the Company for hording any bonaml property;

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

c. 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

00 provide any guarantee security or the like to of on behalf of the animate beneficialles

d. The Company has not received any fund from any person(s) or entityOes). 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 perty (ultimate beneficiaries) or

(If) provide any guarantee, security or the like to or on behair of the ultimate beneficiaries

e. The Company does not have any such transaction which rs not recorded in the books of accounts that has been
surrendered or discJosed as income during the year In the tax assessments under the Income Tax Act, 1991
(such as, search or survey or any other relevant provisions of the Incomo Tax Act. 1961)

f. The Company is nol declared wilful defaulter by any bank or financial Institutions on lender during the year.

g. The Company does net have any charges or eatlsfaction which Is yet to be registered with ROC beyond the

statutory period

h Quarterfy returns or statements of current assets filed by the Company with banks or financial Institutions are In
agreement with the books of accounts

L The Company has used the borrowings from banks and financial institutions for the specific purpose for which H
was oblained,

j. The title deeds of all the Jmmovahle properties disclosed in the financial statements included in property, plant
and equipment and capial work-in-progress are beta In the name of the Company as at the balance sheet date.

A* per our report of oven date attached For & ON BEHALF OF BOARD

For SANJEEV ANAND & ASSOCIATES For NfRAJ ISPAT INDUSTRIES LTD

{£ Chartered AccounLants CINLZ7106 OL1985PLCC21811

Firm Regn No 007171C ,

t -3

ptfiWaSlSKabad (Sumit Gupta) (Val&hali Cheudhry) (Chaltanya Chaudhry)

Dated: 29.05 2024 FCA Director Director and CEO

M No. 423453 Din 01719640 Din 06813394

Kl^ fW--7 .

(Nffra/ Chaudhry) (Shadmar. khan)

CFO Company Secretary