c. Provisions

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. The expense relating to a provision is presented
in the statement of profit and loss net of any reimbursement.

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.

Provisions are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.

n) Revenue Recognition

The Company recognizes revenue when control over the
promised goods or services is transferred to the customer
at an amount that reflects the consideration to which the
Company expects to be entitled in exchange for those
goods or services.

The specific recognition criteria described below must also
be met before revenue is recognised.

The Company recognises revenue generally at the point in
time when the products are delivered to customer or when
it is delivered to a carrier for export sale, which is when
the control over product is transferred to the customer. In
contracts where freight is arranged by the Company and
recovered from the customers, the same is treated as a
separate performance obligation and revenue is recognized
when such freight services are rendered.

Revenue is adjusted for variable consideration such as
discounts, rebates, refunds, credits, price concessions,
incentives, or other similar items in a contract when they
are highly probable to be provided. The amount of revenue
excludes any amount collected on behalf of third parties.

Interest and dividend:

Interest income including income arising on other
instruments are recognised on time proportion basis using
the effective interest rate method.

Dividend income is recognized when the right to receive
dividend is established.

Export Benefits

The benefit accrued under the Duty Drawback, Merchandise
Export Incentive Scheme and other schemes as per the
Import and Export Policy in respect of exports made under
the said schemes is included as 'Export Incentives' under the
head 'Other operating revenue'.

o) Employee benefits

a) Defined Contribution Plan

The Company pays provident fund contributions to publicly
administered provident funds as per local regulations.
The Company has no further payment obligations once
the contributions have been paid. The contributions
are accounted for as define contribution plan and the
contributions are recognised as employee benefit expense
when they are due.

b) Defined Benefit Plan

The liability or asset recognised in the Balance Sheet in
respect of defined benefit gratuity plans is the present value
of the defined benefit obligation at the end of the reporting
period less the fair value of plan assets. The defined benefit
obligation is calculated annually by actuaries using the
projected unit credit method.

The present value of the defined benefit obligation
denominated in ' is determined by discounting the estimated
future cash outflows by reference to market yields at the
end of the reporting period on government bonds that have
terms approximating to the terms of related obligation.

The net interest cost is calculated by applying the discount
rate to the net balance of the defined benefit obligation and
the fair value of plan assets. This cost is included in employee
benefit expense in the statement of profit and loss.

Remeasurement gains and losses arising from experience
adjustments and changes in actuarial assumptions are
recognised in the year in which they occur, directly in other
comprehensive income.

Changes in present value of the defined benefit obligation
resulting from plan amendments or curtailments are
recognised immediately in the statement of profit and loss
as past service cost.

c) Leave Entitlement

Leave entitlement are provided based on an actuarial
valuation, similar to that of gratuity benefit. Re-measurement,
comprising of actuarial gains and losses, in respect of leave
entitlement are recognised in the Statement of Profit and
Loss in the period in which they occur.

d) Short-term Benefits

Short-term employee benefits such as salaries, performance
incentives etc. are recognised as expenses at the
undiscounted amounts in the Statement of Profit and Loss
of the period in which the related service is rendered.

p) Borrowings and Borrowing costs.

Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily takes
a substantial period of time to get ready for its intended use
or sale are capitalised as part of the cost of the asset. All
other borrowing costs are expensed in the period in which
they occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the borrowing
of funds.

q) Taxation

i. Current Tax

The tax currently payable is based on taxable profit for the
year. Taxable profit differs from 'profit before tax' as reported
in the statement of profit and loss because of items of
income or expense that are taxable or deductible in other
years and items that are never taxable or deductible. The
Company's current tax is calculated using rates that have
been enacted or substantively enacted by the end of the
reporting period.

ii. Deferred Tax

Deferred tax is recognized on temporary differences
between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases
used in the computation of taxable profit. Deferred tax
liabilities are generally recognized for all taxable temporary
differences. Deferred tax assets are generally recognized for
all deductible temporary differences to the extent that it is
probable that taxable profits will be available against which
those deductible temporary differences can be utilized.

The carrying amount of deferred tax asset is reviewed at the
end of each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset realized, based on tax rates

(and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the
manner in which the Company expects, at the end of the
reporting period, to recover or settle the carrying amount of
its assets and liabilities.

r) Earnings per Share

Basic earnings per share are calculated by dividing the net
profit or loss for the year attributable to equity shareholders
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
events of bonus issue, if any.

For the purpose of calculating diluted earnings per share,
the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares
outstanding during the year are adjusted for the effects of
all dilutive potential equity shares.

The number of equity shares are adjusted retrospectively for
all periods presented for any bonus shares issues.

s) Cash Flow Statement

Cash flows are reported using the indirect method, whereby
profit for the period is adjusted for the effects of transactions
of a non-cash nature, any deferrals or accruals of past or
future operating cash receipts or payments and item of
income or expenses associated with investing or financing
cash flows. The cash flows from operating, investing and
financing activities of the Company are segregated.

t) Trade Payables & Trade Receivables.

A payable is classified as a 'trade payable' if it is in respect
of the amount due on account of goods purchased or
services received in the normal course of business. These
amounts represent liabilities for goods and services
provided to the Company prior to the end of the financial
year which are unpaid. These amounts are unsecured
and are usually settled as per the payment terms stated
in the contract. Trade and other payables are presented
as current liabilities unless payment is not due within 12
months after the reporting period. They are recognised
initially at their fair value and subsequently measured at
amortised cost using the EIR method.

u) A receivable is classified as a 'trade receivable' if it is in
respect of the amount due on account of goods sold or
services rendered in the normal course of business. Trade
receivables are recognised initially at transaction values and
subsequently measured at amortised cost using the EIR
method (if there is a financing element), less provision for
expected or lifetime credit loss.

v) Leases

Measurement of Lease Liability

At the time of initial recognition, the Company measures lease
liability as present value of all lease payments discounted
using the Company's incremental cost of borrowing and
directly attributable costs. Subsequently, the lease liability is

1) increased by interest on lease liability.

2) reduced by lease payments made; and

3) remeasured to reflect any reassessment or lease
modifications specified in Ind AS 116 'Leases', or to
reflect revised fixed lease payments.

Measurement of Right-of-use assets

At the time of initial recognition, the Company measures
'Right-of-use assets' as present value of all lease payments
discounted using the Company's incremental cost of
borrowing w.r.t said lease contract. Subsequently, 'Right-of-
use assets' is measured using cost model i.e., at cost less any
accumulated depreciation and any accumulated impairment
losses adjusted for any remeasurement of the lease liability
specified in Ind AS 116 'Leases'.

Depreciation on 'Right-of-use assets' is provided on straight
line basis over the lease period.

The exception permitted in Ind AS 116 for low value assets
and short-term leases has been adopted by Company.

w) Segment Reporting

Based on ” Management Approach ”as defined in Ind AS 108
-Operating Segments the chief operating decision maker
regularly monitors and reviews the operating results of the
whole Company as one segment of "Agro -Chemicals". Thus,
as defined in Ind AS 108, the Company's entire business
falls under this one operational segment and hence the
necessary information has already been disclosed in the
Balance Sheet and the Statement of Profit and Loss. The
analysis of geographical segments is based on the areas in
which customers of the Company are located.

A. Expected Credit Loss

Allowance for Expected Credit Loss

In accordance with Ind AS 109, the Company uses the expected credit loss ("ECL") model for measurement and recognition
of impairment loss on its trade receivables or any contractual right to receive cash or another financial asset that result from
transactions that are within the scope of Ind AS 115. For this purpose, the Company uses a provision matrix to compute the
expected credit loss amount for trade receivables. The provision matrix takes into account external and internal credit risk
factors and historical data of credit losses from various customers. The Company estimates impairment under the simplified
approach. Accordingly, it does not track the changes in credit risk of trade receivables. The impairment amount represents
lifetime expected credit loss.

a) Terms/rights attached to equity shares

The Company has a single class of equity shares having a par value of ' 10 per share. Each shareholder of equity share is
entitled to one vote per share. The Company declares and pays dividend in Indian rupees.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of
the Company in proportion to the number of equity shares held by each shareholder, after settlement of all preferential
obligations.

As per the records of the Company, including its register of shareholders/members and other declarations received from
shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of the
shares.

Securities premium

Security Premium in accordance with the provisions of
Section 52 of the Companies Act represents the premium
received on issue of shares. It can be utilised to pay-off
equity related expenses or for issuance of bonus shares and
its related issue expenses.

General reserve

Under the erstwhile Companies Act 1956, general reserve
was created through an annual transfer of net income
at a specified percentage in accordance with applicable
regulations. The purpose of these transfers was to ensure
that if a dividend distribution in a given year is more than
10% of the paid up share capital of the Company for
that year, then the total dividend distribution is less than
total distributable reserve for that year. Consequent to
introduction of the Companies Act 2013, the requirement
to mandatorily transfer a specified percentage of net profit
to general reserve has been withdrawn. However the amount
previously transferred to the general reserve can be utilised

only in accordance with the specific requirements of the
Companies Act, 2013.

Capital Redemption Reserve

Capital redemption reserve represents the amount of
profits transferred from general reserve for the purpose
of redemption of preference shares or for the buyback of
shares.

Dividend

The Board of Directors of the Company at their meeting
held on May 23, 2025 have recommended dividend of ' 1
per share (10% of FV- ' 10) for the Financial Year 2024¬
25 e, subject to shareholder approval at the ensuing Annual
General Meeting.

The dividend proposed for the previous year has been paid
during the year and charged to Retained earning ' 5.00 crore.

I. Terms and Security of Borrowings:

a Cash Credit: Bank Of Baroda -Sanctioned Limit ' 74.75
crore, CC Interest rate 0.25% over 1 year MCLR without
Strategic Premium

b Foreign Currency Loan: Bank of Baroda -It is a sublimit
of ' 60 crore at Interest rate of around 7.62% p.a.
sanctioned under overall Cash Credit limit of ' 74.75
crore. Based on MCLR, payable as and when charged

c Working Capital Loan: Bank of Baroda -It is a sublimit
of ' 50 crore sanctioned under overall Cash Credit limit
of ' 74.75 crore. Interest rate 0.25% over 1 year MCLR
without Strategic Premium

d Packing Credit: Bank of Baroda -Sanctioned limit
' 75.00 crore at average Interest rate of around 6.43%
p.a. (P.Y. Sanctioned limit ' 75.00 crore at average
Interest rate of around 6.50% p.a.)

e Working Capital Demand Loan: CTBC Bank Co. Ltd.
- Sanctioned limit ' 35 crore at interest rate to be
decided at disbursement, Company has not taken
disbursement during year

f Packing Credit: CTBC Bank Co. Ltd. - Sanctioned limit
' 35 crore at average interest rate 6.43% p.a.

Above cash credit and packing credit limits are secured
by way of exclusive first charge on hypothecation of
entire inventories, Book debts and other current assets
present & future.

The above facilities are secured as follows,

i Pari pasu First charge on the current assets of the
Company both present and future.

ii Pari pasu Equitable Mortgage of all land and buildings
and hypothecation of plant and machinery situated at
factories or at godowns.

iii Personal Guarantee of Mr. R.K.Shetty, Mr. S.K.Shetty,
Mr. Raunak Shetty and Mr Shriraj Shetty.

II. Terms of Unsecured Borrowings:

a Working Capital Loan - Arka Fincap - sanctioned limit
of ' 55 crore. The Loans are secured by Pledge of Plant
and Machinery of wholly owned subsidary Heranba
Organic Pvt. Ltd., Corporate Guarantee of Heranba
Organics Pvt. Ltd. and Personal Guarantee of Promoters
- Mr. Sadashiv Kanyana Shetty and Mr. Raghuram
Kanyana Shetty.

b Working Capital Loan - Bajaj Finserv - sanctioned limit
of ' 17.50 crore. Unsecured facility with personal
guarantee of promoters- Mr. Sadashiv Kanyana Shetty,
Mr. Raghuram Kanyana Shetty, Mr. Sriraj Sadashiv
Shetty and Mr. Raunak Raghuram Shetty.

c Loan from R K Shetty: Loan of ' 14 crore at interest of
9.5% per anum. Repayable after 365 days from the date
of disbursement,along with interest.

40. FINANCIAL RISK MANAGEMENT

Risk management framework:

The Company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company's
senior management oversees management of these risks. The Company's focus is to foresee the unpredictability of financial
markets and seek to minimize potential adverse effects on its financial performance.

i) Market Risk

a. Foreign currency risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices
etc. The Company operations involve foreign exchange transactions including mainly import, export, packing credit
facilities and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect
to US$. Foreign currency risk arises from future commercial transactions and recognised in assets and liabilities
denominated in foreign currency that is not Company's functional currency (i.e INR). The risk is measured through
forecast of highly probable foreign currency cash flow.

b. Interest rate risk

Interest rate risk arises from movements in interest rates which could have effects on the Company's net income or financial
position. Changes in interest rates may cause variations in interest income and expenses resulting from interest-bearing
assets and liabilities. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's
debt obligations with floating interest rates.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of borrowings
and loans given affected. With all other variables held constant, the Company's profit before tax is affected through the
impact on floating rate borrowings, as follows:

41. FAIR VALUE HIERARCHY

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a)
recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial
statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified
its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows
underneath the table.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

(*) The Company has made an investment in Alternate Investment Fund (AIF) of ' 2.25 crore (' 1.50 crore in previous year).
This investment is marked at fair value through profit and Loss (FVTPL),

In absence of financials statements of The Shamrao Vithal Co-op. Bank Ltd. And Matrubhumi Co-op. Credit Society Limited
the fair value effect is not given, the same is carried at its carrying value in books, although the same is accounted at FVTPL.
The management does not expect the fair value changes to be material to the financial statements.

42. CAPITAL MANAGEMENT

Capital includes equity attributable to the equity holders to ensure that it maintains an efficient capital structure and healthy
capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure
and makes adjustments to it, in light of changes in economic conditions or its business requirements. To maintain or adjust
the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue
new shares.

As per our report of even date attached

For Natvarlal Vepari and Co LLP For & on behalf of the Board of Directors

(Formerly known as Natvarlal Vepari & Co.) Heranba Industries Limited

Chartered Accountants
Firm Registration No. 106971W/W101085

N Jayendran S. K. Shetty R. K. Shetty

Partner Chairman Managing Director

Membership No. 040441 DIN: 00038681 DIN: 00038703

Place: Mumbai Abdul Latif Raj K Bafna

Date: May 23,2025 Company Secretary Chief Financial Officer