Notes to Accounts of Borana Weaves Ltd.

2.13 Provisions, Contingent Liabilities and Contingent Assets:

• Provisions are recognized when there is a present legal or constructive obligation as a result of a past event
and it is probable (i.e. more likely than not) 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.
Such provisions are determined based on management estimate of the amount required to settle the
obligation at the balance sheet date. When the Company expects some or all of a provision to be
reimbursed, the reimbursement is recognized as a standalone asset only when the reimbursement is
virtually certain.

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

• Present obligations arising under onerous contracts are recognized and measured as provisions. An onerous
contract is considered to exist when a contract under which the unavoidable costs of meeting the
obligations exceed the economic benefits expected to be received from it.

• Contingent liabilities are disclosed on the basis of judgment of management/independent experts. These are
reviewed at each balance sheet date and are adjusted to reflect the current management estimate.

• Contingent Assets are not recognized, however, disclosed in financial statement when inflow of economic
benefits is probable.

2.14 Leases:

• At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is,
or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration. To assess whether a contract conveys the right to control the use of an
identified asset, the Company assesses whether:

• the contract involves the use of an identified asset - this may be specified explicitly or implicitly and
should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If
the supplier has a substantive substitution right, then the asset is not identified.

• the Company has the right to obtain substantially all of the economic benefits from use of the asset
throughout the period of use; and

• the Company has the right to direct the use of the asset. The Company has this right when it has the
decision-making rights that are most relevant to changing how and for what purpose the asset is used. In
rare cases where the decision about how and for what purpose the asset is used is predetermined, the
Company has the right to direct the use of the asset if either:

# the Company has the right to operate the asset; or

# the Company designed the asset in a way that predetermines how and for what purpose it will be used.

At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the
contract to each lease component on the basis of their relative stand-alone prices.

Company as a lessee:

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of
the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets
are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced
by impairment losses, if any, and adjusted for certain measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company''s incremental
borrowing rate. Generally, the Company uses its incremental borrowing rates as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

- fixed payments, including in-substance fixed payments.

- Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement
date.

- Amounts expected to be payable under a residual value guarantee; and

- the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional
renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a
lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortized cost using the effective interest method. It is re-measured when there is change in
future lease payments arising from a change in an index or rate, if there is change in the Company''s estimate of the amount
expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a
purchase, extension or termination option.

When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-
use asset or is recorded in statement of profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

Leasehold land is amortized over the period of lease being remaining as on the date of purchase is stated as below:

1) Plot no. AA/34 of Sachin Udhyognagar Sahakari Sangh Limited: - 9 Years

2) Plot no. B 16/16 of Sachin Udhyognagar Sahakari Sangh Limited: - 9 Years

3) Plot no. AA/93 of Sachin Udhyognagar Sahakari Mandali Limited: - 10 Years

Further mentioned, Wind Mill & Solar Power system are under installation condition at the year end, which is on the leasehold
land, the details for such properties will be shown in the year in which the same is put to use.

Short-term leases and leases of low-value assets:

The Company has elected not to recognize right-of-use assets and lease liability for the short-term leases that have lease term
of 12 months of less and leases of low-value assets. The Company recognizes the lease payments associated with such leases
as an expense on a straight-line basis over the lease term.

2.15 Income Taxes:

Income tax expense represents the sum of tax currently payable and deferred tax. Tax is recognized in the Statement of
Profit and Loss, except to the extent that it relates to items recognized directly in equity or in other comprehensive
income.

Current Tax:

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any
adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best
estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income
taxes. Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities.

The tax rates and the a tax laws used to compute the amount are those that are enacted or substantively enacted, at the
reporting date in the country where the Company operates and generates taxable income. Current tax assets and
liabilities are offset only if there is a legally enforceable right to set it off the recognized amounts and it is intended to
realize the asset and settle the liability on a net basis or simultaneously.

Deferred Tax:

Deferred tax is provided using the balance sheet method on temporary differences between the tax base of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

- When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that
is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit
or loss,

- T axable temporary differences arising on the initial recognition of goodwill.

- Temporary differences related to investments in subsidiaries, associates, and joint arrangements to the extent that the
Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not
reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and
any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry forward of unused tax credits and unused
tax losses (including unabsorbed depreciation) can be utilized, except:

- When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.
Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has
become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items
are recognized in correlation to the underlying transaction either in OCI or directly in equity.

2.16 Current versus Non-Current classification:

The Company presents assets and liabilities in the Balance Sheet based on current/non-current classification.

a) An asset is current when it is:

• Expected to be realized or intended to be sold or consumed in the normal operating cycle,

• Held primarily for the purpose of trading,

• Expected to be realized within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months
after the reporting period.

All other assets are classified as non-current.

b) A liability is current when:

• It is expected to be settled in the normal operating cycle,

• It is held primarily for the purpose of trading,

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.

All other liabilities are classified as non-current.

c) Deferred tax assets and liabilities are classified as non-current assets and liabilities.

d) The operating cycle is the time between the acquisition of assets for processing and their realization in cash and
cash equivalents.

2.17 Government Grants and Subsidies

Government grants are initially measured at amount receivable from the Government and are recognized on an
accrual basis only if there is reasonable assurance that they will be received and the company will comply with
the conditions associated with the grant and for those grants which are uncertain are not recognized unless there
is reasonable assurance of the same.

- In case of capital grants, they are deducted from the cost of the Fixed Assets against which the same is
received & accordingly depreciation is charged on the reduced value of the asset.

- In case of grants that compensate the Company for expenses incurred are recognized in Statement of Profit
and Loss by decreasing the Expense e.g. Power subsidy to be reduced from Factory Power Expenses.

2.18 Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity
shareholders by weighted average number of equity shares outstanding during the financial year, adjusted for
bonus elements and stock split in equity shares issued during the year and excluding treasury shares. The weighted
average number of equity shares outstanding during the period and for all periods presented is adjusted for events,
such as bonus shares and stock split, other than the conversion of potential equity shares that have changed the
number of equity shares outstanding, without a corresponding change in resources.

Diluted EPS adjust the figures used in the determination of basic EPS to consider.

- The after-income tax effect of interest and other financing costs associated with dilutive potential equity
shares, and

- The weighted average number of additional equity shares that would have been outstanding assuming the
conversion of all dilutive potential equity shares.

IPO expenses are generally accounted for as a deduction from equity (security premium) to the extent they are
incremental costs directly attributable to the equity transaction. These expenses include costs like legal, accounting,
and regulatory fees, printing costs, and stamp duties. However, if the IPO is not probable or no longer probable, the
expenses are charged to the profit and loss account. When an IPO is considered probable, expenses are parked in an
advance account. When shares are issued, the advance amount is debited to equity related to listing expenses
whereas Roadshow expenses, which are generally considered promotional activities, are typically not directly
related to the equity issue.

In essence, the IND AS treatment of IPO expenses focuses on ensuring that costs directly attributable to the equity
issuance are properly recognized as deductions from equity, while other costs are expensed as incurred.
Accordingly, the Initial Public Offer (IPO) proceeding expenses which are directly attributable to the offerings are
written off from security premium account where the company has received the premium amount from public
offerings.

Sensitivity Analysis Gratuity Plan

Sensitivity Analysis: Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and
expected salary increase rate. Effect of change in mortality rate is negligible. Please note that the sensitivity analysis presented
below may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in
assumption would occur in isolation of one another as some of the assumptions may be correlated. The results of sensitivity
analysis are given below:

Note 36:

Reconciliation of Effective Tax Rate:

Provision for current tax is made in the accounts on the basis of estimated tax liability as per the applicable
provisions of the Income Tax Act, 1961.

The reconciliation between the income before income taxes and the income tax provision to the amount
computed by applying the statutory income tax rate is summarized below.

Note 37:

FINANCIAL INSTRUMENTS:

A. Accounting classification and fair value measurement:

The fair value of financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation
sale.

The following methods and assumptions were used to estimate the fair values:

The carrying amount of trade receivable, trade payable, loans, cash and cash equivalents, other bank balances and other receivables as at 31st March, 2026 and 31st March, 2025 are considered to be the
same as their fair values, due to their short-term nature. Financial Instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rate and individual
credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

Fair value hierarchy

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of following:

Level 1 - Category includes financial assets and liabilities, that are measured in whole or in significant part by reference to published quoted price (unadjusted) in an active market.

Level 2 - Category includes financial assets and liabilities measured using a valuation technique based on assumptions that are supported by prices from observable current market transactions. These
include assets and liabilities for which pricing is obtained via pricing services, but where prices have not been determined in an active market, financial assets with fair values based on broker quotes and
assets that are valued using the Company''s own valuation models whereby the material assumptions are market observable. The majority of Company’s over-the-counter derivatives and several other
instruments not traded in active markets fall within this category.

Level 3 - Category includes financial assets and liabilities measured using valuation techniques based on non market observable inputs. This means that fair values are determined in whole or in part using
a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. However, the
fair value measurement objective remains the same, that is, to estimate an exit price from the perspective of the Company. The main asset classes in this categoryare unlisted equityinvestments as well as
unlisted funds.

B. Financial risk management objectives and policies:

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

The Company’s financial liabilities comprise of trade payable and other liabilities to manage its operation and financial assets
include trade receivables, security deposits, loans and advances, etc, arises from its operation.

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management
framework. The Company has implemented a robust Business Risk Management framework to identify, evaluate business risks
and opportunities. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance
the Company’s competitive advantage. The business risk framework defines the risk management approach across the enterprise at
various levels including documentation and reporting. The framework has different risk models which help in identifying risks
trend, exposure and potential impact analysis at a Company level.

The Audit Committee of the Board periodically reviews the risk management framework.

1) MARKET RISK:

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market
rates and prices. The Company’s size and operations result in it being exposed to the following market risks that arise from its use
of financial instruments:

a) currency risk;

b) other price risk; and

c) interest rate risk

The above risks may affect the Company’s income and expenses, or the value of its financial instruments. The Company’s
exposure to and management of these risks are explained below.

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the
Company''s operating activities (where revenue, expense or capital expenditure is denominated in foreign currency). Foreign
currency exchange rate exposure is partly balanced by purchasing of goods from the respective countries. The Company evalutes
exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

2) CREDIT RISK:

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company''s exposure to credit risk is
influenced mainly by cash and cash equivalents, trade receivables and financial assets measured at amortised cost. The Company
continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

a) Credit risk management:

i) Credit risk rating:

The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis of
assumptions, inputs and factors specific to the class of financial assets.

A: Low credit risk
B: Moderate credit risk
C: High credit risk

Cash and cash equivalents carry no credit risk and hence are not classified under either of the asset groups.

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party
fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss
experience and considering differences between current and historical economic conditions.

Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation
decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to
enforce repayment. Recoveries made are recognised in statement of profit and loss.

b) Credit loss assessment for trade receivables:

Customer credit risk is managed by the management subject to the Company’s established policy, procedures and control relating
to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit review and individual
credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored. At the year
end the Company does not have any significant concentrations of bad debt risk. An impairment analysis is performed at each
reporting date on an individual basis for major clients. The calculation is based on historical data. The Company does not hold
collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are
located in several jurisdictions and operate in largely independent markets.

3) LIQUIDITY RISK:

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The
Company’s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without
incurring unacceptable losses. In doing this, management considers both normal and stressed conditions. The Company maintained
a cautious liquidity strategy, with a positive cash balance throughout the year ended 31st March, 2026 and 31st March, 2025. Cash
flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company regularly
monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short-term
surplus cash generated, over and above the amount required for working capital management and other operational requirements,
is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and
other highly marketable investments with appropriate maturities to optimise the cash returns on investments while ensuring
sufficient liquidity to meet its liabilities.

Maturities of financial liabilities

The table below summarises the maturity profile of the Group’s non-derivative financial liabilities based on contractual

Note 38:

CAPITAL MANAGEMENT:

A. Risk 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 maximise 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. No changes were
made in the objectives, policies or processes during the year ended March 31, 2026 and March 31,2025.

The Company monitors capital using a gearing ratio, which is net debt divided by total equity.

Net debt = Total borrowings (including lease liabilities) less (Cash and cash equivalents Bank balance other than cash and cash
equivalents (excluding balance earmarked for unclaimed dividend and other liabilities) Current investments).

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets
financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in
meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the
financial covenants of any interest-bearing loans and borrowings in the current period.

f. Figures pertaining to the previous years/period have been regrouped/rearranged, reclassified and restated wherever considered necessary, to make them comparable
with those of current year/period.

g. During the financial year ended March 31, 2025, the Board of Directors of the Company vide resolution dated November 16, 2024 proposed and agreed to increase the
issued share capital of the Company from existing Rs. 19,93,72,950 comprising of 1,99,37,295 equity shares of Face Value Rs. 10/- each to Rs. 26,64,52,950
comprising of 2,66,45,295 equity shares of Face Value Rs. 10/- each.

The above proposed increase in issued share capital was approved by the members of the Company at their Extra Ordinary General Meeting held on October 10, 2024.
Further, the same was also intimated to the Registrar of Companies (RoC) Ahmedabad, vide filig of Form MGT-14 by the Company on October 18, 2024.

However, the process of Initial Public Offer (IPO) was completed and the company was listed on stock exchanges as on May 27, 2025.

Accordingly, the effect of issued share capital which got effective in the closure date of financials for F.Y. 2025-26 has given effect to in the current financial
statements.

Accordingly,same is considered to be Adjusting Event.

h. The Company has a process whereby periodically all long-term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end,
the Company did not have any long-term contracts (including derivative contracts) for which there were any material foreseeable losses.

i. Contingent liabilities and commitments:

(i) Contingent Liabilities:

Notes 40:

OTHER STATUTORY INFORMATION:

a. No proceeding have been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988).

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

c. The Government of India has implemented the new Labour Codes replacing various existing labour legislations. The management has represented that it is in the process
of reviewing and aligning its employment policies, compensation structures, employee benefits, statutory registrations, records and compliance framework with the
requirements of the Code on Wages, 2019, Code on Social Security, 2020, Industrial Relations Code, 2020 and Occupational Safety, Health and Working Conditions
Code, 2020.

Pending completion of such review and assessment, the financial impact, if any, arising from changes in employee remuneration structure, social security contributions,
leave encashment benefits, gratuity obligations, contractual labour compliances and other consequential matters cannot presently be ascertained.

Our reporting under this clause is based on the information and explanations provided by the management and the records produced before us. We are unable to comment
on the completeness of the Company''s compliance with the provisions of the aforesaid Labour Codes and the consequential financial impact, if any, on the financial
statements.

d. The company have not advanced or given loan or invested fund (either borrowed fund or share premium or any other sources or kind of 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.

e. 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 otherewise) 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.

f. The company does not have any such tranasaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the
tax assessment under the Income Tax Act, 1961 (such as, search or survey or any other relevent provisions of the Income Tax Act, 1961)

g. The company has not been declared as Wilful defaulter by the Banks, Financial institution or other lenders.

h. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number
of Layers) Rules, 2017.

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

j. The Company does not has revalued its Property, Plant & Equipments (including Right-of-use Assets) and intangible assets during the year.

k. The Company has not granted any loan or advances in nature of loans to directors, promoters, KMPs, and the Related Parties except as mentioned below during the year
either jointly or severally whether repayable on demand or without specifying any terms or period.

n. The Company has been sanctioned working capital facilities by Sutex Bank, Mehsana Bank and HDFC Bank of India against the security of current assets. We confirm
that the Company has submitted the required quarterly returns and statements, including stock statements, invoice due statements, ageing analysis of invoice due, and
other financial information, to the respective banks in accordance with the stipulated terms of sanction.

To the best of our knowledge and belief, and based on the records maintained, the said quarterly returns and statements submitted to the banks are in agreement with the
audited books of account for the respective quarters and with the audited financial statements for the financial year ended March 31, 2026.

(i) The figures of stock as per books and statements submitted to banks are exclusive of GST.

(ii) The figures of stock and debtors as per the books were derived from the documents and records, generated from accounting software, available at the time and were
used in the preparation of the stock statement submitted to the bank.

o. There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

3.13. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized when there is a present legal or constructive obligation as a result of a past event and it is
probable (i.e. more likely than not) 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. Such provisions are determined based
on management estimate of the amount required to settle the obligation at the balance sheet date. When the Company
expects some or all of a provision to be reimbursed, the reimbursement is recognized as a standalone asset only when
the reimbursement is virtually certain.

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

Present obligations arising under onerous contracts are recognized and measured as provisions. An onerous contract is
considered to exist when a contract under which the unavoidable costs of meeting the obligations exceed the economic
benefits expected to be received from it.

Contingent liabilities are disclosed on the basis of judgment of management/independent experts. These are reviewed at
each balance sheet date and are adjusted to reflect the current management estimate.

Contingent Assets are not recognized, however, disclosed in financial statement when inflow of economic benefits is
probable.

3.14 Leases:

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company
assesses whether:

• the contract involves the use of an identified asset - this may be specified explicitly or implicitly and should be
physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a
substantive substitution right, then the asset is not identified.

• the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout
the period of use; and

• the Company has the right to direct the use of the asset. The Company has this right when it has the decision¬
making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where
the decision about how and for what purpose the asset is used is predetermined, the Company has the right to
direct the use of the asset if either:

# the Company has the right to operate the asset; or

# the Company designed the asset in a way that predetermines how and for what purpose it will be used.

At inception or on reassessment of a contract that contains a lease component, the Company allocates the
consideration in the contract to each lease component on the basis of their relative stand-alone prices.

Company as a lessee:

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-
use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate
of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it
is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated
useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In
addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain
measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing
rates as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

- fixed payments, including in-substance fixed payments.

- Variable lease payments that depend on an index or a rate, initially measured using the index or rate as
at the commencement date.

- Amounts expected to be payable under a residual value guarantee; and

- the exercise price under a purchase option that the Company is reasonably certain to exercise, lease
payments in an optional renewal period if the Company is reasonably certain to exercise an extension
option, and penalties for early termination of a lease unless the Company is reasonably certain not to
terminate early.

The lease liability is measured at amortized cost using the effective interest method. It is re-measured when there
is change in future lease payments arising from a change in an index or rate, if there is change in the Company''s
estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its
assessment of whether it will exercise a purchase, extension or termination option.

When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount
of the right-of-use asset or is recorded in statement of profit and loss if the carrying amount of the right-of-use
asset has been reduced to zero.

Leasehold land is amortized over the period of lease being remaining as on the date of purchase is stated as below:

1) Plot no. AA/34 of Sachin Udhyognagar Sahakari Sangh Limited: - 9 Years

2) Plot no. B 16/16 of Sachin Udhyognagar Sahakari Sangh Limited: - 9 Years

3) Plot no. AA/93 of Sachin Udhyognagar Sahakari Mandali Limited: - 10 Years
Short-term leases and leases of low-value assets:

The Company has elected not to recognize right-of-use assets and lease liability for the short-term leases that have
lease term of 12 months of less and leases of low-value assets. The Company recognizes the lease payments
associated with such leases as an expense on a straight-line basis over the lease term.

3.15 Income Taxes:

Income tax expense represents the sum of tax currently payable and deferred tax. Tax is recognized in the Statement of
Profit and Loss, except to the extent that it relates to items recognized directly in equity or in other comprehensive
income.

Current Tax:

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment
to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the
tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. Current tax
assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The
tax rates and the a tax laws used to compute the amount are those that are enacted or substantively enacted, at the
reporting date in the country where the Company operates and generates taxable income. Current tax assets and liabilities
are offset only if there is a legally enforceable right to set it off the recognized amounts and it is intended to realize the
asset and settle the liability on a net basis or simultaneously.

Deferred Tax:

Deferred tax is provided using the balance sheet method on temporary differences between the tax base of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

- When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss,

- Taxable temporary differences arising on the initial recognition of goodwill.

- Temporary differences related to investments in subsidiaries, associates, and joint arrangements to the extent that
the Company is able to control the timing of the reversal of the temporary differences and it is probable that they
will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and
any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax
losses (including unabsorbed depreciation) can be utilized, except:

- When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.
Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has
become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
the reporting date.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation
authority.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are
recognized in correlation to the underlying transaction either in OCI or directly in equity.

3.16 Current versus Non-Current classification:

The Company presents assets and liabilities in the Balance Sheet based on current/non-current classification.

a) An asset is current when it is:

¦ Expected to be realized or intended to be sold or consumed in the normal operating cycle,

¦ Held primarily for the purpose of trading,

¦ Expected to be realized within twelve months after the reporting period, or

¦ Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period.

All other assets are classified as non-current.

b) A liability is current when:

- It is expected to be settled in the normal operating cycle,

¦ It is held primarily for the purpose of trading,

¦ It is due to be settled within twelve months after the reporting period, or

¦ There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.

All other liabilities are classified as non-current.

c) Deferred tax assets and liabilities are classified as non-current assets and liabilities.

d) The operating cycle is the time between the acquisition of assets for processing and their realization in cash and
cash equivalents.

3.17 Government Grants and Subsidies

Government grants are initially measured at amount receivable from the Government and are recognized on an accrual
basis only if there is reasonable assurance that they will be received and the company will comply with the conditions
associated with the grant and for those grants which are uncertain are not recognized unless there is reasonable assurance
of the same.

- In case of capital grants, they are deducted from the cost of the Fixed Assets against which the same is received
& accordingly depreciation is charged on the reduced value of the asset.

- In case of grants that compensate the Company for expenses incurred are recognized in Statement of Profit and
Loss by decreasing the Expense e.g. Power subsidy to be reduced from Factory Power Expenses.

3.18 Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders
by weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements and
stock split in equity shares issued during the year and excluding treasury shares. The weighted average number of equity
shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares and stock
split, other than the conversion of potential equity shares that have changed the number of equity shares outstanding,
without a corresponding change in resources.

Diluted EPS adjust the figures used in the determination of basic EPS to consider.

(a) The after-income tax effect of interest and other financing costs associated with dilutive potential equity shares,
and

(b) The weighted average number of additional equity shares that would have been outstanding assuming the
conversion of all dilutive potential equity shares.

3.19 Other Notes

Related Party disclosures:

Related Party disclosure, as required by AS -18, Related Party Transactions "as given below:

General

• Balance of Unsecured Loans, Sundry Creditors, Sundry Debtors and Loans and Advances are subject to
confirmation.

• Disclosure of amount due to the creditors which are required by section 22 of the Micro Small and medium
Enterprise Development Act, 2006. The Company has collected the information from the creditors regarding
their MSME Status during the year. Based on the information available there is no amount due to
vendor cover under the Micro, Small and Medium Enterprise Development act, 2006.to Micro & Small
Enterprises.

• Car - Honda Brio, Innova Crysta and Bike - Electric Ola are in the name of directors of the Company.

• The quantity and value of closing stock is certified by the management as true and Correct.

• Managerial remuneration paid/ payable to the Managing Director/ Directors for the period from 1st April
2024 to 31st March 2025 Rs. 18.00 Lacs (Previous Year Rs. 12.00 Lacs)

Explanation for Change in the Ratio by more than 25% as compared to previous Year

*Current Ratio increased due to decreased in current assets during the period/Year
**Debts Equity Ratio decreased due to increased shareholding fund during the period/year
***Return on Equity (ROE) (%) ratio decreased due to Increase in shareholder fund during the period/ year
****Inventory Turnover Ratio decreased due to increase in cost of goods sold during the period/year

*****Trade Receivable Turnover Ratio decreased due to increase in revenue & average trade receivable
during the period/year

******Net Capital Turnover Ratio decreased due to increase in working capital during the period/year

*******Return on Capital Employed(ROCE) (%) increased due to increased share capital during the period/
year

For KSA & Co.

Firm Reg. No. : 0003822C
Chartered Accountants

Sd/-

Arun Kanodiya

Membership No. : 077131
UDIN: 25077131BMGYIO1962

Place : Surat
Date : 10-06-2025