Notes to Accounts of CLN Energy Ltd.

j) Provisions, contingent liabilities and contingent assets

Provision is recognised when the Company has a present obligation as a. result of past event and it is probable that an outflow of
resources will be required to settle die obligation, in respect of which reliable estimate can be made. Provisions are not discounted
to present value and are determined based on best estimate required to settie the obligation on the Balance Sheet date. These are
reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. A disclosure for a contingent liability is made
when there is a present obligation that maty but probably will not, require an outflow of resources. Disclosure is also made in
respect of a present obligation as a result of past event that probably requires an outflow of resource, where it is not possible to
make a reliable estimate of die outflow. Possible obligation diat arises from past events and die existence of which will be
confirmed only by die occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
Company are also included in die disclosure of the contingent liability. Where there is a present obligation in respect of which die
likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are not recognised in the
financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic
benefits will arise, the asset and related income are recognised in die period in which the change occurs.

Income taxes

Tax expense comprises of current tax and deferred tax. Current income tax is measured at the amount expected to be paid to die
tax authorities in accordance widi die provisions of Income Tax Act, 1961 as applicable to the financial year. Deferred income
taxes reflects the impact of current year timing differences between taxable income and accounting income for die year and
reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and die tax laws enacted or substantively enacted at die balance sheet date.
Deferred tax assets are recognised only to die extent that there is reasonable certainty'' that sufficient future taxable income will be
available against which such deferred tax assets can be realized. In situation, where die company has unabsorbed depreciation or
carry forward of losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that
they can be realised against future taxable profits.

ⁿ) Inventories

Inventories are carried at the lower of cost or net realisable value.

Cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to
their present location and condition In determining the cost, FIFO method is used.

Net realisable value is the estimated selling price in die ordinary course of business, less die estimated costs of completion and the
estimated costs necessary to make the sale.

The proportionate amount of additional duty of customs paid on finished goods imported for trading and lying unsold as at die
year end has been included in the value of the finished goods stock.

The comparison of cost and net realisable value is made on an item-by-item basis

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and balance with, banks on current accounts. The Company considers all highly
liquid investments, including bank deposits with an original maturity at die date of purchase of three months or less and that are
readily convertible to known amounts of cash to be cash equivalents. Further, bank deposits having maturity of more tiian 12
montiis have also been disclosed separately by die company under tiiis head. Moreover, the cash flow statement is prepared using
indirect mediod.

_p) Segment Reporting

The Company operates in a single primary business segment. Hence, tiiere are no reportable segment as per AS 17 segment
Reporting.

** The Company has availed a Cash Credit (CC) facility of ?4,000 Lakhs horn HDFC Batik Limited, Sector 18, Mold a. The facility is seemed by the hypothecation of stock, book
debts, and all current assets of die Company (both present and future), which constitute the ptimary security.

The facility is further backed bv the personal guarantee of Mr, Rajiv Seth, Promoter of the Company. Additionally, a Fixed lie posit of ?10Q0.S0 Lakhs has been provided under lien
as collateral security against the sanctioned limit.

The Cash Credit facility is rep ay able on demand and carries an interest rate of Repo rate 2.85% per annum,

*** The Company has availed a Cash Credit (CC) facility of ¥2,000 Lakhs from Kotak Bank Limited, Delhi Aerocity, New Delhi. The facility is seemed by the hypothecation of
stock, book debts, and all current assets of the Company (both present and future), which con stitute the primary security,

The facility is further backed by the personal guarantee of Mr. Rajiv Seth, Promoter of the Company. Additionally, a Fixed Deposit of ¥200 Lakhs has been provided under hen as
collateral security against the sanctioned limit.

The Cash Credit facility is rep at able on demand and carries an interest rate of Repo rate 2.90% pet annum.

**** The Company has availed a Cash Credit (CC) facility of ¥2,500 Lakhs from Axis Bank Limited, Sector 16, Moida. Hie facility is secured by die hypothecation of stock, book
debts, and all current assets of die Company (both present and future), which constitute the primary security.

The facility is further backed by the personal guarantee of Mr, Rajiv Seth, Promoter of the Company. Additionally, a Fixed Deposit of ¥675 Lakhs has been provided under hen as
collateral security against the sanctioned limit,

The Cash Credit facility is rep ay able on demand and carries an interest rate of Repo rate 2.77% pet annum,

***** The Comp any has availed a Cash Credit (CC) fatality of ¥2,500 Lakhs from Induslnd Bank limited, Kalyam Nagar, Pune. The fatality is secured by the hypothecation of
stock, book debts, and all current assets of the Comp any (both present and future), which constitute the primacy security,

The fatality is further backed by the personal guarantee of Mr. Rajiv Serh, Promoter of the Company. Additionally, a Fixed Deposit of ¥375 Lakhs has been provided under lien as
collateral security against the sanctioned limit.

The Cash Credit facility is rep ayable on demand and carries an interest rate of Repo rate 2.90% pet annum,

As of now, the Company has utilised ¥ 1,500 Lakhs against the sanctioned limit. To secure this, a Fixed Deposit of ¥375 Lakhs has been provided under ken as collareral.

# The Company has availed an un secured loan facility of ¥200 Lakhs from Trex Energy Private Limited, Hyderabad. This facility is unsecured* and carries an interest rate of 12%
per annum. Loan has been taken for business purpose and repayable on demand.

During the year ended 31 ilarch 2026, Fuzed Deposits amounting to ?95.10 Laklis (31 March 2025: 5 Nil) have been placed under lien in favour of the President of

India, through the Assistant/Deputy Commissioner, EPCNoida, as security against customs duty liabilities for goods stored in a custom bonded warehouse.

* ’''The Company is subject to proceedings under the Customs Tariff Act, 1975 and die Goods and Services Tax Act, 2017. The proceedings relate to the allied
misclas sification of imported goods and the alleged incorrect availing of benefits under Sr. No. 376AAA and Sr. No. 453 of Notification No. 01/2017-IGST (Rate)
in respect of certain imports, as identified by the Directorate of Revalue Intelligence (DRI).

Hie C ompany has contested the allegations and has filed appeals against die respective orders before the Customs, Excise and Sendee Tax Appellate Tribunal
(CE5TA.T). The matters are currendy pending adjudication before CESTAT.

(i) The Company does not have any Ben ami property, where any proceeding has been initiated or pending against the Company for holding any Ben ami property.

(ii) The Company does not have any transactions with companies struck off.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond die st a tutor:'' period.

(iv) The Company has not traded or invested in Crypto currency or Virtua 1 Currency during the financial year.

(v) The Company has not advanced or loaned or invested funds to any odier person(s) or entity (ies), including foreign entities (Intermediaries) with die
understanding diat the Intermediary shall:

(a) direcdy or indirecdy lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of die company (Ultimate Beneficiaries)

(b) provide any guarantee, security or the like to or on behalf of die Ultima te Beneficiaries.

M TheCompauy 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 otherwise) diat the Company shall:

(a) direcdy or indirecdy lend or invest in other person s or entities identified in any manner what soever by or on behalf of the Funding Party (Ultimate
Beneficiaries) or

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

(~) The Company have not any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in
the tas assessments under die Income Tas Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

The company came out with an Initial Public Offer (IPO) in FT'' 2024-25 of 28,92,000 shares of face value of Rs. 10 each for cash at a fixed price of Rs. 250. per
equity share comprising fresh issue of 28,92,000 equity shares. Net proceeds of the fresh issue of Rs. 6800.55 Lakhs (Net public issue expenditure of Rs. 429.47
lakhs) were utilised in following manner:

Out of 1,000 lakhs paid for capex, 254 lakhs comprises of advance for capital expenditure paid to vendors as on March 31, 2025.
39 Previous year¹ s figures have been regrouped and rearranged wherever necessary to correspond to current year''s cla ssificadon.
This is die summary of significant accounting policies audodier explanatory'' information referred to in our report of even date.

ij Provisions, contingent liabilities and contingent assets

Provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions are not discounted
to present value and are determined based on best estimate required to settle the obligation on the Balance Sheet date. These are
reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. A disclosure for a contingent liability is made
when there is a present obligation that may, but probably will not, require an outflow of resources. Disclosure is also made in
respect of a present obligation as a result of past event that probably requires an outflow of resource, where it is not possible to
make a reliable estimate of the outflow. Possible obligation that arises from past events and the existence of which will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
Company are also included in the disclosure of the contingent liability. Where there is a present obligation in respect of which the
likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets arc not recognised in the
financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic
benefits will arise, the asset and related income are recognised in the period in which the change occurs.

^m) Income taxes

Tax expense comprises of current tax and deferred tax. Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the provisions of Income Tax Act, 1961 as applicable to the financial year. Deferred income
taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal
of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date.
Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized. In situation, where the company has unabsorbed depreciation or
carry forward of losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that
they can be realised against future taxable profits.

___

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ⁿ) Inventories

Inventories are carried at the lower of cost or net realisable value.

Cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their
present location and condition. In determining the cost, FIFO method is used.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the
estimated costs necessary to make the sale.

The proportionate amount of additional duty of customs paid on finished goods imported for trading and lying unsold as at the
year end has been included in the value of the finished goods stock.

The comparison of cost and net realisable value is made on an item-by-item basis

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and balance with banks on current accounts. The Company considers all highly
liquid investments, including bank deposits with an original maturity at the date of purchase of three months or less and that are
readily convertible to known amounts of cash to be cash equivalents. Further, bank deposits having maturity of more than 12
months have also been disclosed separately by the company under this head. Moreover, the cash flow statement is prepared using
indirect method.

_pj Segment Reporting

The Company operates in a single primary business segment. Hence, there arc no reportable segment as per AS 17 segment
Reporting.

(i) The Company does not have any Benntni property, where any proceeding has been initiated or pending against the Company for holding any Bennmi property.

(ii) The Company does not have any transactions with companies struck off.

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

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

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity (ics), including foreign entities (Intermediaries) with the undeistanding that the
Intermediary’ shall:

(a) direcdy or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of die company (Ultimate Beneficiaries) or

(b) provide any’ guarantee, security or the like to or on behalf of die Ultimate Beneficiaries.

(vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (bunding Party ) with the understanding (whether recorded in writing
or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on bclaalf of the bunding Party (Ultimate Beneficiaries) or

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

(vii) The Company have not any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year m 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.

34 Previous year''s figures have been regrouped and rearranged wherever necessary to correspond to current year’s classification.

This is the summary of significant accounting policies and other explanatory information referred to in our report of even date.

For Suraj Mishra & Associates For and on behalf of the board of directors of

Chartered Accountants _m__ CLN Energy Private Limited

Firm''s Registration

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Suraj Mishra H MOIDA ’ I Sunil Gandh, Meniah Shah I \

Proprietor l IN>«/1Director Director —y

Memhetahip No iWtJrNSV Ay/DIN: 0W33754 DIN: 10)43779 \S

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Place: Noida ^ Place: Noida Place: Noida <—

Date: 03 June 2024 ^----^ Date: 03 June 2024 Date: 03 june 2024 \

DDIN: 2.M ^80435^^2-1 P.83''1 1 ''