10. Provisions and contingencies

A provision is recognized when the Company has a present obligation as a result of past
events and it is probable that an outflow of resources will be required to settle the
obligation in respect of which a reliable estimate can be made. Provisions (excluding
retirement benefits) are not discounted to their present value and are determined based
on the best estimate required to settle the obligation at the Balance Sheet date. These
are reviewed at each Balance Sheet date and adjusted to reflect the current best
estimates.

Provisions involving substantial degree of estimation in measurement are recognized as
per said principles being certified by the management.

Contingent liabilities are disclosed when there is a possible obligation arising from past
events, or a present obligation that is not recognized because it is not probable that an
outflow of resources will be required, or the amount of the obligation cannot be measured
with sufficient reliability.

Contingent Assets: Contingent assets are not recognized in the financial statements but
are disclosed where an inflow of economic benefits is probable.

11. Classification of Assets and Liabilities as Current and Non-Current

The Company presents assets and liabilities in the balance sheet based on current and
non-current classification as per the requirements of Schedule III to the Companies Act,
2013.

An asset is classified as current when it is expected to be realised or intended to be sold
or consumed in the normal operating cycle, or expected to be realised within twelve
months after the reporting period, or it is 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.

A liability is classified as current when it is expected to be settled in the normal operating
cycle, or it is due to be settled within twelve months after the reporting period, or the
Company does not have an unconditional right to defer settlement of the liability for at
least twelve months after the reporting period.

All other liabilities are classified as non-current.

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

12. Inventory

Assessee is following Weighted Average Method as a measurement of cost, and that
approximates the actual cost. The stock is value at cost or NRV whichever is lower.

Net realisable value is the estimated selling price in the ordinary course of business.

13. Property, Plant and equipment and Intangible Assets

Property, Plant and Equipment (PPE)

Property, Plant and Equipment are stated at cost less accumulated depreciation and
impairment losses, if any.

Cost includes purchase price, duties and taxes, freight, installation cost, borrowing costs
directly attributable to qualifying assets, and other directly attributable costs incurred to
bring the asset to its working condition for its intended use.

Depreciation on Property, Plant and Equipment is provided once it is put to use over the
estimated useful lives of the assets as prescribed under Schedule II to the Companies
Act, 2013, using Straight Line Method (SLM) and Written Down Value (WDV) method,
depending upon the nature and expected pattern of consumption of future economic
benefits of the respective assets.

Capital work-in-progress represents expenditure incurred on acquisition or construction
of property, plant and equipment which are not yet ready for their intended use and are
carried at cost which includes expenditure directly attributable to construction and
related borrowing costs.. There is no such expenditure as on balance sheet date.

Intangible Assets

Intangible assets are recognized only when it is probable that future economic benefits
attributable to the asset will flow to the Company and the cost of the asset can be
measured reliably. Intangible assets are initially recognized at cost.

Intangible assets are amortised over their estimated useful lives on a systematic basis
and tested for impairment whenever there is an indication of impairment.

Intangible assets under development are shown separately as intangible assets under
development and are carried at cost until they are ready for their intended use.

Subsequent Expenditure: Subsequent costs are included in the asset's carrying amount
or recognized as a separate asset only if it is probable that future economic benefits
associated with the item will flow to the entity and the cost can be measured reliably. All
other repair and maintenance costs are charged to the Statement of Profit and Loss as
incurred.

De-recognition: An item of PPE or intangible assets is derecognized on disposal or when
no future economic benefits are expected from its use or disposal. Gains or losses arising
from derecognition are recognized in the Statement of Profit and Loss.

14. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying
assets are capitalized as a part of the cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready for its intended use. All other
borrowing costs are charged to the Profit and loss statement in the period in which they
incurred.

Borrowing costs include interest expense, amortisation of ancillary costs incurred in
connection with the arrangement of borrowings, in accordance with the applicable
accounting standards.

15. Impairment

An asset is impaired when the carrying amount of the asset exceeds its recoverable
amount. The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication exists, the company
estimates the recoverable amount of the asset. Recoverable amount is the higher of an
asset's net selling price and its value in use. Being an SMC, value in use is taken as a
reasonable estimate by the company (para 4.2 of AS-28). If there is any indication that an
asset may be impaired, the recoverable amount is estimated for the individual asset.
When it is not possible to estimate the recoverable amount of the individual asset, the
company determines the recoverable amount of the cash generating unit to which the
asset belongs (the asset's cash-generating unit). An impairment loss is recognised as an
expense in the statement of profit and loss immediately.

An impairment loss recognised for an asset in prior accounting periods is reversed if there
is a change in the estimates in the asset's recoverable amount since the last impairment
loss was recognised. In such a case, the carrying amount of the asset is increased to its
recoverable amount subject to a maximum of depreciable historical cost. That increase

is a reversal of an impairment. A reversal of an impairment loss for an asset is recognised
as income immediately in the statement of profit and loss.

No such relevant adjustment is required in the balance sheet for the period under
consideration.

16. Investments

Investments are classified as Current Investments and Non-current Investments based
on the management's intention at the time of acquisition.

The cost of investments includes acquisition charges such as brokerage, fees, and duties

• Current Investments: Investments that are by their nature readily realizable and
intended to be held for not more than one year from the date of acquisition are classified
as current investments. They are carried at the lower of cost and fair value determined on
an individual investment basis.

• Long-Term Investments: Investments other than current investments are classified
as long-term investments. They are carried at cost. Provision for diminution in value is
made only if, in the opinion of the management, such a diminution is other than
temporary.

17. Segment Reporting

The Company operates primarily in a single business segment and substantially within
India. During the financial year, the Company incorporated a wholly owned subsidiary in
the United States of America; however, the said subsidiary was not operational as at the
balance sheet date and no business activities were carried out during the year.

Accordingly, the Company does not have any reportable geographical segment as
required under Accounting Standard (AS) 17 - "Segment Reporting".

The disclosure in terms of provisions of AS 17, Segment Reporting, are not applicable for
the company.

18. Claims

Insurance claims and other claims are accounted for when there is reasonable certainty
regarding their ultimate collection and no significant uncertainty exists in their
measurement.

Claims receivable are recognised based on the extent to which the Company is
reasonably certain of their realisation and are disclosed under other current or non¬
current assets, as applicable.

19. Earnings per share (AS 20)

Basic earnings per share is calculated by dividing the net profit or loss for the period
attributable to equity shareholders by the weighted average number of equity shares
outstanding during the period.

For the purpose of calculating basic earnings per share, the net profit or loss for the period
attributable to equity shareholders is the net profit or loss for the period after deducting
preference dividends and any attributable tax thereto for the period

The weighted average number of equity shares outstanding during the period and for all
periods presented are adjusted for events, other than the conversion of potential equity
shares, that have changed the number of equity shares outstanding, without a
corresponding change in resources.

Diluted earnings per share is calculated by adjusting net profit and weighted average
shares for the effects of all dilutive potential equity shares outstanding, assuming
exercise at the period's beginning. The net profit is adjusted for expenses/income
associated with these instruments, net of tax.

Weighted average shares include potential shares, excluding anti-dilutive items. Diluted
EPS is disclosed alongside basic EPS, with restatements made for share splits or
bonuses.

20. Leases

Leases are classified as finance leases or operating leases depending upon the
substance of the transaction and significant terms of the lease arrangement.

Finance Lease

Assets acquired under finance leases are recognized as assets of the Company at the
lower of the fair value of the leased asset and the present value of minimum lease
payments at the inception of the lease. Corresponding lease obligations are recognized
as liabilities.

Lease payments are apportioned between finance charges and reduction of lease liability
so as to achieve a constant periodic rate of interest on the outstanding liability. Finance
charges are recognized in the Statement of Profit and Loss over the lease term.

Depreciation on assets acquired under finance lease is provided over the useful life of the
asset or the lease term, whichever is shorter, in accordance with the Company's
depreciation policy.

Operating Lease

Leases where substantially all risks and rewards incidental to ownership are retained by
the lessor are classified as operating leases.

Lease rentals payable under operating leases are recognized as an expense in the
Statement of Profit and Loss on a straight-line basis over the lease term unless another
systematic basis is more representative of the time pattern of the user's benefit.

Lease income arising from operating leases is recognized on a straight-line basis over
the lease term.

21.Consolidated Financial Statements

The Consolidated Financial Statements (CFS) are to be prepared in accordance with
Accounting Standard (AS) - 21, "Consolidated Financial Statements".

The financial statements of the parent company and its subsidiaries are combined on a
line-by-line basis by adding together like items of assets, liabilities, income, and expenses
after eliminating intra-group balances, intra-group transactions, unrealized profits or
losses, unless cost cannot be recovered.

Subsidiaries are entities over which the Company exercises control, either directly or
indirectly, through ownership of more than one-half of the voting power or control over
the composition of the Board of Directors.

The financial statements of subsidiaries used in consolidation are drawn up to the same
reporting date as that of the parent company. Where necessary, adjustments are made
to bring the accounting policies in line with those used by the parent company.

Minority interest represents the portion of net profit or loss and net assets of subsidiaries
attributable to interests not owned, directly or indirectly, by the parent company and is
disclosed separately in the consolidated financial statements.

Goodwill arising on consolidation is recognized as an asset and is tested for impairment
whenever indicators of impairment exist. Capital reserve arising on consolidation is
recognized where the cost of investment is less than the parent's share in the equity of
the subsidiary.

The company has opened a wholly owned subsidiary (WOS) in the name of "EARKART
INC" in United States of America (USA) in January, 20 2026 during the FY 25-26. However,
during the financial year 2025-26. As the said subsidiary had not commenced operations
and no financial transactions had been carried out as at the balance sheet date, no
financial statements were available for consolidation. Accordingly, consolidated financial
statements have not been prepared for the year under consideration.

Personal guarantees (PG) have been provided by the KMPs / Directors - Mr. Rohit Misra,
Ms. Monika Misra, Mr. Rahul Salesh, and Mr. Ajay Kumar Giri against the Cash Credit
(CC) facility of Rs. 8 Crore availed from Punjab National Bank.

2. Operating Lease Commitments

The Company has taken corporate office premises on operating lease. Lease
rentals in respect of operating leases are recognised as an expense in the
Statement of Profit and Loss on a straight-line basis over the lease term.

The future minimum lease payments under non-cancellable operating leases are
as follows:

• Not later than 1 year: Rs 58,50,000/-

• Later than 1 year and not later than 3 years: f 63,37,500/-
The lease includes lock-in periods of 3 years.

3. Balance confirmations have not been received from most of the parties showing
debit / credit balances. Confirmation of balances to the extent received, have been

reconciled / under reconciliation. The balances on account of Sundry debtors and
creditors tax credits are subject to confirmation or reconciliations.

4. The financial statements including financial information have been prepared after
making such regroupings and adjustments in the previous year audited financial
statements, considered appropriate to comply with the same. As result of these
regroupings and adjustments, the amount reported in the financial
statements/information may not necessarily be same as those appearing in the
respective audited financial statements for the relevant years.

5. In the opinion of the Management, the value declared under current assets, current
liabilities and Loans and Advances has a value on realization in the ordinary course
of business at least equal to the amount at which they are stated in the Balance
sheet. Provisions for liabilities and doubtful assets has already been made in the
financials.

6. Value of Closing stock as on 31.03.2026 is certified by the Management of the
company.

7. As per the information provided by the management of the company, Trade
payables as on 31.03.2026 which are outstanding to small and micro enterprises
are shown separately, if exists as at Balance sheet date.

8. As Informed by the management of the company, that the values as per Goods and
services tax returns and the financial statements are subjected to reconciliation.
The Audited Financial statements does not include any opinion / inference on
account of chargeability of GST on any head of income / expenses.

9. During the financial year, the Company completed an Initial Public Offering (IPO)
which included an Offer for Sale (OFS) by the promoters. The Company temporarily
funded the promoter's proportionate share of IPO/OFS expenses amounting to f
56,34,340/- from October 8, 2025, to May 27, 2026. The Company has
subsequently recovered the entire proportionate expense amount from the
promoters via Cheque deposited on May 27, 2026. Consequently, there is no
outstanding balance due from the promoters as on the date of this report, and
interest has also been charged and received on the said temporary advance.

10. During the year under consideration, the Company has recorded the Property
namely Furniture which is already in possession of the company and is already Put
to use, at an estimated cost based on quote received in the absence of invoice till
date.

11. As Informed by the management of the company, the company has not given any
benefit or perquisite arising directly out of a business or profession (whether
monetary, non-monetary, or a mix of both) to any resident person.

12. As Informed by the management of the company, the Non current Investments are
carried at cost and provision not made for diminution in value being temporary in
nature

13. The company has not made any further investment during the year except during
the financial year 2025-26, the Company incorporated a wholly owned subsidiary
(WOS) in the United States of America in January, 2026. However, as the bank
account of the said subsidiary was not operational as at the balance sheet date or
as on date, the outward remittance towards investment had not been made till
such date. Accordingly, no investment has been recognised in the books of
account as on the balance sheet date. However, the amount Recoverable from
Wholly owned Subsidiary on account of incorporation has duly been accounted for
in the books of account.

14. The company has contingent liability on account of Bank Guarantee of Rs
79,64,500/- and towards outward remittance to Wholly owned subsidiary on
account of investment amount in initial capital.

15. As informed by the management of the company, there are no material events
occurring after the balance sheet date which require adjustment to or disclosure
in the financial statements.