Notes to Accounts of Sona Machinery Ltd.

Mar 31, 2025

b) Rights, preferences and restrictions attached to equity shares Terms/rights attached to equity shares:

(i) The company has only one class of equity shares having a par value of ''10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, if any.

(ii) In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(iii) The company has issued 1,00,00,000 Bonus Shares on 13 September, 2023 in the ratio of 100:1 to existing shareholders.

(iv) Pursuant to shareholder''s resolution dated 04th September, 2023 the authorized share capital of the company be increased from Rs 10,00,000/- (Rupess Ten Lakhs only) divided in to 1,00,000 equity shares of Rs 10/- each to Rs 15,00,00,000 (Rupees Fifteen crore only) divided in to 1,50,00,000 equity shares of Rs 10/- each ranking pari-passu with the existing share capital.

v) The Company has made an initial public offering (IPO) of 36,24,000 no. of Equity shares of face value of Rs 10/- each fully paid up for cash at a Price of Rs 143/- each (including share premium of Rs 133/- each). The equity share of the Company got listed on NSE Emerge platform ''on March 13, 2024. "

1. Total outstanding vehicle loans of Rs. 111.09 Lacs {Rs. 94.61 Lacs reflecting under long term borrowing and Rs. 16.48 Lacs reflecting under short term borrowings} represents towards Kia car loan for Rs. 17.31 lacs which is secured against hypothecation of vehicle. The tenure of this loan will be ends on 15 November 2027. Further, the loan of Rs. 93.22 lacs represent towards Mercedes Benz which is secured against hypothecation of motor vehicle. The tenure of this loan will be ends on 09 August 2029. Interest rate this loan was 8.70% P.A. Further, balance of Rs. 0.56 represent towards Car loan from HDFC bank whose tenure will be ends on 05 October 2025.

2. Total outstanding Machine loan of Rs. 10.00 Lacs reflecting under short term borrowing represents towards Machines taken for productions which is secured against hypothecation of Machines. The tenure of this loan will be ends on 22 July 2025.

3. Total outstanding term loans of Rs. 20.30 Lacs {Rs. 18.37 Lacs reflecting under long borrowing and Rs. 1.93 Lacs reflecting under short term borrowing} represent towards Yes Bank outstanding for Rs. 18.84 Lacs which is secured against personal property of former Director, Mr. Narender Kumar and balance outstanding of Rs. 1.46 Lacs represent towards Federal bank. The tenure of Yes bank loan will ends on 09 August 2045 while federal bank loan ends on 02 June 2025

4. The bank overdraft is secured against personal property of Mr. Narender Kumar who was the former director of the Company.

‘Provision for doubtful debts

Periodically, the Company evaluates all customer dues to the Company for collectability. The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates, general economic factors, which could affect the customer’s ability to settle. The Company pursues the recovery of the dues, in part or full.

The classification of receivables outstanding for a period less than or exceeding six month is done on the basis on the ageing drawn as per due date.

1. The company has issued 1,00,00,000 Bonus Shares on 13 September, 2023 in the ratio of 100:1 to existingshareholders

2. The company has issued 36,24,000 No. of equity shares having Face Value of Rs 10/- each in its Initial Public Issue on 11 March, 2024.

35 Disclosure pursuant to accounting standard - 15 ‘Employee Benefits’a. General description

i. Gratuity (defined benefit plan)

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service.

b. Actuarial assumption:

The following tables set out disclosures prescribed by Accounting Standard-15 on ‘Employee Benefits’ in respect of company’s unfunded gratuity plan.

(1) Current Ratio = Current Assets / Current Liabilities.

(2) Debt- equity ratio = Total debt / Shareholders'' equity.

(3) Debt service coverage ratio = EBITDA/(Principal Interest).

(4) Return on equity ratio= Net profit after taxes / Avg Shareholder''s Equity.

(5) Inventory turnover ratio=Cost of goods sold or sales/Average inventory.

(6) Trade receivables turnover ratio= Revenue from Operations /Average trade receivables.

(7) Trade payables turnover ratio=Purchase/Average trade payables.

(8) Net Capital turnover ratio=Net sales/Average working capital.

(9) Net profit ratio=Net profit after taxes/Total Revenue.

(10) Return on capital employed=Earnings before interest and taxes/Capital employed.

(11) Return on investment/Total Assets=PAT/Total Assets."

In the opinion of the board, the current assets, loans and advances are of the value stated if realized ordinary course of business. The provision for all known liabilities as adequate and not in excess of the amount reasonably required.

In some cases debit or credit balances of parties in respect of Sundry debtors, sundry creditors are subject to confirmation.

Previous year''s figures have been rearranged and regrouped in order to conformity with the current year.

41 BG Issued and Outstanding - :

During the period ended 31 March 2025 Company has given Financial/Performance Bank Guarantee to the tune of Rs 104.70 Lacs to its customers.

42 Other Statutory information

(a) The Company does not own any immovable property which is not held in the name of the Company as on balance sheet data.

"(b) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.

(c) The Company do not have any transactions with companies struck off.

(d) The Company do not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.

(e) The company has not entered into any scheme of arrangement during the current year and previous year.

(f) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(g) The Company has complied with the number of layers prescribed under the Companies Act 2013.

(h) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies),including foreign entities (Intermediaries) with the understanding that the intermediary shall:

(i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or"

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries"

(i) 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 otherwise) that the Company shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or"

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries"

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

(k) The Company is not declared wilful defaulter by any bank or financial institution or government or any government authority.

(l) Disclosures required for MSME payments (similar to Sec 22 of MSMED Act 2006 under the Chapter on Delayed Payments to Micro and Small Enterprises) not been done.

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Mar 31, 2024

1.16 Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when an enterprise 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 a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management 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 management estimates.

Contingent Liabilities are disclosed when the Company has a possible obligation or a present obligation and it is probable that a cash outflow of resources will not be required to settle the obligation.

Depending upon facts of each case and after due evaluation of relevant legal aspects, Claims not acknowledged as debts, are regarded as contingent liabilities in the accounts.

1.17 Earnings Per Share

In determining the Earnings Per share, the company considers the net profit after tax which does not include any post tax effect of any extraordinary / exceptional item. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. Split/Bonus in face value of equity share of company has been considered as if it took place at the beginning of reporting period. There is no Antidilutive nature of instruments in during the reporting period.

1.18 Cash and Bank Balances

Cash and bank balances for the purposes of cash flow statement comprise Fixed Deposit, cash at bank, cash in hand.

1.19 Segment Reporting

Business Segment

(a) The business segment has been considered as the primary segment.

(b) The Company’s primary business segments are reflected based on principal business activities, the nature of service, the differing risks and returns, the organization structure and the internal financial reporting system.

(c) The Company’s primary business includes manufacturing of equipments for Cleaning, Processing, Polishing and Packaging of Rice, Pulses, Wheat, etc. this is the only segment as envisaged in Accounting Standard 17 ‘Segment Reporting’ therefore disclosure for Segment reporting is not applicable."

1.20 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of 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. Cash flows from operating, investing and financing activities of the Company are segregated, accordingly.

Note:

Terms/rights attached to equity shares:

(i) The company has only one class of equity shares having a par value of ''10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, if any.

(ii) ln the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(iii) The company has issued 1,00,00,000 Bonus Shares on 13 September, 2023 in the ratio of 100:1 to existing shareholders.

(iv) Pursuant to shareholder''s resolution dated 04th September, 2023 the authorized share capital of the company be increased from Rs 10,00,000/- (Rupess Ten Lakhs only) divided in to 1,00,000 equity shares of Rs 10/- each to Rs 15,00,00,000 (Rupees Fifteen crore only) divided in to 1,50,00,000 equity shares of Rs 10/- each ranking pari-passu with the existing share capital.

v) The Company has made an initial public offering (IPO) of 36,24,000 no. of Equity shares of face value of Rs 10/- each fully paid up for cash at a Price of Rs 143/- each (including share premium of Rs 133/- each). The equity share of the Company got listed on NSE Emerge platform ''on March 13, 2024.

6 Other statutory information

(a) The Company does not own any immovable property.

(b) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.

(c) The Company do not have any transactions with companies struck off.

(d) During the reporting period there is no fresh loan taken/Squared off by the Company, therefore disclosure with regard to pending charge creation or satisfaction is not applicable to the Company.

(e) The company has not entered into any scheme of arrangement during the current year and previous year.

(f) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(g) The Company has complied with the number of layers prescribed under the Companies Act 2013.

(h) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies),including foreign entities (Intermediaries) with the understanding that the intermediary shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

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

(i) 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 otherwise) that the Company shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

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

(j) The Company have not any such transaction which is not recorded in the books of

accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(k) The Company is not declared wilful defaulter by any bank or financial institution or government or any government authority.

(l) Disclosures required for MSME payments (similar to Sec 22 of MSMED Act 2006 under the Chapter on Delayed Payments to Micro and Small Enterprises) not been done.

7 Change in Accounting Policy

During the year ended 31st March, 2024, Company has rectified its Depreciation policy on intangible Assets from WDV method to SLM method as per AS -26 "Intangible Assets" and corrected the life estimate of office equipment from 15 years to 5 years and accordingly it resulted in reversal of Excess depreciation.

8 Pending Capital Commitment and Contingent Liability

"A) Pending Capital Commitment -:

During the period ended 31st March 2024, Company has entered into a land purchase agreement for Rs 1500.00 Lakhs, and with respect to the same, pending capital commitment is to the tune of Rs 1350.00 Lakhs.

B) BG Issued and Outstanding -:

During the period ended 31st March, 2024, Company has given Financial/Performance Bank Guarantee to the tune of Rs 106.53 (Rs in Lakhs) to its customers.

9 Realisation

In some cases debit or credit balances of parties in respect of Sundry debtors, sundry creditors are subject to confirmation. In the opinion of the Board, the current Assets, Loans and Advances are of the Value stated if realized in ordinary course of business. The provision for all known Liabilities as adequate and not in excess of the amount reasonably required.

(The notes referred to above form an integral part of the Financial Statements)

As Per Our Report as on Even Date Attached

For and on behalf of the board of directors For R K Jagetiya & Co. ^Sona Machinery Limited

Chartered Accountants

ICAI F.R.No. 146264W Vasu Naren Shweta Baisla

Chairman & MD qfo & WTD

CA Ravi K Jagetiya DIN No. 06915821 DIN No. 09652443

Proprietor

“¦No.: 134691 supriya

Place : New Delhi Company Secretary ^{place : New Delhi}

Date: 28th May, 2024 M.no A57314 Date: 28th May, 2024