Notes to Accounts of Sonam Ltd.

Mar 31, 2025

(vii) Provisions, contingent liabilities and contingent assets :

A provision is recognised 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 are not discounted to their
present value and are determined based on best estimates 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.

A contingent liability is a possible obligation that arises from past events whose existence
will be confirmed by the occurrence or non-occurrence of one or more uncertain future
events beyond the control of the company or a present obligation that is not recognized

because it is not probable that an outflow of resources will be required to settle the
obligation. A contingent liability also arises in extremely rare cases where there is a liability
that cannot be recognized because it cannot be measured reliably.

Contingent liabilities are disclosed by way of notes to the accounts.

Contingent assets are not recognized.

(viii) Revenue Recognition:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to
the company and the revenue can be reliably measured.

Sales of Goods:

Sales are recognized when significant risks and rewards of ownership of goods have been
passed to the buyer. Sales are being accounted for net of duties and taxes.

Interest:

Revenue is recognized on a time proportion basis taking into account the amount
outstanding and the rate applicable.

Other Operating Revenue / Other Income:

Other Income being, DEPB licence income, discount and rate difference income, insurance
claim income, etc. are being recognized on accrual basis in the year in which right to receive
the same is established

(ix) Retirement Benefits and other employee benefits:

Defined Contribution Plans:

Defined contribution to provident fund is charged to the profit and loss account on accrual
basis.

Defined Benefit Plans:

Provision for gratuity liability is provided based on actuarial valuation made at the end of the
financial year.

Leave encashment expenditure is charged to profit and loss account at the time of leave
encashed and paid, if any. Bonus expenditure is charged to profit and loss account on accrual
basis.

(x) Foreign Currency Transactions:

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing
on the date of transaction.

Foreign currency current assets and current liabilities outstanding at the balance sheet date
are translated at the exchange rate prevailing on that date and the net gain or loss is
recognized in the profit and loss account.

Foreign currency translation differences relating to liabilities incurred for purchasing of
tangible assets from foreign countries are recognized in the profit and loss account. All other
foreign currency gain or losses are recognized in the profit and loss account.

(xi) Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition, construction or production of
qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one
that necessarily takes substantial period of time to get ready for intended use. Costs incurred
in raising funds are amortised equally over the period for which the funds are acquired. All
other borrowing costs are charged to statement of profit and loss.

(xii) Taxes on Income

Tax expenses comprise Current Tax and deferred tax charge or credit.

Current Tax: Provision for current tax is made based on tax liability computed after
considering tax allowances and exemptions, in accordance with the provisions of The
Income Tax Act, 1961.

Deferred Tax: Deferred tax assets and liability is recognized, on timing differences, being
the differences between taxable income and accounting income that originate in one period
and are capable of reversal in one or more subsequent periods. Deferred tax assets arising
mainly on account of brought forward losses, unabsorbed depreciation and minimum
alternate tax under tax laws, are recognised, only if there is a virtual certainty of its
realisation, supported by convincing evidence. At each Balance Sheet date, the carrying
amounts of deferred tax assets are reviewed to reassure realisation. The deferred tax asset
and deferred tax liability is calculated by applying tax rate and tax laws that have been
enacted or substantively enacted by the Balance Sheet date.

(xiii) Earnings per share:

Basic earnings per share are calculated by dividing the net profit / (loss) for the period
attributable to equity shareholders by the weighted average number of equity shares
outstanding during the period. The weighted average number of equity shares outstanding
during the period are adjusted for any bonus shares issued during the year, if any, and also
after the balance sheet date but before the date the financial statements are approved by the
board of directors.

(xiv) Segment Reporting:

The Chief Operational Decision Maker (CODM) monitors the operating results of its
business segments separately for the purpose of making decisions about resource allocation
and performance assessment. Segment performance is evaluated based on the profit or loss
and is measure consistently with the profit or loss in the financial statements. Operating
segments are reported in a manner consistent with the internal reporting provided to CODM.
In accordance with Ind AS 108- “Operating Segments", the Company has identified its
business segment as "Manufacturing & Trading of Horological items, Clocks, Clock
Movements and related items". There are no other primary reportable segments. The major
and material activities of the company are restricted to only one geographical segment i.e.
India, hence the secondary segment disclosures are also not applicable.

(xv) De-recognition:

The Company derecognizes a Financial Asset when the contractual rights to the cash flows
from the Financial Asset expire or it transfers the Financial Asset and the transfer qualifies
for de-recognition under Ind AS 109. A Financial liability (or a part of a Financial liability)
is derecognized from the Company’s Balance Sheet when the obligation specified in the
contract is discharged or cancelled or expires.

(xvi) Offsetting:

Financial Assets and Financial Liabilities are offset and the net amount is presented in the
balance sheet when, and only when, the Company has a legally enforceable right to set off
the amount and it intends, either to settle them on a net basis or to realise the asset and settle
the liability simultaneously.

As per our attached Report of even date For, and on behalf of Board

For, SVK & ASSOCIATES For, SONAM LIMITED

Chartered Accountants
FRN: 118564W

Sd/- Sd/- Sd/-

Sameer S. Chandarana Jayeshbhai C. Shah Deepaben J. Shah

Partner Chairman & MD Whole Time Director

M. No. 609340 DIN: 00500814 DIN: 01981533

UDIN: 25609340BMOXQP1262

Sd/- Sd/-

Amitbhai J. Vaghjiyani Milankumar Ganatra

Chief Financial Officer Company Secretary

Date: 09^th May, 2025 Date: 09^th May, 2025

Place: Morbi Place: Morbi

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Mar 31, 2024

Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 each (Refer note-2). 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 approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim Dividend.

In the event of liquidation of the Company, the holder 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.

Note-1: Persunat to approval given by the shareholders, the Company has during quarter ended September 2022, issued 1,00,08,000 equity shares of ? 10 Each as fully paid-up bonus equity shares in the ratio of 1 (One) equity share for every 1 (One) existing equity share.

Note-2:Subsequent to the year end and pursuant to Board and Shareholder’s approval, the equity shares of the Company were split / sub-divided such that one (1) equity share having face value of '' 10/- (Rupees Ten only) each fully paid-up, was sub-divided into two (2) equity shares having face value of '' 5/- (Rupees Five only) each, full paid-up with effect from 10th May, 2024 (Record Date). Accordingly, equity shares and earnings per shares have been adjusted for share split in accordance with Ind AS 33 ‘Earning Per Share’ read with Ind AS 10 ‘Events After Reporting Period’.

NOTE - 28: NOTES ON ACCOUNTS:-A The Company

"SONAM LIMITED” (Formerly Known as SONAM CLOCK LIMITED) (CIN U33302GJ2001PLC039689) has been migrated from Emerge Platform of National Stock Exchange ofIndia Ltd. (NSE) to Main Board of National Stock Exchange w.e.f. 7th April, 2022.

B Nature of Operations :-

The Company having its manufacturing facilities at Morbi, Gujarat, is presently engaged in Manufacturing & trading of Horological items, Clocks, Clock Movements and related items.

1 Notes on Audit for the Year Ended March 31, 2024

Previous year’s figure have been reworked, regrouped, rearranged and reclassified wherever necessary, so to give a comparative view. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.

2 Long Term and Short Term Borrowings :-Secured :

[a] Term Loans From Banks

Amt O/s

(i) Indulsand Bank : Rs. 399.16 Lacs Repayable in 40 Installments Primary Security - First and Exclusive Charge on Hypothication of Entire Movable Fixed Assets and Current assests of the Company.

Collateral Security:

EQM of factory land and building (Commercial Premises Area 4451.52 Sq Mtrs, Industrial Premises Area 5159.72 Sq Mtrs & Industrial Premises area 17705 Sq Mtrs.) situated at Ser. No. 337/P & 338/1p1 & 1p2, Village Lajjai, Taluka Tankara, Dist. Morbi standing in the name of M/s. Sonam Clock Limited.

Personal Guarantee of Mr. Jayeshbhai C. Shah (Managing Director), Mrs. Deepaben J. Shah (Whole Time Director) and Mr Harshil J Shah (Director)

[b] Cash Credit & EPC facilities from Banks repayable on demand

Amt O/s

(i) Indulsand Bank - Rs. 1607.89 lacs Primary Security - First and Exclusive Charge on Hypothication of Entire Movable Fixed Assets and Current assests of the Company.

(ii) Indulsand Bank - GECL-WCTL : Rs. 167.20 Lacs - Repayable in 26 Installments.

(iii) Bank of India - GECL 2 (WCDL) : Rs. 41.39 Lacs - Repayable in 10 Installments.

Collateral Security:

EQM of factory land and building (Commercial Premises Area 4451.52 Sq Mtrs, Industrial Premises Area 5159.72 Sq Mtrs & Industrial Premises area 17705 Sq Mtrs.) situated at Ser. No. 337/P & 338/1p1 & 1p2, Village Lajjai, Taluka Tankara, Dist. Morbi standing in the name of M/s. Sonam Clock Limited.

Personal Guarantee of Mr. Jayeshbhai C. Shah (Managing Director), Mrs. Deepaben J. Shah (Whole Time Director) and Mr Harshil J Shah (Director)

The rate of interest on the long term and short term borrowings ranges between 8.20% to 9.50% p.a. depending upon the prime lending rate / base rate of the banks applicable at different point of time during the year and the interest rate spread agreed with the banks.

^Subsequent to the year end and pursuant to Board and Shareholder’s approval, the equity shares of the Company were split / sub-divided such that one (1) equity share having face value of '' 10/-(Rupees Ten only) each fully paid-up, was sub-divided into two (2) equity shares having face value of '' 5/- (Rupees Five only) each, full paid-up with effect from 10th May, 2024 (Record Date). Accordingly, equity shares and earnings per shares have been adjusted for share split in accordance with Ind AS 33 ‘Earning Per Share’ read with Ind AS 10 ‘Events After Reporting Period’.

The estimated future salary increases, considered in actuarial valuation, takes into account the effect of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

9 Segment Information:-

In accordance with Ind AS 108- “Operating Segments", the Company has identified its business segment as "Manufacturing & Trading of Horological items, Clocks, Clock Movements and related items". There are no other primary reportable segments. The major and material activities of the company are restricted to only one geographical segment i.e. India, hence the secondary segment disclosures are also not applicable.

12	Contingent Liabilities*		Amt. Rs.in Lacs
		2023-24	2022-23
(i)	Outstanding LC / BG LC Outstanding	Nil	Nil
(ii)	Pending Litigations: Central Excise Matters under dispute & under adjudication	Nil	Nil
	Value Added Tax (VAT) Matters under dispute & under adjudication Income Tax matter under Appeal CIT(A)	43.11	13.85
	* Contingent liability produced here in above on the basis of information compiled by the management ofthe company

b Audit Trail

The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of accounts, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of accounts along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated from 02nd April,2023 all relevant transactions recorded in the software, except that audit trail feature is not enabled for direct changes to data for users with certain privileged access rights and also for certain changes made using privileged/ administrative access right. Audit trail (edit log) is enabled at the application level.

c The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property

d The Company has not been declared as a willful defaulter by any lender who has powers to declare a company as a willful defaulter at any time during the financial year or after the end of reporting period but before the date when the financial statements are approved

e The Company does not have any transactions with struck-off companies.

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

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

The company has not advanced or loaned or invested funds to any other person(s) or entity(is), 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 has not received any funds 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 to or on behalf of the Ultimate Beneficiaries.

j The Company does not have any transactions which is not recorded in the books of accounts but 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 has not traded or invested in Crypto currency or Virtual Currency during the financial year.

15 In the opinion of the Board and to the best of its knowledge and belief, the value on realisation of current assets and loans and advances are approximately of the same value as stated.

16 Balances of Trade Payables, Unsecured Loans, Trade Receivables, Long-term and Short-term Loans & Advances, other current liabilities and other current assets and Non-Current Investments are subject to the confirmation of the parties concerned. Wherever confirmation of the parties for the amounts due to them / amounts due from them as per books of accounts are not received, necessary adjustments, if any, will be made when the accounts are reconciled / settled.

17 Wherever no vouchers and documentary evidences were made available for our verification, we have relied on the authentication given by management of the company.

18 Figures have been rounded off to nearest lac rupee upto two decimals as per the requirements of Schedule III, unless otherwise stated and have been regrouped, rearranged and reclassified wherever necessary.

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Mar 31, 2023

NOTE - 28: NOTES ONACCOUNTS:-A The_Company

”SONAM CLOCK LIMITED” (CIN U33302GJ2001PLC039689) has been migrated from Emerge Platform of National Stock Exchange of India Ltd. (NSE) to Main Board of National Stock Exchange w.e.f. 7th April, 2022. Hence, the financial statements for the year ended 31st March, 2022 were the first set of financial statements of the company under Ind AS and the date of transition to Ind AS being 1st April, 2020.

B NatureofOfierat^insj^

The Company having its manufacturing facilities at Morbi, Gujarat, is presently engaged in Manufacturing & trading of Horological items, Clocks, Clock Movements and related items.

1 Notes on Audit for the Year Ended March 31, 2023

Previous year’s figure have been reworked, regrouped, rearranged and reclassified wherever necessary, so to give a comparative view. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.

2 Long Term and Short Term Borrowings Secured :

[a] Term Loans From Banks

Amt O/s

(i) Bank of India : Rs. Nil (Rs. 6.17 Lacs) Primary Security - Hypothecation all Plant & Machineries.

(ii) Bank of India : Rs. 540.27 Lacs (Rs. 681.60 Lacs) Primary Security -EQM of factory land and building there on situated at Sr. No.338/1P1&1P2, Village Lajai, Taluka Tankara, Dist. Morbi in name of Sonam Clock Limited. (Land Area: 17705 Sq. Mtrs.)

Collateral Security:

EQM of factory land and building (Commercial Premises Area 4451.52 Sq Mtrs & Industrial Premises Area 5159.72 Sq Mtrs) situated at Ser. No. 337/P, Village Lajjai, Taluka Tankara, Dist. Morbi standing in the name of M/s. Sonam Clock Limited

Personal Guarantee of Mr. Jayeshbhai C. Shah (Director) and Mrs. Deepaben J. Shah (Director)

[b] Cash Credit & EPC facilities from Banks repayable on demand

Amt O/s

(i) Bank of India - Rs. 1551.70 lacs (P.Y. Rs. 1381.30 Lacs) Primary Security - Hypothecation of Stocks and Book Debts.

(ii) Bank of India - GECL-WCTL : Rs. 180.11 Lacs (P.Y. 307.51 Lacs) - Repayable in 36 EMI after Initial Moratorium of 12 Months.

(iii) Bank of India - CESS-2020 (WCDL) : Nil (P.Y. 19.94 Lacs) - Repayable in 18 EMI after Initial Moratorium of 6 Months.

(iv) Bank of India - GECL 2 (WCDL) : Rs. 255.73 Lacs (P.Y. 290.00 Lacs) - Repayable in 36 EMI after Initial Moratorium of 12 Months.

Pledge of TDRs for LC Margin 15% upon full utilization of limit.

Collateral Security:

EQM of factory land and building (Commercial Premises Area 4451.52 Sq Mtrs & Industrial Premises Area 5159.72 Sq Mtrs) situated at Ser. No. 337/P, Village Lajjai, Taluka Tankara, Dist. Morbi standing in the name of M/s. Sonam Clock Limited

Personal Guarantee of Mr. Jayeshbhai C. Shah (Director) and Mrs. Deep C3aben J. Shah (Director)

[c] Vehicle Loans From Banks

Amt O/s

(i) Bank of India - Rs. 13.68 lacs (P.Y. 19.30 lacs) Secured against hypothecation of vehicles.

The rate of interest on the long term and short term borrowings ranges between 7% to 12% p.a. depending upon the prime lending rate / base rate of the banks applicable at different point of time during the year and the interest rate spread agreed with the banks.

Repayment period of long term borrowings ranges from less than 1 year to 6 years from the balance sheet date.

The estimated future salary increases, considered in actuarial valuation, takes into account the effect of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

9 Segment Information:-

In accordance with Ind AS 108- “Operating Segments”, the Company has identified its business segment as "Manufacturing & Trading of Horological items, Clocks, Clock Movements and related items”. There are no other primary reportable segments. The major and material activities of the company are restricted to only one geographical segment i.e. India, hence the secondary segment disclosures are also not applicable.

b The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property

c The Company has not been declared as a willful defaulter by any lender who has powers to declare a company as a willful defaulter at any time during the financial year or after the end of reporting period but before the date when the financial statements are approved

d The Company does not have any transactions with struck-off companies.

e The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies (ROC) beyond the statutory period, except for hypothecation of one vehicle for vehicle loan availed.

f The Company has compiled with the number of layers prescribed under clause (87) of section 2 of the Companies Act 2013 read with Companies (Restrictions on number of Layers) Rules, 2017. g

The company has not advanced or loaned or invested funds to any other person(s) or entity(is), 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

h The Company has not received any funds 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 to or on behalf of the Ultimate Beneficiaries.

i The Company does not have any transactions which is not recorded in the books of accounts but 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).

j The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

15 In the opinion of the Board and to the best of its knowledge and belief, the value on realisation of current assets and loans and advances are approximately of the same value as stated.

16 Balances of Trade Payables, Unsecured Loans, Trade Receivables, Long-term and Short-term Loans & Advances, other current liabilities and other current assets and Non-Current Investments are subject to the confirmation of the parties concerned. Wherever confirmation of the parties for the amounts due to them / amounts due from them as per books of accounts are not received, necessary adjustments, if any, will be made when the accounts are reconciled / settled.

17 Wherever no vouchers and documentary evidences were made available for our verification, we have relied on the authentication given by management of the company.

18 Figures have been rounded off to nearest lac rupee upto two decimals as per the requirements of Schedule III, unless otherwise stated and have been regrouped, rearranged and reclassified