Notes to Accounts of Sunlite Recycling Industries Ltd.

Mar 31, 2025

m Provisions, Contingent liabilities and Contingent
assets

Provision Involving Substantial Degree of estimation
in measurement are recognised when there is
a present obligation as a result of past events
and it is probable that there will be an outflow of
resources.

See accompanying notes to the financial statements

As per our report of even date

^{For Gopal Shah} & ^Co For and on behalf of the Board of Directors of

^{Chartered Accountants} Sunlite Recycling Industries Ltd

FRN. 103301W

CA Gopal Shah, Partner Priyanka Muraka Nitinkumar Heda Prahladrai Heda

Membership No. 036807 Company Secretary Managing Director Chairman, WTD

UDIN: 25036807BMOISJ5105 M. No. A75466 DIN:- 0383855 DIN:-09696242

Place: Ahmedabad Manishkumar Heda Place: Nadiad

Date: May 21, 2025 Chief Financial Officer Date: May 21, 2025

The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008
which recommends that the Micro and Small Enterprises should mention in their correspondence with its
customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance
with the ''Micro, Small and Medium Enterprises Development Act, 2006 (''the Act''). Accordingly the disclosure
in respect of the amounts payable to such enterprises as at 31 March 2025 has been made in the financial
statements based on information received and available with the Company. Further in view of the Management,
the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to
be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.

repayment of cash credit loan.

2 (b) Debt equity ratio has reduced drastically since

company has raised funds through IPO and repaid
majority of cash credit and other loans.

Reason for variance:-

1 (a) There is change in Current Ratio as inventories

has increased drastically as compared to previous
year. Further current liabilities has decreased due to

3 (c)Debt Service Coverage Ratio has increased
because management has repaid major loans
through proceeds of IPO. Further company has
shown good growth in the earnings as compared
to previous year . This has lead to increase in debt
service coverage ratio during the year as compared
to previous year.

4 (d) Return on Equity has reduced because the
company has issued shares through IPO which
resulted in the increase in share capital of the
company.

5 (e) Inventory turnover ratio has increased as the
total revenue of the company is increased.

6 (f) Trade receivables turnover ratio is decreased
as the total amount due from debtors has been
increased as compared to last year.

7 (g) Trade payable turnover ratio has increased due
to increase in Purchase as compare to previous
year.

8 (h) Net capital turnover ratio decreased due to
increase in net working capital of the company as
compared to previous year as there is increase in
debtors and inventories.

9 (i) Net profit ratio increased as company is able to
effectively control its costs and there is increase in
earnings.

10 (j) Return on capital employed increased due
to increase in earnings and decrease in capital
employed due to repayment of debt of the
company.

11 (k) Return on investment has increased since
there were higher investments during the year
as compared to previous year. Apart from that
company has made a Fixed Deposits from the funds
raised through IPO upto the date of utilisation of
those funds. This has lead to higher interest income
in current year.

36 Provisions, Contingent liabilities and Contingent
assets

Contingent Liabilities as defined in Accounting
Standard (AS) - 29 "Provisions, Contingent Liabilities
dealt with as a contingent liability. Provisions
involving substantial degree of estimation in
measurement are recognized when there is a
present obligation as a result of past events and it is
probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are
disclosed in the notes. Contingent assets are neither
recognized nor disclosed in the financial statements
and Contingent Assets" are disclosed by way of
notes to the accounts.

Contingent liabilities of the company as on
March 31, 2025 are as follows:

The GST department has issued various Show
Cause Notices (SCN) from FY 2017-18 to FY 2022Â¬
23. The total outstanding demand is ?4695.85
Lacs as on balance sheet date. Based on the
decisions of the Appellate authorities and the
interpretations of other relevant provisions of the
GST Act the Company has been legally advised that
the demand raised is likely to be either deleted or
substantially reduced and accordingly no provision
is considered necessary. The company has filed
appeal against those notices and no order has been
passed by appropriate authorities against those
appeals.

37 Other Statutory Disclosures as per the Companies
Act, 2013

- The Company has not carried out any revaluation

of Property, Plant and Equipment in any of the
period reported in this Financial Statements hence
reporting is not applicable.

- The company does not hold any benami property

as defined under the Benami Transactions
(Prohibition) Act, 1988 (45 of 1988) and the rules
made thereunder. No proceeding has been initiated
or pending against the company for holding any
benami property under the Benami Transactions
(Prohibition) Act, 1988 (45 of 1988) and the rules
made thereunder.

- Company has borrowings taken from banks and
financial institutions, monthly returns or statements
of current assets filed by the Company with banks
or financial institutions are in agreement with the
books of accounts except reported in CARO report
and summary of reconciliations are provided,
wherever required.

- The company has lien on Fixed Deposits against
Bank Guarantee issued, appropriate charge has
been created with Registrar of Companies.

- The Company does not have 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).

- The Company has 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:

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

- The Company has 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:

(a) 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

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

- During FY 2024-25, the company has not raised
amounts from issue of securities by way of rights
allotment However during FY 2023-24, the company
has raised amounts from issue of securities by way
of rights allotment.

- The Company has not traded or invested in crypto
currency or virtual currency during the financial
year.

- The Company is in compliance with the number

of layers prescribed under clause (87) of section
2 of the Companies Act read with the Companies
(Restriction on number of Layers) Rules, 2017.

38 Other Disclosures

The Income-Tax authorities (''the department'')
had conducted search activity during the month
of February 2025 at the premises of company and
residences of the management and few employees
of the Company. The Company extended full
cooperation to the Income-tax officials during the
search and provided required details, clarifications,
and documents. As on the date of issuance of these
standalone financial statements, the Company has
not received any written communication from the
department regarding the outcome of the search,
therefore, the consequent impact on the standalone
financial statements, if any, is not ascertainable. The
Management, after considering all available records
and facts known to it, is of the view that there is no
material adverse impact on the financial position
of the Company and no material adjustments are
required to these standalone financial statements
for the half-year and year ended 31 March 2025 in
this regard.