Notes to Accounts of Sunrise Efficient Marketing Ltd.

Mar 31, 2025

14 PROVISIONS/ CONTINGENCIES:

A provision is recognised when the Company has 0 present legal or constructive
obligator 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 rot ciscojntqd to ins present v?iuc and arc determined based on bpfle
estimate req''.lined to settle the obligation at the balance sheet date,

No provision has been made for .''.abilities which are contingent in nature but if
material, these are disclosed by way of note,

1.4 During F.Y. 2024-25, the members of the company in the EGM held on March 23, 2024 had resolved to increase the authorised capital of the
company by additional 50,00,000 equrty shares of Face Value of Rs. 10 each ranking pari passu in all respect with the existing shares of the company.
The said increase in authorised capital was mainly for the purpose of issuance of fully paid bonus shares as well as for issuance of equity shares
pursuant to conversion of share warrants. Pursunat to such resolution, the authorised capital of the company was mcreased as on dated 16th May,
2024 by complying the necessary formalities with MCA and total authorised capital after such increment was 1,50,00,000 equity shares of Face value
of Rs. 10 each.

Further, members of the company'' in the EGM held on December 20, 2024 had resolved to increase the authorised capital of the company by
additional 1,00,00,000 equity'' shares of Face Value of Rs. 10 each ranking pari passu m all respect with the existing shares of the company'' resulting in
total authorised capital of 2,50.00,000 equity shares post such increment. The said increase in authorised capital was mainly for tire purpose of
issuance of equity'' shares pursuant to conversion of share warrants.

1.5 Company has allotted fully paid bonus shares to its shareholders in Hie proportion of one equity share of Rs. 10/- each full)'' paid-up for ever)’ two
equity share of Rs. 10/- each fully paid-up of tire company held by them on tire record date - 03rd April, 2024. Consequent to which the fully paid
up equity share capital increased by 50,00,000 shares having face value of Rs 5 Crore, resulting in tire paid up capital of Rs. 15 Crs (1.5 Cr Shares of
Rs. 10 each). The said bonus was issued out of the Securities premium account of tire company.

1.6 Company had further made the allotment of 6,65,000 equity shares during immediately next financial year 2025-26 (as on lOtlr April, 2025) through
conversion of share warrants alloted during F.Y. 2024-25.

As per tire requirement stated in the Accounting Standard4- "Contingencies and Events Occunnrg After tire Balance Sheet Date", tire same lias been
disclosed in the financial statement.

3.1 Pursuant to tire special resolution passed on 20th December, 2024 by the members of the Company, under chapter V of the Securities and Exchange
Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 and Section 62 and 42 of the Companies Act, 2013 read with the
relevant rules framed there under, the Board of Directors at its Meeting held on 15th January, 2025 has approved the Allotment of 51,38,000 (Fifty
One Laldrs Thirty Eight Thousand) convertible warrants at a Price of Rs. 106/- each on preferential basis, convertible into 51,38,000 (Fifty-One Lakhs
Thirty-Eight Thousand) Equity Shares (One Equity Share for One Warrant issued) of the Company of the face value of Rs. 10/- each to the non¬
promoters upon receipt of minimum subscription amount as prescribed under Regulation of SEBIICDR Regulation, 2018.

3.2 Hie company had realization of 25% upfront money with respect to issuance of aforesaid warrants amounting to Rs. 13,61,57,000 as per SEBI (ICDR)
Regulations, 2018. Further, few of tire allottees holding 6,65,000 warrants have also paid additional balance amount of 75% amounting to Rs.
3,43,58,500 during F.Y. 2024-25 and have exercised their option towards tire conversion of 6,65,000 warrant into shares in tire next financial year. As a
result of tins payment, total money’ received against share warrants during F.Y. 2024-25 amounts to Rs. 17,05,15,500.

6.1 Installments of all Term loans due within next 12 months have been classified as short term borrowings.

6.2 Axis Bank ECLGS A/c had been sanctioned to meet the liquidity mismatch arising due to Covid-19 in F.Y. 2021-22, the tenor for the payemnt tvas 60
months (including 24 months of moratorium). The principal to be repaid in 36 equal monthly principal instalments of Rs.425000/- post moratorium
period of 24 months starting from December, 2023. However, the company has repaid the entire loan alongwith interest as on dated 23rd Jamiarry,
2025 and tire same loan account has been closed.

6.3 Bank Balance of Axis Bank CC A/c 920030051353191 is as per books of accounts of tire company wirerein some of the cheques issued/received were
either not cleared or deposited by bank as on the balance sheet date 31.03.2025 and hence tire same is outstanding in the bank reconciliation
statement as on dated 31.03.2025.

6.3 The company has been sanctioned Cash Credit facility of Rs 6 Ciore from Axis Bank which is secured against equitable mortage of Commercial
Property as per list mentioned below and also Personal Gurantee by Mr. Lejas Hemantrai Desai, Mrs. Mitalrben Lejas Desai, Mr. Henrantrar
Thakorbliai Desai, Mrs. Daxaben Hemantrai Desai & Mr. Arif Usman Mistry

6.4 The company had also availed Cash credit facility from the ICICI Bank of Rs. 2.12 Crore from the ICICI Bank in last financial year in March, 2024
agatnst the equitable mortgage of Commercial Property located at Vagra, Bhantch owned by Pyramid Commerce LLP and also on the Personal
Guarantee by -Mr. Lejas Hemantrai Desai, Mrs. Mitaliben Lejas Desai, Mr. Hemantrai Thakorbhai Desai and Corporate guarantee of Pyramid
Commerce LLP.

During F.Y. 2024-25, the company has dosed the said cash credit facility availed from ICICI Bank as on dated 07th March 2025 after making full
repayment of the due in respect of this facility. The security provided as collateral as stated above against this facility stands released. However,
charge on MCA portal in respect of tins cash credit facility from ICICI Bank is pending to be satisfied.

6.5 The channel finance Loan taken from Standard Chartered Bank is a Flexi Loan facility , tire tenor to repay tire same is within 60 days after withdrawal
. This flexi loan facility has been availed against supplies from Bharat Bijlee Ltd.

15.1 111 the opinion of the Board Current Assets, Loans and Advances have a value on realisation in the ordinary course of business, at least equal to the
amount at which they are stated

The accounts of certain Sundry Debtors, Sundry Creditors, Advances and Lenders are subject to confirmation / reconciliation and adjustments, if
any. The management does not expect any material difference affecting the current years financial statements.

15.2 Advances for Capital goods to Mahendra Dubey amounting to Rs. 5 Lakhs has been made during the F.Y. 2021-22. However, no capital goods were
received till the date and further amount advanced has not been refunded till yet.

15.3 The company had given short term funds to the director- ''Mr, Lejas Desai'' and "M/s Mitali Lejas Desai'' for the purpose of incurring business
development and marketing expenditure on behalf of the company which has to be subsequently ratified by the Board resolution. However, since
the said expenditure was not incurred during FY 2024-25, the advance money has been repaid back to tie company by the directors and thus having
no outstanding balance in the books . However, few of the cheques pertaining to die refund of said advance money'' remained uncleared as on the
balance sheet date(i.e. 31.03.2025).

25.1 Profits available for appropriation has been taken to be "Net Profit" as reported in the profit & loss account after taxes.

25.2 "Weighted Average Number of Shares" has been calculated taking into consideration, the weights for period for which tire equity shares was issued
and outstanding throughout the period of financial statement.

25.3 while calculating the EPS for each comparative period, bonus shares issued on the record date of 03rd April 2024 in the ratio of 1:2 have been
considered in the weighted average total no. of shares since the beginning of the both current period and comparitive pieriod (F.Y 2023-24 & F.Y.
2024-25) for the sake of better comparison as suggested by the AS-20 and accordingly previous reporting period''s EPS has been restated.

25.4 Further during E.Y. 2024-25 (as on 15th January, 2025) company has made preferential allotment of 51,38,000 (Fifty One Lakhs Thirty Eight
Thousand) convertible warrants at a Price of Rs. 106/- each on preferential basis, convertible into 51,38,000 (Fifty-One Lakhs Thirty-Eight Thousand)
Equity Shares (One Equity Share for One Warrant issued) of the Company of the face value of Rs. 10/- each to the non-promoters upon receipt of
minimum subscription amount as prescribed under Regulation of SEBIICDR Regulation, 2018.

As pier Accounting standard 20- "Earnings pier Share"-

(l) Share warrants which would be converted into equity share in future is considered as potential equity shares as pier AS-20.

(ii) Potential equity shares should be treated as dilutive when, and only when, their conversion to equity shares would decrease
net profit pier share from continuing ordinary operations.

(iii) Options and other share purchase arrangements are dilutive when they would result in the issue of equity shares for less than
fair value. The amount of the dilution is fair value less the issue price. Therefore, in order to calculate diluted earnings per
share, each such arrangement is treated as consisting of:

(a) a contract to issue a certain number of equity shares at their average fair value during the period. The shares to be so
issued are fairly priced and are assumed to be neither dilutive nor antidilutive. They are ignored in the computation of
diluted earnings per share;

(b) a contract to issue the remaining equity shares for no consideration. Such equity shares generate no proceeds and have
no effect on the net profit attributable to equity shares outstanding. Therefore, such shares are dilutive and are added to the
number of equity shares outstanding in the computation of diluted earnings per share.

(c) For the purpose of calculating diluted earnings per share, an enterprise should assume the exercise of dilutive options and
other dilutive potential equity shares of the enterprise. The assumed proceeds from these issues should be considered to have
been received from the issue of shares at fair value. The difference between the number of shares issuable and the number of
shares that would have been issued at fur value should be treated as an issue of equity shares for no consideration.

(d) Dilutive potential equity shares should be deemed to have been converted into equity shares at the beginning of the
period or, if issued later, the date of the issue of the potential equity shares.

Note Fair value for this purpose is the average price of the equity shares during the period. Theoretically, every market

transaction for an enterprise''s equity shares could be included in determining the average price. As a practical matter,
however, a simple average of last six months weekly closing prices are usually adequate for use in computing the average
price.

25.5 Company lias issued Hie above share warrants at less than fair value price of equity shares and thus the same is considered to be dilutive potential
equity shares. As stated above fair price of the equity share of the company has been derived from tire average of the weekly closing price of of the
equity share on BSE SME Stock exchange in the previous 6 months period (that is from October,2024 to March, 2025 which comes to Rs. 141.8038 per
equity share.

Accordingly, on the basis of this fair value of Rs. 141.8038/- per equity share, Weighted Average number of dilutive potential equity''shares to be
included for the purpose of calculating diluted EPS are computed as under:

25.7 As per tire disclosure requirement of Accounting Standard ^"Contingencies and Events occuring after tire balance sheet date" Company has further
made the allotment of 665000 number of shares on conversion of share warrants in the F.Y. 2025-26 as on dated 10th April, 2025. The same has not
been taken into account in the weighted average no of shares while calculating tire EPS since the same is not issued in the current financial year 2024
25..

26 SEGMENT REPORTING

In view of Accounting Standard 17 " Segment Reporting'''' issued by tire Institute of Chartered Accountants of Erdia the disclosure in respect of
segment information for the year ended 31st March 2025 is not applicable to the company as the company does not deal in varied products/services
and hence not exposed to different risks and returns. During FY - 2024-25, tire company was engaged in tire trading and distribution of industrial
electrical and electronic components like motors, gearbox, lubricants, lightings, drives, pumps, cables etc of various companies like Bharat Bijlee,
Gulf, Yaskawa, Crompton, Kirloskar, Lubi ,Urvam Technologies Pvt Ltd.,Ionnix Smart System Pvt Ltd etc. Further, the company was also in the
distribution of FMCG product of PEPSICO.

Even though the company was engaged in distribution of both Industrial and FMCG products, tire company was not engaged in any of tire
manufacturing or production activities and was solely operating as distributor of these products. Even the company used similar methods and
marketing techniques for distribution of these products. Even further, the regulatory environment involving banking, insurance, public utilities etc
were also similar for the distribution of both these products. Further also , the transactions of the FMCG Division is less than tire threshold limit
prescnbed under tire rules laid dorm under As-17 , thus disclosure in respect to same for the year ended 31st March ,2025 is not applicable to the
company.

The company opened a new branch office in Thane, Maharashtra, and began conducting business there from last year only in F.Y. 2022-23. However,
Thane Branch''s business activity have been relatively meagre even in tire current financial year. However, the business transactions conducted by
Thane Branch being less than tire threshold limit prescribed under the rules laid dorm under As-17 , the disclosure in respect to different
geographical location for the year ended 31st March ,2025 is not applicable to tire company.

Henceforth, all the trading and distribution activities of tire company is expected to be similar with respect to a majority'' of the factors and does not
include products and services with significantly differing risks and returns. Further, Internal organisation and management structure of the
company'' and its system of internal financial reporting to the board of directors and the chief executive officer is similar for all the trading and
distribution activities of tire company.

In view of Accounting Standard 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India the disclosure in respect of
segment information for the year ended 31st Mardr 2025 is not applicable to the company.

28 The details of status of suppliers whether SSI or Otherwise available to the company, hence due /payable to creditors are separately given as
required under the Companies Act. The information regarding lev of the suppliers, whether they are registered wittl the authority specified under
the Micro, Small & Medium enterprises Development Act, 2006 is available with the auditee.

Hie Company is in tire process of obtaining necessary confirmations from suppliers regarding their status under the Micro, Small and Medium
Enterprises (MSME) Development Act, 2006 (the Act’) ,but as per information gathered by the management till date, the disclosures regarding tire
following as on 31-03-2025 have been made as follows:

i. Amount due and outstanding to MSME suppliers as at the end of the year (as on dated 31.03.2025) was Rs. 159.36 Lakhs

ii. Interest paid dunng the period / year to MSME was NIL

hi. Interest payable at the end of the accounting period / year to MSME was NIL

iv. Interest accrued and imp aid at the end of the accounting period / year to MSME was NIL

301 Huge Positive variance is noticed in the Current ratio. Which is due to significant reduction in the current liabilities of the company on account of
following

(i) repayment of ICICI bank cash credit facility of 2.12 Crore as the same has been closed in March, 2025.

(ii) the repayment of the long term loan of AXIS Bank ECLGS A/c (being current maturities of long term borrowings amounting to Rs. 51 Lakhs) as
the same has also been closed in January, 2025.

(iii) zero outstanding balance of channel finance loan taken from Standard Chartered Bank as compared to precious year (Rs. 1.75 Crore) particularly
at the year end.

(iv) reduced outstanding balances of trade payable as compared to the previous year due to faster payment cyde.

302 Extreme high positive variance observed in Debt-Equity ratio is on account of majority repayment of die debt obligation of the company during F.Y.
2024-25 which includes secured and unsecured loans as well as cash credit facility availed by the company. Repayment of substantial debt obligation
has been made due to die availability of equity'' funds raised through allotment of share warrants during F.Y. 2024-25 upon the upfront receipt of
25% of the toal consideration determined for such share warrants.

30.3 As specified in detail in Note No. 1.5, company lias made preferential allotment of 51,38,000 numbers of convertible share warrants and total money
received against share warrants during F.Y. 2024-25 amounts to Rs. 17,05,15,500. This money received against the share warrants has been shown
seperately under the head "Shareholder''s funds" and lienee the same shall be considered in shareholder''s Equity fund while computing Debt-Equity
ratio, Return on Equity ratio and Return on capital employed ratios. Money received from share ivarrants, especially near die end of the financial
year, can lead to a significant increase in equity capital compared to the earnings generated from these funds. This often results in lower return on
equity (ROE) and return on capital employed (ROCE) ratios.

30.4 The Return on Investment can not be computed for uivestments made in Mutual Fund as the same was invested m Growth Fund and no dividend
was recived during the year. Further , as per accounting policies followed by the company , investments in mutual funds are valued at cost or
market value whichever is lower as on 31.03.2025. However, some units of mutual funds were sold during F.Y. 2024-25 and company has earned the
capital gains on such sales.Weighted average annualised rate of return computed taking into account tire period of holding for the units sold. Sales
value of tire mutual funds held has been taken as wheights and applied to annualised rate of return calculated for emits purchased on the same date.
Accordingly, for units of mutual funds sold, weighted average annualised rate of return is calculated as 24.35% p.a.

305 Negative variance noticed in the trade receivable turnover ratio is due to significant increase in the average outstanding balance of trade receivable
for relatively slower payment cycle in comparision of increased credit sales.

30.6 The company has made substantial repayment of its secured and unsecured loan as well as cash credit facility during F.Y. 2024-25 resulting in
significant decrease in its debt obligation resulting in tire huge notable decrease in its finance cost from Rs. 1.43 crores to only'' Rs. 61.77 Lakhs. This
huge savings in the finance cost in F.Y. 2024-25 resulted in the positive variance of Interest coverage ratio.

31

As per regulation of SA-610 i.e. "Usmg the work of Internal Auditor" as provided by ICAI, we have relied on the report of internal auditor M/s
Rachna Patel & Associates appointed by the company'' for conducting day-to-day audit of the company''. The company''s standalone financial figures
for the year ended March 31, 2025 have been examined by internal auditor M/s Rachna Patel & Associates and tire Internal audit report was issued
as on dated 14th April, 2025 and we have relied on their report for any'' discrepancies.

32 As the company is listed on SME Platform of BSE, it has been exempted from applicability of IND-As as per proviso to rule 4 of Companies (Indian
Accounting Standards) Rules, 2015. The Company'' has adopted Accounting Standards as notified by Ministry of Corporate Affairs. Accordingly,
these financial results have been prepared in accordance with tire Accounting Standards prescribed under Section 133 of the Companies Act, 2013
and other accounting principles generally accepted in India.

33 Hie company was expected to abide with the rules of Section 135 (Corporate Social Responsibility) of the Companies Act 2013 during the F.Y.2024-
25 since having net profit exceeding threshold limit of Rs. 5 Crore in previous year.

Company''s CSR obligation being 2% of the last 3 year''s average net profit before tax as per the provision of section 135 amounts toRs. 18,99,256.

[Net profit of F. Y. 2021-22- Rs. 6,66,27,013 ]

[Net profit of F. Y. 2022-23- Rs. 10,79,30,139]

[Net profit of F.Y. 2023-24- Rs. 11,03,31,180]

Average Net profit of preceding 3 years being Rs. 28,48,88,332/3 years = 9,49,62,777.

CSR Liability for F.Y. 2024-25= 9,49,62,777 * 2%= 18,99,256

The company to fulfill its CSR Compliance had donated Rs. 15,00,000 to the Jiva Han Foundation registered with the state of Gujaratunder the
number F/21475/AHMEDABAD and lias tire PAN number AAhi]0292K. Tire company has also donated Rs. 3,99,256 to tire Azad foundation Trust,
which is also registered with the state of Gujarat under the number: CSR00022956 and has the PAN number AAFTA6081J towards CSR compliance.
Thus, company has fulfilled its CSR obligation as per section 135 of the Companies Act, 2013

34 All tire charges which are subject to be registered with the Mininstry Of Corporate Affairs (MCA) Iras been duly registered except for tire charges on
commercial vehicles.

The charges which needs to be satisfied has also been duly filed with MCA whenever applicable except for the following charges :

(1) Charge created for the ICICI Bank cash credit facility ofRs. 2.12 Crore which was closed March, 2025 is yet to be updated as satisfied on the MCA
portal.

(2) Change in the amount of Charge created for the AXIS Bank (both cash credit facility of Rs. 6 Croie as well as ECLGS Term Loan facility of Rs.
1.53 Crore were sanctioned, out of which Axis Bank ECLGS term loan facility rvas closed in January 2025. Thus, reduction of Rs. 1.53 crore from tire
total charge created of Rs. 7.53 crore remains pending to be satisfied on the MCA portal.)

(3) Changes iwith respect to charges created for term loan availed on commercial vehicle are pending to be updated and filed on the MCA Portal.

35 As certified by the management, no transactions lias been entered into by tire company during the F.Y.2024-25 with any struck off companies u/s
248 of the companies act ,2013 or 560 of the companies act, 1956 .

36 Hie figures of the previous year have been rearranged/ regrouped/ reclassified wherever necessary.

In terms of our audit report of even date

For M/s sbmg & co. For Sunrise Efficient Marketing Limited

Chartered Accountants
FRN127756W

Lej as Desai Mitali Desai

Director Director

Sumit Bihani, Partner DIN:02488965 DIN:02594823

M No 121551

UDIN: 25121551BMGYLG9326
Place: Surat

Date: 17/05/2025 Shivani Parth Kothari Bhranti Desai

Company Secretary CFO

M.No.: ACS-46602 PAN:ANLPD8136G