Notes to Accounts of Unimech Aerospace and Manufacturing Ltd.

Mar 31, 2025

Company paid INR 1,544.39 Lakhs towards land which has been allotted from Karnataka Industrial Areas Development Board ("KIADB") on July 07, 2024. Company does not have right or control over land considering physical possession of land is still not received from KIADB as at March 31, 2025 and the same is classified in capital advances refer note 10.

3.1 Deemed Cost

On transition to Ind AS (April 01, 2022), the Company has elected to continue with the carrying value of property, plant and equipment measured as per the previous GAAP and use that carrying value as the deemed cost of property, plant and equipment.

3.2 Contractual obligations

Refer to note 45 for details on contractual commitments for acquiring property, plant and equipment.

7.1 Investments in associate:

During the year ended March 31, 2025, pursuant to approval by the Board of Directors, the Company entered into a Share Subscription and Shareholders Agreement (""SSHA"") with Dheya Engineering Technologies Private Limited ("Dheya”) for the subscription of Compulsory Convertible Preference Shares (CCPS). As of March 31, 2025, the Company has subscribed to and allotted 2,387 (16.94%) CCPS for a total consideration of INR 500 Lakhs. The terms of the SSHA also outline certain terms and rights including options to acquire additional CCPS in subsequent tranches. Accordingly, the Company has recognised the investment of INR 500 Lakhs as on March 31, 2025.

7.2 The cost of investments in Innomech Aerospace Toolings Private Limited includes an amount of INR 72.82 Lakhs (March 31, 2024: INR72.82 Lakhs) relating to fair value of guarantees issued by the Company to various banks and financial institutions for borrowings availed by Innomech Aerospace Toolings Private Limited in FY 2024-25.

7.3 Refer note 38 for information about the Company''s exposure to financial risks and refer note 39 fair value measurement.

16.1 During the year ended March 31, 2025, and March 31, 2024 the Company has incurred expenses towards proposed Initial Public Offering ("IPO") of its equity shares and the qualifying expenses attributable to the proposed issue of equity shares has been recognised as other current assets. The Company has recovered proportionate amount from its shareholders and the balance amount is netted off in securities premium account in accordance with as per Section 18 and Section 52 of the Companies Act, 2013, respectively, upon the shares being issued.

(a) Increase in authorised share capital and Sub-division/Split of equity shares

Pursuant to the Shareholders resolution dated December 23, 2023, the Company split 1,10,000 equity shares of INR 100 each divided into 22,00,000 equity shares of INR 5 each and increased authorised share capital of the Company from INR 110.00 Lakhs to INR 3,000.00 Lakhs by additional creation of 5,78,00,000 equity share of INR 5 each.

(b) Bonus issue of equity shares

Pursuant to the Shareholders resolution dated December 27, 2023, the Company has issued 4,19,09,600 equity shares having face value of INR 5 each by way of bonus issue to its shareholders by utilising an amount of INR 2,095.48 Lakhs from the balance in retained earnings and securities premium in the ratio of 1:20. The paid-up share capital of the Company has been increased to 4,40,05,080 equity shares of face value of INR 5 each as at March 31, 2024.

17.2 Rights, preferences and restrictions attached to shares

Equity shares have a face value of INR 5 each Holder of equity shares is entitled to participate in dividends. The dividend proposed by the board of directors is subject to the approval of the shareholders in the annual general meeting. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts and distribution will be in proportion to the number of equity shares held by the shareholders.

17.3 Pursuant to the board meeting and share holders meeting held on July 03, 2024, the Company raised money by way of private placement of 36,67,090 equity shares of face value INR 5/- each at a price of INR 681.74/-per share (with a premium of INR 676.74 per share) aggregating to INR 25,000 Lakhs.

17.4 The equity shares of the Company were listed on the National Stock Exchange and Bombay Stock Exchange on December 31, 2024, following the completion of an Initial Public Offering ("IPO") of 63,69,426 equity shares, with a face value of share INR 5/- each, at an issue price of INR 785 per equity share (which includes a share premium of INR 780 per equity share). This consisted of a fresh issue of 31,84,713 equity shares and an offer for sale of 31,84,713 equity shares.

17.5 Equity shares allotted by the Company on August 19, 2024 has following terms attached to equity shares as per shareholders'' agreement dated July 16, 2024:

On July 16, 2024, the Company has entered into a Shareholders'' Agreement ("SHA") with Valuequest Investment Advisors Private Limited, Steadview Capital Mauritius Limited and Evolvence Fund India IV Limited (together referred as "Investors"), pursuant to their investment in equity shares of the Company of INR 25,000 Lakhs("investor equity shares").

The SHA provides certain rights to the Investors including exit rights and buy back rights. In the event the Company is unable to provide an exit to the Investors by way of an Initial Public Offer (""IPO"") within a certain timeline, the Company shall provide an exit to the Investors by way of third party sale or Company or promoter buyback or a combination thereof on or before March 31, 2028 ("Exit date") in the manner set out in the SHA. The buy back rights of the Investors shall cease to be in effect on and from the date on which the Company files its Draft Red Herring Prospectus ("DRHP") in connection with its proposed IPO, but shall be made effective again in the event the DRHP so filed is withdrawn with no intention of refiling the same.

Pursuant to the filing of its DRHP on August 19, 2024 by the Company, the buy back rights have become ineffective. Consequently, such investor equity shares meet the definition of an equity instrument as per Ind AS 32 Financial Instruments: Presentation and accordingly have been classified as equity from August 19, 2024. Management has also assessed and concluded that there has not been any significant change in the fair value of the investor equity shares from the date of issue to the date of DRHP filing, and therefore there is no impact to be recognised in the profit and loss.

17.7 Aggregate number of shares issued pursuant to contract without payment being received in cash, for consideration other than cash, bonus shares allotted and shares bought back during the period of five years immediately preceding the reporting date

There are no such shares issued, allotted or bought back during the period of five years immediately preceding the reporting date. Refer note 17.1 (b) for bonus equity shares issued.

18.2 Nature and purpose of items in other equity Retained earnings

Retained earnings are the profits that the Company has earned till date, less any dividends or other distributions to shareholders and these can be utilised as per the provisions of the Companies Act, 2013.

Securities premium

Securities premium issued to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

25.3 Performance obligations:Sale of products:

The performance obligation with respect to sale of products including other operating revenue is satisfied at a point in time that is the when control over the goods is transferred to the customers, generally on the delivery of the goods at the agreed destination as per the terms of contract with customers.

Sale of services;

The performance obligation with respect to sale of services is satisfied at a point in time by measuring the progress towards complete satisfaction of performance obligations during the reporting period and revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided, because the customer receives and uses the benefits simultaneously.

3s| EARNINGS/(LOSS) PER EQUITY SHARE

Basic earnings per equity share amounts are calculated by dividing the profit/loss for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

Diluted earnings per equity share amounts are calculated by dividing the profit/loss attributable to equity holders (after adjusting for interest on the convertible preference shares) by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

(c) Information regarding the classification of securities Convertible debentures

The Company has issued 30,000 convertible debentures issued during the financial year ended March 31, 2019 are considered to be potential equity shares of 544 shares and have been included in the determination of diluted earnings per share from their date of issue.

36| EMPLOYEE BENEFIT OBLIGATIONS(a) Defined contibtion plans

Contributions were made to provident fund and Employee State Insurance in India for the Company as per the regulations. These conrtibutions are made to registered funds administered by the Government of India. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any other contructive obligation.

(b) Defined benefit plan- Gratuity

i) Information regarding gratuity plan

The Company has a defined benefit gratuity plan in India (Gratuity plan). The Gratuity plan is a final salary plan for India employees. The Gratuity plan is governed by the Payment of Gratuity Act, 1972. Under this Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age.

This defined benefit plans expose the Company to actuarial risks, such as longevity risk, interest rate risk and market (investment) risk.

The present value of the defined benefit obligiation and the relevant service cost are measured using Projected Unit Credit Method, with actuarial valution being carried out at each reporting date.

(g) Defined benefit plan- Longevity

Longevity bonus liability is accrued for certain class of key managerial persons, as may be decided by the Board from time to time to recognise their immense contribution in driving the organisation, and payable upon their resignation or exit from the Company or substantial changes in the composition of the parent company''s Board. Amount to be payable is calculated based on latest remuneration of the year multiplied by number of years. Longevity bonus is recognised as liability at the present value of the defined benefit obligation using actuarial valuation at the standalone Balance sheet date.

37.4 Terms and conditions of transactions with related parties

The borrowings of the Company are secured by personal guarantees of Directors of the Company. Further, the Company has also given guarantee for various borrowing arrangements entered into by Innomech Aerospace Toolings Private Limited which is an wholly owned subsidiary of the Company.

37.5 The borrowings of the Company are secured by personal guarantees of Directors of the Company.

38| FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

38.1 The Company is exposed to various financial risks. These risks are categorised into market risk, credit risk and liquidity risk. The Company''s risk management is coordinated by the board of directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.

38.2 Market risk

Market risk is the risk of loss of future earnings, fair value or future cash flows that may result from a change in the price of the financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivable and payables and loans and borrowings. The Company is exposed to market risk primarily related to foreign exchange rate risk (currency risk) and interest rate risk. Thus the Company''s exposure to market risk is a function of borrowing activities, revenue generating and operating activities in foreign currencies.

(a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company manages its interest rate risk by having a balanced portfolio of fixed borrowings amounting to Nil (March 31, 2024: INR Nil) and variable rate borrowings amounting to INR Nil (March 31, 2024: INR 200.00 Lakhs)

The Company''s risk management is carried out by the Senior Management under policies approved by the Board of Directors. The Board of Directors provides guiding principles for overall risk management, as well as policies covering specific areas such as credit risk and liquidity risk.

(b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a different currency from the Company''s functional currency).

38.3 Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises principally from the Company''s receivables, deposits, cash held with banks and financial institutions. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

The Company limits its exposure to credit risk of cash held with banks by dealing with highly rated banks and institutions. The Management reviews the bank accounts on regular basis and fund drawdowns are planned to ensure that there is minimal surplus cash in bank accounts. The Company does a proper financial and credibility check on the landlords

before taking any property on lease and hasn''t had a single instance of non-refund of security deposit on vacating the leased property. The Company does not foresee any credit risks on other financial assets.

To manage the credit risks arising from customers, the Company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivables.

38.4 Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company manages liquidity risk by maintaining sufficient cash and by having access to funding through an adequate amount of committed credit lines. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

39.2 Fair value hierarchy

The fair value measurement of the Group''s financial and non-financial assets and liabilities utilises market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are (the ''fair value hierarchy''):

- Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

39.3 Methods and assumptions

The management assessed that the fair value of cash and cash equivalents, trade receivables, other financial assets, trade payables, other financial liabilities and borrowings approximate the carrying amount largely due to short-term maturity of this instruments. There is an active market for the Company''s quoted equity shares and quoted debt securities and fair value is based on quoted market prices.

40| OTHER REGULATORY INFORMATION40.1 Title deeds of immovable properties not held in name of the Company

The Company did not own any immovable properties for the year ended March 31, 2025.

40.2 Details of benami property held

No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder for the year ended March 31, 2025.

40.3 Borrowings secured against current assets

The Company has borrowings from banks or financial institutions on the basis of security of current assets.

40.4 Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority for the year ended March 31, 2025.

40.5 Relationship with struck off companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

The Company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 for the year ended March 31, 2025.

40.6 Registration of charges or satisfaction with Registrar of Companies

The Company does not have any charges or satisfaction, which is yet to be registered with Registrar of Companies (ROC) beyond the statutory year for the year ended March 31, 2025.

40.7 Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under Sec 2(85) the Companies Act, 2013 for the year ended March 31, 2025.

40.8 Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact on current year or previous financial year for the year ended March 31, 2025.

40.9 Utilisation of borrowed funds and securities premium:

The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies) for the year ended March 31, 2025, 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.

40.10 Undisclosed income

There is no income surrendered or disclosed as income for the year ended March 31, 2025 in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

40.11 Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency for the year ended March 31, 2025.

40.12 Utilisation of borrowings availed from banks and financial institutions

The borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for which such loans were take for the year ended March 31, 2025.

40.13 Core investment companies (CIC)

The Company does not have any CICs which are registered/required to be registered with the Reserve Bank of India for the year ended March 31, 2025.

42| CAPITAL MANAGEMENT

The Company''s objectives when maintaining capital are:

(a) to safeguard the entity''s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and

(b) to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The Company sets the amount of capital it requires in proportion to risk. The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

The Company monitors capital on the basis of the net debt to capital ratio. Net debt is calculated as the total borrowings and lease liabilities less cash and cash equivalents. Capital includes all components of equity.

43| THE CODE ON SOCIAL SECURITY 2020

The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which the Code becomes effective and the related rules to determine the financial impact are published.

4s| COMMITMENTS AND CONTINGENT LIABILITIES
	Year ended March 31, 2025	Year ended March 31, 2024
a. Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for:
Property plant and equipment	1,451.33	-
	1,451.33	-
b. Contingent liabilities
Claims against the Company not acknowledged as debts
Towards Goods and services taxes demand*	384.40	-
Corporate guarantees provided to subsidiary company	8,000.00	3,500.00
	8,384.40	3,500.00

*''The Company received an order under Section 73(9) of the KGST/CGST Act, 2017, dated February 17, 2025, following the completion of the GST audit. The order includes a demand of INR 384.40 Lakhs. Subsequently, the Company filed a request for rectification of the said order with the Deputy Commissioner of Commercial Taxes on May 15, 2025. The matter is currently pending before the concerned authority.

46 The Company has estimated INR3,814.30 Lakhs as IPO related expenses and allocated such expenses between the Company (INR1,908.90 Lakhs) and selling Shareholder (INR1,905.40 Lakhs) in proportion to the equity shares allotted to the public as fresh issue by the Holding Company and under the offer for sale by selling Shareholder respectively. The Company has received an amount of INR 23,091.10 Lakhs (net of IPO expenses of INR 1,908.90 Lakhs out of which INR 326.16 Lakhs remains un-utilised as on March 31, 2025) from proceeds out of fresh issue of equity shares. The utilisation of the net IPO proceeds is summarised below.

46| SEGMENT REPORTING

(a) The Company operates in a single segment, specifically the "manufacture and sale of tooling and components for the aerospace sector." The information provided to the Chief Operating Decision Maker (CODM) for resource allocation and performance assessment is focused on this segment. Consequently, the figures presented in these Standalone Financial Statements pertain solely to this operating segment.

(b) Refer to note 25.1 for breakup of the Company''s revenue by primary geographical market.

(c) During the year ended 31 March 2025, revenue from operations of three customers represented approximately -70.33% (March 31, 2024: three, 78.14%) customers represented approximately 34.14% (March 31, 2024: 35.26%), 23.01% (March 31, 2024: 28.38%) and 13.18% (March 31, 2024: 14.50%) of the Company''s revenue from operations respectively.

47| SUBSEQUENT EVENTS

At its meeting held on February 14, 2025, the Board of Directors approved and recommended the ratification of Employee Stock Option Plan scheme (ESOP''s) 2024 to the shareholders. The proposal was subsequently approved by the shareholders on March 25, 2025 through Postal Ballot remote e-voting. Further, the nomination and remuneration committee, on May 13, 2025 approved granting of 98,526 shares to eligible employees of holding company and subsidiary companies.

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Mar 31, 2024

(k) Provisions
General

Provisions are recognised when the Company has a present obligation (legal or constructive! as a result of a past event, it is probable that an outflow
of resources embodying economic benefits will be required lo settle the obligation and a reliable estimate can be made of the amount of the
obligation, When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presenter! In the statement
of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks
specific to the liability. Wl>cn discounting is used, the increase In the provision due to the passage ol time is recognised as a finance cost.

Warranty provisions

The Company provides warranties for general repairs of defects that existed at the time of sale, as required by law. Provisions related to these
assurance-type warranties are recognised when the product is sold, or the service is provided to the customer. Initial recognition is based on historical
experience. The initial estimate of warranty-related costs is revised annually.

(l) Retirement and other employee benefits

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution
payable to the provident fund. The Company recognises contribution payable to the provident fund scheme as an expense, when an employee renders
the related service.

The Company operates a defined benefit gratuity plan In India. The cost of providing benefits under the defined benefit plan Is determined using the
projected unit credit method.

Remeasurements, comprising of actuarial gains and losses, are recognised linmcdialcly In the balance sheet with a corresponding debit or credit to
retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the
expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the
reporting date. The Company recognises expected cost of short-term employee benefit as an expense, when an employee renders the related service.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the
reporting date. Actuarial gainsflosses are immediately taken to the statement of profit and loss and are not deferred. The obligations are presented as
current liabilities in the balance sheet If the entity does not fiave an unconditional right to defer the settlement for at least twelve months after the
reporting date.

Longevity bonus liability is accrued for certain class of key managerial persons, as may be decided by the Board from time to time to recognise their
immense contribution in driving the organisation, and payable upon their resignation or exit from the Company or substantial changes in the
composition of the parent company''s Board. Amount to be payable Is calculated based on latest remuneration of the year multiplied by number of
years. Longevity bonus is recognised as liability at the present value of the defined benefit obligation using actuarial valuation at the Balance sheet
date.

(m) Fair value measurement

Fair value Is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
maximising the use of relevant observable Inputs and minimising the use of unobservable Inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy,
described as follows, based on the lowest level Input that Is significant to the fair value measurement as a whole:

• Level I - Quoted (unadjusted) market prices In active markets for identical assets or liabilities

• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

• Level i - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

(n) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost. The classification of financial assets at initial
recognition depends on the financial asset''s contractual cash flow characteristics and the Company''s business model for managing them.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified as financial assets at amortised cost (debt instruments). A ''financial asset’ Is
measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to bold assets for collecting contractual cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal
amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using Ihe effective interest rate (EIR) method. Amortised
cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included In finance income in the profit or loss The losses arising from impairment are recognised in the profit or loss.

The Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECls are
based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to
receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of
collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised In two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs
arc provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures
for which there has been a significant increase In credit risk since initial recognition, a loss allowance is required for credit losses expected over the
remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk,
but instead recognises a loss allowance based on lifetime ECLs at each repotting date. The Company has established a provision matrix that is based on
its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as borrowings, payables or other financial liabilities, as appropriate. All financial liabilities are
recognised initially at fair value, net of directly attributable transaction costs.

Subsequent measurement

For purposes of subsequent measurement, financial liabilities are classified as financial liabilities at amortised cost (loans and borrowings).

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate ("EIR”)
method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The
EIR amortisation »s Included as finance costs in the statement of profit and loss.

Derecognition

A financial liability is derecognised when the obligation under (Ik* liability is discharged or cancelled or expires. When an existing financial liability Is
replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification Is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts Is recognised In the statement of profit and loss.

Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss It Incurs
because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument Financial guarantee contracts are
recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee.
Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the
amount recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 115.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the standalone balance sheet If there is a currently enforceable
legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities
simultaneously.

(o) Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or
less, that are readily convertible to a known amount of cash and subject to an insignificant risk of changes in value.

(p) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss attributable to equity holders of parent company (after deducting preference
dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period

The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue,
share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding
change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders of the Company and
the weighted average number of shares outstanding during the period are adjusted for the effects ol all dilutive potential equity shares.

(q) Investment In subsidiaries

Investment In subsidiaries are earned at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying
amount of the investment is assessed. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is written
down immediately to its recoverable amount and the difference is transferred to the standalone statement of profit and loss. On diposalof
investment, the difference between the net disposal proceeds and the carrying amount Is charged or credited to the standalone statement of profit
and loss.

(r> Interest income is recognised using effective Interest rate method. The effective Interest rate is rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the gross carrying amount of a financial asset.

2.3 Critical accounting estimates and judgements

The Company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of luture events that are believed to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Revenue recognition - estimating variable consideration

If the consideration in a contract Includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in
exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until It is highly
probable that a significant revenue reversal In the amount of cumulative revenue recognised will not occur when the associated uncertainty with the
variable consideration is subsequently resolved.

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rale (IBR) to measure tease
liabilities. The IBR is the rate of Interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds
necessary lo obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore lellects what the
Company ''would have to pay’, which icquiies estimation when no observable rates are available. The Company estimates the IBR using observable
Inputs (such as market interest rates) when available and Is required to make certain entity-specific estimates (such as the company''s credit rating).

(c) Provision for expected credit losses (ECLs) of trade receivables and contract assets

The Company uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on days past due for Its customer segments
that have similar loss patterns. The provision matrix is initially based on the Company''s historical observed default rates. At every repotting date, the
historical observed default fates are updated and changes in the forward-looking estimates are analysed. The amount of ECLs is sensitive to changes in
circumstances and of forecast economic conditions. The Company’s historical credir loss experience and forecast of economic conditions may also not
be representative of customer''s actual default in the future.

(d) Defined benefit plan (post-employment gratuity)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actualial valuations. An actuarial
valuation Involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount
rate; future salary increases and mortality rates. Cue to the complexities involved In the valuation and Its long-term nature, a defined benefit
obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date

(e) Useful lives of property, plant and equipment and intangible assets

Management reviews its estimate of the useful lives of property, plant and equipment and intangible assets at each reporting date, based on the
expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of property,
plant and equipment, right of use assets and intangible assets.

(f) Provision for warranties

The Company s product warranty obligations and estimations thereof are determined using historical Information of claims received up to the year end
and the management s estimate of further liability to be incurred In this regard during the warranty period, computed on the basis of past trend oi
such claims.

(g) Deferred tax assets

Valuation of deferred tax assets is dependent on management''s assessment of future recoverability of the deferred tax benefit. Expected
recoverability may result from expected taxable income in the future, planned transactions or planned optimising measures. Economic conditions may
change and lead to a different conclusion regarding recoverability.

7.1 The Company had incorporated Innomech Aerospace Toolings Private Limited on October 26, 2018 at Aerospace Park SEZ, Devanhalli,
Bengaluru. This entity is a wholly owned by the Company and intially subscribed 999 shares at INR 100 each. The minority share of 1 share
@ INR 100 is held by Anil Kumar Puthan (Nominee share holder). Further, during FY 22-23, the company additionally subscribed 1,00,000
shares at INR 100 each

7.2 The Company had incorporated a new subsidiary company by name Unimech Healthcare Private Limited on April 27, 2022 in Peenya
Industrial Area, Bengaluru. This entity is wholly owned by the Company and having 999 shares @ INR 100 each subscribed. The minority
share of 1@ INR 100 is held by Ramakrishna Kamojhala (Nominee share holder). The said investment was disposed during the year ended
March 31,2024.

7.3 The cost of investments in Innomech Aerospace Toolings Private Limited includes an amount of Rs. 72.82 Lakhs (March 31, 2023: Rs.158.33
Lakhs; April 1, 2022: Rs.103.33 Lakhs) relating to fair value of guarantees issued by the Company to various Banks and Financial Institutions
for borrowings availed by Innomech Aerospace Toolings Private Limited.

41.1 The Company it exposed to various financial risks. These risks are categorised into market risk, credit risk and liquidity risk, the Companys risk management is coordinated
by the board ol directors and focuses on secuimg tong mm and short term cash flow* The Company does not engage in trading of financial assets for speculative purposes.

41.2 Market risk

Market risk is the risk of loss of future earnings, fair value or future cash Hows that may result from a change ill the price of the financial Instrument. The value of a financial
Instrument may change as a result of changes In thp interest rates, foreign currency exchange rates and other market changes that affect market risk sensitive instruments.
Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivable and payables and loans and
borrowings. The Company is exposed to market risk primarily related to foreign exchange rate risk {currency risk! and interest rate risk. Thus the Company''s exposure to
market risk Is a function of borrowing activities, revenue gcneiating and opciating activities in foreign currencies.

(a) Interest rate risk

Interest rate risk Is the risk that the fair value or future cash flows of a financial Instrument will fluctuate because of changes In market interest rates. The Company
exposure to the risk of changes In market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates The Company manages its
interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

The Company manages its Interest rate risk by having a balanced portfolio of fixed borrowings amounting to Nil (Marcn 31. 2023: INR 47.91 lakhs. April 1. 2022: INR 60.53
lakhs) and variable rate borrowings amounting to INR 200.00 lakhs (March 31, 2073: INR 315 60 lakhs. April 1, 2077.: INR 376.23 lakhs)

(a) Lease liability and ROU assets

Under previous IGAAP, Leases are classified as operating leases and lease rentals under operating leases are recognised in the statement of profit or
loss on a straight line basis over tease term.

Company as a Lessee

As per Ind AS 116, Leases in which substantially all the risks and rewards of ownership are transferred to the lessee are classified as finance leases.
Finance leases are capitalised at the lease''s inception at the fair value of the leased property or, if lower, the present value of the minimum lease
payments. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or toss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Further, lessee shall recognise a
ROU asset and lease liability. The Company has adopted modified retrospective approach on the date of transition in arriving at the ROU asset and
lease liability.

(b) Investment in subsidiary

The Company has elected to continue with the carrying value of Investment in subsidiary as per the Indian GAAP and use that carrying value as the
deemed cost of the investment in subsidiary.

(^c) Security deposits

Under the Indian GAAP, interest free security deposits for borrowings (that are refundable in cash on completion of the borrowings term) are recorded
at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value using Effective Interest Rate (EIR) method at
initial recognition. Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction
value of the security deposit has been recognised as prepaid expenses. On this fair valued deposit, interest is accounted annually at EIR which will have
an incremental impact on the interest income and security deposit every year. Further, portion of security deposit is shown as other Intangible Asset
which will be amortised over the period of concession on straight line basis every year.

(d) Expected credit loss

Under Indian GAAP, the Company had recognised provision on trade receivables based on the expectation of the Company. Under Ind AS, the Company
has to provide loss allowance on receivables based on the Expected Credit Loss (ECL) model which is measured following the "simplified approach". The
Company uses an allowance matrix to measure the expected credit losses of trade receivables.The loss rates are computed using a roll rate'' method
based on the probability of receivable progressing through successive stages till full provision for the trade receivable is made. Currently Company is
not recognising loss allowance under IGAAP.

(^e) Remeasurements of post-employment benefit obligations

Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under
Indian GAAP, the entire cost, including actuarial gains and losses, are charged to the statement of profit and loss. Under Ind AS, re-measurements
[comprising of actuarial gains and losses] are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings
through OCI.

(f) Deferred Tax

Under Indian GAAP, deferred tax accounting was done using the income statement approach, which focuses on differences between taxable profits and
accounting profits for the period. Under Ind AS, accounting of deferred taxes is done using the Balance Sheet approach, which focuses on temporary
differences between the carrying amount of an asset or liability in the balance sheet and its tax base and Deferred tax has been recognized on the
account of adjustments made due to application of Ind AS.

(g) Borrowings

Under Indian GAAP borrowings are recorded at their transaction value. Under Ind AS, all financial liabilities are required to be recognised at fair value
using Effective Interest Rate (EIR) method at initial recognition. Accordingly, the Company has fair valued these borrowings under Ind AS. Difference
between the fair value and transaction value of the borrowings has been recognised as prepaid loan processing charges which has been adjusted to
borrowings. These prepaid loan processing charges are amortised over the term of the borrowings at EIR which will have an incremental impact on the
finance cost and prepaid loan processing charges every year.

(h) Corporate guarantee

Under Indian GAAP there is no specific accounting guidance for corporate guarantee transactions among the group companies are not recognised except
such transactions are disclosed. However under Ind AS such transactions are recognised as per ind AS 109. Company has given guarantee to its subsidiary
and on the date date of transition, financial guarantee contract liability has been recognised and corresponding impact has been treated as investment in
subsidiary. For subsequent measurement, financial gurantee commission income and amortisation of interest on financial guarantee commission has been
recognised in the profit and loss.

(i) Convertible debentures

Under Indian GAAP convertible debentures issued are accounted as liability and interest paid is recognised as expense. However as per Ind AS 109,
covertibte debentues are analysed as to whether it is financial liability or equity or compound financial instrument. In the given case such debentures are
accounted as financial liabilty.

(j) Material regrouping and adjsutments

Appropriate regroupings and other adjustments have been made in the Standalone Balance Sheet, Standalone Statement of Profit & loss, Standalone
Statement of Cashflows, wherever required, by reclassification and adjustments of corresponding items of incomes, expenses, assets, liabilities and
cashflows, in order to bring them in line with the accounting policies and classification as per Ind AS Standalone Financial Statements of the Company
for the years ended March 31, 2023 and April 01, 2022 prepared in accordance with Schedule III of Companies Act, 2013, requirements of Ind AS 1 and
other applicable Ind AS principles and the requirements of the Securities and Exchange Board of India (Issue of Capital 6 Disclosure Requirements)
Regulations 2018, as amended.

(k) Prior Period Adjustments

The Company has certain accruals of employee benefit expenses, deferred lax and restatement of forex balances which were not accounted in the year
when the expense / restatement was incurred. During the current year, on transition to Ind AS, the Company has rectifed these errors by restating the
transition date balance sheet as at April 01, 2022. Refer note 37.1

42.2 Fair value hierarchy

The fair value measurement of the Group’s financial and non-financial assets and liabilities utilises market observable
inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different
levels based on how observable the inputs used in the valuation technique utilised are (the ‘fair value hierarchy’):

- Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

42.3 Methods and assumptions

The management assessed that the fair value of cash and cash equivalents, trade receivables, other financial assets,
trade payables, other financial liabilities and borrowings approximate the carrying amount largely due to short-term
maturity of this instruments.

43 Other regulatory information

43.1 Title deeds of immovable properties not held in name of the Company

The Company does not have any immovable properties whose title deeds are not held in the name of the Company.

43.2 Details of benami property held

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

43.3 Borrowings secured against current assets

The Company has borrowings from banks or financial institutions on the basis of security of current assets.

43.4 Wilful defaulter

The Company has not been declared as wilful defaulter by any bank or financial institution or government or any government
authority.

43.5 Relationship with struck off companies under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560
of Companies Act, 1956.

43.6 Registration of charges or satisfaction with Registrar of Companies

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

43.7 Compliance with number of layers of companies

The Group has complied with the number of layers prescribed under section 2(87) of the Companies Act, 2013 read with Companies
(Restriction on Number of Layers) Rules, 2017.

43.8 Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme(s) of arrangement which has an accounting impact on current or previous financial
year.

43.9 Utilisation of borrowed funds and securities premium:

No funds have been advanced or loaned or invested by the Company to or in 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.

43.10 Undisclosed income

The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or
disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961.

43.11 Details of crypto currency or virtual currency

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

43.12 Utilisation of borrowings availed from banks and financial institutions

The borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for which such
borrowings were taken.

46 Capital management

The Company''s objectives when maintaining capital are:

|a) to safeguard the entity''s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for
other stakeholders, and

(b) to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The Company sets the amount of capital it requires in proportion to risk. The Company manages its capital structure and makes adjustments to it
in the light of changes In economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital
structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets
to reduce debt.

47 The Code on Social Security 2020

The Code on Social Security 2020 (‘the Code'') relating to employee benefits, during the employment and post-employment, has received
Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and
Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is
yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will
give appropriate impact 1n the financial statements in the period in which the Code becomes effective and the related rules to determine the
financial impact are published.

50 Segment Reporting

(a) The Company''s main objective is to carry on the business of manufacturing toolings and components to be used in the aerospace sector. The Board
of Directors (considered as Chief Operating Decision Maker) reviews these activities under the context of Ind AS 108 Operating Segments as one
single operating segment to evaluate the overall performance of the Group.

(b) Refer to note 27.1 for breakup of the Company''s revenue by primary geographical market.

(c) During the year ended 31 March 2024, revenue from operations of three customers (March 31, 2023: two) customers represented approximately
35.26% (March 31, 2023: 60.32%), 28.38% (March 31, 2023: 10.17%) and 14.50% (March 31, 2023: Nil) of the Company''s revenue from operations.

51 Subsequent events

i) The Company has converted itself from Private Limited to Public Limited, pursuant to a special resolution passed in the extraordinary general
meeting of the shareholders of the Company held on March 04, 2024 and Consequently the name of the Company has changed to Unimech Aerospace
and Manufacturing Limited pursuant to a fresh certificate of incorporation issued by ROC on June 21, 2024.

ii) The Company has incorporated a new wholly owned subsidiary in the United States of America by the name of Unimech Global Manufacturing
Solutions Inc for which the certificate of incorporation was issued on May 29, 2024

iii) The Company has constituted an audit committee on July 3, 2024 as mandated under the Provisions of the Companies Act, 2013 and relevant
rules thereunder.

As per our report of even date

For M S K A a Associates For and on behalf of the Board of Directors

Chartered Accountants Unimech Aerospace and Manufacturing Limited

Firm Registration No: 105047W (formerly Unimech Aerospace and Manufacturing Private Limited)

CIN: U30305KA2016PLC095712

w 4/ /pm

PankajS Bhauwala u O >_v , ^ jj Ramakrishna Kamojhala Anil Kumar Puttan

Partner ___Director and CFO Chairman & Managing Director

Membership No: 233552 DIN: 07004517 DIN: 07683267

Place: Bengaluru —--—Place: Bengaluru Place: Germany

Date: July 3, 2024 Date: July 3, 2024 Date: July 3, 2024

-j: ",i ,X

Krishnappayya Desai

Company Secretary / V-A

Membership No.: A61281 I n’ I BENGALURU j — I

Place: Bengaluru )

Date: July 3, 2024 vAA/