B.7 Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result
of a past event, it is probable that the Company will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the end of the reporting period, taking into account the risks and uncertainties
surrounding the obligation.

When some or all of the economic benefits required to settle a provision are expected to be recovered
from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursements
will be received and the amount of the receivable can be measured reliably.

Contingent liability is disclosed for possible obligations which will be confirmed only by future events not
within the control of the Company or present obligations arising from past events where it is not
probable that an outflow of resources will be required to settle the obligation or a reliable estimate of
the amount of the obligation cannot be made.

Contingent Assets are not recognized since this may result in the recognition of income that may never
be realized.

B.8 Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the
contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at
fair value through profit or loss are recognised immediately in profit or loss.

Financial assets:

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date
basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of
assets within the time frame established by regulation or convention in the marketplace.

Classification of financial assets

The financial assets are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition of financial assets are added to the fair value of the financial assets on initial
recognition.

After initial recognition:

(i) Financial assets (other than investments) are subsequently measured at amortised cost using the
effective interest method.

Effective interest method is a method of calculating the amortised cost of a debt instrument and of
allocating interest income over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash receipts (including all fees and points paid or received that form an
integral part of the effective interest rate, transaction costs and other premiums or discounts) through
the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying
amount on initial recognition.

Investments in debt instruments that meet the following conditions are subsequently measured at
amortised cost:

• The asset is held within a business model whose objective is to hold assets in order to
collect contractual cash flows; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are
solely payments on principal and interest on the principal amount outstanding.

Income on such debt instruments is recognised in profit or loss and is included in the "Other Income".

The Company has not designated any debt instruments as fair value through other comprehensive
income.

(ii) Financial assets (i.e. investments in instruments other than equity of subsidiaries) are subsequently
measured at fair value.

Such financial assets are measured at fair value at the end of each reporting period, with any gains (e.g.
any dividend or interest earned on the financial asset) or losses arising on re-measurement recognised in
profit or loss and included in the "Other Income".

Investments in equity instruments of subsidiaries

The Company measures its investments in equity instruments of subsidiaries at cost in accordance with
Ind AS 27. At transition date, the Company has elected to continue with the carrying value of such
investments measured as per the previous GAAP and use such carrying value as its deemed cost.

Impairment of financial assets:

A financial asset is regarded as credit impaired when one or more events that may have a detrimental
effect on estimated future cash flows of the asset have occurred. The Company applies the expected
credit loss model for recognising impairment loss on financial assets (i.e. the shortfall between the
contractual cash flows that are due and all the cash flows (discounted) that the Company expects to
receive).

De-recognition of financial assets:

The Company de-recognises a financial asset when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another party. If the Company neither transfers nor retains substantially all
the risks and rewards of ownership and continues to control the transferred asset, the Company
recognises its retained interest in the asset and an associated liability for amounts it may have to pay.
On de-recognition of a financial asset in its entirety, the difference between the asset's carrying
amount and the sum of the consideration received and receivable is recognised in the Statement of
profit and loss.

Financial liabilities and equity instruments

Equity instruments

Equity instruments issued by the Company are classified as equity in accordance with the substance and
the definitions of an equity instrument. An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its liabilities.

Financial liabilities

All financial liabilities are subsequently measured at amortised cost using the effective interest
method. The carrying amounts of financial liabilities that are subsequently measured at amortised cost
are determined based on the effective interest method. Interest expense that is not capitalised as part
of costs of an asset is included in the "Finance Costs".

The effective interest method is a method of calculating the amortised cost of a financial liability and
of allocating interest expense over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments (including all fees and points paid or received that
form an integral part of the effective interest rate, transaction costs and other premiums or discounts)
through the expected life of the financial liability, or (where appropriate) a shorter period, to the net
carrying amount on initial recognition.

De-recognition of financial liabilities

The Company de-recognises financial liabilities when, and only when, the Company's obligations are
discharged, cancelled or have expired. An exchange between with a lender of debt instruments with
substantially different terms is accounted for as an extinguishment of the original financial liability and
the recognition of a new financial liability. Similarly, a substantial modification of the terms of an
existing financial liability (whether or not attributable to the financial difficulty of the debtor) is
accounted for as an extinguishment of the original financial liability and the recognition of a new
financial liability. The difference between the carrying amount of the financial liability derecognised
and the consideration paid and payable is recognised in profit or loss.

B. 9 Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to
equity shareholders by the weighted average number of equity shares outstanding during the year. For
the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to
equity shareholders and the weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.

C. Critical Accounting judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with Ind AS requires the Company's Management
to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities
recognised in the financial statements that are not readily apparent from other sources. The
judgements, estimates and associated assumptions are based on historical experience and other factors
including estimation of effects of uncertain future events that are considered to be relevant. Actual
results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates (accounted on a prospective basis) and recognised in the period in which the estimate is
revised if the revision affects only that period, or in the period of the revision and future periods of
the revision affects both current and future periods.

The following are the key estimates that have been made by the Management in the process of applying
the accounting policies:

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets, their fair value are measured using valuation
techniques. The inputs to these models are taken from observable markets where possible, but where
this is not feasible, a degree of judgement is required in establishing fair values. Judgements include
considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating
to these factors could affect the reported fair value of financial instruments.

Allowance for doubtful trade receivables

Trade receivables do not carry any interest and are stated at their nominal value as reduced by
appropriate allowances for estimated irrecoverable amounts.

Estimated irrecoverable amounts are derived based on a provision matrix which takes into account
various factors such as customer specific risks, geographical region, product type, currency fluctuation
risk, repatriation policy of the country, country specific economic risks, customer rating, and type of
customer, etc.

For, For, S D P M & Co. For Mahan Industries Limited

Chartered Accountants

ICAI Firm Reg. No. 126741W

Yogendrakumar Gupta Sushilkumar Goel

Managing Director Director

Sunil Dad DIN: 01726701 DIN: 10647484

Partner

Membership No. 120702 Sunil Gurnani Ritendrasinh Rathod

UDIN: 25120702BMIFTN2542 Chief Financial Officer Company Secretary

PAN: AJNPG3441M PAN: AMEPR0746G

Place: Ahmedabad Place: Ahmedabad

Date: 22.05.2025 Date: 22.05.2025