This is the Statement of Changes in Equity referred to in our audit report of even date.

Nature and Purpose of the Reserves Securities Premium

Securities premium is on account of premium on issue of shares. This reserve is utilized in accordance with the provisions of the Act.

General Reserve

General reserve is created from time to time by way of transfer of profits from retained earnings for appropriation purposes.

15a Term Loans : Bank

i. Floating Term loan from Kotak Mahindra Bank Ltd. aggregating to Rs 1868 Lakhs (Previous year Nil) carries interest rate @ 8.45% p.a. The said loan is secured by way of first and exclusive hypothecation charge on all existing and future current assets of the Company, first and exclusive charge on moveable fixed assets of the Company and first and exclusive equitable/ registered mortgage charge on immoveable properties located at C57/1, C57/2 and C 58, TTC Industrial area, Thane, Belapur Road, Pawane Navi Mumbai and Survey No 2217/1, Khattalwad Manekpur Road, Umbergaon, Gujarat owned by Sky Industries Ltd.

ii. Term loan from Union Bank of India aggregating to Rs 23.35 Lakhs (Rs. 28.74 Lakhs) carries interest rate @ 8.65 % p.a. repayable in 60 equated monthly installments of Rs. 0.60 Lakhs each.

iii. Term loan from Union Bank of India aggregating to Rs 23.99 Lakhs (Rs. 28.74 Lakhs) carries interest rate @ 8.65 % p.a. repayable in 60 equated monthly installments of Rs. 0.60 Lakhs each.

iv. Term loan from Union Bank of India aggregating to Rs 13.06 Lakhs (Rs. Nil) carries interest rate @ 8.40 % p.a. repayable in 60 equated monthly installments of Rs. 0.30 Lakhs each.

v. Term loan from Union Bank of India aggregating to Rs 15.12 Lakhs (Rs. Nil) carries interest rate @ 8.40 % p.a. repayable in 60 equated monthly installments of Rs. 0.34 Lakhs each.

vi. Term loan from Union Bank of India aggregating to Rs 13.04 Lakhs (Rs. Nil) carries interest rate @ 8.40 % p.a. repayable in 60 equated monthly installments of Rs. 0.30 Lakhs each.

15b Term Loans : NBFC

i. Term loan from Kotak Mahindra Prime Ltd. aggregating to Rs 10.08 Lakhs (Rs. 12.33 Lakhs) carries interest rate @ 9.07 % p.a. repayable in 60 equated monthly installments of Rs. 0.25 Lakhs each.

32 Exceptional items

Effective November 21, 2025, the Government of India consolidated 29 existing labour regulations into four Labour codes, namely, The Code on Wages, 2019, The Industrial Relations Code, 2020, The Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020, collectively referred to as the 'New Labour Codes'. The New Labour Codes has resulted in material increase in provision for employee benefits on account of recognition of past service costs. Based on the requirements of New Labour Codes and relevant Accounting Standard, the company has assessed and accounted the estimated incremental impact of Rs. 29.02 lakhs as Exceptional Item in the standalone audited statement of financial results of the Company for the year ended March 31, 2026. Upon notification of the related Rules, including further clarifications, to the New Labour Codes by the Government, the company will evaluate and account for additional impact, if any, in subsequent periods.

Notes:-

(i) It is not practical for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities. Thus, the amount of contingent liability reported is without considering the amount of interest

(ii) The Company does not expect any reimbursements in respect of the above contingent liabilities.

(iii) The Company’s pending litigation comprise of pending proceedings related to Property tax & TDS liability as per the Traces portal. The Management has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Management does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.

36 Capital management

The Company’s objective for Capital Management is to maximise shareholder value, safeguard business continuity, and support the growth of the Company. Capital includes, Equity Capital, Securities Premium and other reserves and surplus attributable to the equity shareholders of the Company. The Company determines the capital requirement based on annual operating plans and long term and strategic investment and capital expenditure plans. The funding requirements are met through a mix of equity, operating cash flows generated and debt. The operating management, supervised by the Board of Directors of the Company regularly monitors its key gearing ratios and other financials parameters and takes corrective actions wherever necessary. The relevant quantitative information on the aforesaid parameters are disclosed in these financial statements.

Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturities of these instruments.

(b) Fair value hierarchy

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Below are the fair value measurement hierarchy of the Company’s assets and liabilities.

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

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

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

The Financial Instruments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market.

The Financial Instruments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market.

Costs of certain unquoted equity instruments has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

There are no transfers between any of the fair value during the year under consideration.

Measurement of Fair Values:

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

- The fair values of investment in mutual fund is the N.A.V as on the reporting date of balance sheet.

- The fair values of loans given and security deposit given is estimated by discounting cash flows using rates currently available for instruments with similar terms, credit risks and remaining maturities. Management regularly assesses a range of reasonably possible alternatives for those significant observable inputs and determines their impact on the total fair value.

38 Financial Risk Management

The Company is exposed to various financial risks majority credit risk, liquidity risk and market risk. The Company’s senior management oversees the management of these risks with an objective to minimise the impact of these risks based on charters and informal policies.

(a) Market Risk:-

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices 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 receivables, payables and loans and borrowings. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs.

(a) (i) Market Risk - Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates primarily to the Company’s borrowings, both short term and long term obligations with floating interest rates.

Exposure to interest rate risk

Company’s Interest Rate Risk arises from Borrowings Obligations. Borrowings issued exposes to fair value interest rate risk. The interest rate profile of the Company’s interest-bearing Financial Instruments as reported to the management of the Company is as follows.

The Company is also exposed to interest rate risk on its financial assets that include fixed deposits (which are part of cash and bank balances) since all these are generally for short durations, there is no significant interest rate risks pertaining to these deposits

(a) (ii) Market Risk - Price Risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price.

Exposure to Currency risk

The Company is mainly exposed to the price risk due to its investment in equity based mutual funds. At 31st March 2026, the investments in mutual fund (at market value) amounts to Rs. 389.18 Lakhs (31st March, 2025 : Rs.537.19 Lakhs ). These are exposed to price risk.

The Company does make deposit with the banks as margin money against the borrowing facility provided by the banks. Deposit is made in fixed rate instrument. In view of this it is not susceptible to market price risk, arising from changes in interest rates or market yields which may impact the return and value of the investments.

(a) (iii) Market Risk - Currency Risk

The fluctuation in foreign currency exchange rates may have a potential impact on the statement of profit and loss and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company. The Company is exposed to currency risk on account of its trade payables in foreign currency. The functional currency of the Company is Indian Rupees. The Company follows a natural hedge driven currency risk mitigation policy to the extent possible

Exposure to Currency risk

The summary quantitative data about the Company’s exposure to currency risk are reported to management of the Company are as follows:

(b) 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, and arises principally from the Company’s receivables from customers.

The carrying amount of Financial Assets represents the maximum credit exposure."

Trade Receivables

The Company has established a credit policy under which each new customer is analysed individually for credit worthiness before the payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, financial statements, industry information, business intelligence and in some cases bank references.

Trade Receivables of the Company are typically unsecured ,except to the extent of the security deposits received from the customers or financial guarantees provided by the market organizers in the business. Credit Risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial condition and monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. The Company has no concentration of Credit Risk as the customer base is geographically distributed in India.

Expected credit loss for trade receivable:

The allowance for impairment of Trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts receivables. On account of adoption of Ind AS 109, the Company uses lifetime Expected Credit Loss (ECL) model for assessing the impairment loss. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. Loss rates are based on actual credit loss experience and past trends. The provision matrix takes into account external and internal credit risk factors and historical experience / current facts available in relation to defaults and delays in collection thereof

The movement of the expected loss provision (allowance for bad and doubtful loans and receivables etc.) made by the Company is as under:

Other Financial Assets

The Company maintains its Cash and Cash equivalents and Bank deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their credit-worthiness on an on-going basis.

Expected credit loss on financial assets other than trade receivable:

With regards to all financial assets with contractual cash flows other than trade receivable, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from whom these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for expected credit loss has been provided on such financial assets. Break up of financial assets other than trade receivables have been disclosed on balance sheet

Company’s maximum exposure to credit risk as at 31st March, 2026 and 31st March 2025 is the carrying value of each class of financial assets.

(c) Liquidity Risk

Liquidity Risk is the risk that the Company will face in meeting its obligation associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach in managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. Any short term surplus cash generated, over and above the amount required for working capital and other operational requirements is retained as Cash and Cash Equivalents (to the extent required).

39 Retirement Benefits(A) Defined benefit plan - Gratuity

The Company provides for gratuity benefit under a defined retirement scheme (the "Gratuity Scheme") as laid out by the Payment of Gratuity Act, 1972 of India covering eligible employees. The Gratuity Scheme provides for a lump sum payment to employees who have completed at least five years of service with the Company, based on salary and tenure of employment. Liabilities with regard to the Gratuity Scheme are determined by actuarial valuation carried out using the Projected Unit Cost Method by an independent actuary. The following tables set out the funded status majorly of the gratuity plans and the amounts recognized in the Company’s financial statements as at March 31, 2026 and March 31, 2025.

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the method (Projected Unit Credit Method) used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

(B) Leave obligations

The leave obligations cover the Company’s liability for sick and earned leave.The amount of the provision of 3.68 lakhs (31 March 2025 2.37 lakhs)

(C) Defined Contribution Plans

Amount recognised as expenses on account of "Contribution / Provision to and for Provident and other Funds" of Statement of Profit and Loss - Rs. 12.57 Lakhs (Previous year Rs. 10.74 Lakhs)

40 Related party disclosures:As per Ind AS 24, ‘Related Party Disclosures', disclosure of transactions with the related parties are given below: List of related partiesA Subsidiary Company:

Skytech Textiles Private Limited [Holding - 99.98%]

B Enterprise in which Key Managerial Personnel and their relatives have signicant Influence :

S. K. Ultratech Machines Private Limited

43 Corporate social responsibility

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief, COVID-19 relief and rural development projects. A CSR committee has been formed by the company as per the Act. The funds were primarily utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

45 Segment reporting

"Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker regularly monitors and reviews the operating results of the whole Company as one segment i.e. "manufacture and trading of narrow fabrics".

Thus, as defined in Ind AS 108 'Operating Segments', the Company’s entire business falls under this one operational segment and hence the necessary information has already been disclosed in the balance sheet and the statement of profit and loss.

Thus, as defined in Ind AS 108 'Operating Segments’, the Company’s entire business falls under this one operational segment and hence the necessary information has already been disclosed in the balance sheet and the statement of profit and loss. Further, the entire business of the Company is within India, hence there is no geographical segment."

47 The Company has obtained borrowings against security of current assets from Banks. The Company has submitted various documents to the banks, details of which are summarised as Annexure A.

48 Additional regulatory information:

(i) The Company does not have any benami property held in its name. 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.

(ii) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.

(iii) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

(iv) Utilisation of borrowed funds and share premium:

(a) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

- 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

- Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries."

(b) 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:

- 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

- Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries."

(v) There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961 (such as search or survey), that has not been recorded in the books of account.

(vi) The Company has not traded or invested in crypto currency or virtual currency during the year.

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

(viii) The Company do not have any transaction with the struck off companies.

49 Previous year’s figures have been reclassified/regrouped, wherever applicable to confirm to current year’s classification. The accompanying notes are an integral part of these standalone financial statements

This is the summary of the significant accounting policies and other explanatory information referred to in our report of even date