ಕಂಪನಿಯ ಅಕೌಂಟಿಗ್ ಪಾಲಿಸಿ Airfloa Rail Technology Ltd.

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES AND
DISCLOSURES UNDER ACCOUNTING STANDARDS

1. AS 1 - DISCLOSURE OF ACCOUNTING POLICIES:

The Statement of Assets and Liabilities of the Company as
on March 31,2026, and the Statement of Profit and Loss
and Statement of Cash Flows for the financial year ended
on March 31,2026 and the annexure thereto (collectively,
the "Financial Statements") have been compiled by the
management from the Financial Statements of the
Company for the financial year ended on March 31,

2026.The Financial Statements have been prepared in
accordance with Indian Generally Accepted Accounting
Principles (IGAAP) under historical cost convention on
the accrual basis. GAAP comprises mandatory accounting
standards prescribed by the Companies (Accounting
Standards) Rules, 2021.

2. AS 2 - ACCOUNTING FOR INVENTORIES:

(a) The Company''s Closing Stock of Raw Materials is
valued at Cost.

(b) Closing Stock of Finished Goods is valued at Cost or
Net Realizable Value whichever is lower.

(c) Cost includes Cost of Conversion and Other Costs
incurred in bringing the inventories to their present
location and condition. Cost is ascertained on
FIFO Method.

3. AS 3 - CASH FLOW STATEMENT:

The Cash Flow Statement for the year ended 31.03.2026
has been prepared in accordance with the applicable
Accounting Standards.

4. AS 4- CONTINGENCIES & EVENTS OCCURRING
AFTER THE BALANCE SHEET DATE:

There are no material contingencies or events occurring
after the Balance Sheet date that would have a material
impact on the financial position of the Company. Details of
contingent liabilities, as applicable, are disclosed in the
Notes to the Financial Statements.

5. AS 5- NET PROFIT OR LOSS FOR THE YEAR,
PRIOR PERIOD ITEMS AND CHANGES IN
ACCOUNTING POLICIES:

During the year under review there was no extraordinary
items. Significant Accounting policies applied are
consistent with those applied in the previous year.

6. AS 7- CONSTRUCTION CONTRACTS:

The Company is not engaged in any construction business
covered by this Standard.

7. AS 9- REVENUE RECOGNITION:

Revenue is recognized to the extent it is probable that the
economic benefits will flow to the Company and can be
reliably measured.

(a) Sales of goods

Revenue from sale of goods is recognized on
dispatch of materials & on raising of Invoice on the
customers where in all significant risks and rewards
of ownership is transferred to the buyer. Sales are
stated net of trade discount and duties.

(b) Service Income

Service income is recognized as per the terms of the
contract when the related services are rendered.

(c) Interest income

Interest income is recognized on time
proportion basis.

(d) Other Income

Other income, if any, recognized based on certainty
of receipts and on accrual basis.

8. AS 10 - PROPERTY PLANT AND EQUIPMENT:

(a) The Company has provided depreciation under the
''written down'' method as per the estimated useful
lives as specified in Schedule II of the Companies Act
2013. Depreciation on new assets acquired during
the year is provided from the date of acquisition to
the end of the financial year. In respect of the assets
sold during the year, depreciation is provided from
the beginning of the year till the date of its disposal.
Residual values of assets are measured at not more
than 5% of their original cost. Individual low-cost
assets (acquired for less than 5000) are depreciated
within a year of acquisition.

(b) Title deeds of all the immovable properties (Other
than properties where the company is the lessee and
the lease agreements are duly executed in favour of

the lessee) disclosed in the financial statements are
held in the name of the company

(c) Depreciation on PPE provided as per the Useful Lives
prescribed under Companies Act, 2013, using WDV
Method. In respect of PPE items added during the year
if any, Depreciation is charged based on the number
of days that PPE Item is in use. No Depreciation is
charged on PPE Items not installed till the end of the
financial year.

9. AS 11 -ACCOUNTING FOR EFFECTS OF CHANGES
IN FOREIGN EXCHANGE RATES:

(a) The Company has been complying with the
accounting treatment in respect of its foreign
currency transactions as specified under Accounting
Standard 11, the Effect of Changes in Foreign
Exchange Rates.

(b) Gain arising if any, on Forex transaction has been
credited in the Profit & Loss Account.

10. AS 12- ACCOUNTING FOR GOVERNMENT GRANTS:

The Company has not received any Government Grants
during the Current Financial Year or during Previous
Financial Year.

11. AS 13- ACCOUNTING FOR INVESTMENTS:

Long Term Investments, if any, are stated at cost.
No provision is made for temporary decline in the value
of Long-Term Investments. Income from Investments,
wherever applicable, is credited to P&L Account.

12. AS 14- ACCOUNTING FOR AMALGAMATION:

This standard is not applicable to the company for the year
under review and also for the previous year.

17. AS 19- LEASES:

The Company has entered into lease agreements for its office premises and manufacturing facilities. The lease rentals are
recognized as an expense in the Statement of Profit and Loss over the lease period in accordance with the applicable provisions
of AS 19 - Leases.

18. AS 20-EARNINGS PER SHARE:

EPS is calculated by considering the Net Profit after Tax, divided by the number of Equity Shares outstanding as at the Balance
Sheet date. The Basic and Diluted EPS for the year is disclosed on the face of the Profit or Loss Account.

19. AS 21- CONSOLIDATED FINANCIAL STATEMENTS:

During the financial year the Company has the subsidiary, Sree Dakssanna Aerospace & Defence Private Limited, which is
engaged in manufacturing and supply of components for aerospace and defence applications. Accordingly, the Consolidated
Financial Statements of the Company have been prepared in accordance with the applicable Accounting Standard on
Consolidated Financial Statements (AS-21). The consolidated results present the financial position and performance of the
Company along with its subsidiary as a single economic entity.

The Parent holds 79.20% equity shares in the Subsidiary and exercises control over its Board and operations. The financial
statements of the Parent and the Subsidiary have been combined on a line-by-line basis, and inter-company balances and
transactions have been fully eliminated on consolidation.

Investment in Subsidiary

The Company holds 79.20% equity shares in Sree Dakssnaa Aerospace & Defence Private Limited, making it a subsidiary
within the meaning of Section 2(87) of the Companies Act, 2013. The details of investment are as under:

Additional Disclosures:

¦ The financial results of the subsidiary have been consolidated in accordance with AS-21 in the Consolidated Financial
Statements.

¦ No impairment loss has been recognized on the investment in subsidiary as at March 31,2026.

20. AS 22- ACCOUNTING FOR TAXES ON INCOME:

The Company adopts AS - 22 in Accounting for Taxes on Income. The material items of Deferred Tax (Assets or Liabilities)
have been recognized as at the end of the year under Report. Current Tax Expense for the year includes Tax, Cess and Interest
thereon. The details of Current and Deferred Tax are as under -

21. AS 23- ACCOUNTING FOR INVESTMENTS IN
ASSOCIATES IN CONSOLIDATED FINANCIAL
STATEMENTS:

This Standard is not applicable to the Company for the
year under review.

22. AS 24- DISCONTINUING OPERATIONS:

This Standard is not applicable to the Company for the
year under review.

23. AS 25- INTERIM FINANCIAL REPORTING:

The Company has prepared an interim financial report for
the period ended September 2025 during the year under
review. Accordingly, the provisions of AS 25 - Interim
Financial Reporting are applicable to the Company in
respect of such interim financial reporting.

24. AS 26- INTANGIBLE ASSETS:

(a) All Intangible items of Property Plant and Equipment
(PPE) are stated in the Balance Sheet at Historical
Cost less accumulated depreciation thereof.
Historical Cost of PPE includes acquisition and
construction cost, and payments made to Asset
Vendor, and directly attributable cost of bringing the
asset to its working condition for its intended use.

(b) Depreciation on PPE provided as per the Useful Lives
prescribed under Companies Act, 2013, using WDV
Method. In respect of PPE items added during the year
if any, Depreciation is charged based on the number
of days that PPE Item is in use. No Depreciation is
charged on PPE Items not installed till the end of the
financial year.

25. AS 27- FINANCIAL REPORTING OF INTEREST IN
JOINT VENTURES:

This Accounting Standard is not applicable to the company
as the Company has not entered into any Joint Venture.

26. AS 28- IMPAIRMENT OF ASSETS:

As on the Balance Sheet date, the Carrying Amount of the
Assets, net of Accumulated Depreciation, is not less than
the Recoverable Amount of such assets. Hence there is no
Impairment Loss on the Assets of the Company.