Afcom Holdings Ltd Auditor Reports

Independent Auditors Examination Report on Restated Financial Information of

AFCOM HOLDINGS LIMITED

(Formerly known as AFCOM Holdings Private Limited)

To,

The Board of Directors, AFCOM Holdings Limited,

(Formerly known as AFCOM Holdings Private Limited) No.2, LIC Colony, Dr. Radhakrishnan Nagar, Thiruvanmiyur, Chennai,

Tamil Nadu-600041.

Respected Sirs / Madam,

We have examined the attached Restated Financial Information of AFCOM Holdings Limited (Formerly known as AFCOM Holdings Private Limited), comprising the Restated Statement of Assets and Liabilities as at February 29 2024, as at March 31 2023, 2022 and 2021, the Restated Statements of Profit and Loss and the Restated Cash Flow Statement for the period from 01-04-2023 to 29-02-2024 and for the years ended March 31 2023, 2022 and 2021, the Summary Statement of Significant Accounting Policies, and other explanatory information (collectively referred to as, the "Restated Financial Information"), as approved by the Board of Directors of the Company at their meeting held on March 20^th, 2024 for the purpose of inclusion in the Draft Red Herring Prospectus / Red Herring Prospectus / Prospectus prepared by the Company in connection with its proposed Initial Public Offer of equity shares ("IPO") on SME Platform of Bombay Stock Exchange ("BSE").

These restated Summary Statement have been prepared in terms of the requirements of:

1. Section 26 of Part I of Chapter III of the Companies Act, 2013 (the "Act")
2. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)

Regulations, 2018, as amended ("ICDR Regulations"); and

3. The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India ("ICAI"), as amended from time to time (the "Guidance Note").

1. The Companys Board of Directors is responsible for the preparation of the Restated Financial Information for the purpose of inclusion in the Draft Red Herring Prospectus / Red Herring Prospectus to be filed with Securities and Exchange Board of India, Registrar of Companies, Chennai and the Stock Exchange in connection with the proposed IPO. The Restated Financial Information has been prepared by the management of the Company on the basis of preparation stated in Annexure 4 to the Restated Financial Information. The responsibilities of the Board of Directors of the Company include designing, implementing, and maintaining adequate internal control relevant to the preparation and presentation of the Restated Financial Information. The Board of Directors is also responsible for identifying and ensuring that the Company complies with the Act, ICDR Regulations and the Guidance Note.
2. We have examined such Restated Financial Information taking into consideration:
1. The terms of reference and terms of our engagement agreed upon with you in accordance with our engagement letter dated December 27^th, 2023 in connection with the proposed IPO of equity shares of AFCOM Holdings Limited (the "Issuer Company") on SME platform of Bombay Stock Exchange ("BSE");
2. The Guidance Note also requires that we comply with the ethical requirements of the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI);
3. Concepts of test checks and materiality to obtain reasonable assurance based on verification of evidence supporting the Restated Financial Information; and
4. The requirements of Section 26 of the Act and the ICDR Regulations. Our work was performed solely to assist you in meeting your responsibilities in relation to your compliance with the Act, the ICDR Regulations and the Guidance Note in connection with the IPO.
3. These Restated Financial Information have been compiled by the management from:
1. Audited Special Purpose Financial Statements of the Company for the period from 01/04/2023 to 29/02/2024 prepared in accordance with Accounting Standard as prescribed under section 133 of the Act and other accounting principles generally accepted in India, which has been approved by the Board of Directors at their meeting held on 20-03-2024.
2. Audited Financial Statements of the Company for the years ended on March 31, 2023, 2022 and 2021, prepared in accordance with the Accounting Standards as prescribed under Section 133 of the Act read with Companies (Accounting Standards) Rules as amended, and other accounting principles generally accepted in India, which have been approved by the Board of Directors at their meeting held on 20-03-2024.
4. For the purpose of our examination, we have relied on:
1. Auditors Report issued by us dated on 20-03-2024 and the Financial Statements of the Company for the period from 01/04/2023 to 29/02/2024, and
2. Auditors Report issued by the Previous Auditors dated September 29, 2023, December 21, 2022 and November 30, 2021 on the financial statements of the Company as at and for the years ended March 31, 2023, 2022 and 2021 respectively as referred in Paragraph 4(b) above.

The Audit for the financial years ended March 31, 2023, 2022 and 2021 were conducted by the Companys previous auditors GURU & RAM LLP, Chartered Accountants ("the Previous Auditor). The Previous auditors resigned during the year due to pre occupation and were not in the position to examine the Restated Statement of Assets and Liabilities and the Restated Statements of Profit and Loss and Cash flow Statements, the Summary Statement of Significant Accounting Policies, and other explanatory information (collectively, the Audited Financial Information). We have performed adequate procedures to restate the Financial Information for the said years. The Examination Report included for the said years is based solely on the report submitted by the Previous Auditor.

1. There were no qualifications in the Audit Reports issued by us and by previous auditor as at and for the period from 01/04/2023 and 29/02/2024 and for the years ended on March 31, 2023, 2022 and 2021 which would require adjustments in this Restated Financial Information of the Company.
2. Based on our examination and according to the information and explanations given to us, we report that:
1. The Restated Summary Statements have been made after incorporating adjustments for the changes in accounting policies retrospectively in respective financial years to reflect the same accounting treatment as per the changed accounting policy for all reporting periods, if any;
2. The Restated Summary Statements do not require any adjustments for the matter(s) giving rise to modifications mentioned in paragraph 5 above.
3. The Restated Summary Statements have been prepared in accordance with the Act, ICDR Regulations and the Guidance Note.
4. The Restated Summary Statements have been made after incorporating adjustments for prior period and other material amounts in the respective financial years to which they relate, if any and there are no qualifications which require adjustments;
5. Extra-ordinary items that need to be disclosed separately in the accounts has been disclosed wherever required;
6. There was no change in accounting policies, which need to be adjusted in the Restated Summary Statement. The details of Prior period Adjustments are given in Annexure 5 of the Restated Financial Statements.
7. From Financial Years 2020-21 to 2022-23 and for the period from 01/04/2023 to 29/02/2024, i.e., the period covered in the restatement, the Company has not declared and paid any dividend.
3. We have also examined the following other financial information relating to the Company prepared by the Management and as approved by the Board of Directors of the Company and annexed to this report relating to the Company as at and for the period from 01/04/2023 to 29/02/2024 and as at and for the years ended on March 31, 2023, 2022 and 2021 proposed to be included in the Draft Red Herring Prospectus / Red Herring Prospectus/ Prospectus.

Annexure No.	Particulars
1	Standalone Financial Statement of Assets & Liabilities as Restated
2	Standalone Financial Statement of Profit & Loss as Restated
3	Standalone Financial Statement of Cash Flow as Restated
4	Significant Accounting Policy and Notes to the Restated Summary Statements
5	Adjustments made in Restated Financial Statements / Regrouping Notes
6	Statement of Share Capital as Restated
7	Statement of Reserves & Surplus as Restated
8	Statement of Share Application Money Pending Allotment as Restated
9	Statement of Long-Term Borrowings as Restated
10	Statement of Deferred Tax Liability as Restated
11	Statement of Long -Term Provisions as Restated
12	Statement of Short - Term Borrowings as Restated
13	Statement of Trade Payables as Restated
14	Statement of Other Current Liabilities as Restated
15	Statement of Short - Term Provisions as Restated
16	Statement of Property, plant and Equipment as Restated
17	Statement of Other Non-Current Assets as Restated
18	Statement of Inventories as Restated
19	Statement of Trade Receivables as Restated
20	Statement of Cash & Cash Equivalent as Restated
21	Statement of Short Term Loans and Advances as Restated
22	Statement of Other Current Assets as Restated
23	Statement of Revenue from Operations as Restated
24	Statement of Revenue from Other Income as Restated
25	Statement of Direct Expenses as Restated
26	Statement of Employees Benefit Expenses as Restated
27	Statement of Finance Cost as Restated
28	Statement of Depreciation and Amortization Expenses as Restated
29	Statement of Other Expenses as Restated
30	Statement of Earnings per Share as Restated
31	Statement of Tax Shelter as Restated
32	Statement of Related Parties & Transactions as Restated
33	Statement of Provision for Gratuity as Restated
34	Statement of Contingent Liability as Restated
35	Statement of Additional Disclosures with Respect to amendments to Schedule - III as Restated
36	Statement of Capitalisation Statement as Restated

4. We, M/s. P P N And Company, Chartered Accountants have been subjected to the peer review process of the Institute of Chartered Accountants of India ("ICAI") and hold a valid peer review certificate issued by the "Peer Review Board" of the ICAI.
5. The Restated Financial Information does not reflect the effects of events that occurred subsequent to the respective dates of the reports on the Special Purpose Financial Statements and Audited Financial Statements mentioned in paragraph 5 above.
6. This report should not in any way be construed as a reissuance or re-dating of any of the previous audit reports issued by us, nor should this report be construed as a new opinion on any of the financial statements referred to herein.
7. We have no responsibility to update our report for events and circumstances occurring after the date of the report.
8. Our report is intended solely for use of the Board of Directors for inclusion in the Draft Red Herring Prospectus / Red Herring Prospectus / Prospectus to be filed with Securities and Exchange Board of India, the stock exchanges and Registrar of Companies, Chennai in connection with the proposed IPO. Our report should not be used, referred to, or distributed for any other purpose except with our prior consent in writing. Accordingly, we do not accept or assume any liability or any duty of care for any other purpose or to any other person to whom this report is shown or into whose hands it may come without our prior consent in writing.

For P P N And Company, Chartered Accountants, ICAI Firm Reg. No.: 013623S

Peer Review Certificate No: 013578

D. Hitesh Partner

Membership No: 231991 UDIN: 24231991BKEXBI1213

Place: Chennai Date: 20-03-2024

AFCOM HOLDINGS LIMITED

(Formerly Known as AFCOM HOLDINGS PRIVATE LIMITED)

No. 2 LIC Colony, Dr. Radhakrishnan Nagar, Thiruvanmiyur, Chennai - 600 041

CIN : U51201TN2013PLC089652

STATEMENT OF ASSETS AND LIABILITIES AS RESTATED

ANNEXURE - 1

(Amount in ? Lakhs)

Particulars	As at
	Feb 29, 2024	March 31, 2023	March 31, 2022	March 31, 2021
I. EQUITY AND LIABILITIES
1 SHAREHOLDERS FUNDS
(a) Share Capital	1,802.13	1,760.38	249.88	212.77
(b) Reserves and Surplus	8,285.58	5,570.19	1,931.78	(549.95)
(c) Share Application Money pending allotment	-	-	20.00	-
2 NON-CURRENT LIABILITIES
(a) Long-Term Borrowings	18.75	-	2.06	1,371.32
(b) Deferred Tax Liability (Net)	-	-	-	(275.77)
(c) Long-Term Provisions	21.65	7.33	1.72	0.97
3 CURRENT LIABILITIES
(a) Short-Term Borrowings	1,528.75	47.60	1.77	100.00
(b) Trade Payables
(A) Total Outstanding Dues of Micro Enterprises and Small Enterprises	-	-	-	-
(B) Total Outstanding Dues of Creditors Other than Micro Enterprises and Small Enterprises	261.07	147.21	114.72	-
(c) Other Current Liabilities	205.68	379.91	145.51	40.59
(d) Short-Term Provisions	806.14	372.78	47.07	0.00
TOTAL EQUITY AND LIABILITIES	12,929.75	8,285.40	2,514.51	899.92
II. ASSETS
1 NON-CURRENT ASSETS
(a) Property, Plant & Equipment and Intangible Assets
(i) Property, Plant & Equipment	42.46	25.99	26.20	26.91
(ii) Intangible Assets	-	-	0.28	-
(iii) Capital Work in Progress	1,222.04	1,222.04	-	-
(b) Other Non-Current Assets	604.74	529.51	1.65	1.00
(c) Deferred Tax Asset (Net)	5.47	2.56	(0.48)
2 CURRENT ASSETS
(a) Inventories	1,569.16	920.91	-	-
(b)Trade Receivables	1,777.11	1,432.29	1,556.19	56.82
(c) Cash & Cash Equivalents	262.06	671.26	53.49	10.89
(d) Short term loans and advances	2,907.16	646.65	61.84	76.53
(e) Other Current Assets	4,539.55	2,834.19	815.34	727.78
TOTAL ASSETS	12,929.75	8,285.40	2,514.51	899.92

As per our report of even date attached

For P P N AND COMPANY

Chartered Accountants Firm Reg No: 013623S

Peer Review Certificate No. 013578

For and on behalf of the Board of Directors of AFCOM Holdings Limited

(Formerly known as AFCOM Holdings Private Limited)

D. Hitesh Partner M.No:231991

UDIN: 24231991BKEXBI1213

Deepak Parasuraman Kannan Ramakrishnan Managing Director Whole-time Director

DIN : 00699855 DIN : 08202306

Sneka Seshadri

Company Secretary cum Compliance Officer. M.No.: A41789

Raghunathan Chief Financial Officer

Date: 20-03-2024

Place: Chennai