ARC Insulation & Insulators Ltd Auditor Reports

Independent Auditors Examination Report on The Restated Financial Statements of ARC INSULATION AND INSULATORS LIMITED (FORMERLY KNOWN AS ARC INSULATION AND INULATORS PRIVATE LIMITED)

To,

The Board of Directors,

ARC INSULATION AND INSULATORS LIMITED

(FORMERLY KNOWN AS ARC INSULATION AND INULATORS PRIVATE LIMITED)

Village - Ramdevpur, Po-Bawali Bishnupur2, Parganas South,

Bishnupur, West Bengal, India, 743384

Dear Sirs,

We, Jay Gupta & Associates, Chartered Accountants, have examined the attached Restated Summary Statements and Other Financial Information of ARC INSULATION AND INSULATORS LIMITED

(Formerly known as ‘ARC INSULATION AND INULATORS PRIVATE LIMITED), which comprises of the Restated Statement of Assets and Liabilities as at March 31, 2025, March 31, 2024 and March 31, 2023, the Restated Statement of Profit and Loss and the Restated Statement of Cash Flows along with the Statement of Material Accounting Policies and other explanatory information for the years ended March 31, 2025, March 31, 2024 and March 31, 2023 (collectively referred to as the

"Restated Summary Statements", "Restated Financial Information" or "Restated Financial Statements") as duly approved by the Board of Directors of the Company as at 06^th August, 2025,

1) The said Restated Financial Statements and other Financial Information have been examined and prepared for the purpose of inclusion in the Red Hearing Prospectus/ Prospectus (collectively hereinafter referred to as "Offer Document") in connection with the proposed Initial Public Offering (IPO) on SME Platform of NSE ("NSE Emerge") of the company taking into consideration the followings and in accordance with the following requirements of:

Section 26 of Part I of Chapter III to the Companies Act, 2013 ("the Act") read with Companies (Prospectus and Allotment of Securities) Rules 2014, as amended from time to time;

The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements Regulations), 2018 (the ‘SEBI ICDR Regulations) as amended from time to time in pursuance of Section 11 of the Securities and Exchange Board of India Act,1992;

The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India ("ICAI") ("Guidance Note"); and The applicable regulation of SEBI (ICDR) Regulations, 2018, as amended, and as per Schedule VI (Part A) (11) (II) of the said Regulations.

2) The Companys Board of Directors is responsible for the preparation of the Restated Financial Information for the purpose of inclusion in the RHP to be filed with Securities and Exchange Board of India and the National Stock Exchange of India Limited ("NSE") in connection with the proposed IPO. The Restated Financial Information have been prepared by the management of the Company on the basis of preparation stated in note 1.1 to the Restated Financial Information. The Board of Directors of the Company responsibility includes designing, implementing and maintaining adequate internal control relevant to the preparation and presentation of the Restated Financial Information. The Board of Directors are also responsible for identifying and ensuring that the Company complies with the Act, ICDR Regulations and the Guidance Note.

3) We have examined such Restated Financial Information taking into consideration:

The terms of reference and terms of our engagement agreed upon with you in accordance with our engagement letter dated October 04, 2024 in connection with the proposed Initial Public Offering of equity shares on SME Platform of NSE Limited ("NSE Emerge") ("IPO" or "SME IPO").;

The Guidance Note also requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI;

Concepts of test checks and materiality to obtain reasonable assurance based on verification of evidence supporting the Restated Financial Information; and

Requirements of Section 26 of the Act and the ICDR Regulations.

4) These Restated Financial Information (included in Annexure I to XXXVI) have been extracted by the Management of the Company from:

a) Audited Financial Statements of the Company as at and for the financial year ended March 31, 2025 prepared in accordance with accounting standards prescribed under Companies (Accounting Standard) Rules, 2021 read with section 133 of the Act and other accounting principles generally accepted in India which have been approved by the Board of Directors at their meeting held on August 06, 2025 and audited by us. b) Audited Financial Statements of the Company for the financial years ended March 31 2024 and March 31, 2023 prepared in accordance with accounting standards prescribed under Companies (Accounting Standard) Rules, 2021 read with section 133 of the Act and other accounting principles generally accepted in India which have been approved by the Board of Directors at their meeting held on September 02, 2024 & September 20, 2023 respectively which were audited by M/S Vineet Kedia & Company, Chartered accountants and had issued unqualified reports for these years.

5) In accordance with the requirement of Section 26 of the Companies Act, 2013 read with Companies (Prospectus and Allotment of Securities) Rules 2014, the SEBI Regulations, the Guidance Note, as amended from time to time and in terms of our engagement agreed with you, we further report that the Restated Financial Information have been compiled by the management from:

(a) The Restated Statement of Assets and Liabilities for the financial years ended March 31, 2025, 2024 and 2023 examined by us, as set out in Annexure I to this report, is prepared by the Company and approved by the Board of Directors. These Restated Summary Statement of Assets and Liabilities, have been arrived at after making such adjustments and regroupings of the financial statements, as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes to Accounts as set out in Annexure IV to XXXVI to this Report.

(b) The Restated Statement of Profit and Loss for the financial years ended March 31, 2025, 2024 and 2023 examined by us, as set out in Annexure II to this report, is prepared by the Company and approved by the Board of Directors. These Restated Summary Statement of Profit and Loss, have been arrived at after making such adjustments and regroupings of the financial statements, as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes to Accounts as set out in Annexure IV to XXXVI to this Report.

(c) The Restated Statement of Cash Flows for the financial years ended March 31, 2025, 2024 and 2023, examined by us, as set out in Annexure III to this report, is prepared by the Company and approved by the Board of Directors. These Restated Summary Statement of Cash Flows, have been arrived at after making such adjustments and regroupings of the financial statements, as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes to Accounts as set out in Annexure IV to XXXVI to this Report.

As a result of these adjustments, the amounts reporting in the above-mentioned statements are not necessarily the same as those appearing in the audited financial statements of the Company for the relevant financial years.

6) For the purpose of our examination, we have relied on:

a) Auditors report issued by us dated August 06, 2025 on the Financial Statements of the entity as at and for the year ended March 31, 2025 as referred in Para 4 above.

b) Auditors report issued by Vineet Kedia & company, Chartered Accountants, dated September 02, 2024 on the financial statements of the entity as at and for the year ended March 31, 2024, as referred to in Para 4 above.

c) Auditors report issued by Vineet Kedia & company, Chartered Accountants, dated September 20, 2023 on the financial statements of the entity as at and for the year ended March 31, 2023, as referred in Para 4 above

7) Based on the above, as per the reliance placed by us on the audited financial statements of the Company and report thereon given by the Statutory Auditor of the Company for the financial years ended March 31, 2025, 2024 and 2023, and to the best of our information and according to the explanation given to us, we are of the opinion that Restated Financial Statement:

(a) have been prepared 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 policies for all the reporting periods based on the significant accounting policies adopted by the Company as at March 31, 2025.

(b) have been made after incorporating adjustments for prior period and other material amounts, if any, in the respective financial years to which they relate to;

(c) do not contain any extra ordinary items that need to be disclosed separately other than those presented in the Restated Financial Statement and do not contain any qualification requiring adjustments;

(d) There were no qualifications in the Audit Reports issued by the Statutory Auditors for the financial years ended March 31, 2025, 2024 and 2023 which would require adjustments in this Restated Financial Statements of the Company;

(e) Restated Summary Statement of Profits and losses have been arrived at after charging all expenses including depreciation and after making such adjustments/restatements and regroupings as in our opinion are appropriate and are to be read in accordance with the

Significant Accounting Polices and Notes to Accounts as set out in Annexure IV to XXXVI to this report;

(f) Adjustments in Restated Summary Statements have been made in accordance with the correct accounting policies,

(g) There was no change in accounting policies, which needs to be adjusted in the Restated Summary Statements;

(h) There are no revaluation reserves, which need to be disclosed separately in the Restated Financial Statements;

8) We have also examined the following other Restated Financial Information as set out in the respective Annexures to this report and forming part of the Restated Financial Statement, prepared by the management of the Company and approved by the Board of Directors of the company for the financial years ended March 31, 2025, 2024 and 2023 proposed to be included in the Red Hearing Prospectus / Prospectus ("Offer Document") for the proposed IPO:

1. Statement of Assets & Liabilities, as restated in Annexure I to this report.

2. Statement of Profit & Loss, as restated in Annexure II to this report.

3. Statement of Cash Flow, as restated in Annexure III to this report.

4. Statement of Significant Accounting Policies & Explanatory Notes on Financial Statement, as restated in Annexure IV to this report.

5. Statement of Share Capital, as restated in Annexure V to this report.

6. Statement of Reserves & Surplus, as restated in Annexure VI to this report

7. Statement of Long-Term Borrowings, as restated in Annexure VII to this report.

8. Statement of Long-Term Provisions, as restated in Annexure VIII to this report.

9. Statement of Short-Term Borrowings as restated in Annexure IX to this report.

10. Statement of Trade Payables as restated in Annexure X to this report.

11. Statement of Other Current Liabilities as restated in Annexure XI to this report.

12. Statement of Short-Term Provisions as restated in Annexure XII to this report.

13. Statement of Plant, Property & Equipment and Intangible Assets, as restated in Annexure XIII to this report.

14. Statement of Non-Current Investments as restated in Annexure XIV to this report.

15. Statement of Deferred Tax Liabilities/(Assets) as restated in Annexure XV to this report.

16. Statement of Other Non-Current Assets as restated in Annexure XVI to this report.

17. Statement of Inventories as restated in Annexure XVII to this report.

18. Statement of Trade Receivables as restated in Annexure XVIII to this report.

19. Statement of Cash and Cash Equivalents as restated in Annexure XIX to this report.

20. Statement of Short-Term Loans and Advances as restated in Annexure XX to this report.

21. Statement of Other Current Assets as restated in Annexure XXI to this report.

22. Statement of Revenue from Operations as restated in Annexure XXII to this report.

23. Statement of Other Income as restated in Annexure XXIII to this report.

24. Statement of Cost of Material Consumed as restated in Annexure XXIV to this report.

25. Statement of Changes in Inventories as restated in Annexure XXV to this report.

26. Statement of Employee Benefit Expenses as restated in Annexure XXVI to this report.

27. Statement of Finance Cost as restated in Annexure XXVII to this report.

28. Statement of Depreciation & Amortization as restated in Annexure XXVIII to this report.

29. Statement of Other Expenses as restated in Annexure XXIX to this report.

30. Statement of Related Party Transactions as restated in Annexure XXX to this report.

31. Statement of Capitalization as restated in Annexure XXXI to this report

32. Statement of Other Financial Information as restated in Annexure XXXII to this report.

33. Statement of Reconciliation of Restated Profit, Reconciliation of Restated Shareholders Equity as restated in Annexure XXXIII to this report.

34. Statement of Tax Shelters as restated in Annexure XXXIV to this report.

35. Statement of Contingent Liabilities as restated in Annexure XXXV to this report.

36. Statement of Accounting Ratios as restated in Annexure XXXVI to this report.

9) We, Jay Gupta & Associates, Chartered Accountants hold a valid peer review certificate issued by the "Peer Review Board" of the Institute of Chartered Accountants of India ("ICAI").

10) The preparation and presentation of the Financial Statements referred to above are based on the Audited financial statements of the Company and are in accordance with the provisions of the Act and ICDR Regulations. The Financial Statements and information referred to above is the responsibility of the management of the Company.

11) This report should not in any way be construed as a re-issuance or re-dating of any of the previous audit reports issued by Statutory Auditor, nor should this report be construed as an opinion on any of the Financial Information referred to herein.

12) We have no responsibility to update our report for events and circumstances occurring after the date of the report.

13) In our opinion, the above Restated Financial Statements contained in Annexure I to XXXVI to this report read along with the ‘Significant Accounting Policies and Notes to the Financial Statements appearing in Annexure IV to XXXVI after making adjustments and regrouping/reclassification as considered appropriate and have been prepared in accordance with the provisions of Section 26 of the Companies Act, 2013 read with the Companies (Prospectus and Allotment of Securities) Rules 2014, to the extent applicable, the SEBI Regulations, the Guidance Note issued in this regard by the ICAI, as amended from time to time, and in terms of our engagement agreed with you.

14) Our report is intended solely for use of the Management and for inclusion in the offer documents in connection with the proposed SME IPO of equity shares of the Company and is not to be used, referred to or distributed for any other purpose except with our prior written consent. 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 Jay Gupta & Associates

(Erstwhile Gupta Agarwal & Associates)

Chartered Accountants

Firm Registration No.: 329001E

Jay Shanker Gupta

Membership No. 059535

Partner

UDIN: 25059535BMHCFE5496

Place: Kolkata

Date: August 06, 2025

ARC INSULATION AND INSULATORS LIMITED

(Formerly Known as ARC INSULATION AND INULATORS PRIVATE LIMITED) CIN : U18109WB2008PLC129263