Innomet Advanced Materials Ltd Auditor Reports

To,

The Board of Directors.

Innoinct Advanced Materials Limited

B-31. Rhol Ancillary Industrial estate,

RanmehaJrapuram. Medak,

I Is derabnd - 502032.

Felaiiganu. India

Sir/Madam,

Proposed initial public offering (the "Issue• **) of equity shares tthc "F.uuitv Shares") bv Inuumei Advanced Materials Limited (the "Company")

1) We have examined tile attached Restated Summary Statements and Other Financial Information of Innumci Advanced Materials Limited (hereinafter referred to as "the Company") described below and annexed to this report for the financial periods ending on March 31". 2024, half-year ended September 30"¹.202.1. March 31". 2023, 2022 and 2021 based on the audited financial statements of the Company (collectively referred to as the "Restated Summary Statements" or "Restated Financial Statements") of the Company as duly approved by the Board of Directors of the Company.

2) The said Restated Financial Statements and other Financial Information have been examined and prepared for the purpose of inclusion in the Prospectus Prospectus (collectively hereinafter referred to as "Offer Document") in connection with the proposed Initial Public Offering (IPO) of the Company taking into consideration the followings and in accordance with the following requirements of:

• Section 26 ot 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:

• flic .Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations

* 20IS (the \SEBI ICDR Regulations) as amended from time to time in pursuance of Section 1 I of the

Securities and Exchange Board of India Act. IY92:

• Ihe Guidance Note on Reports in Company Prospectus.Prospectus (Revised) issued by the Institute ol Chartered Accountants of India ("ICAI") ("Guidance Note").

• I he applicable regulation olSLBI (ICDR) Regulations. 2018. us amended, and as per Schedule VI (Pan A)( II) (II) of the said Regulations: and

• fhc terms of reference to our engagement letter with the Company dated 10.08.2024 requesting u carry out the assignment, in connection with the proposed Initial Public Offering of equity :

Stock Exchange. In this case the Designated Stock Exchange being i Ml KGL platform of or "SME IPO"). " t

.3) t hese Restated Consolidated Financial Information (included in Annexure I to the auditors report here in) have been extracted by the Management of the Company from:

t he Companys Financial Statements for the financial periods ending on March 31", 202*4, half-year ended September 3U^lh. 2023, March 31 2023. 2022 and 2021 which have been approved by the Hoard of Directors

at their meeting held on 26/08 2024. Oi l 1 2023. 26/07^/2023. 05/09/2022 and Oi l I2021 and as approved by the shareholders at their meeting held on 10/08/2023. 05/04. 2022 and 30 ) I 2021 respectively and books of accounts underlying those financial statements and other records of the Company, io the extent eonsidcied necessary fur the preparation of the Restated Financial Statements, are the responsibility of the Company s Management, The Financial Statements of the Company for the financial period ended March 31", 2024 have been audited by M s, H M CI!A I RATH & CO LLP.. Chartered Accountants as sole statutory auditors, half- year ended September SO¹¹. 2023, March 31". 2023 have been audited by GRANDMARK &. Associates. Chartered Accountants as sole statutory auditors and for the financial years March 31¹, 2022 and 2021 have been audited by P. Mohana Rao <? Co. Chartered Accountants as sole statutory auditors had issued unqualified reports for these years.

4} 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 m terms of our engagement agreed with you, we further repun that

(a) I he Restated Statement of Assets and Liabilities for the financial periods ended on March 31". 2024. half-year ended September 30", 2023. September 30". 2023. March 31". 2023.2022 and 2021. examined by us. as set out in Anne sure 1 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 to the individual financial statements of the Company, as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes to Accounts as set oul in Annexui e 4 to this Report.

(b) Hie Restated Statement of Profit and Loss of the Company for the financial periods ended on March 31", 2024, half-year ended September 30¹. 2U23. September 30\ 2023. March 31", 2023. 2U22 and 2021. examined by us. as set out in Annevure 2 lo 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 to the individual financial statements of the Company, as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes to Accounts as set out in Annexure to this Report.

(c) I he Restated Statement of Cash Flows of the Company for the financial periods ended on Match 31".

2024. half-year ended September 30¹. 2023. September 30¹". 2023. March 31", 2023. 2022 and 2021. examined by us. as set out in Annexure 3 lo this report, is prepared by the Company and approved by the Board of Directors, lhe.se Restated Summary Statement of Cash Flows, have been arrived at after

. making such adjustments and regroupings to the individual financial statements of the Company, as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes to Accounts as set out in Annexure 4 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

y ears.

5) F.mphasis of Matters

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 periods ended on March 31",

2024. half-year ended September 30^lh, 2023, September 30¹. 2023. March 31", 2023,2022 and 2021, 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) Itjjve been made after incorporating adjustments for the changes in accounting policies retrospectively in

respective financial years io idled the same accounting treatment as per the changed accounting polidut^^. lor all the reporting periods based on the significant accounting policies adopted by the Company

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

(c) Do not contain am c\tra ordinary items that need to be disclosed separately utlior than those presented in the Restated Financial Statement and do not contain an> qualification requiring adjustments;

(d) There are no qualifications in the Audit Reports issued by the Statutory Auditors for the financial periods ended on March 31". 2024. half-year ended September 30^,h. 2023, September 30". 2023. March 31¹. 2023. 2022 and 2021. which would require adjustments in this Restated Financial Statements of the Company.

<e) Fro fits 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 4 to this report;

(0 Adjustments in Restated Summary Statements have been made in accordance with the correct accounting policies.

(g) I here was no change in accounting policies, which needs to be adjusted in the Restated Summary Statements:

(h) I here are nu revaluation reserves, which need to be disclosed separately in the Restated Financial Statements;

(i) flte Company has not paid any dividend since its incorporation.

We have also examined the following other Restated Financial Information as set out in the respective Aoncxurcs to this report and forming part of the Restated Financial Statement, prepared by the management of the Company and approved by the Hoard of Directors on August 26". 2024 relating to the Company for the financial periods ended on March 31". 2024. half-year ended September 30". 2023. September 30". 2023. March 31^,l, 2023.2022 and 2021 proposed to be included in the Prospectus ("Offer Document") fur the proposed IPO

I. Statement of Share Capital, as restated in Anncvurc 5 to this report.

2. Statement of Reserves <? Surplus as restated in Anncxure 6 to this report.

3, Statement of Long-Term i .labilities as restated in Anncxurc 7 lu this report.

4. Statement of Short-Term borrowings as restated in Anncxurc H tu this repurt,

5. Statement of Trade Payables us restated in Anncxurc 9 to this report,

6. Statement of OtherCurrent Liabilities as restated in Anncxurc 10 iu this report.

7. Statement of Short-Term Provisions as restated in Anncxurc 11 lu this report.

S. Statement of Non-CuiTcnt Investments as restated in Anncxurc 12 to iliis report.

9. Statement of details of Other Non-Current Assets as restaied in Anncxurc 13 to this report.

10. Statement of Inventories as restated in Anncxurc 14 to this report.

11. Statement of Trade Receivables as restated in Anncxurc 15 to this report.

12. Statement of Property. Plant & Equipment as restated in Anncxurc 16 to this report. I.Ci

13. Statement of Cash and Cash Balances as restated in Anncxure 17 to this report.

I4. Statement of Short-Term Loans & Advances as restated in Annexure 18 to this report.

15. Statement of Other Current Assets as restated in Annexure 19 to this report

16. Statement of Revenue from Operations as restated in Annexure 20 to this report.

17. Statement of Segment -Wise Revenue from Operations as restated in Annexure 21 to this report

18. Statement of Other Income as restated in Annexure 22 to this report.

19. Statement ofCost of Materials Consumed as restated in Annexure 23 to this report.

20. Statement of Lmployee Benefit Hxpenses as restated in Annexure 2-1 to this report.

21. Statement of Depreciation and Amortisation fxpenses as restated in Annexure 25 to this report.

22. Statement of Finance Costs restated in Annexure 26 to this report.

23, Statement of Other expenses as restated in Annexure 27 to this report.

21. Statement of Capitalization as restated in Annexure 28 to this report.

25. Statement of Contingent Liabilities as restated in Annexure 29 to this report.

2b. Statement of tamings in Foreign currency as restated in Annexure 30 to this report.

27. Statement of Expenditure in Foreign currency as restated in Annexure 31 to this report.

28. Statement of details of Related Party Transactions as restated in Annexure 32 to this report.

29, Statement of Other Financial Information-Statement of Accounting Ratios as restated in Annexure 33 to this report.

30. Statement of Ratio Analysis in Annexure 34 to this report.

31. Other relevant disclosures in Vnncvure 35 to this report.

b) Wc. B M Cl IAI RATH & CQ J.L P. Chartered Accountants have been subjected to the peer review process of the Institute of Chartered Accountants of India ("ICAl") and hold a valid Peer Review Certificate No.U 16758 dated May lb, 2024 issued by the "Peer Review Board" of the ICAl and is valid till Ma\ 31, 2027.

7) I lie preparation and presentation of the I inancial 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 1CDR Regulations. The f inancial Statements and information referred to above is the responsibility of the management of the Company.

81 This report should not in any wav be construed as a re-issuance or re-dating of any of the previous audit reports issued by us, nor should this report be construed as an opinion on any of the Standalone Financial Information referred to herein.

9) We have no responsibility to update our report for events and circumstances occurring after the date of the -5 repurl.

10) In our opinion, the above Restated Financial Statements contained in Anncxiirc I -i t<i this report read along with the Significant Accounting Policies and Notes to the Restated Standalone Financial Statements appearing in Annexurc 4 alter making adjustments and regrouping/reclassification as considered appropriate and have been prepared in accordance with the provisions of Section 26 of the Companies Act. 2012 read with the Companies (Prospectus and Allotment of Securities) Rules 2014, to the extent applicable, the SHBI Regulations, the Guidance Note issued in this regard by the ICAI, ns amended from lime to time, and in terms of our engagement agreed with you.

11) 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.