Kasturi Metal Composite Ltd Auditor Reports

INDEPENDENT AUDITORS EXAMINATION REPORT ON RESTATED FINANCIAL INFORMATION

To,

The Board of Directors,

Kasturi Metal Composite Limited

A-30/3/1 & A-30/3, MIDC, Sai Nagar,

Amravati, Maharashtra 444607

Dear Sirs,

Reference: - Proposed Public Issue of Equity Shares of Kasturi Metal Composite Limited.

1. We have examined the attached Restated Financial Statements of Kasturi Metal Composite Limited (Formerly known as Kasturi Metal Composite Pvt. Ltd.) (the "Company") and its subsidiary (the Company and its subsidiary together referred to as the "Group"), comprising the Restated Statement of Assets and Liabilities as at September 30, 2024 (Consolidated), March 31, 2024 (Consolidated), as at March 31, 2023 (Standalone) and as at March 31, 2022 (Standalone), the Restated Statements of Profit and Loss, the Restated Cash Flow Statement for the period / year ended September 30, 2024 (Consolidated), March 31,

2024 (Consolidated), March 31, 2023 (Standalone) and March 31, 2022 (Standalone), the Summary Statement of Significant Accounting Policies, the Notes and Annexures as forming part of these Restated Financial Statements (collectively, the "Restated Financial Information"), as approved by the Board of Directors of the Company at their meeting held on 17th March,

2025 for the purpose of inclusion in the Draft Red Herring Prospectus / Red Herring Prospectus /Prospectus ("Offer Document") prepared by the Company in connection with its proposed SME Initial Public Offer of equity shares ("SME IPO") prepared in terms of the requirements of:

a) Section 26 of Part I of Chapter III of the Companies Act, 2013 (the "Act");

b) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended ("SEBI ICDR Regulations"); and

c) 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").

2. The Companys Board of Directors is responsible for the preparation of the Restated Financial Information for the purpose of inclusion in the offer document to be filed with Securities and Exchange Board of India (SEBI), relevant stock exchange and Registrar of Companies, Mumbai in connection with the proposed SME IPO. The Restated Financial Information has been prepared by the management of the Company on the basis of preparation stated in Annexure IV of the Restated Financial Information. The Board of Directors responsibility includes 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 Companies Act, (ICDR) Regulations and the Guidance Note.

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

a) The terms of reference and terms of our engagement agreed upon with you in accordance with our engagement letter dated 27^th September 2024 in connection with the proposed IPO of the Company;

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

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

d) The requirements of Section 26 of the Act and the SEBI ICDR Regulations.

Our work was performed solely to assist you in meeting your responsibilities in relation to your compliance with the Act, the SEBI ICDR Regulations and the Guidance Note in connection with the IPO.

4. These Restated Financial Information have been compiled by the management from:

a) Audited special purpose interim consolidated financial statements of the Group as at and for the six month period ended September 2024 prepared in accordance with accounting standards as prescribed under Section 133 of the Companies Act, 2013 (‘the Act) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions 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 March 11^th, 2025.

b) Audited financial statements of the company as at and for the year ended March 2024 (consolidated ), March 23 ( Standalone) and March 22 ( Standalone ) prepared in accordance with accounting standards as prescribed under Section 133 of the Companies Act, 2013 (‘the Act) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions 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 27^th 2024, September 6^th, 2023 and on September 6^th, 2022 respectively.

5. For the purpose of our examination, we have relied on:

a) Auditors reports issued by us dated March 11^th, 2025 and September 27^th, 2024 on the consolidated financial statements of the Group as at and for the six-month period ended September 30, 2024 and as at and for the year ended March 31, 2024 respectively as referred in Paragraph (4) above; and

b) Auditors Report issued by the Previous Auditors, M/s Kaloti & Lathiya, dated September 6^th, 2023 and September 6^th, 2022 on the Standalone financial statements of the Company as at and for the years ended March 31, 2023 and March 31, 2022 respectively as referred in Paragraph (4) above.

6. Based on our examination and according to the information and explanations given to us, we report that the Restated Financial Information have been prepared:

a) After incorporating adjustments for the changes in accounting policies, material errors and regrouping/reclassifications retrospectively, for the financial period / years ended September 30, 2024, March 31, 2024, March 31, 2023 and March 31, 2022 to reflect the same accounting treatment as per the accounting policies and groupings / classifications followed as at and for the period ended 30^th September 2024.

b) Does not require any adjustments for modifications as there is no modification in the underlying audit reports and

c) In accordance with the Act, SEBI ICDR Regulations and the Guidance Note.

7. The Restated Financial Information do not reflect the effects of events that occurred subsequent to the respective dates of the reports on the audited financial statements mentioned in paragraph 4 above.

8. 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 or the Previous Auditors, nor should this report be construed as a new opinion on any of the financial statements referred to herein.

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

10. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC)-1, Quality controls for firms that perform audits and review of historical financial information, and other assurance and related services engagements.

11. We have also examined the following Notes to the Restated financial information of the Company set out in the Annexure V, prepared by the management and approved by the Board of Directors on 17th March, 2025 for the period / years ended September 30, 2024, March 31, 2024, March 31, 2023 and March 31, 2022.

Annexure V - Notes to the Restated Summary Financial Information;

a) Restated Statement of Share Capital, Reserves and Surplus as appearing in Note 3 & 4 to this report;

b) Restated Statement of Long-Term Borrowings & Short-term borrowings as appearing in Note 5 to this report;

c) Restated Statement of principal terms of Secured Loans and Assets charged as security as appearing in Note 5(A) to this report;

d) Statement of terms & conditions of unsecured loans as appearing in Note 5(B) to this report;

e) Restated Statement of Deferred Tax (Assets) / Liabilities as appearing in Note 12 to this report;

f) Restated Statement of other Long term liabilities & Long term provisions as appearing in Note 6 and Note 7 to this report;

g) Restated Statement of Trade Payables as appearing in Note 8 to this report;

h) Restated Statement of Other Current Liabilities as appearing in Note 9 to this report;

i) Restated Statement of Short-Term Provisions as appearing in Note 10 to this report;

j) Restated Statement of Property, Plant & Equipment as appearing in Note 11 to this report;

k) Restated Statement of Long-term loans & advances and other non-current assets as appearing in Note 13 & Note 14 to this report;

l) Restated Statement of Inventories as appearing in Note 15 to this report;

m) Restated Statement of Trade Receivables as appearing in Note 16 to this report;

n) Restated Statement of Cash and Cash Equivalents as appearing in Note 17 to this report;

o) Restated Statement of Short-Term Loans and Advances as restated as appearing in Note 18 to this report;

p) Restated Statement of Other Current Assets as appearing in Note 19 to this report;

q) Restated Statement of Revenue from Operations as appearing in Note 20 to this report;

r) Restated Statement of Other Income as appearing in Note 21 to this report;

s) Restated Statement of Cost of Raw Material Consumed as appearing in Note 22 to this report;

t) Restated Statement of Direct site expenses as appearing in Note 23 to this report

u) Restated Statement of Employee Benefit Expenses as appearing in Note 25 to this report;

v) Restated Statement of Finance Cost as appearing in Note 26 to this report;

w) Restated Statement of Depreciation & Amortization as appearing in Note 27 to this report;

x) Restated Statement of Other Expenses as appearing in Note 28 to this report;

y) Restated Statement of Contingent Liabilities as appearing in Note 37 to this report;

z) Restated Statement of Related Party Transactions as appearing in Note 30 to this report; aa) Capitalisation Statement as appearing in Note 39 to this report;

bb) Restated Statement of Mandatory Accounting Ratios as appearing in Note 40 to this report;

12. Our report is intended solely for use of the Board of Directors for inclusion in the offer document to be filed with Securities and Exchange Board of India, relevant stock exchange and Registrar of Companies, Mumbai 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.