Kataria Industries Ltd Auditor Reports

To,

The Board of Directors,

KATARIA INDUSTRIES LIMITED

(CIN: U27300MP2004PLC029530)

Dear Sir,

(c) We have examined the attached Restated Financial Statements of Kataria Industries Limited, comprising the Restated Statement of Assets and Liabilities as at March 31, 2024, March 31, 2023 and March 31, 2022 the Restated Statements of Profit and Loss, the Restated Cash Flow Statement for the years/periods ended March 31, 2024, March 31, 2023 and March 31, 2022 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 03^rd July, 2024 for the purpose of inclusion in the Draft Red Herring Prospectus/ Red Herring Prospectus/

Prospectus ("Draft Offer Document/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 ("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").

(d) The Companys Board of Directors is responsible for the preparation of the Restated Financial Information for the purpose of inclusion in the Draft Offer Document/Offer Document to be filed with Securities and Exchange Board of India, relevant stock exchange and Registrar of Companies, Gwalior 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.

(e) We, K A R M A & CO. LLP, Chartered Accountants have been subjected to the peer review process of the

Institute of Chartered Accountants of India ("ICAI") and holds the peer review certificate dated 15^th July, 2021 valid till 31^st July, 2024. We confirm that there is no express refusal by the peer review board of ICAI to renew the certificate and the process to renew the peer review certificate has been initiated by us.

(f) 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 2^nd January 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 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.

(g) These Restated Financial Information have been compiled by the management from the Audited Financial Statements of the Company for the period ended 31^st Macrh,2024, 31^st March 2023 and 31^st March 2022 which has been approved by the Board of Directors. The Audit of financial statements of the Company for the year ended March 31, 2024, March 31, 2023 and March 31, 2022 was conducted by M/s P.D. Nagar & Co. Accordingly reliance has been placed on the financial information examined by them for the said years. The financial report included for March 31, 2024, March 31, 2023 and March 31, 2022.

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

a) Auditors reports dated 21^st May, 2024 issued by us for the period ended 31^st March, 2024, and dated 21^st September, 2023 and 23^rd September, 2022 respectively issued by M/s P.D. Nagar & Co., on the financial statements of the Company as at and for the period ended 31^st March 2023 and 31^st March 2022 as referred in Paragraph 5 above;

(i) 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 and regrouping/reclassifications retrospectively, if any in the financial years/period ended March 31, 2024, March 31, 2023 and March 31, 2022 to reflect the same accounting treatment as per the accounting policies and grouping/classifications; and

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

(j) 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 03^rd July,2024 for the years/period ended March 31,2024, March 31, 2023 and March 31, 2022.

Annexure V - Notes to the Restated Summary Financial Information;

1. Restated Statement of Share Capital, Reserves and Surplus as appearing in Note A to this report;

2. Restated Statement of Long Term Borrowings as appearing in Note B to this report;

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

4. Restated Statement of Deferred Tax (Assets) / Liabilities as appearing in Note C to this report;

5. Restated Statement of Long Term Liabilities as appearing in Note D to this report

6. Restated Statement of Long Term Provisions as appearing in Note E to this report;

7. Restated Statement of Short Term Borrowings as appearing in Note F to this report

8. Restated Statement of Trade Payables as appearing in Note G to this report;

9. Restated Statement of Other Current Liabilities as appearing in Note H to this report;

10. Restated Statement of Short Term Provisions as appearing in Note I to this report;

11. Restated Statement of Fixed Assets as appearing in Note J to this report;

12. Restated Statement of Other Non-Current asset as appearing in Note K to this report;

13. Restated Statement of Trade Receivables as appearing in Note L to this report;

14. Restated Statement of Cash and Cash Equivalents as appearing in Note M to this report;

15. Restated Statement of Inventories as appearing in Note N to this report;

16. Restated Statement of Short Term Loans and Advances as appearing in Note O to this report;

17. Restated Statement of Other Current Assets as appearing in Note P to this report;

18. Restated Statement of Revenue from Operations as appearing in Note Q to this report;

19. Restated Statement of Other Income as appearing in Note R to this report;

20. Restated Statement of Raw Material Consumption as appearing in Note S to this report;

21. Restated Statement of Change in Inventories as appearing in Note T to this report;

22. Restated Statement of Employee Benefit Expenses as appearing in Note U to this report;

23. Restated Statement of Finance Cost as appearing in Note V to this report;

24. Restated Statement of Depreciation & Amortization as appearing in Note W to this report;

25. Restated Statement of Other Expenses as appearing in Note X to this report;

26. Restated Statement of Contingent Liabilities as appearing in Note Y to this report;

27. Restated Statement of Related Party Transactions as appearing in Note Z to this report;

28. Restated Statement of Tax Shelter as appearing in Note AA to this report;

29. Capitalization Statement as appearing in Note AB to this report;

30. Restated Statement of Mandatory Accounting Ratios as appearing in Note AC to this report;

31. Restated Statement of Other Disclosures as per Schedule-III of the Companies Act, 2013 in Notes AD to this report

32. Ratio Analysis as appearing in Note AE to this report

(k) 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.

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

(m) Our report is intended solely for use of the Board of Directors for inclusion in the Draft Offer Document/ Offer Document to be filed with Securities and Exchange Board of India, relevant stock exchange and Registrar of Companies, Gwalior 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.

(n) In our opinion, the above financial information contained in Annexure I to Annexure V of this report read with the respective Significant Accounting Polices and Notes to Accounts as set out in Annexure IV are prepared after making adjustments and regrouping as considered appropriate and have been prepared in accordance with the Act, ICDR Regulations, Engagement Letter and Guidance Note and give a true and fair view in conformity with the accounting principles generally accepted in India, to the extent applicable.

For, K A R M A & CO LLP

Chartered Accountants

Firm Reg No: 127544W/W100376

Sd/-

CA Jignesh A Dhaduk

Designated Partner

Mem. No: 129149

UDIN: 24129149BKEBKZ6621

Place: Ahmedabad

Date: 03 July, 2024