Kothari Industrial Corporation Ltd Auditor Reports

To the Members of

KOTHARI INDUSTRIAL CORPORATION LIMITED

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of KOTHARI INDUSTRIAL CORPORATION LIMITED (“the Company”), which comprise the standalone Balance Sheet as at March 31, 2026, the standalone Statement of Profit and Loss (including Other

Comprehensive Income), the standalone Statement of Changes in Equity and the standalone Statement of Cash Flows for the year ended on that date, and a accounting policies and summary of the significant other explanatory information (hereinafter referred to as

“the financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind

AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at

March 31, 2026, the Loss and total comprehensive loss, changes in equity and its cash flows for the year ended on that date except for the matters as discussed in the basis of qualified opinion para.

Basis for Qualified Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs).

Our responsibilities under those Standards are further described in the Auditors Responsibilities for the

Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

1. Attention is drawn to Note No 7, wherein a subsidy of Rs. 80 lakhs is carried in the books as receivable from the Government for which no documentary evidence was produced to us for verification. Also, the Company has not made a provision against such balance which is outstanding for more than

8 years. Hence, we are unable to comment on its realizability or otherwise and its accounting treatment in consonance with Ind AS 20. This was also reported in our audit report for the previous year.

2. Year-end direct balance confirmation in respect of promoters Rs. 1.80 crores, trade receivables Rs. 33.49 crores trade payables Rs. 23.24 crores, vendor advances Rs. 15.06 crores, advances from customers Rs. 3.99 crores, other loans payable Rs. 52.88 crores have not been provided for our verification. Further, out of the total related party balances of Rs. 15.26 crores balance was not provided for Rs. 1.44 crores. In the absence of such confirmations, we are unable to as certain any consequential effect of the above in the financial results for the year.

3. The Companys books of accounts reflect a balance of Rs. 10.41 crores in GST input credit, Rs. 10.55 crores in GST output liability, and a debit balance of Rs. 1.41 crores in the GST payable account. However, the Company has not reconciled the input credit as per the GST portal and GSTR-2B with the balances recorded in the books. In the absence of such reconciliation, we are unable to verify the accuracy of the GST input credit and output liability, or to comment on the actual liability and credit available to the Company for future adjustments.

4. Out of the total recorded inventory of Rs. 17.02 crores, detailed stock valuation reports for

Rs. 10.98 crores was not made available to us. Further, the Companys current system does not separately track non-moving and slow-moving inventories. Accordingly, the financial statements reflect the inventory balance as reported and we are unable to comment on the potential impact of such items in the financial statements.

5. As per information available from the TRACES portal, there is a default of Rs. 7.12 lakhs relating to tax deducted at source under the Income tax Act,

1961. This indicates non compliance with statutory requirements and may attract further interest and penalties.

6. The proceedings initiated by the Collector of Nilgiris for repossession of certain plots of land in Coonoor earmarked for public use has been challenged by the company on a Writ Petition filed before Madras

High Court and the matter is pending adjudication. Decision, if any, by the Madras High Court which does not go in favour of the Company, could give rise to a liability and consequential loss, which could not be ascertained at the balance sheet date.

7. The Company has recorded closing liability of statutory deductions (employer and employee contributions) under Provident Fund (PF) Rs. 40.68 lakhs, Employees State Insurance (ESI) Rs. 9.38 lakhs and Professional Tax (PT) Rs. 30.03 lakhs as part of its payroll process. Final reconciliation workings to match the salary payable of Rs. 2.56 crores as per the books with the payroll records, and to align these deductions with the corresponding payments to employees and statutory authorities, were not made available for our review. Accordingly, our procedures were limited to the information provided by management Hence, we are unable to comment whether any differences exists in respect of such deductions and remittances.

Emphasis of matter

We draw attention to Note No 44(5)(n) of the financial statements, wherein the Company has not made provision for the royalty to be paid to Royer Group for the period from July 2025 to June 2026 since negotiations were ongoing and the Management is optimistic of obtaining a waiver.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter	Principal Audit Procedures
The Evaluation of the Company as a going concern and the consequent classification of the assets as "held for sale"	The Company has been making losses in the previous years which has eroded the networth and the current liabilities exceeds the current assets.The Company is in the process of expansion of business and has entered into business contracts with various customers in India and abroad. The Company has provided for our verification the contracts in support of the assumption of going concern on the basis of which the accompanying financial statements have been drawn.
Acquisition of M/s Parveen Roadways, proprietorship of Mr. Rafiq Ahmed.	The Company had acquired Parveen Roadways, a sole proprietorship firm engaged in logistics and railway-related services, for a consideration of Rs. 2,404 lakhs through a business transfer agreement dated 8th April 2025. The business includes over 100 vehicles (such as tippers, trailers, buses, and forklifts) and a workforce of approximately 500 employees. Major clients include Integral Coach Factory, Southern Railways, Port Trusts, and Aavin Milk Factory. We have considered the valuation report obtained from an independent valuer. All assets and liabilities of Parveen Roadways has been accounted in the Books of the Company as on 1st April 2025 alongwith resultant goodwill recognized of Rs. 1,192.89 lakhs.
During the year, the Company obtained unsecured short-term loans aggregating to Rs. 5,183 lakhs from various parties at an interest rate of 24%. At the same time, the Companys fixed deposits with banks earned interest at significantly lower rates. In our view, this financing arrangement results in interest expense substantially exceeding the interest income, which may be prejudicial to the interests of the Company.	We obtained details of the borrowings and examined the terms and conditions of the loan agreements, including the interest rates and repayment schedules. We compared these rates with prevailing market benchmarks to assess reasonableness. We also reviewed the Companys treasury management practices, including placement of fixed deposits and related interest income. Management explained that the Company had approached banks for funding; however, applications were rejected due to the Companys losses. Given the urgent need for short-term funds and the unsecured nature of the borrowings, the Company had limited options and therefore accepted loans at higher interest rates. We evaluated the impact of such borrowings on the Companys financial position and discussed the rationale with management. Based on our procedures, we noted that the cost of borrowings is significantly higher than the returns on deposits, which may adversely affect the Companys financial performance.

Information Other than the Financial Statements and

Auditors Report Thereon

The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the

Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Business

Responsibility Report, Corporate Governance and

Shareholders Information, but does not include the financial statements and our auditors report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

MANAGEMENTS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing thefinancial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of

Directors are responsible for overseeing the Companys financial reporting process.

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of thefinancial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY

REQUIREMENTS

1. As required by the Companies (Auditors Report) Order, 2020 (“the Order”) issued by the Central

Government of India in terms of sub- section 11 of

Section 143 of the Act, we give in “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, based on our audit we report that: a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the relevant books of account. d. In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act. e. On the basis of the written representations received from the directors as on March 31, 2026 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2026 from being appointed as a director in terms of Section 164(2) of the Act. f. In our opinion and to the extent of information made available to us, managerial remuneration for the year ended 31st March 2026 that has been paid/provided by the Company is in accordance with the provisions of Section 197 read with Schedule V to the Act. g. With respect to the adequacy of the internal financial controls over financial reporting of the

Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”. Our report expresses a modified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting.

h. With respect to the other matters to be included in the Auditors Report in accordance with

Rule 11 of the Companies (Audit and Auditors)

Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements Refer Note 40 of the standalone financial statements. ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. i. In our opinion and to the best of our knowledge and belief and as represented to us by the Company, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other source or kind of funds) by the company to or in any other person(s) or entity(ies) including foreign entities (“intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary, shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the

Company (“ultimate beneficiaries”) or provide any guarantee, security or the like on behalf of the ultimate beneficiaries as per Clause (e)(i) of

Rule 11 of Companies Audit and Auditors Rules,

2014. Refer Note No. 38 to the accompanying financial statements.

j. In our opinion and to the best of our knowledge and belief and as represented to us by the Company, other than as disclosed in the notes to the accounts, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding parties”), with the understanding, whether recorded in writing or otherwise, the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries as per

Clause (e)(ii) of Rule 11 of Companies Audit and Auditors Rules, 2014. Refer Note No. 39 to the accompanying financial statements.

Based on such audit procedures as considered reasonable by us, we have not come across anything to believe that the representations made by the Company for Clause (i) & (j) as above contain any material misstatement k. No dividend has been declared or paid by the Company during the year. l. Based on our examination, which included test checks, the Company has used accounting software systems for maintaining its books of account for the year ended 31st March, 2026 which have the feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software systems. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with, and the audit trail has been preserved by the Company as per the statutory requirements for record retention.

ANNEXURE “A” TO THE INDEPENDENT AUDITORS

REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements of our report of even date) i In respect of the Companys fixed assets : (a) The Company has generally maintained proper records showing full particulars, except for details like supplier name, quantitative details,the location of the plant, property and equipment and particulars regarding sale, discarding, demolition, destruction and assets that have been retired from active use. Refer to footnote to Note No. 3 of the financial statements which describes differences noted between the gross block and accumulated depreciation figures in the Fixed Assets Register vis-?-vis prior year balances. The net written down value (WDV) of fixed assets remains consistent. Management has informed us that reconciliation of these differences is in progress.

(b) The Company has not maintained proper records showing full particulars of intangible assets.

(c) The Management has a regular programme for verification of property, plant and equipment at reasonable intervals on rotational basis of two years considering the large number of assets at various locations. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

However, the company has not carried out physical verification of its immovable properties (viz land) for more than 3 years. Accordingly, we are unable to comment on the existence, condition, or possible encroachment of such properties.

(d) The title deeds of immovable properties are held in the name of the company However, in the absence of the physical verification report, we are unable to independently verify the current status of the immovable properties (viz land).

(e) The Company has not revalued its Property, Plant and Equipment including (Right of use) assets or intangible assets during the year.

(f) According to the information and explanation given to us, no proceeding have been initiated or are pending against the Company for holding any benami property under the Benami

Transactions (Prohibition) Act, 1988 and rules made thereunder. ii. (a) According to the information and explanation given to us, physical verification of inventory has been conducted at reasonable intervals by the Management and no discrepancies were reported by the Management. Based on the reports presented, we are of the opinion that the coverage and the procedure adopted for such verification is appropriate.

(b) According to the information and explanation given to us, the Company has not been sanctioned working capital limits at any point of time during the year. Hence, we have nothing to report under this clause. iii. According to in the information and explanations given to us, the Company, during the year, has not made investments in, provided any guarantee or security or granted any loans or advances, in the nature of loan, secured or unsecured, to companies, firms, limited liability partnership or any other parties. Hence, we have nothing to report under sub-clause (a) to (f) of this clause. iv. According to the information and explanations given to us, the Company has not advanced any loans or advances directly or indirectly to the directors of the

Company covered u/s 185 of the Companies Act 2013. The Company has not made investment and given guarantee during the year. Hence, we have nothing to report under this clause. v. According to the information and explanations given to us, the Company has not accepted deposits or amounts which are deemed to be deposits during the year and therefore, the provisions of this clause is not applicable to the Company. vi. The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013 for the business activities carried out by the Company. Hence, we have nothing to report under this clause. vii. According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has not been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax (TDS), Goods and Service Tax, Professional tax and other material statutory dues applicable to it with the appropriate authorities (Refer Pt No. 7 of the main report for qualification). (b) There were undisputed amounts payable in respect of the following statutory dues in arrears as at March 31, 2026 for a period of more than six months from the date they became payable.

Name of the statue	Nature of dues	Amount (Rs.)	Period to which the amount relates	Due date	Date of payment	Remarks
Tamil Nadu Tax on Professions, Trades Callings, and Employments Act, 1992	Professional tax	20,35,003	2008-09 to 2023-24	Half yearly	Not paid	Not paid till the date of this report
Provident Fund Act	PF penal damages	30,38,008	FY 2023-24 and previous years	15th of subsequent month	Not paid	Not paid till the date of this report

(c) As per the information and explanations provided to us, there were no dues of Income-tax, Sales Tax, Service

Tax, Customs Duty, Excise duty and Value Added Tax which have not been deposited as on March 31, 2026 on account of disputes except as mentioned below:

Name of the statue	Nature of dues	Amount in Rs.	Period to which it relates AY	Forum where dispute is pending
Income Tax 1961- Section 156	Income tax	95,33,960	2022-23 (FY 2021-22)	CIT(A)
Income Tax 1961- Section 148A(1)	Income tax	1,16,26,892	2022-23 (FY 2021-22)	AO
Central Goods & Services Tax Act, 2017	CGST/SGST/ IGST	66,27,248	FY 22-23 & FY 23-24	CTO

viii. According to the information and explanation given to us, there were no transactions that were not recorded in books & was surrendered or disclosed as income during the year in the tax assessments under Income Tax Act 1961. ix. (a) According to the information and explanations provided to us, the Company has not defaulted in the repayment of loans or other borrowings or in the payment of interest thereon to any lender. However, in respect of loans amounting to

Rs. 180.95 lakhs from promoters and Rs. 5,388.73 lakhs from others, the schedule

for repayment of principal and interest has not been stipulated. Consequently, we are unable to comment on the regularity of repayment of such loans during the year. In addition, a loan of Rs. 100 lakhs, which was repayable in full during the year, remains outstanding as at 31st March 2026.

(b) According to the information and explanation given to us, the Company has not been declared as a wilful defaulter by any bank or financial institutions or any other lender.

(c) According to the information and explanation given to us, no term loan was obtained by the Company during the year. However, the Company obtained a car loan from the Bank in the previous year which was utilized for the purpose for which the loan was obtained. Hence, we have nothing to report on the utilization of such loans under this clause. (d) According to the information and explanations given to us and based on our examination of records, the Company has raised short term loans during the year. As represented by management, these loans have been utilized for working capital requirements. We did not come across any material evidence indicating that such short term loans were applied for long term purposes. Accordingly, we have nothing further to report under this clause. (e) According to the information and explanation given to us, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures. Hence, we have nothing to report under this clause.

(f) According to the information and explanation given to us, the Company has not raised any loans during the year on pledge of securities held in its subsidiaries, joint ventures or associate companies. Hence, we have nothing to report under this clause. x. (a) According to the information and explanation given to us, the Company has not raised money by way of initial public offer or further public offer (including debt instruments) during the year. Hence, we have nothing to report under this clause.

(b) According to the information and explanation given to us, the Company has utilized funds raised by way of preferential allotment of shares for the purpose for which they were raised. In one instance where the object clause for preferential allotment was changed, the Company has carried out necessary compliances alongwith shareholders approvals. xi. (a) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or any fraud on the Company has been noticed or reported during the year. (b) According to the information and explanation given to us, no report under sub-section

(12) of Section 143 of the Companies Act has been filed by the auditors in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with Central

Government.

(c) As represented to us by the Management, there are no whistle-blower complaints received by the Company during the year. xii. According to the information and explanations given to us, the Company is not a Nidhi Company. Hence, we have nothing to report under this clause. xiii. In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards. xiv. (a) Based on information and explanations provided to us and our audit procedures, in our opinion, the Company has an internal audit system commensurate with the size and nature of its business. (b) We have considered the internal audit reports of the Company issued till date for the period under audit. xv. In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its Directors or persons connected to its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

xvi. (a) & (b) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934. Hence, we have nothing to report under this clause.

(c) & (d) In our opinion, according to the information, representation and explanations given to us, the Company is not a Core Investment Company as per the definition contained in the Core Investment Company (Reserve Bank) Directions 2016. Hence, we have nothing to report under this clause. xvii. The Company has incurred cash losses of

Rs. 1,928.25 lakhs in the current financial year and Rs. 1,728.54 lakhs incurred in the immediately preceding financial year. xviii. There has been no resignation of the statutory auditors during the year. Hence, we have nothing to report under this clause. xix. According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payments of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts upto the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due. xx. According to the information and explanation given to us and based on our examination of the books of accounts, the Company does not have any unspent amount specified in Schedule

VII to the Act within the time limits. However, the

Company has during the year donated Rs. 25 lakhs to an educational institution. xxi. The reporting under clause 3(xxi) of the Order is not applicable in respect of audit of standalone financialstatements. Accordingly, no comment in respect of the said clause has been included in the report.

ANNEXURE ‘B TO THE INDEPENDENT AUDITORS

REPORT

(Referred to in paragraph 1(g) under ‘Report on Other Legal and Regulatory Requirements of our report of even date)

Report on the Internal Financial Controls Over

Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of KOTHARI INDUSTRIAL CORPORATION LIMITED (“the Company”) as of

March 31, 2026 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial

Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Aditors Responsibility

Our responsibility is to express an opinion on the

Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section

143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls.

Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of lnternal Financial Controls Over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial deficiencies reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us and during the course of our audit of the financial statements for the year ended 31st March 2026, we evaluated the design and operating effectiveness of internal financial controls over financial reporting. Our audit of the internal financial controls over financial reporting was carried out in accordance with the Guidance note issued by the Institute of Chartered Accountants of

India. The procedures performed included obtaining an understanding of the internal control framework, assessing the risk of material weakness and testing controls on a sample basis.

Based on these procedures undertaken, we identified certain deficiencies in the internal financial control framework, which, in our professional judgement, constitute . While our sample significant testing did not reveal any material misstatement in the financial statements, the presence of such deficiencies indicates an increased risk that misstatements, if they occur, may not be prevented or detected on a timely basis. It should be noted that our audit provides reasonable assurance only, regarding the adequacy and operational effectiveness of the Companys internal financial controls. Because of the inherent limitation of internal controls, including the possibility of management override, misstatements due to error or fraud may occur and not be detected. We have communicated these matters to the management and the Audit committee, alongwith our recommendations for appropriate and immediate remediation.

	For M/s. Ray & Ray
	Chartered Accountants
	Firm Reg.No.301072E
	(Swetha Srinivasan)
	Partner
Place : Chennai	Membership No. 240553
Dated: 03.06.2026	UDIN : 26240553WJAGOM2019