pae ltd Auditors report


To the Members of PAE Limited

Report on the Standalone Financial Statements Qualified Opinion

We have audited the standalone financial statements of PAE Limited (“the Company”), which comprise the balance sheet as at 31st March 2023, and the statement of Profit and Loss (Including Other Comprehensive Income), Statement of changes in Equity and Statement of Cash flows for the year ended on that date, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the standalone financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, except as stated in the Basis of Qualified opinion paragraph below, the aforesaid standalone 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 Standard) Rules, 2015, as amended (“hid As”) and the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2023, its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

1) We draw your attention to the fact that the Net Worth of the company has been completety eroded as at the year ended 31st March, 2023.

Further the liabilities of the Company far exceed the realizable value of assets owned by the company. In addition the company has significant litigations under various taxation & other laws the outcome & impact of which is unascertainable.

These conditions state that a material uncertainty exists that may cast significant doubt on the entitys ability to continue as a going concern. Despite these circumstances, for the reasons mentioned in Note No. 33 to the standalone financial statements, the accounts have been prepared on a going concern basis.

2) We draw your attention to the fact that the company has total unclaimed matured fixed deposits of Rs. 3.95 lakhs as at the year ended 31st March, 2023. However, against the total amount of unclaimed matured deposits, a sum of Rs. 2.30 lakhs has been maintained in liquid funds. Further, against interest of Rs. 0.44 lakh on these unclaimed fixed deposits, a sum of Rs. 0.36 lakhs has been maintained in liquid funds. Therefore, the company has not funded the said amount in compliance with the provisions for Section 74 of the Companies Act, 2013.

Further, as required under section 125 of the Companies Act, 2013, the Company has also not transferred unclaimed matured deposits amounting to Rs. 3.95 Lakhs & interest on unclaimed matured deposits amounting to Rs 0.44 Lakh to Investor Education and Protection Fund which were due for transfer as at 31st March, 2023.

3) The Companys policy for Internal Financial Controls over Financial Reporting requires to be strengthened for adequate effectiveness to determine the risk assessments & to detect fraud if any. We are unable to comment on Internal Financial Control over Financial Reporting as the company neither has internal audit control system nor an externally appointed internal auditor as required under section 138 of the Companies Act, 2013.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone 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 together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the standalone financial statements.

Key Audit Matters

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

Information other than the financial statements & Auditors report thereon

The Companys management and Board of Directors are responsible for preparation of the other information. The other information comprises the information included in the Companys annual report, but does not include the standalone financial statements and our auditors report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance or conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Managements Responsibility for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting Standards specified under section 133 of the Act. This responsibility

also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 the financial 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. In preparing the standalone financial 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 is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial 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 standalone 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 standalone 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 control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, 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 standalone 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. Refer Note No. (1) of our basis for qualified opinion.

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

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonable knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality & qualitative factors in

(i) planning the scope of our audit and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

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 standalone 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 Section 143(11) 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, 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 in 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, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.

d. In our opinion, the aforesaid standalone Ind-AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act read with relevant rules issued thereunder.

e. On the basis of the written representations received from the directors as on 31st March, 2023 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023 from being appointed as a director in terms of Section 164(2) of the Act;

f. 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”

g. With respect to the matter to be included in the Auditors Report under section 197(16) of the Act:

In our opinion and to the best of our information and according to the explanations given to us and examination of the records of the Company, the Company has not provided for any remuneration payable to its directors during the current year. Therefore, comments required u/s 197(16) have not been given.

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 standalone Ind-AS financial statements. Refer note 31 to the standalone Ind-AS financial statements.

(ii) The Company does not have any long-term contracts including derivative contracts as at 31st March, 2023, for which there were any material foreseeable losses.

(iii) There has been delay in transferring amounts in respect of interest and matured unclaimed principal amount, required to be transferred, to the Investor Education and Protection Fund by the Company. Refer foot note to note no. 16 to the standalone Ind- AS financial statements.

(iv) (a) The Management has represented that, to the best of its knowledge and belief, as disclosed in the note no. 48 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources 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, 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.

(b) The Management has represented, that, to the best of its knowledge and belief, as disclosed in the note no. 48 to the standalone financial statements, 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, that the Company shall, 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.

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub clause (i) and (ii) of Rule 11(e), as provided under (a) &

(b) above, contain any material misstatement.

(v) The company has neither declared nor paid any dividend during the year. Hence comments as required under Clause 11(f) of the Companies (Audit & Auditors) Rules, 2014 have not been given.

For Jayesh Dadia & Associates LLP

Chartered Accountants

Firms Registration No. 121142W / W100122

Rahil Dadia Partner

Membership No. 143181

Place of Signature: Mumbai

Date: 26th May, 2023

UDIN: 23143181BGVJBV1576

Annexure A to the Auditors Report

The Annexure referred to in the Independent Auditors Report to the members of the Company on the

Standalone IND-AS financial statements for the year ended 31st March, 2023

In our opinion and to the best our information and according to the explanations provided to us by the

Company and based on our examination of the books of account in the normal course of audit, we state

that:

(i) In respect of the Companys Property, Plant & Equipment and Intangible Assets:

(a) (A) The Company is maintaining proper records showing lull particulars, including quantitative details and situation of Property, Plant & Equipment.

(B) The Company does not own any intangible assets as at the year ended 31st March, 2023. Accordingly, comment under this clause has not been given.

(b) A substantial portion of the Property, Plant & Equipment has been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) As explained to us & based on our examination of the records of the company, the company does not own any immovable property as on the balance sheet date.

(d) The Company has not revalued any of its the Property, Plant & Equipment and intangible assets during the year.

(e) No proceedings have been initiated during the year or are pending against the Company as at 31st March, 2023 for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) and the rules made thereunder.

(ii) (a) The Company did not hold any inventory as at the year end. Therefore, comment under this clause has not been given.

(b) As explained to us, the Company has not been sanctioned working capital limits in excess of 5 crore, in aggregate, from banks on the basis of security of current assets during the year. Therefore, comment under this clause has not been given.

(iii) The Company has not provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured to companies, firms, limited liability partnership or any other parties during the year. The Company has not made any investments in firms, limited liability partnership or any other parties. Accordingly, clause 3(iii)(a) to clause 3(iii)(f) of the Order are not applicable to the Company.

(iv) The Company has not given any loans, made any investments or provided any guarantee or security as specified under section 185 and 186 of the Companies Act, 2013. Accordingly, comment of compliance with the provisions of section 185 and 186 of the Companies Act, 2013 as required by clause 3(iv) has not been given.

(v) The Company has not accepted any deposits or amounts deemed to be deposits during the year.

However, the Company had accepted deposits prior to the commencement of Companies Act, 2013. In terms of section 74(1 )(b) of the Companies Act, 2013, an amount of Rs. 3.95 lakhs is matured but unclaimed as at the year end. The company has shortage of liquid assets required to be maintained amounting to Rs. 1.65 lakhs in respect of principal amount of the unclaimed matured deposits and Rs. 0.08 lakh in respect of unpaid interest on the matured deposits which is subject to reconciliation. Company has not transferred unclaimed matured deposit amounting

to Rs. 3.95 Lakhs & interest on unclaimed deposits amounting to Rs. 0.08 Lakh to investor education and protection fund which were due for transfer as on 31.03.2023.

(vi) According to the information & explanation provided to us, the Central Government has not prescribed the maintenance of cost records under sub-section (1) of section 148 of the Companies Act, 2013.

(vii) In respect of statutory dues:

(a) The Company is not regular in depositing undisputed statutory dues including Goods & Service Tax, Provident Fund, Employees State Insurance, Income Tax, Sales-tax, Service tax, duty of Customs, duty of Excise, Value Added Tax, Cess and any other statutory dues applicable to it to the appropriate authorities. The extent of arrears of statutory dues which have remained outstanding as at the last day of the financial year under audit for a period of more than six months is given in the table below.

Nature of Dues

Amount Rs in Lakhs, (excluding interest)

Labour welfare funds

0.004

Entry Tax

0.61

Central Sales Tax

0.17

Value Added Tax

8.50

Superannuation Payable

4.25

Family Pension Fund

0.80

Tax Deducted at Source

9.00

Provident Fund

10.82

Staff/Employer ESIC

5.48

Profession Tax

2.20

Staff Insurance

0.13

Total

41.95

(b) Details of disputed statutory dues referred to in Clause (a) above which have not been deposited or partially deposited as on 31st March, 2023 are as follows:

Name of the Statute

Nature of Dues

Period to which amount relates Amount (Rs. in lakhs)

Forum where dispute is pending

Central Sales Tax and VAT Act

VAT, CST, penalty and interest

1992-93 3.05

Appellate Tribunal

Central Sales Tax and VAT Act

VAT, CST, penalty and interest

1996-97, 2001-02 till 2015-16 601.60

West Bengal Sales Tax

VAT Act

VAT, penalty and interest

2005-06 107.99

Asst. Commissioner

Various State VAT Act

VAT, penalty and interest

2006-07 3.80

Revisional Tax board / Asst. Commissioner

Various State VAT Act

VAT, CST penalty and interest

2007-08 39.27

Asst. Commissioner /Rev. Tax Board/ commercial tax office/ Appellate Assistant Commissioner

Various State VAT Act

VAT, penalty and interest

2008-09 17.27

Asst. Commissioner / Rev. Tax Board / Appellate Asst. Commissioner

Central Sales Tax & Various State VAT Act

VAT, CST, penalty and interest

2009-10 38.97

Asst. Commissioner / Rev. Tax Board / Appellate Assistant Commissioner

Central Sales Tax & Various State VAT Act

VAT, CST, penalty and interest

2010-11 202.74

Appellate Asst Commissioner/Commerc ial Taxes Dept/ Deputy Commissioner of Sales Tax

Central Sales Tax & Various State VAT Act

VAT, CST, penalty and interest

2011-12 55.37

Asst.

Commissioner/Appellate

Tribunal/Deputy

Commissioner

Central Sales Tax & Various State VAT Act

VAT, CST, penalty and interest

2012-13 407.67

Commissioner of sales Tax/ Asst. Commissioner/ Commercial

Taxes/Appellate Asst Commissioner /Deputy Commissioner.

Central Sales Tax & Various State VAT Act

VAT, CST, penalty and interest

2013-14 36.65

Commissioner of Sales tax/Asst. Commissioner/ Deputy

Commissioner/Joint

Commissioner.

Central Sales Tax & Various State VAT Act

VAT, CST, penalty and interest

2014-15 381.68

Asst. Commissioner/ DC Sales Tax Officer/Appellate Asst Commissioner/ Commercial Tax Office

Various State VAT Act

VAT, Penalty and Interest

2015-16 48.14

Commissioner of Sales Tax/DC Commercial Tax/The Asst. /Joint Commissioner

Central Sales Tax & Various State VAT Act

VAT, CST, penalty and interest

2016-17 0.99

DC Commercial Tax/DC Sales Tax Officer

Total

1,945.21

Above mentioned amounts are net of amounts paid against the demands which are subject to reconciliation with various branches. Amounts are as certified by the management.

(viii) There were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

(ix) (a) The company does not have any borrowings from banks or financial institutions or government at any points of time during the year. Further, loans amounting to Rs. 1,066.62 lakhs from directors & inter corporate deposits are repayable on demand and terms & conditions for payment of interest thereon have not been stipulated. The management has represented to us that

the lender has not demanded prepayment of principal or payment of interest during the year. Accordingly, in our opinion the Company has not defaulted in repayment of loans or borrowings or on the payment of interest thereon during the year.

(b) The Company has not been declared a willful defaulter by any bank or financial institution or government or any government authority.

(c) The Company has not taken any term loans during the year and there are no outstanding term loans at the beginning of the year. Hence reporting under clause 3(ix)(c) of the Order is not applicable.

(d) On an overall examination of the financial statements of the Company, funds raised on shortterm basis have, prima facie, not been used during the year for long term purposes by the Company.

(e) On an overall examination of the financial statements of the Company, the Company does not hold investments in any subsidiary, associate or joint ventures, as at 31st March, 2023, as defined under Companies Act, 2013. Hence reporting under clause 3(ix)(e) of the Order is not applicable.

(f) On an overall examination of the financial statements of the Company, the Company does not hold investments in any subsidiary, associate or joint ventures, as at 31st March, 2023, as defined under Companies Act, 2013. Hence reporting under clause 3(ix)(f) of the Order is not applicable

(x) (a) The Company has not raised any moneys by way of initial public offer or further public offer including debt instruments during the year. Hence reporting under clause 3(x)(a) of the Order is not applicable.

(b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally). Hence reporting under clause 3(x)(b) of the Order is not applicable.

(xi) (a) During the course of our examination of the books and records of the Company, carried out in accordance with generally accepted auditing practices in India and to the best of our knowledge and belief and according to the information and explanations given to us, we have neither come across any material fraud by the Company or on the Company by its officers or employees noticed or reported during the year nor have we been informed of such case by the management.

(b) To the best of our knowledge and belief and according to the information and explanations given to us, no report under sub-section (12) of section 143 of the Companies Act, 2013, has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit & Auditors) Rules, 2014 with the central government, during the year and up to the date of this report.

(c) As represented to us by the management, there are no whistle blower complaints received by the Company during the year.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

(xiii) In our opinion, the Company is in compliance with the provisions of section 177 and 188 of the Companies Act, 2013 with respect to applicable transactions with related parties and the details of related party transactions have been disclosed in note no. 28 in the standalone financial statements as required by the applicable accounting standards.

(xiv) (a) In our opinion and based on our examination, though the company is required to have an internal audit system under section 138 of the Act, it does not have the same established during the year.

(b) The Company is required to appoint an internal auditor in accordance with the provisions of section 138 of the Act. However, during the year under audit, the company has not appointed any

internal auditor and accordingly no reports of internal auditor were made available to us for our consideration.

(xv) According to the information & explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected to its directors and hence the provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

(xvi) (a) & (b) In our opinion, the Company is not required to be registered under section 45-1(A) of the Reserve Bank of India Act, 1934. Hence reporting under clause 3(xvi)(a) & (b) of the Order is not applicable.

(c) & (d) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, clause 3(xvi)(c) & (d) of the Order is not applicable.

(xvii) The Company has not incurred cash losses during the financial year covered by our audit. However, the Company had incurred cash loss of Rs. 84.15 lakhs during the immediately preceding financial. The above figures have been computed without considering income earned on account of exceptional items.

(xviii) There has been no resignation of the statutory auditors of the Company during the year. Accordingly, clause 3(xviii) of the Order is not applicable.

(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 payment 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, as mentioned in the ‘Basis for qualified opinion paragraph of this report, in our opinion material uncertainty exists as on the date of the audit report that the 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.

(xx) In our opinion and according to the information and explanations given to us, the provisions of section 135 of the Companies Act, 2013 are not applicable to the Company. Accordingly, clauses 3(xx)(a) and 3(xx)(b) of the Order are not applicable.

For Jayesh Dadia & Associates LLP

Chartered Accountants

Firms Registration No. 121142W / W100122

Rahil Dadia

Partner

Membership No. 143181

Place of Signature: Mumbai

Date: 26th May, 2023

UDIN: 23143181BGVJBV1576

Annexure - B to the Independent Auditors Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) referred to in paragraph 2 (f) on Report on Other Legal and Regulatory Requirements of our report

Disclaimer of Opinion

We have not audited the internal financial controls over financial reporting with reference to the standalone financial statements of PAE Limited (“the Company”) as of 31stMarch, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

According to the information and explanation given to us, the Company has not established its internal financial controls over financial reporting on criteria based on or 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. Because of this reason, we are unable to obtain sufficient appropriate audit evidence to provide a basis for our opinion whether the Company had adequate internal financial controls over financial reporting and whether such internal financial controls were operating effectively as at 31st March, 2023.

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 (TCAF). 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.

Auditors 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 judgment, 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 Internal 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 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 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 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.

For Jayesh Dadia & Associates LLP

Chartered Accountants

Firms Registration No. 121142W / W100122

Rahil Dadia

Partner

Membership No. 143181

Place of Signature: Mumbai

Date: 26th May, 2023

UDIN: 23143181BGVJBV1576