Patron Exim Ltd Auditor Reports

TO

THE BOARD OF DIRECTORS OF PATRON EXIM LIMITED CIN : U24100GJ2022PLC134939

Report on the Financial Statements

We have audited the Financial Statements of PATRON EXIM LIMITED U24100GJ2022PLC134939 (the Company), which comprise the Balance Sheet as at 31st March 2025, the Statement of Profit and Loss, Statement of Cash Flows for the year then ended and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

Qualified Opinion

In our qualified 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 Accounting Standards prescribed under section 133 of the Act and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, the Profit and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules there under, 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.

Our qualified opinion is based on the matters described in Annexure 1 to this report.

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 key audit matter to communicate in our report as under

1. Non payment of previous year income tax dues Rs. 92.14 lacs & TDS Rs. 27.69 lacs. Further online outstanding demand for AY2023-24 Rs.15.37crores income tax and Rs2.61crores interest demand unpaid for which company has not produce appeal papers and not considered as contingent liability.

2. The transactions of unsecured loans and advances Rs. 12.96 crores (including current year Rs. 8.18 crores) to related parties having no any income and are subject to justification of disbursement and recovery.

3. No provisions for interest have been made on unsecured loan and interest receivable on loan and advances.

4. The advances to creditors Rs. 10.36 crores (including current year Rs. 5.52 crores) to various parties (including Rs. 4.87 crores to related parties) are subject to justification of disbursement and recovery.

5. The earlier years unsecured investment Rs. 8.67 crores outstanding from two parties having no actual income and are subject to justification of disbursement and recovery.

6. Purchase turnover as per GST data not tallied and which are subject to verification and reconciliation.

7. In debtors and creditors ledgers the transaction other then sales and purchases are not according to accounting standard to show nature of transaction, there are Rs. 41.36 lacs debit balances in creditors ledgers.

8. All related party transactions shown in para 2 of notes on accounts.

9. Other remarks as per Annexure - 1 of this report.

Information Other than the Standalone 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 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. Except remarks stated in Annexure - 1.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, considered whether the other information is materially inconsistent with the 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 reported in Annexure - 1 and in key matters.

Annexure - 1 to the financial results for the year ended on March 31, 2025. (Matters on the basis on which qualified opinion given.)

(Pursuant to the regulation 33 of the SEBI (Listing obligation and disclosure requirement) regulations) 2015 to the board of directors of PATRON EXIM LIMITED and under Companies Act, 2013.

1. The Company has failed to comply with the mandatory requirements of section 128(5) of the Companies Act, 2013, and the Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014. Specially, the company has not implemented accounting software capable of maintaining a nondisable audit trail , including a comprehensive edit log with date and time stamps for all modifications to the books of account, consequently, we are unable to assess the reliability and accuracy of the audit trail.

2. Advances to creditors amounting to Rs. 976.44 Including Rs. 555.67 to related parties given to suppliers are subject to confirmations and out of this Rs. 420.77 lacs are estimated doubtful recovery from other then related parties. Hence, we are unable to determine whether any adjustments are necessary and their potential impact on the financial statements.

3. The company (erstwhile Name M/s Arvind Traders has received and assessment order from the Goods and services Tax (GST) department dated February 2, 2025, pertaining to the financial year 2017-18 , for demand of Rs. 2198.06 lacs. This matter is currently subject to litigation, we are unable to assess the necessity of any potential adjustments to the financial statements.

4. As of the financial year 2023-24 the companys books of accounts reflect an outstanding income tax provision of Rs.92.14 lakhs. furthermore, according to the Income Tax Departments records, there is a disputed income tax demand of Rs. 1537.17 lakhs, along with associated interest of Rs. 245.95 lakhs, which are currently unpaid and not recorded in the companys accounts. Given that these matters are under litigation (U/s 154), we are unable to assess whether any adjustments the recorded or unrecorded liabilities or the financial results are necessary.

5. Debtors outstanding from the opening balance amount to Rs. 315.66 lakhs, primarily comprising related party transactions. These amounts have been outstanding for a significant period. The company is in the process of reconciliation and obtaining confirmations: however, these have not been received as of the reporting date, Consequently, we are unable to quantify the financial impact, if any, on the companys financial position.

6. The company has deducted / collected TDS and TCS amounting to Rs. 34.39 loakhs , however the amounts remain unpaid to the government and have been outstanding since the opening balance, including the current year. Consequently, we are unable to determine whether any adjustments are necessary concerning the recorded liability and its potential impact on the financial statements.

7. For the financial year ended March 31, 2025 the company has appointed an internal auditor as mandated by section 138 of the companies Act, 2013 , Consequently, no internal audit report have been issued. The non - compliance exposes the company to increased risks, including potential financial irregularities, operational inefficiencies, and regulatory penalties.

8. The company has reported short - term loans totaling Rs. 1661.04 lakhs under current loans out of which loan totaling Rs. 1616.04 lakhs given to nine related parties. However, the company has not adhered to the provisions of section 177, 185, 186, 188, and 189 of the companies Act 2013.

9. As explain to us online outstanding demand for AY2023-24 Rs.15.37crores income tax and Rs2.61crores interest demand unpaid for which company has not produced appeal papers and not considered as contingent liability.

10. There were GST demand to FY. 2017-18 for Rs. 21.98 crores in the name of Arvind traders (erstwhile firm) for which appeal has been filed. The GST department with order dated 28/01/2025 raise penalties and tax demands against 34 entities including 24 group entities of Patron Exim Ltd for suspicious sales.

11. Investment Rs. 867.00 lakhs to two parties including Rs 417.00 lacs to related parties since long having no income in earlier years. In current year 8.67 lakhs J. V. for receivable income having no details/agreements. Therefore, results may be affected due to non-recovery of income / investment if any.

12. There was old stock which was verified by the third-party CA. However, for old stock valued Rs.2.23 crores (at cost) for which we are unable to justify the realizable value. The said stock not insured.

13. As per cashflow statement there were negative cash flow, due to increase of loan and advances Rs. 3.65 crores.

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE(I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013

Managements Responsibility for the 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 financial statements that give a true and fair view of the financial position , financial performance 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, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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.

The Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities

Our objectives are to obtain reasonable assurance about whether the 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 financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement 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 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 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 the financial statements, including the disclosures, and whether the 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 reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work 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 financial statements of the current period and are therefore the key audit matters and qualified report. 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

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 Companies Act, 2013. We give in the Annexure A statements on the matters specified in paragraphs 3 and 4 of the order, to the extent applicable.

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 so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the representations received none of the directors is disqualified as 31/03/2025 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 other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has not disclosed the impact of pending litigations on its financial position in its financial statements.

ii. The Company has not 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 has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. (a) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the key matters, qualified opinion as per Annexure -1 & notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share 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, 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.

(b) The management has represented, that, to the best of its knowledge and belief, other than as disclosed in the key matters, qualified report & 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, that 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; and

(c) Based on audit procedures which we considered reasonable and appropriate in the circumstances, nothing has come to their notice that has caused them to believe that the representations under sub-clause (i) and (ii) contain any material mis-statement.

v. The company has not declared or paid any dividend during the year in contravention of the provisions of section 123 of the Companies Act, 2013.

vi. For holding company as regard report on audit trail (Rule 11g) we report that has per provision to rule 3(1) of the companies (Account) Rules 2014 is applicable for the company. We report as under:-

• Based on our examination, which included test checks, and other generally accepted audit procedures performed by us, we report that the company has used an accounting software Tally for maintaining its books of account which has no feature of recording audit trail (edit log) facility hence the same has not operated throughout the year for all relevant transactions recorded in the software for the period from 01/04/2024 to 31/03/2025. Further, during the course of our audit, we did not come across any instance of audit trail feature being tampered with as no audit trail software facility.

• Additionally, the audit trail has not been preserved by the Company as in absence of audit trail software facility.

Annexure B to the Independent Auditors Report of even date on the Standalone Financial Statements of .

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013.

We have audited the internal financial controls over financial reporting of as of March 31,2025 in conjunction with our audit of the standalone 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.

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, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 amout the adequacy of the internal financial control system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and operating effectiveness of internal control based on the assessed risk. The procedures selected depend upon 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 not 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 not 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 no 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.

Opinion

In our opinion, the Company has, in all material respects, there were no an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were not operating effectively as at March 31, 2025, 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 issues by the Institute of Chartered Accountants of India.

	For, J M Patel & Bros.
	Chartered Accountants
	Reg. No. 107707W
Place: Ahmedabad	CA JASWANT M PATEL
Date: 23/05/2025	(PROPERITOR)
UDIN: 25030161BMIBWI7634	Mem. No. 030161