Sarup Industries Auditors Report


To the Members of

SARUP INDUSTRIES LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the Financial Statements of SARUP INDUSTRIES LIMITED ("the Company"), which comprisethe balance sheet as at 31st March 2024, and the statement of profit and loss, (statement of changes inequity) and statement of cash flows for the year then ended, and notes to the Financial Statements, includinga summary of significant accounting policies and 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 aforesaidFinancial Statements give the information required by the Companies Act, 2013 in the manner so requiredand give a true and fair view in conformity with the accounting principles generally accepted in India, of thestate of affairs of the Company as at March 31, 2024, and its profit/loss, (changes in equity) and its cash flowsfor the year ended on that date.

Basis for Opinion

We conducted our audit of the Financial Statements in accordance with the Standards on Auditing (SAs)specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards arefurther described in the Auditors Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued by the Institute ofChartered Accountants of India together with the ethical requirements that are relevant to our audit of theFinancial Statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and wehave 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 ouropinion.

Emphasis of Matter

We draw attention to:

a) Note no 2.9 of the accompanying Ind AS financial statements which describes that Board Resolutionpassed in Board Of Directors meeting Dt. 30.05.2023, wherein it has been decided by the Board toconvert the Capital WIP (Mall under Construction) at Jalandhar, amounting Rs. 1619.63 Lakhs/- toStock in Trade. Due to this conversion, Inventories as at 31.03.2024 includes Rs. 1619.63 Lakhs /-transferred on account of conversion of Capital WIP (Mall under construction) to Stock in Trade. Sincethe Capital WIP has been transferred to Stock in Trade, therefore there is no Capital WIP as at31.03.2024.

b) Note no 2.16 of the accompanying Ind AS financial statements which describes that Out of the totalinterest paid, amounting to Rs. 195.79 Lakhs, Rs. 92.94 Lakhs has been paid to the Related parties.

Our opinion is not modified in respect of the above matters.

"Information Other than the Financial Statements and Auditors Report Thereon"

The Companys Management and Board of Directors are responsible for the other information. The otherinformation comprises the Boards Report, Management Discussion and Analysis, Corporate GovernanceReport and Business Responsibility Report, but does not include the financial statements and auditors reportthereon, which we obtained prior to the date of this auditors report, and the remaining sections of theCompanys Annual Report, which are expected to be made available to us after that date.

Our opinion on the Financial Statements does not cover the other information and we do not express anyform of assurance conclusion thereon.

In connection with our audit of the Financial Statements, our responsibility is to read the other informationand, in doing so, consider whether the other information is materially inconsistent with the FinancialStatements, 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 otherinformation, we are required to report that fact. We have nothing to report in this regard.

Managements Responsibility for the Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the CompaniesAct, 2013 ("the Act") with respect to the preparation of these Financial Statements that give a true and fairview of the financial position, financial performance, (changes in equity) and cash flows of the Company inaccordance with the accounting principles generally accepted in India, including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and design, implementation andmaintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracyand completeness of the accounting records, relevant to the preparation and presentation of the FinancialStatements that give a true and fair view and are free from material misstatement, whether due to fraud orerror.

In preparing the Financial Statements, the Board of Directors is responsible for assessing the Companysability to continue as a going concern, disclosing, as applicable, matters related to going concern and usingthe going concern basis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also 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 the Financial Statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditors report that includesour opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conductedin accordance with SAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if, individually or in the aggregate, they could reasonably beexpected 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 professionalskepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Financial Statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence 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 mayinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we arealso responsible for expressing our opinion on whether the company has adequate internal financialcontrols system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates 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 orconditions that may cast significant doubt on the Companys ability to continue as a going concern. Ifwe conclude that a material uncertainty exists, we are required to draw attention in our auditorsreport to the related disclosures in the Financial Statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditors report. However, future events or conditions may cause the Company to cease to continueas a going concern.

• Evaluate the overall presentation, structure, and content of the Financial Statements, including thedisclosures, and whether the Financial Statements represent the underlying transactions and eventsin a manner that achieves fair presentation.

• Materiality is the magnitude of misstatements in the Financial Statements that, individually or inaggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of theFinancial Statements may be influenced. We consider quantitative materiality and qualitative factorsin

o Planning the scope of our audit work and in evaluating the results of our work; ando to evaluate the effect of any identified misstatements in the Financial Statements.

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

We also provide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, relatedsafeguards.

From the matters communicated with those charged with governance, we determine those matters thatwere of most significance in the audit of the Financial Statements of the current period and are therefore thekey audit matters. We describe these matters in our auditors report unless law or regulation precludes publicdisclosure about the matter or when, in extremely rare circumstances, we determine that a matter shouldnot be communicated in our report because the adverse consequences of doing so would reasonably beexpected 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 CentralGovernment of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the

"Annexure A" statement on the matters specified in paragraphs 3 and 4 of the Order, to the extentapplicable.

A. 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 ourknowledge 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 asit appears from our examination of those books [and proper returns adequate for the purposes of ouraudit have been received from the branches not visited by us.]

c) The reports on the accounts of the branch offices of the Company audited under Section 143(8) ofthe Act by branch auditors have been sent to us and have been properly dealt with by us in preparingthis report.

d) The Balance Sheet, the Statement of Profit and Loss, (the Statement of Changes in Equity) and theCash Flow Statement dealt with by this Report are in agreement with the books of account [and withthe returns received from the branches not visited by us].

e) In our opinion, the aforesaid Financial Statements comply with the Accounting Standards specifiedunder Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

f) On the basis of the written representations received from the directors as on 31st March 2024 takenon record by the Board of Directors, none of the directors is disqualified as on 31st March 2024 frombeing appointed as a director in terms of Section 164(2) of the Act.

With respect to the adequacy of the internal financial controls over financial reporting of the Company andthe operating effectiveness of such controls, refer to our separate Report in "Annexure B"

B. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our informationand according to the explanations given to us.

a) The Company does not have any pending litigations which would impact its financial position.

b) The Company did not have any long-term contracts including derivative contracts for which therewere any material foreseeable losses.

c) There were no amounts transferred to the Investor Education and Protection Fund by the Companyduring the year.

d) The management has represented that, to the best of its knowledge and belief, other than asdisclosed in the notes to the accounts, no funds have been advanced or loaned or invested (eitherfrom borrowed funds or share premium or any other sources or kind of funds) by the company to orin any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with theunderstanding, 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 whatsoeverby or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or thelike on behalf of the Ultimate Beneficiaries

e) The management has represented, that, to the best of its knowledge and belief, other than asdisclosed in the notes to the accounts, no funds have been received by the company from anyperson(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, lendor invest in other persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf ofthe Ultimate Beneficiaries;

f) Based on such audit procedures which we have considered reasonable and appropriate in thecircumstances, nothing has come to our notice that has caused us to believe that the representationsunder sub-clause (i) and (ii) contain any material misstatement.

g) The company has not declared or paid any dividend during the year is in accordance with section 123of the Companies Act 2013", Hence clause not applicable.

FOR YK SUD & CO
CHARTERED ACCOUNTANTS
(Firm Registration No. 0000047N)
Sd/-
YOGINDER KUMAR SUD
Prop
Place: Jalandhar Membership No.: 016875
Dated: 30-05-2024 UDIN:- 24016875BKGUCQ5520

Annexure A to the Independent Auditors Report on the Financial Statements of SARUP INDUSTRIES

LIMITED for the year ended 31 March 2024

The Annexure referred to in our Independent Auditors Report to the members of SARUP INDUSTRIES LIMITEDon the financial statements for the year ended 31st March 2024, we report that

1. (a) (A) The Company has maintained proper records showing full particulars, including quantitative detailsand situation of Property, Plant and Equipment and relevant details of right-of-use assets.

(B) The Company has intangible asset.

(b) The Company has a program of verification to cover all the items of Property, Plant and Equipment in aphased manner over a period of 3 to 5 years which, in our opinion, is reasonable having regard to the size ofthe Company and the nature of its assets. Pursuant to the program, certain Property. Plant and Equipmentwere physically verified by the management during the year. According to the information and explanationsgiven to us, no material discrepancies were noticed on such verification.

(c) Based on the examination of the registered sale deed/ transfer deed/ conveyance deed provided to us, wereport that, the title deeds, of all the immovable properties (other than immovable properties where theCompany is the lessee, and the lease agreements are duly executed in favour of the Company) disclosed in thefinancial statements included in Property, Plant and Equipment are held in the name of the Company as at thebalance sheet date.

(d) The Company has not revalued its property. Plant and Equipment (including Right-of-Use assets) andintangible assets during the year.

(e) No proceedings have been initiated or are pending against the Company as at 31st March 2024 forholdingany benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rulesmade thereunder.

2. (a) The inventories have been physically verified by the management during the year. In our opinion andbased on information and explanations given to us, the coverage and procedure of such verification by themanagement is appropriate having regard to the size of the Company and the nature of its operations. Nodiscrepancies of 10% or more in the aggregate for each class of inventories were noticed on such physicalverification of inventories.

(b) According to the information and explanations given to us, the Company has been sanctioned/ renewedworking capital limits in excess of 5 crores, in aggregate, at points of time during the year, from bank(s) on thebasis of security of current assets. In our opinion and according to the information and explanations given tous, the quarterly statements filed by the Company with the bank(s) are reconciled with the audited books ofaccount of the Company of the respective quarters.

3. The Company has not made any third-party investment or provided any third-party guarantee or security orgranted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, LimitedLiability Partnerships, or any other parties during the year

4. According to the information and explanations given to us, there is no loan to any director including entitiesin which the directors are interested. So, the provisions of section 185 and 186 of the Act, in respect of thesaid loans and advances given, investments made, guarantees & securities given are not applicable to theCompany.

5. In our opinion and according to the information and explanations given to us, the company has compliedwith the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any otherrelevant provisions of the Companies Act, 2013 and the rules framed there under with regard to the depositsaccepted from public.

6. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (CostRecords and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) ofSection 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost recordshave been made and maintained.

7. (a) The Company does not have liability in respect of Service tax, Duty of excise, Sales tax and Value addedtax during the year since effective 1 July 2017, these statutory dues have been subsumed into GST.

According to the information and explanations given to us and on the basis of our examination of the recordsof the Company, in our opinion amounts deducted / accrued in the books of account in respect of undisputedstatutory dues including GST, Provident Fund, Employees State Insurance, Income-Tax, Duty of Customs, Cessand other statutory dues have been regularly deposited by the Company with the appropriate authorities.According to the information and explanations given to us and on the basis of our examination of the recordsof the Company, no undisputed amounts payable in respect of GST, Provident fund, Employees StateInsurance, Income-Tax, Duty of Customs, Cess, and other statutory dues were in arrears as at 31 March 2024for a period of more than six months from the date they became payable.

(b) The Company has not any disputed Liabilities, which not provided as expense in the accounts.

8. There were no transactions relating to previously unrecorded income that were surrendered or disclosed asincome in the tax assessments under the Income Tax Act, 1961 (43 of 1961) during the year.

9. (a) According to the information and explanations given to us and on the basis of our examination of therecords of the Company, the Company has not defaulted in repayment of loans and borrowing or in thepayment of interest thereon to any lender.

(b) According to the information and explanations given to us and on the basis of our examination of therecords of the Company, the Company has not been declared a wilful defaulter by any bank or financialinstitution or government or government authority.

(c) In our opinion and according to the information and explanations given to us by the management, termloans were applied for the purpose for which the loans were obtained.

(d) On an overall examination of the Financial Statements of the Company, funds raised on short-term basishave, prima facie, not been utilised during the year for long-term purposes by the Company.

(e) The Company has not taken any funds from any entity or person on account of or to meet the obligationsof its subsidiaries or associates during the year and hence, reporting under clause (ix)(e) of the Order is notapplicable.

(f) The Company has not raised loans during the year on the pledge of securities held in its subsidiaries orassociate companies.

10. (a) The Company has not raised any moneys by way of initial public offer or further public offer (includingdebt instruments). Accordingly, clause 3(x)(a) of the Order is not applicable.

(b) According to the information and explanations given to us and on the basis of our examination of therecords of the Company, the Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year. Accordingly, clause 3(x)(b) of the Order is notapplicable.

11. (a) To the best of our knowledge, no fraud by the Company and no material fraud on the Company hasbeen noticed or reported during the year.

(b) To the best of our knowledge, no report under sub-section (12) of section 143 of the Companies Act, 2013has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 withthe Central Government, during the year and up to the date of this report.

(c) There was no whistle blower complaint received by the Company during the year.

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

13. In our opinion, the Company is in compliance with Section 177 and 188 of the Companies Act, whereapplicable, for all transactions with the related parties and the details of related party transactions have beendisclosed in the Financial Statements as required by the applicable accounting standards.

14. (a) In our opinion, the Company has an adequate internal audit system commensurate with the size andthe nature of its business.

15 In our opinion, during the year, the Company has not entered into any non-cash transactions with any of itsdirectors or persons connected with such directors and hence provisions of section 192 of the Companies Act,2013 are not applicable to the Company.

16. The Company is not required to be registered under section 45-A of the Reserve Bank of India Act, 1934Hence, reporting under clause (xvi)(a), (b), (c) and (d) of the Order are not applicable.

17. The Company has incurred cash losses of Rs. 84.43 lakhs during the financial year covered by our auditand Rs. 158.66 lakhs during the immediately preceding financial year.

18. There has been no resignation of the statutory auditors of the Company during the year.

19. On the basis of the financial ratios, ageing and expected dates of realization of financial assets andpayment of financial liabilities, other information accompanying the financial statements and our knowledgeof the Board of Directors and management plans and based on our examination of the evidence supportingthe assumptions, nothing has come to our attention, which causes us to believe that any material uncertaintyexists as on the date of the audit report indicating that Company is not capable of meeting its liabilitiesexisting at the date of balance sheet and when they fall due within a period of one year from the balancesheet date. We, however, state that this is not an assurance as to the future viability of the Company. Wefurther state that our reporting is based on the facts up to the date of the audit report and we neither giveany guarantee nor any assurance that all liabilities falling due within a period of one year from the balancesheet date, will get discharged by the Company as and when they fall due.

20. In our opinion and according to the information and explanations given to us, there is no unspent amountunder sub-section (5) of section 135 of the Act pursuant to any project. Accordingly, clauses 3(xx)(a) and3(xx)(b) of the Order are not applicable.

21. There has been no qualification or adverse remark by the respective auditors in the Companies (AuditorsReport) Order (CARO) reports of the companies included in the financial statements.

FOR YK SUD & CO
CHARTERED ACCOUNTANTS
(Firm Registration No. 0000047N)
Sd/-
YOGINDER KUMAR SUD
Prop
Place: Jalandhar Membership No.: 016875
Dated: 30-05-2024 UDIN:- 23016875BGWNWZ1095

Annexure B to the Independent Auditors Report on the Financial Statements of SARUP INDUSTRIES

LIMITED for the year ended 31 March 2024

Report on the internal financial controls with reference to the aforesaid standalone financial statements

under Clause (i) of Sub-section 3 of Section 143 of the Act

Opinion

We have audited the internal financial controls with reference to financial statements of SARUP INDUSTRIESLIMITED ("the Company") as of 31 March 2024 in conjunction with our audit of the financial statements ofthe Company for the year ended on that date.

In our opinion, the Company has, in all material respects, adequate internal financial controls with referenceto financial statements and such internal financial controls were operating effectively as at 31 March 2024,based on the internal financial controls with reference to financial statements criteria established by suchcompanies/the Company considering the essential components of such internal controls stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India (the "Guidance Note").

Managements and Board of Directors Responsibilities for Internal Financial Controls

The Companys Management and the Board of Directors are responsible for establishing and maintaininginternal financial controls based on the internal financial controls with reference to financial statementscriteria established by the Company considering the essential components of internal control stated in theGuidance Note. These responsibilities include the design, implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly and efficient conduct of itsbusiness, including adherence to the companys policies, the safeguarding of its assets, the prevention anddetection of frauds and errors, the accuracy and completeness of the accounting records, and the timelypreparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference tofinancial statements based on our audit. We conducted our audit in accordance with the Guidance Note andthe Standards on Auditing, prescribed under Section 143(10) of the Act, to the extent applicable to an audit ofinternal financial controls with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to financial statements wereestablished 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 internalfinancial controls with reference to financial statements and their operating effectiveness. Our audit ofinternal financial controls with reference to financial statements included obtaining an understanding ofinternal financial controls with reference to financial statements, assessing the risk that a material weaknessexists, and testing and evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditors judgement, including the assessment of therisks of material misstatement of the standalone 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 ouraudit opinion on the Companys internal financial controls with reference to financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

A companys internal financial controls with reference to financial statements is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparation of standalonefinancial statements for external purposes in accordance with generally accepted accounting principles. Acompanys internal financial controls with reference to financial statements include those policies andprocedures that: -

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation ofstandalone financial statements in accordance with generally accepted accounting principles, and thatreceipts and expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use,or disposition of the companys assets that could have a material effect on the standalone financialstatements.

Inherent Limitations of Internal Financial Controls with Reference to Financial Statements

Because of the inherent limitations of internal financial controls with reference to financial statements,including the possibility of collusion or improper management override of controls, material misstatementsdue to error or fraud may occur and not be detected. Also, projections of any evaluation of the internalfinancial controls with reference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequate because of changesin conditions, or that the degree of compliance with the policies or procedures may deteriorate.

FORYKSUD & CO
CHARTERED ACCOUNTANTS
(Firm Registration No. 0000047N)
Sd/-
YOGINDER KUMAR SUD
Prop
Place: Jalandhar Membership No.: 016875
Dated: 30-05-2024 UDIN:- 23016875BGWNWZ1095