Sumeet Industries Ltd Auditor Reports

TO,

THE MEMBERS OF,

SUMEET INDUSTRIES LIMITED

Report on the Audit of Standalone Financial Statements

1. Qualified Opinion

We have audited the accompanying standalone financial statements of SUMEET INDUSTRIES LIMITED ("The Company") which comprises the Balance Sheet as on 31^st March 2024, the Statement of Profit and Loss, the Statement of Changes in Equity and Statement of Cash Flows for the year ended and the notes to the financial statements including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph and Material Uncertainty Related to Going Concern under the Emphasis of Matter paragraph below, the aforesaid standalone financial statements: (a) Are presented in accordance with the requirements by the Companies Act 2013, ("Act") in the manner so required; and (b) give a true and fair view in conformity with the Indian Accounting Standards ("IND AS") prescribed under Section 133 of the Act read with Companies (Indian Accounting Standard) Rules 2015, as amended, and other accounting principles generally accepted in India, of the state of affairs of the company as at 31 March 2024 and its Loss (financial performance including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

2. Basis for Qualified Opinion

We conducted our audit of standalone financial statements in accordance with the Standards on Auditing (SAs) issued by ICAI and 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 financial statements section of our report. We are independent of the Company in accordance with the Code of ethics issued by ICAI together with 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 obtained by us is sufficient and appropriate except:

? The company has not created any provision for interest on loan taken from bank and financial institutions for the year ending 31.03.2024. The financial impact is not quantifiable as the provision amount cannot be ascertained based on the material existing.

? The company has not created provision for Interest amounting to Rs 1,04,31,389/- (pertaining to purchases made after the CIRP period cut-off date i.e 20.12.2022) and previous pending interest amounting to Rs. 12,89,57,976/- (pertaining to purchases made before CIRP period cut-off date i.e 20.12.2022) on delayed payment of MSME dues resulting in overstatement of profit.

? The Company has not complied the disclosure for the following as per IND AS: - IND AS 36: The Company has carried out review of its assets with respect to economic performance. However detailed evaluation/working as to whether any impairment is warranted has not been made available to us. In the absence of such evaluation/working, we are unable to comment about the impact, if any, arising on account of impairment, as required to be provided under Ind AS 36 Impairment of Assets.

? Trade receivables include overdue amounts outstanding for a period of more than three years aggregating to Rs. 4,46,09,949/- receivable from its subsidiary and amount outstanding for a period of more than 1 year of Rs. 3,91,06,533/- from its customer. The company has not made any Expected Credit Loss provision till date as the management feels that no provisions would be required as per their policy of recognition of ECL. In the absence of sufficient appropriate audit evidence to corroborate managements assessment of recoverability of these balances and having regard to the age of these balances, we are unable to comment on the carrying value of above receivables and the shortfall, if any, on the amount that would be ultimately realizable from the said customers.

? With reference to the Standalone Financial Statements, in respect of investments held in subsidiary of Rs. 22,73,77,500/- and in respect of Trade receivables of Rs.4,46,09,494/- from its subsidiary as at March 31, 2024, the business continuity of such subsidiary is significantly dependent upon the financial support of the Company to enable to meet its liabilities as and when they fall due. No impairment assessment was carried out on the Investments held in subsidiary and Trade Receivable. Therefore, we are unable to comment upon the carrying value of these investments and Trade receivables pertaining to the Subsidiary.

Emphasis of Matter:

We draw attention to the following matters: -

? The Standalone Financial Statement explains that the Company was admitted under the CIRP vide order dated 20.12.2022 as the Corporate Debtor was admitted into CIRP, in an application filed by the Financial Creditor, namely, IDBI Bank u/s 7 of the IB Code, triggering moratorium under section 14 of the IB Code and Mr. Kuresh Hatim Khambati was appointed as Interim Resolution Professional (hereinafter referred to as "IRP"), who made a public announcement in Form-A on 28.12.2022

? After collating the claims received from the creditors of the Corporate Debtor, the IRP formed the CoC on 18.01.2023 comprised of Six Financial Creditors, namely: Union Bank of India with 4.61% voting share, Bank of Baroda with 60.98 % voting share, IDBI Bank Limited with 25.10 % voting share, Canara Bank with 3.04 % voting share, Central Bank of India with 4.68 % voting share, Oldenburgische Landesbank AG with 1.59 % voting share (with which Bremer Kredibank AG, formerly known as KBC Bank Deutschland AG merged).

? The 1st CoC meeting was held on 24.01.2023 wherein the members of the COC did not confirm the IRP as RP. Further, in the 2nd COC meeting was held on 09.02.2023 in which COC passed the resolution for the appointment and replacement of IRP from RP Mr. Satyendra Prasad Khorania. It is also decided by the CoC for the appointment of two Registered Valuers to carry out the valuation. The 03rd CoC meeting was held on 04.03.2023 wherein the COC approved the resolution for publication of FORM- G along with the eligibility criteria and the same was published on 12.03.2023.

? The Resolution Professional had examined and admitted the claims from Secured Financial Creditors amounting to Rs. 583.48 Cr, Unsecured Financial Creditors amounting to Rs. 107.61 Cr and from Operational Creditors (other than Workmen, Employees and Government dues) amounting to Rs. 36.64 Cr. The variations between balances as per books and amount claimed by the Secured financial creditors was due to charging of interest and other charges claimed by the financial creditors and by unsecured financial creditors amounting was due to claim by Bank of Baroda against Corporate Guarantee by Company for Sumeet Global Pte Ltd and claim by Sitaram Prints Pvt. Ltd. against Corporate Guarantee given in favour of secured creditors of company, as explained to us.

? Then an application was been filed by Mr. Satyendra Prasad Khorania, Resolution Professional of M/s. Sumeet Industries Ltd. under section 30(6) read with Section 31 and 60(5) of Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as IBC, 2016) for approval of the Resolution Plan submitted by the M/s Eagle Fashions Private Limited, Eagle Fibers Limited, Eagle Synthetics Private Limited, Padmini Polytex Private Limited, Eagle Sizers & JPB Fibers Jointly as Eagle Group / Successful Resolution Applicant(hereinafter referred to as "SRA") which was approved by Committee of Creditors ("COC") of Sumeet Industries Limited ("Corporate Debtor"). However, pertaining to the observations as mentioned in the points a) to k) of Para 20 of the NCLT order pronounced on 05.04.2024 the application was rejected. The company have filed an appeal before the NCLAT against the order passed vide Company Appeal (AT) (Insolvency) No. 922 of 2024 registered on 29.04.2024 and the order is awaited.

? As stated in the Standalone Ind AS Financial Statements which indicate that as the Net worth has become negative, the existence of a material uncertainty that may cast significant doubt about the Holding Companys ability to continue as a going Concern. Adding the Holding Companys ability to continue as a going concern is dependent upon many factors including continued support from the financial creditors, operational creditors and approval of a viable resolution plan by the prospective investor. These events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Holding Companys ability to continue as a going concern. In view of the opinion of the Directors and KMPs, resolution and revival of the Holding Company is possible in foreseeable future. Further the RP is required to make every endeavor to protect and preserve the value of the property of the corporate debtor and manage the operations of the corporate debtor as a going concern. In view of the aforesaid details and pending outcome of the CIRP at NCLAT, the financial statements of the Holding Company have been prepared on going concern basis.

? We have not received the bank statement and confirmation of balance for the balance lying in Central Bank amounting to Rs. 10,000/-. In the absence of sufficient appropriate audit evidence, we are unable to determine any possible impact thereof on the loss for the year ended March 31, 2024 and on the carrying value of bank balance as on that date.

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

3. Information other than the Financial Statements and Auditors Report Thereon

The Companys Board of Directors and Management is responsible for the preparation of the other information. The other information comprises the information obtained at the date of this auditors report, but does not include the financial statements and our auditors report thereon.

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

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. 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.

4. Responsibility of Management and Those Charged with Governance for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, change in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act, read with rule 7 of Companies (Accounts) Rules, 2014 and the companies (India Accounting Standards) Rules 2015, as amended.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing 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 are also responsible for overseeing the companys financial reporting process.

5. Auditors Responsibility for the Audit of the 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 financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism 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 Act, we are also responsible for explaining 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 standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

? Materiality is the magnitude of the misstatements in the 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 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 consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter 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.

6. Report on Other Legal and Regulatory Requirements

1. In our opinion, the provision of the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Sub-section (11) of Section 143 of the Act, 2013 are applicable to the company. Refer "Annexure A", a statement on the matters specified in the paragraph 3 & 4 of the order.

2. As required by section 143(3) of the Act, based on our audit we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive Income, the Standalone Statement of Changes in Equity and the Standalone Cash Flow Statement dealt with by this Report are in agreement with the books of account;

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

e) On the basis of written representations received from the directors as on 31 March, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2024 from being appointed as a director in terms of Section 164(2) of the Act;

f) In our opinion, the provisions of section 143(3)(i) of Companies Act, 2013 with respect to reporting about the adequacy of the internal financial controls are applicable. Refer, "Annexure B", a separate report on adequacy of internal financial controls.

g) With respect to the other matters to be included in the Auditors Report in accordance with the requirement of Section 197(16) of the Act, as mentioned, in our opinion and to the best of our information and according to the explanation given to us, no remuneration were provided to its directors during the current year.

h) With respect to 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 disclosed the impact of pending litigations on its financial position in its standalone financial statements. Refer Note No. 22(R) Provisions and Contingent Liabilities to the Standalone Financial Statements.

ii. Based on the assessment made by the company, there are no material foreseeable losses on its long-term contracts that may require any provisioning.

iii. There were no amounts which were 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, as disclosed in Note No. 30(vi) 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 persons or entities, 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 or any of such subsidiaries ("Ultimate Beneficiaries") or

? provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

b) The management has represented, that, to the best of its knowledge and belief, as disclosed in Note No. 30(vii) to the accounts, no funds have been received by the Company from any persons or entities, 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 ("Ultimate Beneficiaries") by or on behalf of the Funding Party or

? provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

c) Based on such audit procedures as 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 (iv)(a) and (iv)(b) contain any material mis-statement.

v. The company has not paid/declared any dividend during the year and hence compliance of section 123 of the Act is not applicable.

vi. Based on our examination which included test checks, the company, has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

FOR H T K S & CO

CHARTERED ACCOUNTANTS

CA. HARISHANKAR TOSNIWAL

(PARTNER)

M. NO. : 055043

FRN : 111032W

PLACE : SURAT

DATE : 28-05-2024

UDIN : 24055043BKBGOE1964

ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT

The Annexure referred to in our report to the members of SUMEET INDUSTRIES LIMITED for the year ended 31^st March, 2024.

To the best of our information and according to the explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, we state that:

(i) (a) (A)The Company has maintained proper records showing full particulars, including Quantitative details and situation of Property, Plant and Equipment.

(B) The Company has maintained proper records showing full particulars of Intangible assets.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has a programme of physical verification of its Property, Plant and Equipment so as to cover all the assets once every three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain Property, plant and equipment were verified during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties disclosed in the financial statements are held in the name of the Company.

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not revalued its property, plant and equipment and Intangible assets during the year.

(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no proceedings initiated or are pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made there under.

(ii)

(a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable and procedures and coverage as followed by management were appropriate. No discrepancies were noticed on verification between the physical stocks and the book records that were 10% or more in the aggregate for each class of inventory.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been sanctioned any working capital limit in excess of five crore rupees, in aggregate, from banks and financial institutions on the basis of security of Stocks, Debtors and Creditors at any point of time of the year. Accordingly, Clause 3(ii)(b) of the Order is not applicable to the Company.

(iii)According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has made investment and granted advances in the nature of unsecured loans to any other parties during the year. The company has not provided any guarantee or security during the year.

a) Based on the audit procedures carried on by us and as per the information and explanations given to us, the Company has provided the following unsecured loan as below:

Particulars	Guarantees	Security	Loans	Advances in nature of Loan
Aggregate amount granted during the year
-Others	-	-	Rs.14,235/-	-
Balance Outstanding at Balance Sheet date
-Others	-	-	Rs.4,49,005/-	-

b) A ccording to the information and explanations given to us and based on the audit procedures conducted by us, we are of the opinion that the investments made, guarantees provided, security given and the terms and conditions of the grant of all loans and advances in the nature of unsecured loans are not prejudicial to the companys interest.

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the unsecured loan granted by the company are repayable on demand and hence no repayment schedule of principal and interest have been stipulated.

d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the loan is repayable on demand and hence no overdue amount for more than ninety days in respect of loans given is applicable and correspondingly Clause (iii)(d) of the Order is not applicable

e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the loan is repayable on demand and hence applicability of loan or advance granted by the Company being renewed or extended or fresh loans granted to settle the overdues of existing loans does not exist and hence Clause (iii)(e) of the Order is not applicable.

f) The Company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment during the year. Hence, reporting under clause 3(iii)(f) is not applicable.

(iv)According to the information and explanations given to us and on the basis of our examination of the records, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of loans granted and investments made. The company has not made any new guarantees and provided any security during the year. The company has not provided any loan to the directors, hence clause 3(iv) is not applicable.

(v) The Company has not accepted any deposits or amounts which are deemed to be deposits from the public. Accordingly, clause 3(v) of the Order is not applicable. (vi)According to the information and explanations given to us, the company is maintaining cost records as prescribed under provisions of Sec 148(1) of the Companies Act, 2013. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii)

(a) The Company is regular in depositing undisputed statutory dues including provident fund, employees state insurance, goods and services tax, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, to the appropriate authorities. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.

(b) There are no dues in respect of income-tax, sales-tax, service tax, duty of customs, duty of excise and value added tax that have not been deposited with the appropriate authorities on account of any dispute.

(viii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not surrendered or disclosed any transactions, previously unrecorded as income in the books of account, in the tax assessments under the Income-tax Act, 1961 as income during the year.

(ix)

(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has defaulted in repayment of loans and borrowings to financial institutions, banks, etc. The detail of period and the amount of default as ascertained by the management is as follows: -

Nature of borrowing including debt securities	Name of Lender	Amount not paid on due date	Whether principal or interest	No. of days delay or unpaid	Remarks, if any
Term Loan	BOB Term Loan	10,85,00,000.00	Principal	365	NPA declared by bank
Term Loan	Canara Bank Term Loan (Texturising)	40,44,678.00	Principal	365	NPA declared by bank
Term Loan	IDBI Corporate Loan	15,27,77,770.00	Principal	365	NPA declared by bank
Term Loan	Bremer Kredit Bank AG	1,38,22,890.35 [1,64,078.11 EURO]	Principal	365	Overdue Loan
Term Loan	ECB London Term Loan (BOB)	29,77,56,218.00 [39,28,571 USD]	Principal	365	Loan recalled by Bank
C/C	Bank of Baroda C/C A/C	1,74,77,96,050.47	Principal	365	NPA declared by bank
C/C	Central Bank of India C/C A/C	22,60,86,277.31	Principal	365	NPA declared by bank
C/C	IDBI Bank C/C A/C	96,77,12,435.28	Principal	365	NPA declared by bank
C/C	Union Bank of India C/C A/C	22,94,47,171.00	Principal	365	NPA declared by bank
Inland L/C	Canara Bank- Inland L/C A/C	15,90,95,959.26	Principal	365	NPA declared by bank

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

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

(d) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term purposes by the Company.

(e) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries as defined under the Companies Act, 2013. Accordingly, Clause 3(ix)(e) of the Order is not applicable.

(f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries as defined under the Companies Act, 2013. Accordingly, clause 3(ix)(f) of the Order is not applicable.

(x)

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

(xi)

(a) Based on the examination of books and records of the company, no fraud by the Company and on the Company has been noticed or reported during the year.

(b) According to the information and explanations given to us, no report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and 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) According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause

(xii) of the Order is not applicable (xiii) In our opinion and according to the information and explanations given to us, the transactions with related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013, where applicable, and the details of the related party transactions have been disclosed in the financial statements as required by the applicable Indian Accounting Standards.

(xiv) (a) Based on information and explanation provided to us and our audit procedures, in our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(b) We have considered the internal audit reports of the Company issued till date for the period under audit

(xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected to its directors and hence, provisions of Section 192 of the Companies Act, 2013 are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 as nature of the business is not banking and finance. Hence, reporting under clause 3(xvi)(a), (b) and (c) of the Order is not applicable. In our opinion, there is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under clause 3(xvi)(d) of the Order is not applicable.

(xvii) The Company has incurred cash losses during the financial year covered by our audit and the immediately Preceding financial year.

(xviii) There has been no resignation of the statutory auditors 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 realisation 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, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that 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. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) The provisions of CSR as per 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 H T K S & CO

CHARTERED ACCOUNTANTS

CA. HARISHANKAR TOSNIWAL

(PARTNER)

M. NO. : 055043

FRN : 111032W

PLACE : SURAT

DATE : 28.05.2024

UDIN : 24055043BKBGOE1964

AUDITORS REPORT- ANNEXURE B

TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF THE SUMEET INDUSTRIES LIMITED

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

We have audited the internal financial controls over financial reporting of SUMEET INDUSTRIES LIMITED ("The Company") as on March 31, 2024 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 (ICAI). 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 about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of 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.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2024, 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.

FOR H T K S & CO

CHARTERED ACCOUNTANTS

CA. HARISHANKAR TOSNIWAL

(PARTNER)

M. NO. : 055043

FRN : 111032W

PLACE : SURAT

DATE :

UDIN : 24055043BKBGOE1964