Sun Retail Ltd Auditor Reports

To

The Members of SUN RETAIL LIMITED

Report on the audit of the Standalone Financial Statement

1. I have audited the accompanying standalone financial result of SUN RETAIL LIMITED (the company) for the year ended 31st March, 2025 which comprise the Balance Sheet as at 31 March 2025, and the Statement of Profit and Loss (including other comprehensive income), Statement of Changes in Equity and 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 (the Financial Statements).

2. Qualified Opinion : In my opinion and to the best of my information and according to the explanations given to me these standalone financial statement, except for the matters pointed out in basis of qualified opinion paragraph, give the information required by the Companies Act, 2013 (Act) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, its Profit and cash flows for the year ended on that date.

3. As per MCA Notification dated February 16, 2015, the companies whose shares are listed on SME Platform as referred to chapter XB of SEBI (ICDR) Regulation, 2009 are exempted from compulsory adoption of IND-AS and as the company falls under exempt category, it has not adopted IND-AS for preparation of financial statement.

Basis of Qualified Opinion:

4. We have conducted my audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013 (the Act). My responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Results section of my report. I am 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 my audit of the financial results under the provisions of the Companies Act, 2013 and the Rules there under, and I have fulfilled my other ethical responsibilities in accordance with these requirements and the Code of Ethics. I believe that the audit evidence I have obtained are sufficient and appropriate to provide a basis for my qualified opinion as stated in the report.

1) During the year under consideration company has settled its liability of Rs. 5.27 lacs by writing off Creditors / payable accounts of various parties and of Rs 5.92 lacs for amount receivable from various parties. I have not been provided with confirmation or consent of parties for this transaction. In absence of any clear audit evidence regarding existence of right to receive from debtor, liability to pay toward creditors and consent of parties for recorded settlement, I am unable to comment upon existence, reliability and accuracy of recorded transaction and future liabilities as far as payable accounts written off

2) I have not been provided with clear classification of creditors such as creditor for expenses and creditor for goods with respect to registration as MSME entity. I am unable to comment upon compliances under MSMED Act. Thus in absence of clear audit evidence in this regard I am unable to determine the delay in making payment to MSME entities, liability of interest and compliance on such delayed payments in terms of provisions of MSMED Act, if any.

Further there is Outstanding TDS Account for FY 2022-23 by amount of Rs. 24.33 Lacs which arise due to some adjustment entries passed in respective financial year and no clear documentary evidences or supporting documents available for our verification. Management has no clarification regarding this liabilility.

3) There are number of parties to whom advances given without any agreement and no Interest charged on such advances/loans. Total amount of such loan accounts are Rs. 1462.00 lacs, in absence of proper loan agreement and explanations, we can not comment upon the under estimation of Interest Income and Assets of the company to the extent. Further, there are number of parties from whom unsecured loans taken for which no agreement exist. Such loans are of Rs. 517.80 Lacs [ Previous Years Rs. 206.90 Lacs ] and Closing Loans liabilities are of Rs. 517.81 Lacs for which no interest provided and in absence of any agreement, we could not comment upon the interest free loan funds and its future liablities and its nature.

4) Company has obtained DDU-GKY project from Gujarat Livelihood Promotion Company Limited for skilling Rural Youth in the state of Gujarat and project from Government of Jammu and Kashmir for skill development and has recorded grant income of Rs. 371.75 Lacs from these projects. This income has been recorded as grant income under head other income. Other current assets includes Grant receivable Rs.588.42 Lacs for Jammu Project and Rs 412.54 Lacs for Gujarat Project as on 31/03/2025. Company has incurred total booked skilled development expenses of Rs.371.75 Lacs as expenses in profit and loss account of which significant amount remains payable. I have not been provided any records, bills, evidence relating to all expenses incurred and its payments and statutory compliances for the skill development project during the year under audit. All income, expenses, Assets & Liabilities relating to Skill Development project are as provided by the management only. Further, I have not been provided audit evidence highlighting detailed terms and conditions regarding recoverability of grant Income, thus, I am unable to comment upon the same.

5. Key Audit Matter

Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the Financial Statements of the current year. These matters were addressed in the context of my audit of the Financial Statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters. The key audit matters are as under:

Closing Inventory:

The closing inventory includes slow and non-moving inventories. Further GST certificate contains no address where such huge inventories can be kept. Company has maintained its inventory in the custody of third party. In my view it is considered as key audit matter because formal agreement for maintanace of stock is not executed which may affect the interest of company for any shortage, damage in stock and its responsibility which will affect the financial statement adversely.

My audit procedure in this case includes examination of custody related documents with the third party and physical verification of inventories.

Unusual Movement in Sales:

There are unusual sales transactions by amount as well its periodicity, there are no sale transactions in total 5 months and in some month, abnormal increase or decrease in volume, which indicates unusual trend in the sales.

Further, whole sales and purchase, sales return and purchase return transactions are FOB basis, conduting delivery at sellers place without incurring any kind of goods movement related expenses. All transactions are supported by bills only. As per Management explanation, goods are purchased against sale order only and buyers have to manage goods delivery from sellers locations and the company has not to bear any kind of transportation and related expenses. In case of sales return, goods returned by parties to the seller party directly. What ever goods lying out of sales return are stored in third party s godown. The Company has not receive any written agreement for storage of goods on behalf of Sun Retail Ltd.

My audit procedure in this case includes examination of statutory records to ensure proper recording of revenue and verification of confirmation from debtors to ensure genuineness of transactions.

6. Other Information

i) The Companys Board of Directors are responsible for the other information. The other information comprises the information included in the Companys annual report, but does not include the Financial Statements and my auditors report thereon. My opinion on the Financial Statements does not cover the other information and I do not express any form of assurance conclusion thereon.

In connection with my audit of the Financial Statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information; I am required to report that fact. I have nothing to report in this regard, except reported in the basis for qualified opinion paragraph.

7. Managements Responsibilities for the Standalone Financial Results

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. 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 standalone financial results, the Board of Directors are 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 the Board of Directors 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.

8. Auditors Responsibilities for the Audit of the Standalone Financial Results

My 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 my 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, I exercise professional judgment and maintain professional scepticism throughout the audit. I also:

a) 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 my 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.

b) 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) the Act, I am also responsible for expressing my opinion on whether the Company has adequate internal financial controls with reference to Financial Statements in place and the operating effectiveness of such controls.

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

d) Conclude on the appropriateness of the 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 I conclude that a material uncertainty exists, I am required to draw attention in my auditors report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

e) 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.

f) I 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 I identify during my audit.

g) I also provide those charged with governance with a statement that I 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 my independence, and where applicable, related safeguards.

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

9. 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 Act, I give in the Annexure A a statement 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, I report that:

a) I have sought and obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purposes of my audit.

b) In my opinion, proper books of account as required by law have been kept by the Company so far as it appears from my examination except for those books for the matters stated in the paragraph 10(h) below, on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

c) The balance sheet, the statement of profit and loss including other comprehensive income, the statement of changes in equity and the cash flow statement dealt with by this Report are in agreement with the books of account.

d) In my opinion, the aforesaid Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standard) Rules, 2015, as amended.

e) On the basis of the written representations received from the directors as on 31 March 2025 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 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 with reference to Financial Statements of the Company and the operating effectiveness of such controls, refer to my separate Report on internal financials control over financials reporting as per Annexure-2; and

g) In my opinion and according to the information and explanations given to me, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. Company has paid sitting fees to its directors.

h) The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 9(b) above on reporting under section 143(3)(b) of the Act and paragraph 10(h) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

10. 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 my opinion and to the best of information and according to the explanations given to me:

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 there were any material foreseeable losses.

c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

d) The management has represented that 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. Based on reasonable audit procedures adopted by me, nothing has come to my notice that such representation contains any material misstatement except advances or loan given by company to various parties which are interest free and without any agreement on records. [ Refer Point No of Key Audit Matters as reported above]

e) The management has represented that 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. Based on reasonable audit procedures adopted by me, nothing has come to my notice that such representation contains any material misstatement except advances or loan received by company[ including earlier yerars receipts ] from various parties which are interest free and without any agreement on records. [ Refer Point No of Key Audit Matters as reported above ]

f) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to my notice that has caused me to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

g) In my opinion and according to the information and explanations given to me, no dividend has been declared and / or paid during the year by the Company.

h) Based on my examination, which included test checks, the Company has not used accounting software for maintaining its books of account for the financial year ended March 31, 2025 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. Thus, I am unable to comment upon incidence of tempering with audit trail.

Annexure - A to the Auditors Report

The Annexure as referred to in Independent Auditors Report to the members of the Company on the financial statements for the year ended 31 March 2025, I report that:

I. The company has no fixed assets hence requirements of clause number (a) to (d) are not applicable.

(e) There are no proceedings inititated or are pending against the Company for holding any benami property under the Prohibition of Benami Property Transaction Act,1988 and rules made thereunder .

II. (f) The management has conducted physical verification of inventory at reasonable intervals during the year. As explained by the management, inventories are stored and is under control of third party. In my opinion the coverage and the procedure of such verification by the management is not appropriate in absence of any formal stock holding or stock storage agreement. As explained by the management they verify stock periodically and discrepancies of 10% or more in aggregate for each class of inventory were not noticed on such physical verification as and when they decide but no such formal documentation made available. The closing stock includes significant quantity of slow or non-moving goods. The slow and non-moving goods are identified on the basis of its movement during reporting period. Closing stock includes total 1 items of stock worth Rs. 4.80 lacs which remains dormant during the year under audit. It constitutes almost 41.39% of the closing stock. In absence of proper stock storage arrangement and agreement and storage with third party, we are unable to comment upon its existence, accuracy and realizability of the slow and non-moving stock. This may affect financial statement adversely.

(g) The Company has not been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks or financial institutions on the basis of security of current assets. Therefore, the requirement to report on clause 3(ii)(b) of the Order is not applicable to the Company.

III. (a) During the year the Company has provided loans, advances in the nature of loans, guarantee and security.

Particulars	Aggregate Amount during the year (Rs. In lacks)	Balance outstanding as on Balance Sheet date
a) Subsidary	-	-
b) Related Party	-	-
c) Others	951.97	1737.46

(b) During the year the investments made and the terms and conditions of the grant of all loans and advances in the nature of loan during the year are, prima facie, prejudicial to the Companys interest since no interest charged to loan parties and not supported by any formal agreement.

(c) The company has granted interest free loan which is violation of the Act.

(d) Company has granted loan to companies which are overdue for more than ninety days. Balance Outstanding as at balance sheet date in respect of these cases is Rs. 1737.46 Lakhs (previous year is Rs. 2516.24 lacs).

(e) I have not been provided any documents containing terms and condition of loans and advances and thus I am unable to comment upon whether the loan and borrowing balance outstanding as on balance sheet date were fallen due during the year, or that have been renewed or extended or fresh loans granted to settle the overdue of existing loans given to the same parties.

(f) The Company has granted loans or advances in the nature of loans, without specifying any terms or period of repayment to companies, firms, Limited Liability Partnerships or any other parties.

IV. According to the information and explanations given to me and on the basis of my examination of the records, the Company has not given any loans, or provided any guarantee or security as specified under Section 185 of the Companies Act, 2013 and the Company has not provided any guarantee or security as specified under Section 186 of the Companies Act, 2013. Further, the Company has complied with the provisions of Section 186 of the Companies Act, 2013 in relation to loans given and investments made.

V. The financial statement of the company contains amounts which are deemed to be deposits from the public. Company has received advances from debtors; however, company has not appropriated it against supply of goods or provision of services within a period of three hundred and sixty-five days from the date of acceptance of such advance. Further I have not been provided with any documents regarding compliances made by company in this regard, thus I am unable to comment upon on other details as required by clause 3(v) of the Order.

VI. As the main business activity of company is trading, major provisions of cost records are not applicable to the company. I have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacturing activities, to the extent applicable, and am of the opinion that prima facie, the specified accounts and records have been made and maintained, to the extent applicable. I have not, however, made a detailed examination of the same.

VII. (a) The Company does not have liability in respect of Service tax, Duty of excise, Sales tax and Value added tax during the year since effective 1 July 2017, these statutory dues has been subsumed into GST. According to the information and explanations given to me and based on audit procedures performed by me, no undisputed amounts payable in respect of these statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. I would like to draw attention of the stakeholder on the following points which may create indirect tax liability in future: a. The amount recorded in previous year as TDS payable 2022-23 and carried forward as payable in current financial year also for which no explanation or documentary support received from the management and are not in conformity with records of income tax. I have not been provided any audit evidence in this regard and thus, I am unable to comment upon existence of such liability.

b. Significant number of creditors are outstanding for long time have been written off to profit and loss account, total such creditors amount is Rs. 5.27 lacs. Moreover, on writing off creditors, the input tax credit availed in relation to these transactions, if any needs to be reversed as required under GST Laws which has not been provided.

d. Company has not made TDS compliance as applicable as per Income Tax Act, 1961. As per TDS Portal the outstanding liability of company under section 201 of Income Tax Act, 1961 is Rs. 11842.50/-, under section 234E is Rs. 31,600 and under section 220(2) is Rs. 256/-. For Current Financial Year, TDS Compliances are pending for payment of TDS and filing of TDS returns.

(b) The Company is regularly depositing with appropriate authorities undisputed statutory dues. Therefore, the requirement to report on clause 3(v) of the Order is not applicable to the Company.

VIII. According to the information and explanations given to me and on the basis of my 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) I have not been provided any documents in relation to loan and advances accepted by the company and hence I am unable to comment whether any loan fall due for repayment during the year. As per management representation the Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender. Company has not recorded interest expenses in relation to loan outstanding during the year.

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

(c) According to the information and explanations given to me by the management, the Company has not obtained any term loans during the year. Accordingly, clause 3(ix)(c) of the Order is not applicable.

(d) On an overall examination of the standalone financial statements of the Company, no funds raised on short-term basis have been used for long-term purposes by the Company. However, classification of funds as short-term or long term is as per the accounting policy followed by the management. Company has outstanding loan for period more then one year. I have not been provided with any documents containing term and conditions of such borrowing and thus I am unable to comment upon its nature.

(e) On an overall examination of the standalone financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

(f) The Company has not raised loans during the year on the pledge of securities held in, its subsidiaries, joint ventures or associate companies. Hence, the requirement to report on clause (ix)(f) of the Order is not applicable to the Company.

X. (a) The Company has not raised any money during the year by way of initial public offer /further public offer (including debt instruments) hence, the requirement to report on clause 3(x)(a) of the Order is not applicable to the Company.

(b) The Company has not Made any Preferential allotment or private placement of shares or convertible debentures during the year hence, the requirement to report on clause 3(x)(b) of the Order is not applicable to the Company.

XI. (a) Based on examination of the books and records of the Company and according to the information and explanations given to me, considering the principles of materiality outlined in Standards on Auditing, I report that no fraud by the Company or on the Company has been noticed or reported during the course of the audit.

(b) During the year, no report under sub-section (12) of section 143 of the Companies Act, 2013 has been filed by cost auditor and secretarial auditor or by me in Form ADT- 4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

(c) As informed by the management, company has not received whistle blower complaints during the year under consideration.

XII. The Company is not a Nidhi Company as per the provisions of the Companies Act, 2013. Therefore, the requirement to report on clause 3(xii)(a),(b) and (c) of the Order is not applicable to the Company.

XIII. Transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the standalone financial statements, as required by the applicable accounting standards.

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

(b) Internal audit under section 138 of Companies Act, 2013 is applicable. However, I have not been provided with audit report of Internal Auditor.

XV. The Company has not entered into any non-cash transactions with its directors or persons connected with its directors and hence requirement to report on clause 3(xv) of the Order is not applicable to the Company.

XVI. (a) The company is not required to be registered under section 45-IA of the Reserve Bank of lndia Act.

(B) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clause 3(xvi)(b) of the Order is not applicable.

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

(D) According to the information and explanations provided to us during the course of audit, the Group does not have any CIC. Accordingly, the requirements of clause 3(xvi)(d) are not applicable.

XVII. The Company has not incurred cash losses in the current year and in the immediately preceding financial year.

XVIII. There has been resignation of the statutory auditors during the year and I have taken into consideration the issues, objections or concerns raised by the outgoing auditors.

XIX. On the basis of the ageing report, financial ratios and expected dates of realization of financial assets and payment of financial liabilities, any other information accompanying the financial statements, management plans and based on my examination of the evidence supporting the assumptions, nothing has come to my attention, which causes me to believe that any material uncertainty exists as on the date of the audit report that Company, subject to points mentioned in basis for qualified opinion. I, however, state that this is not an assurance as to the future viability of the company. I further state that my reporting is based on the facts up to the date of the audit report and I 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. Corporate social responsibility under section 135(5) of Companies Act, 2013 is not applicable to the Company. Therefore, the requirement to report on clause 3(xx)(a) and 3(xx)(b) of the Order is not applicable to the Company.

Annexure-2

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (the Act)

I have audited the internal financial controls over financial reporting of M/S. Sun Retail Limited (the Company) as of March 31, 2025 in conjunction with my 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

My responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on my audit. I conducted my 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 I 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.

My audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. My audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my 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 misstatements.

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.

Qualified Opinion

In my opinion, the Company has, in all material respects, does not have adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were not operating effectively as at 31 March 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 issued by the Institute of Chartered Accountants of India.

Basis of Opinion

A companys internal financial control over financial reporting in context with dispositions of the assets of the company and fair recording of transaction with respect to inventories and recoverability of debtors and repayment of creditor including long outstanding loans liabilities is not accurate. Further, I have not been provided with the copy of internal auditors report, thus unable to comment upon the same.

(For more details refer basis of qualified opinion paragraph of audit report)

For,
DDS & Associates
Chartered Accountants
Firm No. 120362w
CA Dinesh D Shah
(Proprietor)
M No: - 106871
UDIN: 25106871BMNAST2076
Place: Ahmedabad
Date: 30.05.2025