We have audited the accompanying standalone Ind AS financial statements of ARNOLD
HOLDINGS LIMITED ("the Company"), which comprise the Balance Sheet as at March
31, 2025, the Statement of Profit and Loss, including the statement of other
comprehensive income, the cash flow statement and the statement of changes in equity
for the year then ended, and a summary of significant accounting policies and other
explanatory information.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5)
of the Companies Act, 2013 ("the Act") with respect to the preparation of these
standalone Ind AS financial statements that give a true and fair view of the financial
position, financial performance including other comprehensive income, cash flows and
changes in equity of the Company in accordance with accounting principles generally
accepted in India, including the Indian Accounting Standards (Ind AS) specified under
section 133 of the Act, read with the Companies (Indian 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 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 the design, implementation and maintenance of adequate internal
financial control that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and presentation of
the Ind AS financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.

In preparing the financial statement, management is responsible for assessing the
Company's 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 responsible for overseeing the Company's financial reporting
process.

Auditor's Responsibility for the Audit of the Financial Statement

Our responsibility is to express an opinion on these standalone Ind AS financial statements
based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards
and matters which are required to be included in the audit report under the provisions of
the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance with
the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as
specified under Section 143(10) of the Act. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the
standalone Ind AS financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal financial control relevant to the
Company's preparation of the standalone Ind AS financial statements that give a true
and fair view in order to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the standalone Ind AS financial statements.

As part of an audit in accordance with SA's, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.

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

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

• Conclude on the appropriateness of management's 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 Company's
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor's 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 auditor's
report. However, future events or conditions may cause the Company to cease to
continue as a going concern.

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

• Materiality is the magnitude of misstatements in the financial statements that,
individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the 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 financial statements of
the current period and are therefore the key audit matters. We describe these matters
in our auditor's report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

Opinion

In our opinion and to the best of our information and according to the explanations given
to us, the standalone Ind AS financial statements give the information required by the
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 including other comprehensive income, its cash flows and
the changes in equity for the year ended on that date.

Basis of Opinion

We conducted our audit of the Financial Statements in accordance with the Standards on
Auditing specified under section 143(10) of the Act. Our responsibilities under those
Standards are further described in the Auditor's Responsibility for the Audit of the
Financial Statements section of our report. We are independent of the Company in
accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India (ICAI) together with the ethical requirements that are relevant to our audit of the
financial statements under the provision of the Act and Rules made there under, and we
have fulfilled our other ethical responsibilities in accordance with these requirements and
the ICAI's Code of Ethics. We believe that the audit evidence obtained by us is sufficient
and appropriate to provide a basis for our audit opinion on the financial statements.

Key Audit Matters

Emphasis of Matter

Significant Outflow from Operating Activities:

As disclosed in the Cash Flow Statement, the Company has reported a net cash outflow
from operating activities of ?1,164.35 lakhs for the year ended March 31, 2025, as
compared to an inflow of ?3,063.46 lakhs in the previous year. This shift is primarily due
to a substantial increase in purchases of stock-in-trade and reduction in financial
liabilities, which has impacted working capital and operating liquidity.

Increase in Borrowings to Fund Operations:

The borrowings of the Company have increased significantly from ?6,010.88 lakhs as at
March 31, 2024, to ?8,415.38 lakhs as at March 31, 2025. The management has indicated
that these borrowings were primarily availed to meet operational cash requirements. The
ability of the Company to service this debt will be critical to its future liquidity position.

Decline in Profitability Despite Stable Revenue:

Although total revenue has remained relatively consistent at ?20,200.12 lakhs in FY
2024-25 (?20,597.32 lakhs in FY 2023-24), profit before tax has reduced significantly
from ?1,274.25 lakhs to ?616.47 lakhs. This decline is attributable to higher purchases
and increased employee benefit expenses. Management has stated that these changes
align with its business expansion plans.

Increased Inventory Holdings:

Inventory has increased from ?2,379.55 lakhs as at March 31, 2024, to ?3,332.41 lakhs
as at March 31, 2025. This increase of approximately 40% is significant. Management
has explained this is due to anticipated deman d and stockpiling. However, the
carrying value and realizability of such inventory in the future could impact the results of
subsequent periods.

Related Party Transactions:

We draw attention to Note 33 to the financial statements, which describes the Company's
significant transactions with related parties during the year, particularly with entities in
which key managerial personnel (KMP) or their relatives can exercise significant
influence.

Our opinion is not modified in respect of this matter.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the other
information. The other information comprises the information included in the
Management Discussion and Analysis, Board's Report including Annexure to Board's
Report, Business Responsibility Report, Corporate Governance and Shareholder's
Information, but does not include the Financial Statements and our auditor's 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.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's report) Order, 2020 ("the Order") issued by

the Central Government of India in terms of sub-section (11) of section 143 of the Act,

we give in the Annexure A statement on the matters specified in paragraphs 3 and 4

of the Order.

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

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

d. In our opinion, the aforesaid standalone Ind AS financial statements comply with the
Accounting Standards specified under section 133 of the Act, read with Companies
(Indian Accounting Standards) Rules, 2015, as amended;

e. On the basis of written representations received from the directors as on March 31,
2025

and taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2025, from being appointed as a director in terms of section 164
(2) of the Act;

f. With respect to the adequacy of the internal financial controls over financial

reporting of the Company with reference to these standalone Ind AS financial
statements and the operating effectiveness of such controls, refer to our separate
Report in "Annexure B" to this report; ₆

g. With respect to the other matters to be included in the Auditor's Report in
accordance with the requirements of section 197(16) of the Act, as amended: In
our opinion and to the best of our information and according to the explanations
given to us, the remuneration paid by the Company to its directors during the year
is in accordance with the provisions of section 197 of the Act.

h. With respect to the other matters to be included in the Auditor's 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 Ind AS financial statements.

ii. The Company did not have any long-term contracts including derivative
contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company.

i. Based on our examination, which included test checks, the Company has 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. Further, during the course of our audit we did not come across any
instance of the audit trail feature being tampered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from
April 1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors)
Rules, 2014 on preservation of audit trail as per the statutory requirements for
record retention is not applicable for the financial year ended March 31, 2025.

For AMIT RAY & COMPANY
Chartered
Accountants Firm
Reg. No. 000483C

SD/-

FCA Nag Bhushan Rao
Partner

Membership No: 073144 UDIN:

25073144BMGJHY7928

Place: Mumbai
Date: 27.05.2025