We have audited the Financial Statements of Vijay Textiles Limited (“the Company”), which comprise the balance sheet as
at March 31,2024, the statement of profit and loss, including the statement of other comprehensive income, the statement
of cash flows and the statement of changes in equity for the year then ended, and notes to the financial statements, including
a summary of material accounting policies and other explanatory information.

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 , the aforesaid financial statements give the information
required by the Companies Act, 2013 as amended (“the Act”) in the manner so required and give a true and fair view in
conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules 2015, as amended (“Ind AS”), and other accounting principles generally accepted in India, of the
state of affairs of the Company as at March 31,2024, its loss including other comprehensive income, changes in equity and its
cash flows for the year ended on that date.

Basis for Qualified Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) as specified under section 143(10) of the act.
Our responsibilities under those Standards are further described in the “Auditor's Responsibilities for the Audit of the financial
statements” section of our report. We are independent of the Company in accordance with the Code of Ethics issued by
the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit
of the financial statements under the provisions of the Act 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 we have
obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements.

A. The company's trade receivables as at balance sheet date amounts to Rs. 152.28 crores (as on March 31,2023 - Rs.156.88
crores) wherein the debtor's receivable overdue for period exceeding three years amounts to Rs. 150.11 crores (as
on March 31, 2023 -Rs. 147.77 crores). We draw attention to Note number 5A & 24.18 to the financial Statements
providing details with respect to actions implemented by management with respect to overdue trade receivables and
recognition of expected credit loss. We further noted that the collections of trade receivables were made only for the
dues ageing less than one year and balance ageing more than one year are accumulated since 31st March 2022.

B. The company's loan accounts with State Bank of India (“SBI”) and Axis Bank Limited (“Axis”) have become Non
Performing asset. Post which regular business transactions were conducted through trust & retention account (“TRA”)
managed by SBI on behalf of company for both SBI & Axis. Validity of such operation was permitted up to July 31,2022
after which all the banking transactions were freezed by the banks. Subsequent to the above event company has been
issued demand notices by SBI and Axis under letter dated August 17, 2022 and September 09, 2022 respectively under
section 13 (2) of Securitization and Reconstruction of Financial Assets & Enforcement of Securities Interest Act, 2002
(“SARFAESI Act”) giving company a sixty days' time period to deposit the amounts due to the banks amounting to Rs.
72.84 Crores & Rs. 20.04 Crores (amounts specified are per the notices issued by respective banks after application of
interest and penal charges upto the date of these notices).

Pursuant to the above, the company has submitted a proposal for compromise on November 10, 2022 for one time
settlement of dues by making a payment of Rs.79.60 Crore (SBI: Rs.61.00 Crore & Axis: Rs.18.60 Crore) as stipulated
in the offer letter to be completed by March 15, 2023. Wherein Company has received approval from the consortium
banks viz. State Bank of India and Axis Bank Limited vide their letters dated January 25, 2023 and January 27, 2023
respectively to its compromise proposal submitted on November 10, 2022 for one time settlement of bank dues
of Rs.79.60 Crore to be paid by March 31, 2023, However, Company was unsuccessful to honor the compromise

agreement as on March 31,2023. Subsequently SBI & Axis has revoked the compromise agreement as on April 29, 2023
and May 03, 2023. Company has submitted request for revival of the compromise agreement to banks but same is yet
to confirmed by the respective banks.

As the TRA Account is freezed the company is managing its daily operations with the support of Promoter Directors.

C. We draw attention to Note No.24.15 wherein the application filed by State Bank of India before Hon'ble National
Company Law Tribunal [NCLT] Hyderabad bench under section 7 of Insolvency and Bankruptcy Code, 2016 in respect
of dues payable to State bank of India & Axis Bank Limited, was rejected by the Hon'ble tribunal on 08th May 2024
without costs since same petition cannot be filed with two different authorities simultaneously and other grounds.

D. We draw attention to Note No.24.15 wherein State Bank of India has also sued for recovery before Debt Recovery
Tribunal under SARFAESI Act, 2002, proceedings for which are in progress and next date of hearing is fixed for 21st
August 2024.

E. We draw attention to Note No.24.16 wherein the company has received warrant of attachment of immovable property
vide RC no. 175/ 2023 dated 13 March 2024 under Rule 48 of the second schedule to the Income Tax Act,1961 read
with the Recovery of Debts & Bankruptcy Act, 1993 which is listed for hearing before the Debt Recovery Tribunal for
21st August 2024.

F. We draw attention to Note No.24.17 wherein company has received notice dated 24th April 2024 from the Advocate
Commissioner appointed by the court of chief Judicial Magistrate has served warrant of commission issued u/s 24 of the
SARFAESI Act, 2002 giving therein 15 days' notice & has taken possession of factory unit on 06 June 2024 in compliance
of the said order of the court.

G. The company has outstanding statutory dues of Rs. 77.46 lakhs as on 31st March 2024 (Customs - 20.14 lakhs, TDS -
37.67 lakhs, PF - 17.72 lakhs, ESI - 1.93 lakhs)

H. The Company has outstanding payables to vendors of Rs. 24.15 crores out of which a total of Rs. 22.03 Crores is
overdue for more than 180 days in payments to vendors against which input tax credit (ITC) has been claimed. These
outstanding amounts are subject to reversal with an 18% interest charge due to non-compliance with ITC rules.

Material uncertainty related to going concern

I. We draw attention to the accompanying financial Statements, which indicates that the company has incurred a net
loss for the year ended March 31, 2024 - Rs.23.29 crores (for the year ended March 31, 2023 -Rs. 6.42 crores). The
company has outstanding amount due to vendors for more than three years as on March 31,2024 amounting to Rs.5.53
crores (as on March 31,2023 - Rs. 6.09 crore) and repayment of loans due to banks amounts to Rs.72.5 crores, further
the withdrawal of support from Banks and other indicators as listed above in the qualification paragraphs, indicate
existence of material uncertainty on the company's ability to continue as a going concern.

Emphasis of Matters

J. We draw attention to Note No. 24.9 wherein the company has derecognized available balance in deferred tax asset of
Rs. 10.07 crore in accordance with IND AS 12 which states that deferred tax asset should be derecognized when it no
longer probable that future taxable profits will be available against which DTA can be utilised.

Other Information

The Company's Board of Directors are responsible for the other information. The other information comprises the
information included in the Annual Report, 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 in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.

Responsibility of Management for the Financial Statements

The Company's Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to
the preparation of these financial statements that give a true and fair view of the financial position, financial performance,
including other comprehensive income, changes in equity and cash flows of the Company in accordance with the
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 design, implementation and maintenance of adequate internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or
error.

In preparing the financial statements, management and Board of Directors are 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 is also responsible for overseeing the company's financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error and to issue an auditor's 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 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 controls 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 management.

• Conclude on the appropriateness of management and Board of Directors' use of the going concern basis of
accounting in preparation of financial statements 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.

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.

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”, 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, to the extent applicable, that:

a. In our opinion, except as stated in basis of qualified opinion para we have obtained all the information and
explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b. In our opinion, except as stated in basis of qualified opinion para, 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. Except as stated in the basis of qualified opinion, the Balance sheet, the statement of profit and loss (including
the statement of other comprehensive income), the statement of cash flows and statement of changes in
equity dealt with by this report are in agreement with the books of account;

d. In our opinion, except as stated in the basis of qualified opinion, the aforesaid financial statements comply
with the Ind AS specified under Section 133 of the Act read with Companies (Indian Accounting Standards)
Rules, 2015, as amended;

e. On the basis of the written representations received from the directors as on 31st March, 2023 taken on
record by the Board of Directors, none of the directors is disqualified as on 31st March, 2024 from being
appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

g. No managerial remuneration for the year ended March 31,2024 has been paid / provided by the Company
to its directors.

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 financial
statements. Refer Note 24.1 to the 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 were no amounts which were required to be transferred to the Investor Education and Protection
Fund.

iv. (a) The management has represented that, to the best of its knowledge and belief, 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 or entity, including foreign
entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise,
that the Intermediaries shall, whether,

a. directly or indirectly lend or invest in other person or entity identified in any manner
whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or

b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented that, to the best of its knowledge and belief, no funds have
been received by the company from any person or entity, including foreign entities (“Funding
Parties”), with the understanding, whether recorded in writing or otherwise, that the company
shall, whether,

a. directly or indirectly, lend or invest in other person or entity identified in any manner
whatsoever by or on behalf of the Funding Parties (“Ultimate Beneficiaries”) or

b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(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 misstatement.

v. The company has not declared any dividend during the year.

vi. Based on our examination which included test checks, the Company has used 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, in respect of accounting software where the
audit trail has been enabled.

For SVD & Associates.

Chartered Accountants
(Firm's Registration No. 0I5405S)

Avinash Doba

(Partner)

Place : Hyderabad (Membership No. 232340)

Date: 31-07-2024 UDIN: 24232340BKEJOU5659