1. We have audited the accompanying standalone financial statements of Kandagiri Spinning Mills Limited
(“the Company”), which comprise the standalone balance sheet as at March 31, 2025, the standalone
statement of profit and loss (including other comprehensive income), the standalone statement of changes
in equity, the standalone statement of cash flows for the year then ended and notes to the standalone
financial statements, including a summary of the significant accounting policies and other explanatory
information (hereinafter referred to as the “Standalone financial statements).

2. In our opinion and to the best of our information and according to the explanations given to us, except as
stated in the Basis of Qualified Opinion paragraph below, the aforesaid standalone financial
statements give the information required by the Companies Act 2013 (“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 31,2025, and its loss, including other comprehensive income, the changes in equity and its cash
flows for the year ended on that date.

Basis for Qualified Opinion

3. The Net worth of company has been completely eroded as at the year ended March 31,2025. Further the
company has incurred a loss of Rs.79.28 lakhs for the year ended March 31, 2025. Also the company's
current liabilities exceeded the current assets as at the year ended March 31,2025. Though the company
doing its yarn trading business, the company still incurring losses. We are of the opinion that the above
factors indicate existence of material uncertainty in the company's ability to continue as a going concern.
The attached standalone financial statements do not include any adjustments that might result had the
above uncertainties been known. Management has represented in this regard that there is no further
adjustments to be made in the carrying values/standalone financial statements even if the Going Concern
Concept is not adopted.

4. We conducted our audit of the standalone financial statements in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under
those Standards are further described in the Auditor's Responsibilities for the Audit of the standalone
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 standalone financial statements under the provisions of
Act, and the Rules thereunder, 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 we have obtained is
sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

5. Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the standalone financial statements of the financial year ended March 31,2025. These matters
were addressed in the context of our audit of the standalone financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the
matters described below to be the key audit matters to be communicated in our report.

A. Revenue Recognition

Key Audit Matter Description

Reference may be made to note 3 of significant accounting policies and note 21 to the standalone
financial statements of the Company.

Revenue recognition is inherently an area of audit risk, which we have substantially focused on mainly
covering the aspects of cut off and the impact of Ind AS 115 as key audit matters.

Response to Key Audit Matter
Principal Audit Procedures

Our audit procedures relating to revenue comprised of test of controls and substantive procedures
including the following:

a. We assessed whether the policy of recognizing revenue was in line with Ind AS - 115.

b. We performed procedures to assess the design and internal controls established by the management
and tested the operating effectiveness of relevant controls related to the recognition of revenue.

c. Selected a sample of continuing and new contracts, and tested the operating effectiveness of the
internal control, relating to identification of the distinct performance obligations and determination of
transaction price. We carried out a combination of procedures involving enquiry and observation,
reperformance and inspection of evidence in respect of operation of these controls.

d. We have tested, on a sample basis, whether specific revenue transactions around the reporting date
has been recognised in the appropriate period by comparing the transactions selected with relevant
underlying documentation, including goods delivery notes, customer acknowledgement / proof of
acceptance and the terms of sales.

e. We have also validated subsequent credit notes and sales returns up to the date of this Report to
ensure the appropriateness and accuracy of the revenue recognition.

f. We tested journal entries on a sample basis to identify any unusual or irregular items.

g. We also considered the adequacy of the disclosures in Company's standalone financial statements
in relation to Ind AS 115 and whether they meet the disclosure requirements.

Conclusion

Based on the procedures performed above, we did not find any material exceptions with regards to
adoption of Ind AS 115 and timing of revenue recognition.

Other information

6. The Company's Management and Board of Directors is responsible for the other information. The other
information comprises the Management discussion and analysis, Board's Report including Annexures to
Board's Report and Shareholder's information but does not include the standalone financial statements
and our report thereon.

7. The other information is expected to be made available to us after the date of this auditor's report. Our
opinion on the standalone financial statement does not cover the other information and we do not express
any form of assurance for conclusion thereon.

8. In connection with our audit of the standalone financial statements, our responsibility is to read the other
information and in doing so, consider whether the other information is materially inconsistent with the
standalone 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.

Responsibilities of Management and Board of Directors and those charged with Governance for
the Standalone Financial Statements

9. The Company's Management and Board of Directors are responsible for the matters stated in section
134(5) of the Act with respect to the preparation of these standalone 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. 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 standalone financial statements
that give a true and fair view and are free from material misstatement, whether due to fraud or error.

10. In preparing the standalone financial statements, management and Board of Directors 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.

11. The Management and Board of Directors are also responsible for overseeing the Company's financial
reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

12. 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 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
standalone financial statements.

13. 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 standalone 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 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'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 standalone 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 standalone financial statements, including
the disclosures, and whether the standalone financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.

14. 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.

15. 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.

16. From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the standalone 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.

Report on Other Legal and Regulatory Requirements

17. As required by the Companies (Auditor's Report) Order,2020 (“the Order”) issued by the Central
Government in terms of Section 143(11) of the Act, we give in “Annexure A” a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the extent applicable.

18. As required by Section143 (3) of the Companies Act, 2013, 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 purposes 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 IND AS specified under
Section 133 of the Act read with the relevant rules issued thereunder.

(e) On the basis of the written representations received from the directors as on March 31,2025, 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 Section164(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) The company has not paid/provided any managerial remuneration to the directors of the Company and
hence the question of compliance of requisite approvals mandated by the provisions of Section 197 of
Act read with Schedule V to the Act does not arise.

(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 Auditor's) Rules, 2014 as amended, in our opinion and to the best of our
information and according to the explanation given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its
standalone financial statements. (Refer Note 35 to the standalone financial statements).

ii. The company did not have any long-term contracts including derivative contracts for which
there were any material foreseeable losses as at March 31,2025.

iii. There has been no delay in transferring amounts, 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 it's 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 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
(“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.

(b) The Management has represented, that, to the best of it's knowledge and belief, 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 by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on the audit procedures that have been 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 (i) and (ii) of Rule 11(e), as provided under (a) and (b)
above, contain any material misstatement.

v. The company has not declared or paid 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 have a feature of recording audit trail (edit log) facility
and the same has operated throughout the year for all relevant transactions recorded in the
respective software. Further, for the periods where audit trail (edit log) facility was enabled and
operated throughout the year for the respective accounting software, we did not come across any
instance of the audit trail feature being tampered with. Further the audit trail has been preserved by
the company as per the statutory requirements for record retention.

For Krishnen & Associates

Chartered Accountants
Registration No. 018163S

R Krishnen - Partner

Date : May 10, 2025 Membership No. 201133

Place : Salem UDIN : 25201133BMMMVK2377