Auditor Report of N K Industries Ltd.

Mar 31, 2024

We have audited the accompanying standalone IND AS financial statements of N.K. INDUSTRIES LIMITED (the "Company"), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and a summary of significant accounting policies and other explanatory information (hereinafter referred to as the "standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion Section of our report, the aforesaid standalone Ind AS 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 (financial Position )of the Company as at March 31, 2024, and its losses (financial performance including other comprehensive income), its Cash flows and changes in equity for the year ended on that date.

Basis for Qualified Opinion

1. The Company had entered into financial arrangement with National Spot Exchange Ltd (NSEL) through trading and Clearing Member, N.K. Proteins Private Ltd (erstwhile N. K. Proteins Limited (NKPL) (Group Company) by way of purchase and sales of various goods up to financial year 2012-13. The trade payables and trade receivables arising out of the said transactions through National Spot Exchange Limited (NSEL) from the concerns other than the group concerns are subject to confirmations by the respective parties/NSEL and reconciliations/ adjustments, if any. Further, NSEL has suspended the trading on 31.07.2013, as per the directions issued by the Government of India, Ministry of Consumer Affairs. NSEL has initiated recovery proceedings against the group company NKPL and also against the company by filing a civil suit in the Hon''ble High Court of Mumbai for an alleged amount of around ''937 crores plus interest .and the said proceedings are pending as on date. Further, the Home department, Government of Maharashtra has issued a notification under the Maharashtra Protection of Interest of Depositors (in financial establishments)-Act, 1999 (MPID Act) attaching the Land, Building & Plant & Machinery of the company located at Kadi, Gujarat. The company had challenged the notification issued by Home department of Maharashtra before Hon''ble Gujarat High Court which was disposed off vide its order dated 29th March 2017. The company preferred a Special Leave Petition before the Hon''ble Supreme Court of India against the order of Hon''ble Gujarat High Court and The Hon''ble Supreme Court of India had disposed off the Special Leave Petition on 17th April, 2017 with a observation to file an application before Hon''ble Bombay High Court, Mumbai, and as informed by the management, the company has filed petition before the Hon''ble Bombay High Court in June 2017 which is pending .Besides the above, the company has also filed its objections against the attachment notification before the Designated Special MPID Court, Mumbai. In view of the above that the matter is subjudice, and the alleged liability /claim are not accepted by the company, we are unable to quantify the final liability and its impact if any, on the loss of the company for the Year ended on 31st March, 2024. (Refer to the note no.36 of Standalone IND AS Standalone Financial Statement)

2. The Directorate of Enforcement, Government of India has initiated proceedings against the company under section 5(1) of the prevention of Money Laundering Act, 2002, along with group company NKPL, and by virtue of the provisional attachment order dated 10/03/2015, attached the assets of the company comprising of Land, building, plant and machinery situated at Survey Nos.719, 720, 721, 732/1, 732/2, 733, 741, 743, 744, 745, Kadi Thol Road, Village Kadi Kasba, taluka- Kadi, District Mehsana-382715 Gujarat. As explained to us, The Company has preferred an appeal before the Hon''ble Appellate Tribunal under the Prevention of Money laundering Act, 2002 against the order of Adjudicating Authority.

Further,the Director of Enforcement (hereinafter referred to as ED), Government of India had initiated proceedings of search/seizure on 30.05.2018 on the group company NKPL, the promoters of the company late Shri Nilesh Patel and Shri Nimish Patel, one of the family member as well as on the company and thereafter on 29.06.2018, the ED, Government of India, had preferred an application u/s 17(4) of the Prevention of Money Laundering Act, 2002 before the Adjudicating Authority, New Delhi, vide it''s Application No. OA/236 of 2018 against the company as well as group company NKPL and the promoters for retention of the seized properties and for continuation of order of freezing the properties, till finalization of the proceedings, of the properties mentioned in the application u/s 17(4) of the PMLA Act, 2002. The company along with Group Company and promoters challenged the show cause notice issued by the adjudicating authority New Delhi, before the Hon''ble High Court of Delhi and the Hon''ble High Court has set aside the said show cause notice. The Director of Enforcement has attached assets of the company, group company NKPL and the promoters

of the company by issuing a fresh show cause notice dated 30/08/2018 and the company has filed an appeal before PMLA Appellate Tribunal, Delhi. In view of the above that the matter is subjudice, and the alleged liabilities /claims are not accepted by the company, we are unable to quantify the final liability and its impact, if any, on the loss of the company for the Year ended on 31st March, 2024. (Refer to note no. 37 of the IND AS Standalone Financial Statement)

3. The Government of Maharashtra, (at the instance of Economic wing offence Mumbai), has filed supplementary Charge sheet dated 25th December, 2018 under the various sections of IPC AND MPID Act. against the company and its chairman Shri Nimish Patel. Further MPID Court on the basis of above supplementary charge sheet has issued summons dated 19th March, 2019 against the company asking them to remain present on 26th April 2019. The Company has complied with the said summons and the matter was adjourned to 7th November, 2019 and further adjourned to various dates and now the matter is further adjourned 18th June 2024. Thus, in view of the fact that the said criminal proceedings which have been initiated, inter alia, against the company and its Chairman Shri Nimish Patel are pending, we are unable to ascertain/quantify the final liability, if any, that may arise from the said criminal proceedings and therefore we are unable to quantify its impact, if any, on the loss of the company for the Year ended on 31st March, 2024. (Refer to the note no. 38 of the IND AS Standalone Financial Statement).

We conducted our audit 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 Responsibilities for the Audit of the standalone Ind AS 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 qualified opinion on the standalone financial statements.

Material Uncertainty Related to Going Concern

1. The company is having accumulated losses (after taking into account the balance of reserves) of '' 34864.94 lakhs as at 31.03.2024 and the net worth of the company is negative However, as per the business plan and future cash flow projections submitted by the management to us and accepted by us, The Company is making sincere efforts for the revival of the Business & the management is confident to recover the losses through improved profitability in foreseeable future. Therefore, no provision for the impairment has been made and accounts for the year have been prepared on "going concern basis." Further the above projections also contains business plan/ projected cash flow prepared by the management and accepted by us with respect to the subsidiaries company i.e. Banpal Oil Chem Private limited and NK OIL Mills Private limited,( Except Tirupati Retail India Pvt ltd where proper provision of Impairment has been done )the management is confident to also revive the operations of the loss making subsidiary companies, hence no provision for impairment in the fair value of the investment made in the said subsidiary companies has been made in the books of accounts. (Refer Note No 33 of standalone INDAS Standalone financial statements)

Our opinion is not modified on the above matter.

Key Audit Matters

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 current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Kev Audit Matter:

Description of Key audit Matter

Our response and results

Litigations and claims (Refer note 28) to the standalone Ind AS financial statements) The cases are pending with multiple tax authorities like Income Tax, Sales tax etc. and there are claims against the company which have not been acknowledged as debt by the company. In normal course of business, financial exposures may arise from pending proceedings and from claims of the customers not acknowledged as debt by the company. Whether a claim needs to be recognized as liability or disclosed as contingent liability in the standalone Ind AS financial statements is dependent on a number of significant assumptions and judgments. The amounts involved are potentially significant and determining the amount, if any, to be recognised or disclosed in the standalone Ind AS financial statements, is inherently subjective. We have considered Litigations and claims, a Key Audit Matter as it requires significant management judgement, including accounting estimates that involves high estimation uncertainty.

Our audit procedures, inter alia, included following: - Discussed disputed litigation matters with the company''s management. - Evaluated the management''s judgment of tax risks, estimates of tax exposures, other claims and contingencies. Past and current experience with the tax authorities and management''s correspondence/ response including on the claims lodged by customers, were used to assess the appropriateness of management''s best estimate of the most likely outcome of each uncertain contingent liability. - Critically assessed the entity''s assumptions and estimates in respect of claims, included in the contingent liabilities disclosed in the financial statements. Also, assessed the probability of negative result of litigation and the reliability of estimates of related obligations. Conclusion: Based on the procedures described above, we did not find any material exceptions to the management''s assertions and treatment, presentation & disclosure of the subject matter in the standalone Ind AS financial statements.

Emphasis of Matter

1. The company is having accumulated losses (after taking into account the balance of reserves) of '' 34864.94 lakhs as at 31.03.2024 and the net worth of the company is negative However, as per the business plan and future cash flow projections submitted by the management to us and accepted by us, The Company is making sincere efforts for the revival of the Business & the management is confident to recover the losses through improved profitability in foreseeable future. Therefore, no provision for the impairment has been made and accounts for the year have been prepared on "going concern basis." Further the above projections also contains business plan/ projected cash flow prepared by the management and accepted by us with respect to the subsidiaries company i.e. Banpal Oil Chem Private limited and NK OIL Mills Private limited, (Except Tirupati Retail India Pvt ltd where proper provision of Impairment has been done ) the management is confident to also revive the operations of the loss making subsidiary companies, hence no provision for impairment in the fair value of the investment made in the said subsidiary companies has been made in the books of accounts. (Refer Note No 33 of standalone INDAS Standalone financial statements)

2. The Income Tax Department had carried out survey u/s 133 of the Income tax Act, 1961(the IT Act) on the company

along with other group companies during FY 2013-14 and had ordered a special audit of the books of the company u/s 142(2A) of the IT Act, 1961, for AY 2011-12 & A.Y 12-13. The department had raised a demand of '' 86.00 lakhs

A.Y2014-15 on the company for the aforesaid assessment years and the said demand has been disputed by the company and the company has initiated appellate proceedings before appropriate authorities. The said amount has been shown as contingent liability in the notes forming part of standalone financial statements. Further, Income tax department has passed an attachment order on 22.04.2015 & 14.08.2015 by which it has attached properties of the company in pursuant to a demand, the details of the properties attached which are in the name of company is as under:

• 803, Manas Complex, Opp Star Bazaar, Nr Jodhpur Cross road, Satellite, Ahmedabad 380015.

• 603, Manas Complex, Opp Star Bazaar, Nr Jodhpur Cross road, Satellite, Ahmedabad 380015.

• Land, situated at Survey Nos.719, 720, 721, 732/1, 732/2, 733, 741, 743, 744, 745, Kadi Thol Road, Village Kadi Kasba, taluka- Kadi, District Mehsana-382715.

• Factory Building Situated at survey No 745, Kadi Thol Road, Village Kadi Kasba, taluka- Kadi, District Mehsana-382715 (Refer to the note no 39 of the IND AS Standalone Financial Statement)

3. A Search & Seizure action U/S 132 of the Income Tax Act took place on 24.2.99. The Income Tax department had raised demand of '' 3312 lakhs vide the block assessment Order dt. 30.4.2001. In case of the company, the Hon''ble Income Tax Appellate Tribunal (ITAT), Ahmedabad has subsequently given partial relief to the extent of '' 2884 lakhs. The company had preferred an appeal before the Hon''ble High Court of Gujarat against the order of Hon''ble ITAT, Ahmedabad. The Hon''ble Gujarat High Court vide its order dated 20th June,2016 had given partial relief on some of the grounds and had also dismissed some of the grounds of the company. Against the grounds dismissed by Hon''ble High Court of Gujarat, the company had further preferred an appeal before Hon''ble Supreme Court of India, and the Hon''ble Supreme Court of India vide order dated 16th January,2017 had dismissed the appeal of the Company. The Company had already provided an amount of '' 288 lakh against the grounds dismissed by Hon''ble ITAT, Ahmedabad during F.Y 2002-03 as well as '' 127 lakh was provided in the books of accounts for the Assessment year in question for the interest payable up to 31-03-2005 during F.Y 2004-05. However, in view of the management and on the basis of the Judgment of the Hon''ble Gujarat High Court, the amount provided/paid by the company towards total demand shall result in refund to the company. Pending effect of the various orders of adjudicating authorities by the Income Tax Department, the Company is yet to provide final entries in its books of accounts even during the year under review. In view of non-availability of order of the appeal effects from the Income Tax Department, we are unable to opine on the same. (Refer to the note no 30 of the IND AS Standalone Financial Statement)

4. The Sales Tax Department has completed the assessment proceedings for various assessment years and raised demand of '' '' 3314.22 lacs (net of recovery) for the earlier financial years. The company has not made any provision for the above demand raised by the sales tax authority in its books of accounts as in view of the Management, the said demand shall not withstand before the Appellate Authorities and the company has already preferred an appeal before the appellate authority which is still pending. In view of the above, the said amount has been shown as contingent liability in the notes forming part of standalone financial statements. (Refer to the note no 41 of the IND AS Standalone Financial Statement)

5. The balance confirmation from the suppliers, customers as well as to various loans or advances, capital advances given, certain non-moving banks & Fixed Deposit with Bank have been called for by the company, but the same are awaited till the date of audit. Thus, the balances of receivables, capital advances, trade payables as well as loans and advances, certain non-moving bank balances and Fixed Deposit balance have been taken as per the books of accounts submitted by the company and are subject to confirmation from the respective parties. (Refer to the note no 45 of the IND AS Standalone Financial Statement)

6. As per the information obtained from the website of the Ministry of Corporate Affairs (MCA), a suit has been filed against the company and its officers u/s 383A(1A), 372A(9), 58A(6)(A)(I) of the Companies Act, 1956 for the year 2016. As informed by the management, the company is having basic information about such suit filed as reflected on the website of the MCA. However, the company does not have any communication of such proceedings against the company and its officers. As the matter is still subjudice, we are unable to quantify the final liability and its impact, if any, on the company and its officers. (Refer to the note no 42 of the IND AS Standalone Financial Statement)

Our opinion is not modified on the above matters.

Other Matters

The Comparative financial information of the Company for the year ended 31st March, 2023 included in these Standalone financial statements, are based on the previously issued statutory Standalone financial statements audited by predecessor auditors vide their report for the year ended 31 March 2023 dated 02nd May, 2023 expressed a modified opinion on those financial statements.

Our opinion is not modified on the above matters.

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

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone IND AS financial statements and our auditor''s report thereon.

Our opinion on the standalone IND AS 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 standalone IND AS 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 Those Charged with Governance 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 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, changes in equity and cash flows of the Company in accordance with the IND AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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 standalone IND AS financial statements, 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.

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

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

Our objectives are to obtain reasonable assurance about whether the standalone IND AS 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 IND AS financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the 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 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 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 IND AS financial statements, including the disclosures, and whether the standalone IND AS 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.

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

1. As required by section 197(16) of the Act as amended, in our Opinion and to the best 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.

2. As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditors on separate financial statements and other financial information of the subsidiaries, we report, to the extent applicable, that:

a. We have sought and except for the matters described in the Basis for Qualified opinion, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated Ind AS financial statements,

b. Except for the possible effects of the matter described in the Basis for Qualified opinion, paragraph above, 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 and the report of the other auditors,

c. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including other Comprehensive Income, Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flow dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid Consolidated Ind AS financial statements comply with the Indian Accounting Standards specified under section 133 of the Act.

e. On the basis of written representations, received from the directors of the Holding Company and taken on record by the Board of Directors of the Holding and the reports of the Board of Directors of the Holding Company and the reports of the other statutory auditors of its subsidiary companies, none of the directors of the Group companies, are disqualified as on March 31,2024 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 with reference to consolidated financial statements, and the operating effectiveness of such controls, refer to our separate Report in "Annexure A" which is based on the auditor''s report of the company and its subsidiary companies. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of internal financial controls with reference to consolidated financial statements of those companies.

g. 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, as amended, in our opinion and to the best of our information and according to the explanations given to us & based on the consideration of the report of the other auditors on financial statement as also the other financial information of the subsidiaries:

i. The Consolidated Ind AS financial statements disclose the impact of pending litigations on the consolidated Ind AS financial position of the Group (Refer Note No 29 to the Consolidated Ind AS Financial Statements.)

ii. The Group did not have any material foreseeable losses on long term contracts including derivative contracts.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company and its subsidiary company during the year ended 31st March 2024.

iv. (a) The respective management of the Holding company and its subsidiaries has represented that, to the best

of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Holding Company or any of its subsidiaries to or in any other person or entity, including foreign entity ("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 Holding Company or any of its subsidiaries ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The respective management of the Holding company and its subsidiaries has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Holding Company or any of its subsidiaries from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Holding Company or any of its subsidiaries 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;

(c) Based on the audit procedures performed by us and those performed by the auditors of the subsidiaries and that have been considered reasonable and appropriate in the circumstances, nothing has come to our and other auditors notice that has caused us or other auditor 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 Group has not declared and paid any Interim divided nor has proposed any final dividend during the previous year, and hence the question of Compliance and applicability of Section 123 of the Companies Act does not arise.

vi. Based on our examination which included test checks and that performed by the respective auditors of the subsidiaries which are companies incorporated in India whose financial statements have been audited under the Act, the Holding Company and subsidiaries have used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit, we and respective auditors of the above referred subsidiaries did not come across any instance of 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 31,2024.

3. With respect to the matters specified in paragraph 3(xxi) and 4 of the Companies (Auditors'' Report ) Order, 2020 ("the Order") issued by the Central Government in terms of the Section 143(11) of the Act , to be included in the Auditor''s report , according to the information and explanation given to us , and based on the CARO reports issued by us for the Company and respective auditors of its subsidiaries included in the Consolidated financial statements of the Company, to which reporting under CARO is applicable , we report that there are no qualification or adverse remarks in these CARO reports.

For, Pankaj R Shah & Associates

Chartered Accountants FRN-107361W UDIN: 24107414BJZXCF7552

CA Nilesh Shah

Place: Ahmedabad Partner

Date: 02nd May 2024 Membership No. 107414

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Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of N.K.Industries Ltd. which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for 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 Standards notified under the Companies Act, 1956 ("the Act) read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies act,2013. This responsibility includes the design, implementation and maintenance of internal control 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.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of companies internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

1. We draw attention to Note 30 to the financial statements which indicates that the company had incurred huge losses in past years, including the financial year under audit and the company''s net worth is negative. In spite of this in view of the management, the accounts have been prepared on "Going Concern basis".

Further, a Winding up petition before the Hon''ble High Court of Gujarat has been filed by Vemag Engineering Pvt. Ltd. for its dues of Rs 17.38 lacs. The aforesaid Debt is disputed by the Company, and has been disclosed as a contingent liability (Refer note No 25 b of notes to financial statements).Pending decision of the Hon''ble High Court of Gujarat and considering the fact that the company is registered and declared "Sick" by Hon''ble Board for Industrial & Financial Reconstruction under SICA Act, the accounts have been prepared on "Going concern basis".

2. The Company has entered into financial arrangement with National Spot Exchange Ltd (NSEL) through trading and Clearing Member, N.K.Proteins Ltd (Group Company) by way of purchase and sales of various goods,without physical delivery of the goods, during the previous fiscal year. Further although the balances of long term creditors include the creditors resulting out of such transactions, the liability of NSEL could not be ascertained due to the difference between the balance as per the books of the company and balance due as per the demand of NSEL through the trading and clearing member N.K.Proteins Ltd. In view of the fact that matter is still under reconciliation and under dispute, we are unable to quantify the amount of liability or unable to make any comments on the same .Further NSEL suspended the trading on 31st July 2013 and has moved an arbitration petition in the H''onble Mumbai High Court for recovery of outstanding amount from N.K. Proteins Limited, and has made the company a Respondent The matter is pending with H''onble Bombay High Court. The matter being Subjudice we are unable to comment on the same. (Refer Note no 31 of notes to financial Statements)

3. The income tax department had carried out survey under section 133A on the company along with other group companies. The investigation is pending with Income Tax Department. Further, the Investigation by Economic Offence Wing of Mumbai Police (EOW) is also in progress against trading and clearing member N.K.Proteins Limited relating to the issue. The matter being subjudice we are unable to comment on the same. (Refer Note no 33 of notes to financial Statements)

4. Trade payables include amounts payable to third parties as elaborated vide note no 31 above, and trade receivables include receivable from third parties towards transactions through National Spot Exchange Ltd (NSEL). The said balances as on date are subject to confirmation by respective parties and reconciliation/adjustments if any. The Balance amount of trade payables and receivables and other loans and advances are also subject to confirmation and we are unable to comment on the same. (Refer Note no 32 of notes to financial Statements).

5. Sales Tax Department has completed the assessment for various assessment years and raised demand of Rs 5423.55 lacs for the earlier previous years and further an amount of Rs 130.88 Lacs for the year under review making total demand of Rs 5554.43 Lacs. The company has not made any provision for the above demand raised by the sales tax authority in view of the fact that the company had preferred an appeal before the appellate authority. Had the provision for sales tax would have been made for the earlier years as well as for the year under review, the loss for the current year would have been higher by Rs 130.77 Lacs and loss for the earlier year would have been higher by Rs 5423.55 Lacs and Liabilities would have been higher by Rs 5554.43 Lacs (Refer Note no 36 of notes to financial Statements).

6. No provision for interest is made during the year on advances of Rs 2920.25 Lacs (P.Y. Rs 1171.60 Lacs), since the same is considered as doubtful. (Refer Note no 28 of notes to financial Statements)

7. Impact, if any, of the rehabilitation scheme by operating agency appointed by Hon''ble Board for Industrial & Financial Restructuring (BIFR) is not ascertainable since the scheme is pending. (refer note No.26 of notes to financial statements).

Qualified Opinion

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 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:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(ii) in the case of the Statement of Profit and Loss Account, of the Loss for the year ended on that date and

(iii) In the case of the cash flow statement, of the cash flows for the Year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report), Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section(4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. we have 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 appears from our examination of those books

c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account

d. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act,1956 ("the Act) read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies act,2013

e. on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the Auditors'' Report

Referred to in paragraph of our report of even date on the accounts of N. K. Industries Limited for the year ended on 31st March 2014.

i) a) The company has maintained records showing full particulars, including quantitative details & the situation of the fixed assets with effect from 1st April 2008 onwards.

b) As explained to us, a major portion of the fixed assets has been physically verified by the management during the year in accordance with a phased programme of verification adopted by the Company. In our opinion, the frequency of verification is reasonable having regard to the size of the company & nature of its assets. In absence of availability of fixed asset register prior to period 1st April 2008,we are unable to comment on material discrepancies noticed on physical verification of fixed assets & its effect in the books of accounts.

c) According to the information and explanation given to us, no Fixed assets has been disposed off during the year and hence the question of affecting going concern assumption does not arise.

ii) a) As explained to us, inventories were physically verified by the management at reasonable intervals during the year.

b) In our opinion & according to the information & explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable & adequate in relation to the size of the company & nature of its business.

c) In our opinion and according to the information and explanations given to us, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the Physical stocks and the book records were not material.

iii) a) The company has granted interest free unsecured loans to five companies covered in the register maintained under section 301 of the Companies Act, 1956. The net worth of four companies is negative. The said loans are doubtful for recovery. The maximum amount involved during the year was Rs 2507.46 lacs and the year-end balance of such loan was Rs 2507.46 lacs.

b) The loans are interest free loans and are considered doubtful of recovery.

c) There is no stipulation for repayment of loan.

d) There is no stipulation in respect of repayment of loans granted, therefore, the question of overdue amount thereon does not arise.

e) The company has not taken any loan from any company, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

iv) In our opinion and according to information given to us, there are adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. There is no continuing failure to correct major weaknesses in internal control system;

v) (a) In our opinion and according to the information & explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under section 301 of the Companies Act, 1956

(b) In our opinion, and according to information and explanation given to us, the transactions of purchase of goods & materials, sales of goods, materials,& services made in pursuance of contract or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year Rs 5.00 Lacs or more in respect of such parties have been made at prices which are reasonable having regard to the prevailing market prices for such goods, materials, fixed assets & services or the prices at which the transactions for similar goods, materials, & services have been made with other parties.

vi) The Company has not accepted any deposits from the public.

vii) In our opinion the Company has an in house internal audit system, commensurate with the size of the Company and nature of its business, however the same is required to be strengthened with regard to the scope, reporting and its compliance.

viii) We have broadly reviewed the books of accounts maintained by the company in respect of products where pursuance to the rules made by the Central Government of India, the maintenance of Cost records has been prescribed u/s 209(1) clause (d) of the Companies Act 1956 and we are of the opinion that prima facie, the prescribed accounts & records have been maintained. We have however, not made a detailed examination of the records.

ix) a) According to the information and explanations given to us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income- tax, Sales-tax, Wealth tax, Service tax, Custom Duty, Excise Duty, Cess and any other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty and Cess were in arrears as at the end of the year, for a period of more than six months from the date they become payable.

b) On the basis of records produced before us for our verification and according to the information and explanations given to us, the details of disputed, Sales Tax & Income Tax dues aggregating to Rs 5886.67 lacs that have not been deposited as on 31st March, 2014 on account of matters pending before appropriate authorities, the details of which are as under.

a) Name of the Statute Nature of Dues Amount (Rs in Lacs)

Income Tax Act Corporate Tax 30.26 Lacs (upto 31/3/14)

Income Tax Act Corporate Tax 161.72 Lacs

Income Tax Act Corporate Tax 140.26 Lacs

Guj. Sales Tax Sales Tax 5423.55 (Net of payments)

Guj. Sales Tax Sales Tax 130.88

Name of the Statute Period to which Forum where dispute is amount relates pending

Income Tax Act Block Assessment Gujarat HighCourt from 1989 to 1999

Income Tax Act A.Y.2006-2007 CIT Appeal

Income Tax Act A.Y.2007-2008 CIT Appeal

Guj. Sales Tax F.Y. 1989-90, 90-91, Sales Tax Tribunal / 97-98 to 2001-02 Commercial Tax Officer

Guj. Sales Tax F.Y. 2008-09 Commissioner of Commercial Tax, Appeal-I, Ahmedabad

x) In our opinion, the accumulated losses of the company as on 31st March 2014 are more than the fifty percent of its net worth. The company has incurred cash loss during the current financial year and also during the immediately preceding financial year.

xi) As there are no loans taken by the company during the year, the question of default in repayment does not arise.

xii) In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debenture and other securities.

xiii) According to the information & explanations given to us, the company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003, are not applicable to the company.

xiv) According to the information & explanations given to us, the company is not dealing or trading in shares, Securities, debentures & other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003, are not applicable to the company.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi) The Company has not raised any new term loans during the year.

xvii) Based on the information and explanations given to us and on an overall examination of the balance sheet of the company, in our opinion Rs 2155.40 lacs raised on Short term basis stands utilized for long term investments.

xviii) The Company has not made any Preferential allotment of shares during the year under review.

xix) The company has not issued any debentures during the year.

xx) The company has not raised any money by way of public issue during the year.

xxi) According to the information and explanation given to us, no fraud on the company has been noticed or reported during the course of our audit. As regards frauds by the company is concerned, we have been informed that the company has been made a joint respondent with N.K. Proteins Limited (one of the group companies) in the Arbitration Petition filed by National Spot Exchange Limited (NSEL) in Mumbai High Court, in view of the fact that the investigations/litigations related to the transactions with NSEL are still under progress and the matter is subjudice, we are unable to give our comments under this head.

For PARIKH & MAJMUDAR Chartered Accountants FR No. 107525W

sd/- [CA Dr HITEN PARIKH] Place : Ahmedabad PARTNER Date : 16th July, 2014 M. No. 40230

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Mar 31, 2013

We have audited the accompanying financial statements of N.K. Industries Ltd. ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 Act. This responsibility includes the design, implementation and maintenance of internal control 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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements 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 management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Qualified Opinion

1. We draw attention to Note 25(i) in the financial statements which indicate that the company had incurred huge losses in past years and the company''s net worth is negative. In spite of this in view of the management, the accounts has been prepared on Going Concern basis.

2. A Company has been buying and selling goods on National Spot Exchange Limited (NSEL) through trading and clearing member, N.K. Proteins Limited (Group Company). NSEL suspended the trading on 31st July 2013 and has referred the matter for arbitration for recovery of outstanding amount from NX. Proteins Limited, this company and other clients. The matter is pending with Bombay High Court.

Further, income tax department carried out survey under section 133 A on the company along with other group companies for investigating the transactions with NSEL. The investigation is pending with Income Tax Department.

Further, the investigation by EOW is also in progress.

a) The trading loss of Rs. 176.34 Crores (P.Y. Rs. 49.26 Crores) represents the loss made on purchase and sales of commodities through National Spot Exchange Ltd. without physical delivery of goods. (Refer note No.250).

b) The Balances of Trade Creditors, Trade Debtors, Advances and Loans (including in respect of transactions through National Spot Exchange Limited) are Subject to confirmation (Refer note no.25K and 25L).

We are unable to give any opinion of the likely impact on the financial statements of this transactions referred to in paragraph (2) above.

3. The company has not made provision for sales tax liabilities of Rs.5423.55Lacs (Refer note no 25A). Had the provision would have been made the Loss for the current year and accumulated Loss would have been more by this amount and liabilities would have been more by this amount.

4. No provision for interest is made during the year on advances of Rs. 1171.60 Lacs (P.Y. Rs.1011.98Lacs), since same is considered as doubtful.

5. Impact if any of the rehabilitation scheme by operating agency appointed by BIFR is not ascertainable since the scheme is pending (refer note No. 25D)

6. Attention is invited to prior period adjustment of Rs. 104.54 Crore (refer to Note No.25M)

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, excepts for the possible effects to the matters described in the Basis for qualified opinion, the financial statements give the information required by the Act in the manner so required and give a true and fair view incofirmity with the accounting principles genrally accepted in india.

a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March,2013.

b) In the case of the Statement of Profit and Loss, of the loss for the year ended on that date and

c) In the case of the Cash flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1) As required by the Statement on Companies (Auditor''s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

2) As required by section 227(3) of the Act, we report that:

a) Except for the matter described in the basis for Qualified Opinion paragraph, we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) Except for the matter described in the basis for Qualified Opinion, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

c) The Balance Sheet, Statement of Profit and Loss and cash flow statement dealt with by this Report are in agreement with the books of account.

d) Except for the matter described in the Basis for Qualified Opinion paragraph, in our opinion Balance Sheet, Statement of Profit and Loss and cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of section 211of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT

Referred to in paragraph of our report of even date on the accounts of N. K. Industries Limited for the year ended on 3Ist March 2013.

0) (a) The Fixed Assets Register is not maintained by the company.

(b) The Fixed Assets are physically verified by the Management during the year but as there is no fixed asset register is maintained, therefore discrepancy, if any. could not be ascertained.

(c) During the year substantial part of fixed assets have not been disposed off.

(ii) (a) As explained to us, the inventory has been physically verified by the management at reasonable intervals. In our opinion the frequency of verification is reasonable.

(b) The procedure of physical verification of stock followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material.

(iii) (a) The company has granted interest free unsecured loans to five companies covered in the register maintained under section 301 of the Companies Act, 1956. The net worth of four companies is negative. We are unable to express our opinion on recoverability of the same (Amount outstanding Rsl007.46 Lacs (P.Y.966.07Lacs). The maximum amount involved during the year was Rs.2507.46 lacs (P.Y.Rs. 966.07 lacs) and the year-end balance of such loan was Rs.2507.46 lacs (P.Y. Rs. 966.07 lacs). The company has not granted any loan to firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The loans are interest free loans and are considered doubtful of recovery.

(c) There is no stipulation for repayment of loan.

(d) There is no stipulation in respect of loans granted therefore the question of overdue amount does not arise.

(e) The company has not taken any loan from any company, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to information given to us, there an adequate internal

control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. There is no continuing failure to correct major weaknesses in internal control system;

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered.

(b) According to the information and explanations given to us, in respect of transactions (Includes transactions referred to in Note No.25 O) referred to in section 301 of the Companies Act, 1956 made with the company or firm in pursuance of contracts or arrangements, We are unable to comment on prevailing market price in view of nature of transaction and commodity.

(vi) The company has not accepted any deposit from any party throughout the year.

Therefore, provisions of section 58A, 58AA or any other relevant provisions of Companies Act, 1956 and the rules made there under are not applicable.

(Vii) In our opinion, the company''s internal audit system needs to be strengthened to make it commensurate with the size of the company and nature of its business.

(viii) The company has carried on manufacturing activities on its own only for two months during the year and therefore the management is of the view that books of account and records Pursuant to rules prescribed by Central Government under section 209(1 )(d) of Companies Act, 1956 in respect of all its manufacturing activities are not applicable. Hence company has not maintained the cost accounting records for the year.

(ix) (a) According to the Information and explanations given to us the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Custom Duty, Excise Duty, Cess and any other material statutory dues applicable to It.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty and Cess were In arrears as at the end of the year, for a period of more than six months from the date they become payable.

(C) According to the information and explanations given to us, there are no disputed dues which are not deposited of sales tax/income tax/wealth tax/service tax/custom duty/excise duty, or cess except stated below:

Name of the Nature of Amount Period to Forum where Statute Dues (Rs.in Lacs) which amount dispute is relates pending Income Tax Act Corporate 25.93 Lacs Block Assessment Gujarat Tax (upto from 1989 to 1999 High 31/3/13) Court

Income Tax Act Corporate 161.72 A.Y.2006-2007 CIT Appeal Tax Lacs

Income Tax Act Corporate 140.26 A.Y.2007-2008 CIT Appeal Tax Lacs Guj. Sales Tax Sales Tax 5423.55 F.Y. 1989-90, Sales Tax (Net of 90-91, 97-98 Tribunal / Officer to 2001-02 Commercial Tax payments) (x) In our opinion, the accumulated losses of the company as on 31st March 2013 are more than the fifty percent of its net worth. It has incurred cash loss during the current financial year. There was also cash loss during the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company

has settled the outstanding dues with Visnagar Nagarik Sahakari Bank Ltd during the year. There is no other outstanding loan at the end of the year.

(xii) According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore provisions of clause of the Order are not applicable to the company.

(xiv) According to the information and explanations given to us the company is not dealing or trading in shares and securities. There are no such shares or securities held by the company.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) The Company has not raised any new term loans during the year.

(xvii) Based on the information and explanations given to us and on an overall examination of the balance sheet of the company, in our opinion the short term fund raised are not utilized for acquiring fixed asset or long term investment or vice-a-versa.

(xviii) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 during the year.

(xix) The company has not issued any debentures and therefore the creation of securities does not arise.

(xx) The company has not raised any money by public issue during the year.

(xxi) According to information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

FOR RAJIV SHAH & ASSOCIATES Chartered Accountants (FR NO.108454W)

sd/- (RAJIV C SHAH) Partner M.No.: 043261

Place : Ahmedabad

Dated : 30th September 2013

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Mar 31, 2012

1. We have audited the attached Balance Sheet of N.K.Industries Ltd., as at 31st March 2012 and also the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Statement on Companies (Auditor''s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books

(iii) The Balance Sheet, Statement of Profit and Loss & Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss & Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 except referred to in para (vi) below.

(v) On the basis of written representations received from the directors, as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) a) The accounts are prepared on the assumption of "Going Concern" though the net worth is negative and reference is made to BIFR.

b) Attention is invited to Note No. (g) To Schedule 24 regarding non provision of interest receivable on various advances amounting to Rsl171.60 Lacs.

c) Balances of Debtors, Creditors, Unsecured Loans and Advances are subject to confirmation.

(vii) Subject to above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012 and

(b) In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date.

(c) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS'' REPORT

Referred to in paragraph 3 of our report of even date on the accounts of N. K. Industries Limited for the year ended on 31st March 2012.

(i) (a) The Fixed Assets Register is not maintained by the company.

(b) The Fixed Assets are physically verified by the Management during the year but as there is no fixed asset register is maintained, therefore discrepancy, if any, could not be ascertained.

(c) During the year substantial part of fixed assets have not been disposed off.

(ii) (a) As explained to us, the inventory has been physically verified by the management at reasonable intervals. In our opinion the frequency of verification is reasonable.

(b) The procedure of physical verification of stock followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material.

(iii) (a) The company has granted interest free unsecured loans to four companies covered in the register maintained under section 301 of the Companies Act, 1956. The net worth of these companies is negative. We are unable to express our opinion on recoverability of the same. The maximum amount involved during the year was Rs.966.07 lacs (P.Y.Rs. 798.09 lacs) and the year-end balance of such loan was Rs. 966.07 lacs (P.Y. Rs. 798.09 lacs). The company has not granted any loan to firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The loans are interest free loans and are considered doubtful of recovery.

(c) There is no stipulation for repayment of loan.

(d) There is no stipulation in respect of loans granted therefore the question of overdue amount does not arise.

(e) The company has not taken any loan from any company, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to information given to us, there an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. There is no continuing failure to correct major weaknesses in internal control system;

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered.

(b) According to the information and explanations given to us, in respect of transactions referred to in section 301 of the Companies Act, 1956 made with the company or firm in pursuance of contracts or arrangements. We are unable to comment on prevailing market price in view of nature of commodity.

(vi) The company has not accepted any deposit from any party throughout the year. Therefore, provisions of section 5 8A, 58AA or any other relevant provisions of Companies Act, 1956 and the rules made there under are not applicable.

(vii) In our opinion, the company''s internal audit system needs to be strengthened to make it commensurate with the size of the company and nature of its business.

(viii) We have broadly reviewed books of account and records maintained by the company Pursuant to rules prescribed by Central Government under section 209 91)(d) of Companies Act, 1956 in respect of all it''s manufacturing activities. We are of the opinion that primafacia the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.

(ix) (a) According to the information and explanations given to us the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Custom Duty, Excise Duty, Cess and any other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty and Cess were in arrears as at the end of the year, for a period of more than six months from the date they become payable.

(c) According to the information and explanations given to us, there are no disputed dues which are not deposited of sales tax/income tax/wealth tax/service tax/custom duty/excise duty, or cess except stated below:

Name of the Nature of Amount Period to Forum where Statute Dues (Rs.in Lacs) which amount dispute is relates pending

Income Tax Corporate 25.93 Lacs Block Gujarat Act Tax (upto 31/3/12) Assessment High Court from 1989 to 1999

Income Tax Corporate 161.72 Lacs A.Y.2006-2007 CIT Appeal Act Tax

Income Tax Corporate 140.26 Lacs A.Y.2007-2008 CIT Appeal Act Tax

Guj. Sales Sales 5423.55 (Net F.Y. 1989-90, Sales Tax Tax Tax of payments) 90-91, 97-98 Tribunal / to 2001-02 Commercial Tax Officer

(x) In our opinion, the accumulated losses of the company as on 31st March 2012 are more than the fifty percent of its net worth. It has incurred cash loss during the current financial year. There was also cash loss during the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company had defaulted in repayment of term loan and working capital dues in previous year of M/s. Kotak Mahindra Bank Ltd. This is fully paid off at end of the year.

(xii) According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore provisions of clause of the Order are not applicable to the company.

(xiv) According to the information and explanations given to us the company is not dealing or trading in shares and securities. There are no such shares or securities held by the company.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) The Company has not raised any new term loans during the year.

(xvii) Based on the information and explanations given to us and on an overall examination of the balance sheet of the company, in our opinion the short term fund raised are not utilized for acquiring fixed asset or long term investment or vice-a-versa.

(xviii) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 during the year.

(xix) The company has not issued any debentures and therefore the creation of securities does not arise.

(xx) The company has not raised any money by public issue during the year.

(xxi) According to information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

FOR RAJIV SHAH & ASSOCIATES Chartered Accountants (FR.NO. 108454W)

(RAJIV C SHAH) Partner M.No.: 043261

Place: Ahmedabad

Dated: 30/05/2012

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Mar 31, 2010

1. We have audited the attached Balance Sheet of N.K. Industries Ltd., as at 31st March 2010 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Statement on Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books

(iii) The Balance Sheet, Profit and Loss Account & Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

(iv) In our opinion, the Balance Sheet, Profit and Loss Account & Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 except referred to in para (vi) below.

(v) On the basis of written representations received from the directors, as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 st March, 2010 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) a) The accounts are prepared on the assumption of "Going Concern" though the net worth is negative and reference is made to BIFR. (Refer Note No.:5 of Schedule- 21)

b) Attention is invited to Note No. 7 to Schedule 21 regarding non provision of interest receivable on various advances amounting to Rs 821.65 Lacs which are considered doubtful.

c) Balances of Secured Loans, Debtors, Creditors, Unsecured Loans and Advances are subject to confirmation. _

(vii) Subject to above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2010 and

(b) in the case of the Profit and Loss Account, of the Profit for the year ended on that date.

(c) in the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT Referred to in paragraph 3 of our report of even date on the accounts ot N. K. Industries Limited for the year ended on 31st March 2010.

(i) (a) The Fixed Assets Register is not maintained by the company.

(b) The Fixed Assets are not physically verified by the Management during the year. Therefore discrepancy, if any, could not be ascertained.

(c) During the year substantial part of fixed assets have not been disposed off.

(ii) (a) As explained to us, the inventory has been physically verified by the management at reasonable intervals. In our opinion the frequency of verification is reasonable.

(b) The procedure of physical verification of stock followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material.

(iii) (a) The company has granted interest free unsecured loans to three companies and one other party covered in the register maintained under section 301 of the Companies Act, 1956.The maximum amount involved during the year was Rs.978.44 lacs (RY.Rs. 651.53 lacs) and the year-end balance of such loan was Rs.912.84 lacs (P.Y. Rs. 651.53 lacs).

(b) The loans are interest free loans and are considered doubtful of recovery.

(c) There is no stipulation for repayment of loan.

(d) There is no stipulation in respect of loans granted therefore the question of overdue amount does not arise.

(e) The company has taken interest free unsecured loans from two parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs, 55.00lacs (P.Y Rs. 277.24 lacs) and the year end balance of such loan was Rs. 35.49 Lacs (P.Y. Rs.277.24 lacs). There are no loans taken from firms or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(f) The rate of interest and other terms and condition of such loan is not prejudicial to the interest of the company

(g) There is no stipulation for repayment of loan taken.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered. (b) According to the information and explanations given to us, the transactions referred to in section 301 of the Companies Act, 1956 made with the company in pursuance of such contracts or arrangements have been made at prices which are reasonable having regards to the prevailing market prices at the relevant time.

(vi) The company has accepted deposit from two parties during the year though the net worth of the company is negative. This is not in conformity with the provisions of section 58A, 58AA or any other relevant provisions of Companies Act, 1956 and the rules made thereunder are not applicable.

(vii) In our opinion, the companys internal audit system needs to be strengthened to make it commensurate with the size of the company and nature of its business.

(viii) We are informed that maintenance of cost records are not prescribed under section 209 (1 )(d) of the Companies Act, 1956

(ix) (a) According to the information and explanations given to us the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Custom Duty, Excise Duty, Cess and any other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty and Cess were in arrears as at the end of the year, for a period of more than six months from the date they become payable except Income Tax dues of Rs. 70.23 lacs for the accounting year 2007-08 which is fully paid on 12/04/2010.

(c) According to the information and explanations given to us, there are no disputed dues which are not deposited of sales tax/income tax/wealth tax/service tax/custom duty/excise duty, or cess except stated below.

Name of the Statute Nature of Amount Period to which Forum where

Dues (Rs.in Lacs) amount relates dispute is pending

Income Tax Act Corporate 71.43 Lacs Block Assessment Gujarat High Court

(including from 1989 to 1999

interest upto 31/3/10) Tax

Guj. Sales Tax Sales Tax 4460.59 F.Y. 1989-90, 90-91, Sales Tax Tribunal /

(Net of 98-99 to 2001 -02 & Commercial Tax Officer

payments) 2003-04

(ix) !n our opinion, the accumulated losses of the company as on 31st March 2010 are more than the fifty percent of its net worth. It has incurred cash loss during the current financial year. There was no cash loss during the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company had defaulted in repayment of term loan and working capital dues, amounting to Rs. 957.39 lacs, being balance outstanding on 31 st March, 2010. The Company has entered into compromise agreements under One Time Settlement scheme with all the banks (except Visnagar Nagrik Sahkari Bank Ltd.). All the banks are fully paid off as per the compromise settlements save and except M/s. Kotak Mahindra Bank Ltd to whom the balance amount of Rs. 7.62 crores is due to be paid in monthly installments by the end of August,2011.The Visnagar Nagrik Sahakari Banks balance dues stood to Rs.179.84 lacs which is under negotiation as per the settlement scheme of the Government of Gujarat.

(xii) According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiit) The company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore provisions of clause (xiii) of the Order are not applicable to the company.

(xiv) According to the information and explanations given to us the company is not dealing or trading in shares and securities. There are no such shares or securities held by the company.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) The Company has not raised any new term loans during the year.

(xvii) The company has not made any preferential atlotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 during the year.

(xviii) The company has not issued any debentures and therefore the creation of securities or charges does not arise.

(xix) The company has not raised any money by public issue during the year.

(xx) According to information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

Place : Ahmedabad FOR CHANDULAL M. SHAH & CO

Dated : May 29, 2010 Chartered Accountants

(FRNO.101698W) (K.H.Vasavada) Partner M.No.; 12322