INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF

PARAS DEFENCE AND SPACE TECHNOLOGIES LIMITED
Report on the Audit of the Standalone Financial Statements
OPINION

We have audited the accompanying Standalone Financial Statements
of PARAS DEFENCE AND SPACE TECHNOLOGIES LIMITED (“the
Company”), which comprise the Standalone Balance Sheet as at March
31, 2023, the Statement of Standalone Profit and Loss (including Other
Comprehensive Income), the Statement of Standalone Changes in
Equity and the Statement of Standalone Cash Flows for the year then
ended, and notes to the Standalone Financial Statements, including
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, 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,
2023 and its profit including Other Comprehensive Income, Changes in
Equity and its Cash Flows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit of the Standalone Financial Statements in
accordance with the Standards on Auditing (SAs) 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 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 the
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 (KAM)

Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the Standalone Financial Statements
for the year ended March 31, 2023. 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. For the matter below, our description of how our audit
addressed the matter is provided in that context.

We have determined the matter described below to be the key
audit matter to be communicated in our report. We have fulfilled
the responsibilities described in the Auditors’ responsibilities for
the audit of the Standalone Financial Statements section of our
report, including in relation to that matter. Accordingly, our audit
included the performance of procedures designed to respond to our
assessment of the risks of material misstatement of the Standalone
Financial Statements. The results of our audit procedures, including
the procedures performed to address the matter below, provide the
basis for our audit opinion on the accompanying Standalone Financial
Statements.

INFORMATION OTHER THAN THE STANDALONE
FINANCIAL STATEMENTS AND AUDITOR’S REPORT
THEREON

The Company’s Board of Directors is responsible for the other
information. The other information comprises the management
discussion & analysis and director’s report included in the annual
report but does not include the Standalone Financial Statements and
our auditor’s report thereon. The above information is expected to be
made available to us after the date of this auditor’s report.

Our opinion on the Standalone 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 Financial Statements,
our responsibility is to read the other information identified above
when it becomes available and, in doing so, consider whether the other
information is materially inconsistent with the Standalone Financial
Statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated.

When we read the above other information, if we conclude that there
is material misstatement therein, we are required to communicate the
matter to those charged with governance.

RESPONSIBILITIES OF MANAGEMENT AND THOSE
CHARGED WITH GOVERNANCE FOR THE STANDALONE
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 Financial Statements that give a true and fair
view of the financial position, financial performance including other
comprehensive income, cash flows and the Statement of changes in
equity of the Company in accordance with the Ind AS and the 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 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.

In preparing the Standalone Financial Statements, management is
responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.

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

AUDITORS’ RESPONSIBILITY FOR THE STANDALONE
FINANCIAL STATEMENTS

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.

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

• I dentify 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 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
ability of the Company 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.

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 Financial Statements of the current year 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 the Companies (Auditor’s Report) Order, 2020 (“the

Order”), issued by the Central Government of India in terms of sub¬
section (11) of section 143 of the Act, we give in the “Annexure A”

a statement on the matters specified in paragraphs 3 and 4 of the

Order.

2. As required by Section 143 (3) of the Act, we report 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 Statement of
Standalone Profit and Loss (Including other comprehensive
income), the Statement of Standalone Changes in Equity
and the Statement of Standalone Cash Flows 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 prescribed under
Section 133 of the Act.

e. On the basis of the written representations received from
the directors as on March 31, 2023 and taken on record by
the Board of Directors, none of the directors is disqualified
as on March 31, 2023 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 Standalone Financial Statements
and the operating effectiveness of such controls, refer to
our separate Report in “Annexure B”.

g. With respect to the other matters to be included in the
Auditor’s Report in accordance with the requirements of
section 197(16) of the Act, as amended:

In our opinion and to the best of our information and
according to the explanations given to us, the remuneration
paid / provided by the Company to its directors during the
year is in accordance with the provisions of section 197 of
the Act.

h. With respect to the other matters to be included in
the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, as amended,
in our opinion and to the best of our information
and according to the explanations given to us and as
represented by the management:

i. The Company has disclosed the impact of pending
litigations on its financial position in its Standalone
Financial Statements as referred to in Note No. 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;

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

iv. (a) Management has represented to us that, to the best

of it’s knowledge and belief, as disclosed in the notes
to the Standalone Financial Statements, during
the year 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, whether,
directly or indirectly lend or invest in other persons
or entities identified in any manner whatsoever
by or on behalf of the Company (“Ultimate
Beneficiaries”) or provide any guarantee, security
or the like on behalf of the Ultimate Beneficiaries;

(b) Management has represented to us that, to the best
of it’s knowledge and belief, as disclosed in the notes
to the Standalone Financial Statements, during the
year no funds have been received by the Company
from any person(s) or entity(ies), including foreign
entities (“Funding Parties”), with the understanding,
whether recorded in writing or otherwise, that the
Company shall, whether, directly or indirectly, lend
or invest in other persons or entities identified in

any manner whatsoever by or on behalf of the
Funding Party (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of the
Ultimate Beneficiaries

(c) Based on our audit procedure conducted that have
been considered reasonable and appropriate in the
circumstances, nothing has come to our attention
that cause us to believe that the representation
given by the management under paragraph
(2) (h) (iv) (a) & (b) above, contain any material
misstatement.

v. The Company has not declared or paid any dividend
during the year and has also not proposed dividend for
the year.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules,
2014 for maintaining books of account using accounting
software which has a feature of recording audit trail (edit
log) facility is applicable to the Company with effect from
April 1, 2023, and accordingly, reporting under Rule 11(g)
of Companies (Audit and Auditors) Rules, 2014 is not
applicable for the financial year ended March 31, 2023.

For CHATURVEDI & SHAH LLP

Chartered Accountants
Firm Reg. No. 101720W / W100355

Anuj Bhatia

Partner

Membership No. 122179
UDIN No.: 23122179BGQWTU9518
Mumbai
Date: May 16, 2023