INDEPENDENT AUDITOR'S REPORT

To,

The Members

KIRI INDUSTRIES LIMITED

REPORT ON THE AUDIT OF THE STANDALONE

FINANCIAL STATEMENTS

Opinion

We have audited the accompanying standalone financial
statements of Kiri Industries Limited ("the Company"),
which comprise the Balance Sheet as at March 31,
2023, 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 the 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, the loss including total
comprehensive income, changes in equity and the 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 (SA's) 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 made 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 audit opinion on the
standalone financial statements.

Emphasis of Matter

1. We draw attention to various court cases and

judgments in relation to disputes between Kiri

Industries Ltd., ("the Company") and DyStar Global

Holdings (Singapore) Pte. Ltd. ("DyStar") & Senda

International Capital Ltd. ("Senda")

• The Court of Appeal (the Supreme Court of
Singapore) vide its judgement dated July 6, 2022
has dismissed all points in three appeals filed by
Senda and allowed majority two of the appeal
issues filed by the Company.

• In another judgment, the Court of Appeal
(the Supreme Court of Singapore) vide its
judgement dated November 25, 2022 in favour
of the Company uphelding the earlier cost
judgement of SICC.

• The Singapore International Commercial Court
("SICC") vide judgement dated February 8, 2023
has decided computation base of 53,550 tonnes
annually to be considered for computation of
patent licence fees.

• Senda has failed to make payment of cost amount
awarded to the Company and failed to comply
within deadlines given till 20 January 2023. The
Company has filed Writ of Seizure and Sale of
Senda's shares held in DyStar to the extent of
recovery of cost awarded by SICC and Singapore
Supreme Court on January 20, 2023.

• The SICC vide its judgement dated March 3,
2023 has confirmed the final value of Company's
37.57% stake in DyStar as US$603.80 million as
against US$481.60 million, which was valued by
the SICC vide its judgement dated June 21, 2021
which is now significantly increased by US$122.20
million. We do not express any form of assurance/
conclusion thereon with respect to performance/
honour of SICC judgment by other party.

• The Court of Appeal (the Supreme Court of
Singapore) dismissed both the appeals, an appeal
of the Company as well as an appeal of DyStar vide
judgement dated April 14, 2023. The Company
and DyStar had filed appeals against SICC
judgement dated September 24, 2021, dismissing
the Company's counterclaim of pertaining to
whether the Company being treated as preferred
supplier against DyStar in SIC/7.

• The defamation suit filed by the Company against
the DyStar, Senda & MLS India & their respective
directors/officers is pending with City Civil
Court, Ahmedabad.

2. We draw attention to cash loss incurred by the
company during the year under review and also losses
in the current financial year and previous financial
year. We have been informed by the management
of the company that the business of the company
is cyclical in nature and is affected either favourably
or adversely by various local and global factors. The
main reasons for losses are the operating losses due
to a squeeze on margins, slack demand, recession in
Europe, USA & elsewhere and the significant litigation
costs incurred to protect the economic interest in the
investment in the overseas associate namely DyStar
Global Holdings (Singapore) Pte. Ltd. However, the
realizable value of the assets including investment
in overseas associate is significantly higher than
the liabilities as ascertained by Supreme Court of
Singapore in its Judgment. On discussion regarding
risk assessment, the management of the company
informed us that the company is able to realise its
assets and discharge its liabilities in the normal course

A Ý - ' •

of business and the management does not intend to
liquidate the company or cease its operations.

Our Opinion is not modified in respect of the above
matters.

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 standalone financial statements as a whole, and
in forming our opinion thereon, and we do not provide
a separate opinion on these matters. Against Key audit
matter, our description of how our audit addressed the
matter is provided in that context.

We have determined the matters described below to be
the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the
Auditor's responsibilities for the audit of the standalone
financial statements section of our report, including in
relation to these matters. 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.

Information other than the Standalone Financial
Statements and Auditor's Report thereon

The Company's Management and Board of Directors are
responsible for the preparation of the other information.
The other information comprises the information included
in the Management Discussion and Analysis, Director's
Reportincluding Annexures thereto, Business Responsibility
Report, Corporate Governance and Shareholder's
Information, but does not include the standalone financial
statements and our auditor's report thereon.

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 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 the management for the Standalone
Financial Statements

The Company's Management and Board of Directors
are responsible for the matters stated in section 134(5)
of the Act with respect to the preparation of these
standalone financial statements that give a true and fair
view of the financial position, financial performance, total
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 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.

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

Auditor's Responsibilities for the Audit of 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 Standards on Audit
(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 Standards on Audit
(SAs), we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:

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

> Obtain an understanding of internal 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
Company's ability to continue as a going concern. If

we conclude that a material uncertainty exists, we
are required to draw attention in our auditor's report
to the related disclosures in the standalone financial
statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions
may cause the Company to cease to continue as
a going concern.

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

Materiality is the magnitude of misstatements in the
standalone financial statements that, individually or
in aggregate, makes it probable that the economic
decisions of a reasonably knowledgeable user of the
financial statements may be influenced. We consider
quantitative materiality and qualitative factors
in (i) planning the scope of our audit work and in
evaluating the results of our work; and (ii) to evaluate
the effect of any identified misstatements in the
financial statements.

We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal
control that we identify during our audit.

We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and
to communicate with them all relationships and
other matters that may reasonably be thought to
bear on our independence, and where applicable,
related safeguards.

From the matters communicated with those charged
with governance, we determine those matters
that were of most significance in the audit of the
standalone financial statements of the current period
and are therefore the key audit matters. We describe
these matters in our auditor's report unless law or
regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated
in our report because the adverse consequences
of doing so would reasonably be expected to
outweigh the public interest benefits of such
communication.

REPORT ON OTHER LEGAL AND REGULATORY

REQUIREMENTS

1. As required by the Companies (Auditors' Report) Order,
2020 ("the Order") issued by Central Government in
terms of sub-Section (11) of section 143 of the Act,
we give in "Annexure-1", a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the
extent applicable.

2. (A) As required by Section 143(3) of the Act,

we report that:

a. We have sought and obtained all the
information and explanations which to
the best of our knowledge and belief were
necessary for the purpose of our audit;

b. In our opinion, proper books of accounts
as required by law have been kept by the
Company so far as it appears from our
examination of those books;

c. The Balance Sheet, Statement of Profit
and Loss including Statement of other
comprehensive income, Cash Flow
Statement and the Statement of Changes
in Equity dealt with by this Report are in
agreement with the books of accounts;

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

e. On the basis of written representations
received from the directors as on March
31, 2023, and taken on record by the Board
of Directors, none of the directors are
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 over financial reporting
of the Company with reference to these
standalone financial statements and the
operating effectiveness of such controls,
refer to our separate report in "Annexure-2"
to this report.

g. In our opinion the managerial remuneration
for the year ended March 31, 2023 has
been paid/ provided by the company
to its directors in accordance with the
provisions of Section 197 read with
Schedule V to the Act.

(B) 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:

i. The Company has disclosed the impact of
pending litigations on its financial position
in its standalone financial statements.

ii. TheCompany has made provision,asrequired
under the applicable law or accounting
standards, for material foreseeable losses on
long-term contracts.

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

iv. (a) The management has represented

that, to the best of it's knowledge and
belief, other than as disclosed in the
notes to the accounts, no funds have
been advanced or loaned or invested
(either from borrowed funds or share
premium or any other sources or kind
of funds) by the company to or in any
other person(s) or entity(ies), 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) The management has represented,
that, to the best of it's knowledge and
belief, other than as disclosed in the
notes to the accounts, 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

vi. As proviso to Rule 3(1) of the Companies
(Accounts) Rules, 2014 is applicable for the
Company w.e.f. April 01, 2023, reporting
under this clause is not applicable.

For, Pramodkumar Dad & Associates

Chartered Accountants

CA Pramod Dad

Partner
MRN: 038261

Place: Ahmedabad FRN: 115869W

Date: May 30, 2023 UDIN:23038261BGZGAY1511