We have audited the accompanying stand-alone financial statements of Precision Electronics Limited ("the
Company"), which comprise the Balance Sheet as at 31st March 2025, the Statement of Profit & Loss (including Other
Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement for the year ended, and a
summary of the Significant Accounting Policies and other explanatory information (hereinafter referred to as 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 31 March, 2025, the net
loss and 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 financial statements in accordance with the Standards on Auditing specified under
section 143(10) of the Act (SAs).

Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of
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 independence
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.

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. We have determined the matters described below to be the key audit matters to be
communicated in our report.

Key Audit Matters

A. Evaluation of uncertain Sales Tax positions and GST

The Company has uncertain Sales Tax positions and GST including matters under dispute which involves
significant judgment to determine the possible outcome of these disputes. Refer Note 37 to the Standalone
Financial Statements.

Auditor's Response

We obtained from the Company's management, details of the status as of 31 March 2025 concerning these tax
assessments and demands for current as well as past years. We assessed the management's underlying
assumptions in estimating the tax provision and the possible outcome of the disputes to evaluate whether any
change was required to management's position on these uncertainties.

B. Company's business model

The existing business model has been impacted by uncertainty due to high dependence on government contracts

which have been going down over the years, resulting in lower capacity utilisation and recurring losses leading to
difficulty in bank financing and increasing dependence on loans from others.

Auditor's response

The Company has diversified into Tactical infrastructure, Box build Manufacturing Services, System integration
for Defence & Security and Engineering Services which has the potential to give better contributions in the
medium and long term.

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

The Company's Board of Directors is responsible for the preparation of the other information. The other information
comprises the information included in the Management Discussion and Analysis, Board's Report including
Annexures to Board's Report, 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.

Management's Responsibility 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, total comprehensive income, changes in equity and cash flows of the Company in accordance with 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
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:

• 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

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

As required by Section 143(3) of the Act, based on our audit, 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 Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of
Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant
books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133
of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on 31 March 2025 taken on record by the
Board of Directors, none of the directors is disqualified as on 31 March 2025 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 Financial Statements of the
Company and the operating effectiveness of such controls, please refer to our separate Report in "Annexure 2".
Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's
internal financial controls over financial reporting.

g) With respect to 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 & to the best of our information & according to the
explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance
with 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 :

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

ii. The Company has made provision, as required under the applicable law or accounting standards, for
material foreseeable losses, if any, on long-term contracts including derivative contracts.

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

iv. (a) The Management has represented that, to the best of 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 Company 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 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 its knowledge and belief, no funds(which are
material either individually or in the aggregate)have been received by the Company from any person or
entity, including foreign entity ("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 the audit procedures that have been considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that there presentations
under sub-clause(i) and (ii) of Rule11(e), as provided under (a) and (b) above, contain any material
misstatement.

(d) The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is applicable from
1st April 2023

Based on our examination which included test check, except for the instances mentioned below, the
Company has used accounting software for maintaining its books of accounts which have a feature of
recording audit trail (edit log) facility and the same has operated throughout the year for all relevant
transactions recorded in the respective software.

The features of recording audit trail (edit log) facility were not enabled for the software relating to payroll,
Sale Invoice generation, Property, plant and Equipment and Production records.

Further for the periods where audit trail (edit log) facility was enabled and operated throughout the year for
the respective accounting software, we did not come across any instances of the audit trail feature being
tempered with and the audit trail has been preserved by the company as per the statutory requirements for
record retention.

V. The company has not declared or proposed dividend during the year.

For Nemani Garg Agarwal & Co.

Chartered Accountants
Firm Registration No. 010192N

J.M. Khandelwal
Partner

Membership No: 074267
UDIN:25074267BMOXY08307
Place: New Delhi
Dated: 30 May, 2025