We have audited the accompanying (Standalone) financial statements of SHRI BHOLANATH CARPETS LIMITED,
which comprise the Balance Sheet as at March 31, 2024 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.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
financial statements give the information required by the Companies Act, 2013 (‘Act) in the manner so required
and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2024 and its profits or Loss for the year ended on that date.

Basis for opinion

We have conducted our audit in accordance with the standards on auditing specified under section 143 (10) of the
Companies Act, 2013. Our responsibilities under those Standards are further described in the auditor’s
responsibilities for the audit of the 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 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 opinion.

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. For each matter below our description of how our audit addressed the matter
is provided in that context.

A. Revenue Recognition

The accounting policies of the company for revenue recognition are set out in the Financial Statement. The auditors
of company have reported revenue recognition as a key audit matter due to the high volume of the transactions,
high degree of manufacturing process, labour involvement and considering that accounting involve exercise of
judgments and estimates, thereby affecting oeeurrenee and accuracy assertions in respect of revenue recognition.
The company is engaged in manufacturing , export and trading carpets on a principal basis and recognizes full
value of consideration on transfer of control of traded goods to the customers which most of the time coincides with
collection of cash or cash equivalent.

Auditors Response

Our audit procedures included and were not limited to the following:

• Obtained and read the financial statements of the company to identify whether the revenue recognition policies
are followed in the financial statement of the company.

• We performed audit the following procedures as under:-

i. involvement of IT environment and testing of the IT environment inter-alia for access controls and change
management controls over company’s billing and other relevant support systems.

ii. evaluation and testing of the design and operating effectiveness of the relevant business process controls,
inter-alia controls over the capture, measurement and authorization of revenue transactions and involvement of IT
specialists for testing the automated controls therein.

iii. Evaluation of substantive testing involved, testing collections, testing the reconciliation between revenue per the
billing system and the financial records and testing supporting documentation for manual journal entries posted in
revenue to ensure veracity thereof.

iv. Validation of the judgements and estimates exercised by the management regarding the application of revenue

recognition accounting standard._

2.Inventory

The auditors Company have reported existence of inventory as a key audit matter due to involvement of high risk
and high volumes .

Auditors Response

Our audit procedures included and were not limited to the following:

We performed inquiry of the audit procedures performed by them to address the key audit matter. As reported to us
by the subsidiary auditor, the following procedures have been performed by them:-

i. Evaluation of the design and testing of the implementation of internal controls relating to physical inventory

ii. Performance of test of controls over verification of documentary evidences of controls including the calculation of

consumption of raw material in relation to manufacturing prosess and its loss occurred during manufacturing .

iii. Performance of test of details through sample selection of stores as part of the inventory verification program,
including verification of inventory with documentary evidence and verification of shrinkage and moisture gain or
loss.

3. Litigation matters

The company has certain significant open legal proceedings with the Income tax , continuing from earlier years,
which are as under:

Due to complexity involved in these litigation matters, management’s judgement regarding recognition and
measurement of provisions for these legal proceedings is inherently uncertain and might change over time as the
outcomes of the legal cases are determined. Accordingly, it has been considered as a key audit matter
Auditors Response

Our audit procedures included and were not limited to the following:

i. Assessing management’s position and judgement through discussions (where considered necessary) on legal
precedence and other ruling in evaluating managements position on these uncertain tax positions and the
probability of success in the aforesaid cases, and the magnitude of any potential loss.

ii. Discussion with the management on the development in these litigations during the year ended March 31, 2024.
Review of the disclosures made in the financial statements in this regard.

iii. Obtained representation letter from the management on the assessment of these matters.

Information other than the financial statements and auditors’ 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 Board’s Report including Annexures to Board’s Report, Business
Responsibility Report but does not include the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance and conclusion thereon.

In connection with our audit of the 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.

Based on the work we have performed, we conclude that there is no material misstatement in this other information
and conclued that we have nothing to report in this regard.

Information other than the financial statements and auditors’ 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 Board’s Report including Annexures to Board’s Report, Business
Responsibility Report but does not include the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance and conclusion thereon.

In connection with our audit of the 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.

Based on the work we have performed, we conclude that there is no material misstatement in this other information
and conclued that we have nothing to report in this regard._

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013
(“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 and cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 financial
statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the 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 also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

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

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
Identify and assess the risks of material misstatement of the 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 control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, 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 and Board of Directors.

Conclude on the appropriateness of management and Board of Directors’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 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 financial statements, including the
disclosures, and whether the 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 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._

1 As required by the Companies (Auditor’s Report) Order, 2020 (the “Order”) issued by the CentralGovernment
in terms of Section 143(11) of the Act, we give in “Annexure A” a statement on thematters 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
appears from our examination of those books.

(c) The Balance Sheet and the Statement of Profit and Loss 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 Accounting Standards

specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of written representations received from the directors as on 31 March, 2024, taken on
record by the Board of Directors, none of the directors is disqualified as on 31 March, 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 standalonefinancial
statements of the Company and the operating effectiveness of such controls, refer toour separate Report
in “Annexure B”. Our report expresses an unmodified opinion on theadequacy and operating
effectiveness of the Company’s internal financial controls withreference to standalone financial
statements.

(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, in our opinion and to the best of our information and
according to the explanations given to us:

1) The Company has not deposited self assessment tax of the past precedings two assessment year
inculding the current assessment year and also have some of the pending litigations which would not
impact its financial position as such which is mentioned below:-

(c) Based on the audit procedures that have been considered reasonable

5) The Company has neither declared dividend nor distributed dividend

6) Based on our examination, which included test checks, the Company

For O.P. TULSYAN & CO.
CHARTERED ACCOUNTANTS
FRN 500028N

PLACE: VARANASI

DATE: 30/05/2024 Sd/-

(S.N.GARG)

(PARTNER)

M.No. 052740

1

Inculding Interest and Refund Adjusted by

2) The Company did not have any long-term contracts including derivative contracts for which there were
any material foreseeable losses.

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

4) (a) The Management has represented that, to the best of its knowledge and belief, details of funds in
Note No. 13 (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;_