We have audited the accompanying financial statements
of KOTHARI INDUSTRIAL CORPORATION LIMITED

(“the Company”), which comprise the Balance Sheet
as at March 31,2025, 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 financial
statements”).

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 (“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, 2025, the Loss and total comprehensive
income, changes in equity and its cash flows for the
year ended on that date except for the matters as
discussed in the basis of opinion para.

Basis for Qualified 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 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 (ICAI) together with
the independence requirements that are relevant to our
audit of the financial statements under the provisions of
the Act and the Rules made there under, 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 financial statements.

1. During the financial year 2023-24, the Company
has sold its land and plant and machinery located
in its factory in Ennore to Coromandel International
Limited for Rs. 48,95,00,000 and Rs. 1,33,00,000
respectively. We were informed that the sale
registration is still pending with the Sub Registrar
office for assessment of market value for stamp
duty purposes. Subject to this, the Company has
computed capital gains on the sale consideration
as per the sale deed. Pending the final order of the
SRO, we are unable to comment on the correctness
of the computation of the capital gains in line with
the relevant provisions of the Income Tax Act 1961.
To this extent, the provision for Current income tax
may undergo revision depending on the outcome
of the order of the competent authority against the
writ petition. The Company plans to seek a valuation
from the Income Tax Valuation Officer and pursue
further steps, including appeals, if required.

2. For the land held by the Company in Gujarat valued
at cost Rs. 1,85,174 we are unable to comment on
the title of the Company as sufficient audit evidence
viz sale deed/allotment letter was not provided. This
was also reported by us in the previous year.

3. Year-end direct balance confirmation in respect of
trade receivables Rs. 4,13,85,015, trade payables
Rs. 3,39,58,473, vendor advances Rs. 7,19,50,858,

Continued...

advances from customers Rs. 1,63,37,105 and
other advances/deposits Rs. 26,32,927 have not
been provided for our verification. In the absence of
such confirmations, we are unable to ascertain any
consequential effect of errors/disputes, if any, that
may impact the financial results for the year.

4. The Company has recorded its closing inventory
at Rs. 7,18,53,535 as of 31^st March 2025. In the
absence of stock valuation reports, a detailed
assessment of the valuation’s correctness and its
effect on financial reporting for FY 2024-25 could
not be ascertained. Further, the Company does
not have a system of identifying and recording
non-moving and slow-moving inventories as a
result of which we are unable to comment on the
impact of such items in the accompanying financial
statements.

5. Out of the total related party balances of
Rs. 11,63,11,633, sufficient audit evidence for
nature of such transactions by way of loan/deposit
agreements, balance confirmations was not
provided for Rs. 4,90,000. Hence, we are unable to
substantiate the correctness and existence of these
loans & advances.

6. Attention is drawn to Note No 41(7)(n), wherein
a subsidy of Rs. 80 lakhs is carried in the books
as receivable from the Government for which no
documentary evidence was produced to us for
verification. Also, the Company has not made a
provision against such balance which is outstanding
for more than 8 years. Hence, we are unable to
comment on its realizability or otherwise and its
accounting treatment in consonance with Ind
AS 20.

7. The proceedings initiated by the Collector of Nilgiris
for repossession of certain plots of land in Coonoor
earmarked for public use has been challenged by

the company on a Write Petition filed before Madras
High Court and the matter is pending adjudication.
Decision, if any, by the Madras High Court which
does not go in favour of the Company, could give
rise to a liability and consequential loss, which
could not be ascertained at the balance sheet date.

Emphasis of matter

1) Attention is drawn to Note No 42 wherein the
Company has Subsequent to the submission
of financial results under Regulation 33 of SEBI
(LODR) for FY 2024-25, the Company has
regrouped certain items in the audited financial
statements presented in this Annual Report. These
changes have been made to enhance clarity and
align with the requirements of Schedule III and Ind
AS disclosures. The regrouping does not impact the
previously reported loss or total equity for the year
ended 31^st March 2025.

2) Attention is drawn to Note No 4 wherein the
Company has liquidated its stake in subsidiary
company Kothari Marine International Limited as
a result of which the Company has not presented
consolidated financial statements.

Our opinion in the above matter remains unmodified.

Key Audit Matters

Key audit matters are those matters that, in our
professional judgment, were of most significance
in our audit of the 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. We have determined
the matters described below to be the key audit matters
to be communicated in our report.

Information Other than the 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
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 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 financial statements or our knowledge obtained
during the course of our audit or otherwise appears to
be materially misstated.

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 Act with
respect to the preparation of these 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 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 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 throughout the audit. We also:

• 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 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 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 consolidated
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 (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 “Annexure A” a
statement on the matters specified in paragraphs 3
and 4 of the Order, to the extent applicable.:

2. 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 Flows dealt with by this
Report are in agreement with the relevant books
of account.

d. In our opinion, the aforesaid financial statements
comply with the Ind AS specified under Section
133 of the Act.

e. On the basis of the written representations
received from the directors as on March 31,
2025 taken on record by the Board of Directors,
none of the directors is disqualified as on March
31, 2025 from being appointed as a director in
terms of Section 164(2) of the Act.

f. In our opinion and to the extent of information
made available to us, managerial remuneration
for the year ended 31^st March 2025 that has
been paid/provided by the Company is in
accordance with the provisions of Section 197
read with Schedule V to the Act.

g. With respect to the adequacy of the internal
financial controls over financial reporting of
the Company and the operating effectiveness
of such controls, refer to our separate Report
in “Annexure B”. Our report expresses a
modified opinion on the adequacy and operating
effectiveness of the Company’s internal financial
controls over financial reporting.

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 financial statements - Refer Note 41 of
the standalone financial statements.

ii. The Company has made provision, as
required under the applicable law or
accounting standards,for materialforeseeable
losses, if any, 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 Company.

i. In our opinion and to the best of our knowledge
and belief and as represented to us by the
Company, 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 source 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 as per Clause (e)(i) of Rule 11 of
Companies Audit and Auditors Rules, 2014.
Refer Note No 38 to the accompanying financial
statements.

j. In our opinion and to the best of our knowledge
and belief and as represented to us by the
Company, 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, 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 as per
Clause (e)(ii) of Rule 11 of Companies Audit
and Auditors Rules, 2014.Refer Note No 39 to
the accompanying financial statements.

Based on such audit procedures as considered
reasonable by us, we have not come across anything to
believe that the representations made by the Company
for Clause (i) & (j) as above contain any material
misstatement

k. No dividend has been declared or paid by the
Company during the year.

l. Based on our examination, which included test
checks, the Company has used accounting
software systems for maintaining its books of
account for the year ended 31^st March, 2025
which have the feature of recording audit trail
(edit log) facility and the same has operated
throughout the year for all relevant transactions
recorded in the software systems. Further,
during the course of our audit we did not come
across any instance of the audit trail feature
being tampered with, and the audit trail has
been preserved by the Company as per the
statutory requirements for record retention.

For M/s. Ray & Ray

Chartered Accountants
Firm Reg.No.301072E
(Swetha Srinivasan)

"^a“ ^: Members^. 240553

^{Ua,ed: 30052025} UDIN : 25240553BMLXEN6062