1. I have audited the accompanying Ind AS Standalone Financial Statements of KANEL INDUSTRIES
LIMITED ("the Company”), which comprise the Balance Sheet as at 31st March 2024, and the
Statement of Profit and Loss (including other comprehensive income), Statement of Changes in
Equity and Statement of 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 ("the Standalone Financial Statements”).

2. In my opinion and to the best of my information and according to the explanations given to
me, the aforesaid Standalone Financial Statements, because of the omission of the information
mentioned in the Basis for Adverse Opinion paragraph, does not give the information required
by the Companies Act, 2013 ("Act”) in the manner so required and does not 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 31st March 2024, and its loss and other comprehensive income,
changes in equity and its cash flows for the year then ended.

Basis for Adverse Opinion

3. I conducted my audit in accordance with the Standards on Auditing (SAs) specified under section
143(10) of the Companies Act, 2013 (the Act). My responsibilities under those Standards are
further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Results
section of my report. I am 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 my audit of the financial results under the provisions of the Companies Act,
2013 and the Rules there under, and I have fulfilled my other ethical responsibilities in accordance
with these requirements and the Code of Ethics. I believe that the audit evidence I have obtained
are sufficient and appropriate to provide a basis for my adverse opinion as stated in the report.

MSMED ACT COMPLIANCES

I have not been provided with classification of creditors and as per management representation all
creditors are other than registered under MSMED Act. Thus in absence of clear audit evidence in
this regard I am unable to determine the delay in making payment to MSME entities, liability of
interest and compliance on such delayed payments in terms of provisions 6f MSMED Act, if any.

GOING CONCERN:

The Naroda Unit has been inoperative since last many years. Plant and Machinery at Naroda Unit
became scrape and sold out as a scrape during last year (as mentioned in audit report of last
financial year) Company has no Trading activities/ Manufacturing activities during the year under
audit, majority Financial indicators and operating indicators remained negative and to the date of
Audit report and in absence of formal developments for financial support there is substantial doubt
that it will be able to continue as a going concern even though the books of accounts of the
Company has been prepared on the assumption of a Going Concern basis. In this situation,
adjustments may be required to the recorded assets amounts at current value and classification of
liabilities is required.

National Company Law Tribunal; Ahmedabad Bench has admitted the application of Corporate
Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016
(IBC) in the matter of M/s Ardent Ventures LLP a financial creditor of the company versus M/s
Kanel Industries Limited corporate Debtor for the alleged default amounting to Rs. 29,11,77,568/-
till 31.07.2021. National Company Law Tribunal; Ahmedabad Bench has admitted the said
application and commenced the Corporate Insolvency Resolution Process ( CIRP) w.e.f. 03rd
December, 2021.

The company has not paid Listing Fees for Ahmedabad, Jaipur and Calcuttal stock exchange.

TRADE RECEIVABLE:

Company has not made provision for doubtful Debtors of Rs 291.04 Lacs [Rs 291.04 Lacs ] Which
are long outstanding and chances for recovery are very less, as per my opinion, these are bad
debts, to that extent, Current Assets have been overstated and current years Losses and
accumulated losses have been understated.

DOCUMENTS:

Certain documents, registers, etc. including fixed assets register were seized during the search
operations as on 5th October, 2001. Such registers were not made available except fixed assets
register prepared by management separately to me for inspections, usual verifications and
periodical updation.

OTHER CURRENT ASSETS AND LIABILITIES:

Though there is no major movement in the other current assets and liabilities, no concreate
evidences are produced before me to determine its accuracy and existence. In absence of clear
audit evidence in this regard I am unable to determine existence of rights and liability in respect to
other current assets accuracy of the amount stated. The company may or may not able to realise
the amount as stated in other assets. The liability may or may not exits.

Out of total Inter Corporate Loans as above, the Company has taken total Mortgage Loan of
Rs.343 lakhs from M/s Ardent Ventures LLP in earlier years and in current year closing balance at
year end is Rs. Rs. 363.1/-. I have not provided any formal Loan Agreement copy except Mortgage
Deed which does not contain any repayment terms and interest rate. No interest is provided on
such Loans.

Further M/s Ardent Ventures LLP has filed application of Corporate Insolvency Resolution Process
(CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). In absence of account
confirmation, formal documents for loan take over from Adani Enterprise limited and formal
explanations from management, I am unable to comment upon non provision of interest, huge
differences between balance outstanding, which is pointed out by previous auditor.

Key Audit Matters

4. Key audit matters are those matters that, in my professional judgment, were of most significance
in my audit of the Standalone Financial Statements of the current year. These matters were
addressed in the context of my audit of the Standalone Financial Statements as a whole, and in
forming my opinion thereon, and I do not provide a separate opinion on these matters. There are
no key audit matters to communicate.

Other Information

5. The Company's Board of Directors are responsible for the other information. The other
information comprises the information included in the Company's annual report, but does not
include the Standalone Financial Statements and my auditors' report thereon.

6. My opinion on the Standalone Financial Statements does not cover the other information and I do
not express any form of assurance conclusion thereon.

7. In connection with my audit of the Standalone Financial Statements, my 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 my knowledge obtained in the audit or
otherwise appears to be materially misstated. If, based on the work I have performed, I conclude
that there is a material misstatement of this other information; I am required to report that fact. I
have nothing to report in this regard.

Management's responsibility for the Standalone Financial Statements

8. 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 state of affairs, profit and other comprehensive income, changes in equity and
cash flows of the Company in accordance with the accounting principles generally accepted in
India, including the Indian accounting standards ("Ind AS”) specified under section 133 of the Act.
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.

9. In preparing the Standalone Financial Statements, the 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 the management either
intends to liquidate the Company or to cease operations, or has no realistic alternative but to do
so.

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

Auditor's responsibilities for the audit of the Standalone Financial Statements

11. My 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 my 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.

12. As part of an audit in accordance with SAs, I exercise professional judgment and maintain
professional scepticism throughout the audit. I also:

12.1. 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 my 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.

12.2. 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) the Act, I am
also responsible for expressing my opinion on whether the Company has adequate internal
financial controls with reference to Standalone Financial Statements in place and the
operating effectiveness of such controls.

12.3. Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by themanagement.

12.4. Conclude on the appropriateness of the 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 I conclude that a material uncertainty exists, I am
required to draw attention in my auditor's report to the related disclosures in the
Standalone Financial Statements or, if such disclosures are inadequate, to modify my
opinion. My conclusions are based on the audit evidence obtained up to the date of my
auditor's report. However, future events or conditions may cause the Company to cease to
continue as a going concern.

12.5. 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.

13. I 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 I identify during my audit.

14. I also provide those charged with governance with a statement that I 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 my independence, and where
applicable, related safeguards.

15. From the matters communicated with those charged with governance, I 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. I describe these matters in my auditor's report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, I determine that a matter should not be communicated in my 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

16. 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, I give in the "Annexure
A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent
applicable.

17. As required by Section 143(3) of the Act, I report that:

17.1. I have sought and obtained all the information and explanations which to the best of my
knowledge and belief were necessary for the purposes of my audit.

17.2. In my opinion, proper books of account as required by law have been kept by the Company
so far as it appears from my examination of those books except those books for the matters
stated in the paragraph 18.8 below, on reporting under Rule 11(g) of the Companies (Audit
and Auditors) Rules, 2014 AND mentioned in this report specifically and in basis for adverse
opinion paragraph.

17.3. The balance sheet, the statement of profit and loss including other comprehensive income,
the statement of changes in equity and the cash flow statement dealt with by this Report

are in agreement with the books of account except mentioned in this report specifically and
in basis for adverse opinion paragraph.

17.4. In my opinion, the aforesaid Standalone Financial Statements does not comply with the Ind
AS specified under Section 133 of the Act.

17.5. On the basis of the 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.

17.6. With respect to the adequacy of the internal financial controls with reference to Standalone
Financial Statements of the Company and the operating effectiveness of such controls, refer
to my separate Report on internal financials control over financials reporting as per
Annexure-2; and

17.7. In my opinion and according to the information and explanations given to company has not
paid remuneration to its directors during the current year.

17.8. The modifications relating to the maintenance of accounts and other matters connected
therewith are as stated in the paragraph 17.2 above on reporting under section 143(3)(b) of
the Act and paragraph 18.8 below on reporting under Rule 11(g) of the Companies (Audit
and Auditors) Rules, 2014.

18. 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 my opinion and to the best of my

information and according to the explanations given to me:

18.1. To the extent of management information available with me, the company has disclosed the
impact of pending litigations as at March 31, 2024 on its financial position in its Standalone
Financial Statements.

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

18.3. The company had deposited the amount of dividend declared in preceding years with SBS
Isanpur Branch and SBS IFC Branch. As per the amendments made in the Companies Act,
2013 the amount of unclaimed dividend has to be transferred to special fund called Investor
Protection and Education Fund from the date on which the unclaimed dividend has been
transferred to a special bank account. Company has no information about the balance of
unclaimed dividend with Bank. In absence of the above information, management is unable
to comment about status of unclaimed dividend amount or its transfer to Investor
Protection and Education Fund. Since dividend declared in year 1995, 1996, 1997 and 1998
are due from Transfer U/s. 125 of Companies Act, 2013. The company has received several
complaints for revalidation of dividend cheques but in absence of banker's cheque and
details of unclaimed dividend, management is unable to solve their complaints.

18.4. The management has represented that 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. Based on reasonable audit procedures adopted by me, nothing has come to
my notice that such representation contains any material misstatement.

18.5. The management has represented that 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. Based on reasonable
audit procedures adopted by me, nothing has come to my notice that such representation
contains any material misstatement.

18.6. Based on the audit procedures that have been considered reasonable and appropriate in the
circumstances, nothing has come to my notice that has caused me to believe that the
representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b)
above, contain any material misstatement.

18.7. In my opinion and according to the information and explanations given to me, no dividend
has been declared and / or paid during the year by the Company.

18.8. Based on my examination which included test checks and information given to me, the
Company has used accounting software for maintaining its books of account, which did not
have a feature of recording audit trail (edit log) facility throughout the year for all relevant
transactions recorded in the respective software, hence I am unable to comment on audit
trail feature of the said software.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1,
2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on
preservation of audit trail as per the statutory requirements for record retention is not
applicable for the financial year ended March 31, 2024.

For N.S. NANAVATI & CO.

Chartered Accountants

FRN: 134235W

(CA NITESH SHIRISHCHANDRA NANAVATI)

Proprietor

Date: 27.05.2024 Membership No.: 143769

Place: Ahmedabad UDIN: 24143769BKFPCC4481