We have audited the accompanying Standalone Financial
Statements of PARAS DEFENCE AND SPACE TECHNOLOGIES LIMITED

(“the Company”), which comprise the Standalone Balance Sheet
as at March 31, 2025, the Statement of Standalone Profit and
Loss (including Other Comprehensive Income), the Statement of
Standalone Changes in Equity and the Statement of Standalone
Cash Flows for the year then ended, and notes to the Standalone
Financial Statements, including a summary of material 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, 2025 and its profit including
Other Comprehensive Income, Changes in Equity and its 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 (SAs) 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 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 opinion on the
Standalone Financial Statements.

Key Audit Matters (KAM)

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the Standalone
Financial Statements for the year ended March 31, 2025. 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 the
matter below, our description of how our audit addressed the matter
is provided in that context.

We have determined the matter described below to be the key
audit matter to be communicated in our report. We have fulfilled
the responsibilities described in the Auditors’ responsibilities for
the audit of the Standalone Financial Statements section of our
report, including in relation to that matter. 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. The results of our audit procedures, including
the procedures performed to address the matter below, provide
the basis for our audit opinion on the accompanying Standalone
Financial Statements.

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

The Company’s Board of Directors is responsible for the other
information. The other information comprises the Management
discussion & analysis and Director’s report included in the annual
report but does not include the Standalone Financial Statements
and our auditor’s report thereon. The above information is expected
to be made available to us after the date of this auditor’s report.

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 identified above
when it becomes available and, in doing so, consider whether the
other information is materially inconsistent with the Standalone
Financial Statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.

When we read the above other information, if we conclude that there
is material misstatement therein, we are required to communicate
the matter to those charged with governance.

Management responsibilities 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 including other
comprehensive income, cash flows and the Statement of changes in
equity of the Company in accordance with the Ind AS and the 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 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.

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.

Those Board of Directors are also responsible for overseeing the
Company’s financial reporting process.

Auditors’ Responsibility for 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 ability of the Company 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 Standalone Financial Statements may be influenced.

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 year 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 the “Annexure A” a statement on the matters 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 it appears
from our examination of those books.

c. The Standalone Balance Sheet, the Statement of
Standalone Profit and Loss (Including other comprehensive
income), the Statement of Standalone Changes in Equity
and the Statement of Standalone Cash Flows 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 Ind AS prescribed under
Section 133 of the Act.

e. On the basis of the written representations received
from the directors as on March 31, 2025 and 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. With respect to the adequacy of the internal financial
controls with reference to Standalone Financial
Statements and the operating effectiveness of such
controls, refer to our separate Report in “Annexure B”.

g. With respect to the 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 and to the best of our information
and according to the explanations given to us, the
remuneration paid / provided by the Company to its
directors during the year is in accordance with the
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 and as represented by the management:

i. The Company has disclosed the impact of pending
litigations on its financial position in its Standalone
Financial Statements as referred to in Note No. 35
to the Standalone Financial Statements;

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

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

iv. (a) Management has represented to us that,

to the best of its knowledge and belief, as
disclosed in the notes to the Standalone
Financial Statements, during the year 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
persons or entities, 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) Management has represented to us that,
to the best of its knowledge and belief, as
disclosed in the notes to the Standalone
Financial Statements, during the year 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