Auditor Report of Paras Defence and Space Technologies Ltd.

Mar 31, 2025

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.

Key Audit Matter

How our audit addressed the key audit matter

1) Revenue: During the year, the Company’s revenue from operation has been increased by 43.63%. Revenue is recognized when control of the underlying products have been transferred along with satisfaction of performance obligation. The terms of sales arrangements, including the timing of transfer of control and delivery specifications, create complexity and judgment in determining sales revenues. Significant Risk exists that revenue is recognized without substantial transfer of control and is not in accordance with IND AS115 ‘Revenue from contracts with customers’, resulting into recognition of revenue in incorrect period. Refer Note No. 1.3 (I) and 27 to the Standalone Financial Statements.

We assessed the Company’s processes and controls for recognizing revenue as part of our audit. Our audit procedures included the following: • Assessing the systems related to invoicing and measurement as well as other relevant systems supporting the accounting of revenue. • Performed sample tests of individual sales transaction and traced to sales invoices, sales orders, shipping documents and other related documents. In respect of the samples selected, tested that the revenue has been recognized as per the sales orders. • Verifying the completeness of disclosure in the Standalone Financial Statements as per Ind AS 115.

Key Audit Matter

How our audit addressed the key audit matter

2) Inventories As of March 31, 2025, inventories appear in the Standalone Financial Statements for an amount of H 14,546.25 Lakhs constitutes 17.51% of the total assets of the Company. Inventories are valued at the lower of cost and net realizable value The Company may recognize an inventory allowance if inventory items are damaged, if the selling price has declined, or if the estimated costs to completion or to be incurred to make the sale have increased. We considered this matter as key audit matter due to the: • Significance of the inventories balance. • Complexities involve in determining quality of inventories and quantities on hand due to the number, weight, diversity of inventory, storage, Valuation procedure including of obsolete inventories. Refer note no. 1.3 (F) and 9 to the Standalone Financial Statements.

Our audit procedure included, among others: • Reviewing the Company’s process and procedure for physical verification of the Inventories, identification of non-moving and obsolete items and accounting for the same. • Obtaining the physical inventory count reports of the Management as per verification plan and discussing with the Management about the Control checks performed by them • Assessing the methods used to value inventories and ensuring the consistency of accounting methods. • Testing, by sampling, the effectiveness of the controls set up by Management to prevent or detect possible errors in valuation of inventories. • Analyzing the company’s assessment of net realizable value and calculations for stock obsolescence. • Verifying the completeness of disclosure in the Standalone Financial Statements as per Ind AS 2. • Obtaining representation letter from the management as per SA 580 (revised) - Written representations.

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

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 our audit procedure conducted
that have been considered reasonable and
appropriate in the circumstances, nothing
has come to our attention that cause us to
believe that the representation given by the
management under paragraph (2) (h) (iv) (a) &
(b) above, contain any material misstatement.

v. The Company have not declared or paid dividend
during the year.

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

For CHATURVEDI & SHAH LLP

Chartered Accountants
Firm Reg. No. 101720W / W100355

RupeshShah

Partner

Navi Mumbai Membership No. 117964

Date: April 30, 2025 UDIN No.: 25117964BMOOSQ2585

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Mar 31, 2024

PARAS DEFENCE AND SPACE TECHNOLOGIES LIMITED Report on the Audit of the Standalone Financial Statements

Opinion

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, 2024, 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, 2024 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, 2024. 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.

Key Audit Matter

How our audit addressed the key audit matter

1) Revenue: During the year, the Company’s revenue from operation has been increased by 8.47%. Revenue is recognized when control of the underlying products have been transferred along with satisfaction of performance obligation. The terms of sales arrangements, including the timing of transfer of control and delivery specifications, create complexity and judgment in determining sales revenues. Significant Risk exists that revenue is recognized without substantial transfer of control and is not in accordance with IND AS115 ‘Revenue from contracts with customers’, resulting into recognition of revenue in incorrect period. Refer Note No.1.3(J) and Note No.27 to the Standalone Financial Statements.

We assessed the Company’s processes and controls for recognizing revenue as part of our audit. Our audit procedures included the following: • Assessing the systems related to invoicing and measurement as well as other relevant systems supporting the accounting of revenue. • Performed sample tests of individual sales transaction and traced to sales invoices, sales orders, shipping documents and other related documents. In respect of the samples selected, tested that the revenue has been recognized as per the sales orders; • Verifying the completeness of disclosure in the Standalone Financial Statements as per Ind AS 115.

Key Audit Matter	How our audit addressed the key audit matter
2) Inventories	Our audit procedure included, among others:
As of March 31, 2024, inventories appear in the Standalone Financial	•	Reviewing the Company’s process and procedure for physical
Statements for an amount of H 14,081.29 Lakhs constitutes 23.16%		verification of the Inventories, identification of non-moving
of the total assets of the Company. Inventories are valued at the		and obsolete items and accounting for the same.
lower of cost and net realizable value	•	Obtaining the physical inventory count reports of the
The Company may recognize an inventory allowance if inventory		Management as per verification plan and discussing with the
items are damaged, if the selling price has declined, or if the		Management about the Control checks performed by them
estimated costs to completion or to be incurred to make the sale have increased.	•	Assessing the methods used to value inventories and ensuring the consistency of accounting methods.
We considered this matter as key audit matter due to the:	•	Testing, by sampling, the effectiveness of the controls set up by
• Significance of the inventories balance.		Management to prevent or detect possible errors in valuation
• Complexities involve in determining quality of inventories		of inventories.
and quantities on hand due to the number, weight, diversity	•	Analyzing the company’s assessment of net realizable value
of inventory, storage, Valuation procedure including of		and calculations for stock obsolescence.
obsolete inventories.	•	Verifying the completeness of disclosure in the Standalone
Refer note no. 1.3 (F) and 9 to the Standalone Financial Statements.		Financial Statements as per Ind AS 2.
	•	Obtaining representation letter from the management as per SA 580 (revised) - Written representations.

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, 2024 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 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 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 our audit procedure conducted that have been considered reasonable and appropriate in the circumstances, nothing has come to our attention that cause us to believe that the representation given by the management under paragraph (2) (h) (iv) (a) & (b) above, contain any material misstatement.

v. The Company has not declared or paid any dividend during the year and has also not proposed dividend for the year.

vi. Based on our examination, which included test checks, the company has used accounting software for maintaining its books of account for the financial year ended 31^st March, 2024, which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

vii. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from 1^st April, 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 31^st March, 2024.

For CHATURVEDI & SHAH LLP

Chartered Accountants Firm Reg. No. 101720W / W100355

RupeshShah Partner

Navi Mumbai Membership No. 117964

Date: May 25, 2024 UDIN No.: 24117964BKFYDF8131

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Mar 31, 2023

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF

PARAS DEFENCE AND SPACE TECHNOLOGIES LIMITED
Report on the Audit of the Standalone Financial Statements
OPINION

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, 2023, 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 significant 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,
2023 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, 2023. 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.

RESPONSIBILITIES OF MANAGEMENT AND THOSE
CHARGED WITH GOVERNANCE 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:

• I dentify 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.

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, 2023 and taken on record by
the Board of Directors, none of the directors is disqualified
as on March 31, 2023 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 it’s 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 it’s 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 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 our audit procedure conducted that have
been considered reasonable and appropriate in the
circumstances, nothing has come to our attention
that cause us to believe that the representation
given by the management under paragraph
(2) (h) (iv) (a) & (b) above, contain any material
misstatement.

v. The Company has not declared or paid any dividend
during the year and has also not proposed dividend for
the year.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules,
2014 for maintaining books of account using accounting
software which has a feature of recording audit trail (edit
log) facility is applicable to the Company with effect from
April 1, 2023, and accordingly, reporting under Rule 11(g)
of Companies (Audit and Auditors) Rules, 2014 is not
applicable for the financial year ended March 31, 2023.

For CHATURVEDI & SHAH LLP

Chartered Accountants
Firm Reg. No. 101720W / W100355

Anuj Bhatia

Partner

Membership No. 122179
UDIN No.: 23122179BGQWTU9518
Mumbai
Date: May 16, 2023