TO THE MEMBERS OF NAHAR SPINNING MILLS LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial of Nahar Spinning MillsLimited ("the Company") which comprise the Balance Sheet as at March 31 2022the Statement of Profit and Loss (including Other Comprehen -sive Income) the Statementof Changes in Equity and the Statement of Cash Flows for the year ended on that dateaccounting policies and andasummary of the significant other explanatory information(hereinafter referred to as "the financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("IndAS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2022 the profit and total compre-hensive income changes in equity and its cash flowsfor the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance withthe Standards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements sec of the Company in -tion ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India(ICAI) together with the independencerequirements that are relevant to our audit of the financial Rules made there under andwe have fulfilled -ical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence obtained is sufficient andappropriate to provide a basis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere 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 awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. There is no key matters to be communicated in our report.

Information Other than the Financial Statements and Auditor'sReport Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Board's Report including annexures to the Board's Report andManagement Discussion & Analysis Report but does not include the standalone financialstatements and our auditors' report thereon. The Board's Report includingannexures to the Board's Report and Management Discussion & Analysis Report isexpected to be made available to us after the date of this auditors' report. Ouropinion on the standalone financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. When we read theBoard's Report including annexures to the Board's Report and ManagementDiscussion & Analysis Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance Ifthere is no material misstatement we will not issue separate report in this regard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financial per-formance total comprehensive income changes in equity accordance with the Indandcashflows AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; statements under the provisions of the Actand the selection and application of appropriate accounting policies; our other eth makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial -fectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial view and are free from material misstatement whether due to fraud or error.

In preparing the financial statements management is re -sponsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the FinancialStatements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financialstatements whether due to fraud error design and perform audit procedures responsive tothose risks and obtain audit evidence that is sufficient and opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resultingfrom error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control.

Obtain an understanding of internal financial controls relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant -ty tocontinue as a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditor's report to the related disclosures in thefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the stand-alonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. -ality and qualitative factors in (i) planning the scope ofour audit work and in evaluating the results of our work; and (ii) to evaluate the effectof any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant -nificantdeficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's appropriate to provide a basis for our report unlesslaw or regulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit wereport that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept 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 OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow doubton the Company's abili dealt with by this Report are in agreement with the relevantbooks of account.

d) In our opinion the aforesaid financial statements comply with theInd AS specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules2014.

e) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2022 from being appointed as a director in termsof Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.

g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended: In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in theAuditor'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 accordingto the explanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements.

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

iv. (a) The Management has represented that no funds have beenadvanced or loaned or invested (either from borrowed funds or share premium or any othersources or kind of funds) by the Company to or in any other person or entity includingforeign entity ("Intermediaries") with the understanding whether recorded inwriting or otherwise that the Intermediary shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Company ("Ultimate Beneficiaries")or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;

(b) The Management has represented that no funds have been receivedby the Company from any person or entity including foreign entity ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries")or provide any guaran -tee security or the like onbehalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11(e) as providedunder (a) and (b) above contain any material misstatement.

v. As stated in Note 35 the standalone financial statements

(a) The final dividend proposed in the previous year declared and paidby the Company during the year is in accordance with Section 123 of the Act asapplicable.

(b) The interim dividend declared and paid by the Company during theyear complies with Section 123 of the Act.

(c) The Board of Directors of the Company have proposed final dividendfor the year which is subject to the approval of the members at the ensuing AnnualGeneral Meeting. The amount of dividend proposed is in accordance with section 123 of theAct as applicable.

2. As required by the Companies (Auditor's Report) Order 2020(the "Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report to the Members of NAHAR SPINNING MILLSLIMITED of even date) Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct") We have audited the internal financial controls over financial reporting ofNAHAR SPINNING MILLS LIMITED ("the Company") as of March 31 2022 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishingand maintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that we are operating effectively for ensuring the orderly andefficient conduct of its business including adherence to respective company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section143(10) of theCompanies Act2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effective -ness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatementof the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlssystem over financial reporting of the Company.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have statements materialeffect onthe financial

Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2022 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

ANNEXURE ‘B' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal andRegulatory Requirements' section of our report to the Members of NAHAR SPINNING MILLSLIMITED of even date) To the best of our information and according to the explanationsprovided to us by the Company and the books of account and records examined by us in thenormal course of audit we state that:

i. In respect of the Company's Property Plant and Equipment andIntangible Assets:

(a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant and Equipment

(B) The Company has maintained proper records showing full particularsof intangible assets.

(b) The Company has a program of physical verification of PropertyPlant and Equipment so to cover all the assets in a phased manner which in our opinionis reasonable having regard to the size of the Company and the nature of its assets.Pursuant to the program certain Property Plant and Equipment were due for verificationduring the year and were physically verified by the Management during the year. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch verification.

(c) According to information and explanations given to us and based onthe examination of records of the company conveyance deed etc. we report that the titlein respect of self-constructed buildings and title deeds of all other immovableproperties disclosed in the financial statements are held in the name of the Company asat the balance sheet date.

(d) The Company has not revalued any of its Property Plant andEquipment and intangible assets during the year.

(e) No proceedings have been initiated during the year or are pendingagainst the Company as at March 31 2022 for holding any benami property under the Bena-miTransactions (Prohibition) Act 1988 (as amended in 2016) and rules made thereunder.

ii. (a) The physical verification of inventory has been conducted atreasonable intervals by the management and in our opinion the coverage and procedure ofsuch verification by the management is appropriate No discrepancies of 10% or more in theaggregate for such class of inventory were noticed

(b) The Company has been sanctioned working capital limits in excess of5 crore in aggregate during the year from banks on the basis of security of currentassets. The stock statements has been filed with banks by the company during the year arein agreement with books of accounts of the company. Except the following:-

iii. The Company has made investments in companies firms LimitedLiability Partnerships and granted unsecured loans to other parties during the year inrespect of which:

(a) The Company has not provided any loans or advances in the nature ofloans or stood guarantee or provided security to any other entity during the year andhence reporting under clause 3(iii)(a) of the Order is not applicable.

(b) In our opinion the investments made and the terms and conditionsof the investments during the year are prima facie not prejudicial to the Company'sinterest.

(c) The Company has not provided any loans or advances in the nature ofloan hence reporting under clause 3(iii)(c)(d)(e) and (f) of the Order is notapplicable.

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 185 and 186 of theAct in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

v. The Company has not accepted deposits during the year and does nothave any unclaimed deposits as at March 31 2022 and therefore the provisions of theclause 3 (v) of the Order are not applicable to the Company.

vi. We have broadly reviewed the cost records maintained by the companypursuant to the sub section (1) of section 148 of the Companies Act specified by theCentral Government and are of the opinion that prima facie the prescribed records havebeen maintained. We have however not made a detailed examination of cost records with aview to determine whether they are accurate or complete.

vii. According to the information and explanations given to us inrespect of statutory dues:

a. The Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income TaxGoods and Service Tax Customs Duty Cess and other material statutory dues applicable toit with the appropriate authorities.

b. There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income Tax Goods and Service Tax Customs DutyCess and other material statutory dues in arrears as at March 31 2022 for a period ofmore than six months from the date they became payable.

c. Details of dues of Income Tax Sales Tax Service Tax Excise Dutyand Value Added Tax which have not been deposited as at March 312022 on account ofdispute are given below:

viii. There were no transactions relating to previously unrecordedincome that have been surrendered or disclosed as income during the year in the taxassessments under the Income Tax Act 1961 (43 of 1961).

ix. (a) The Company has not defaulted in repayment of loans or otherborrowings from any lender.

(b) The Company has not been declared wilful defaulter by any bank orfinancial institution or government or any government authority.

(c) According to the information and explanation given to us and basedon examination of records of the company the Company has applied the term loans for thepurpose for which loans were obtained

(d) On an overall examination of the financial state -ments of theCompany funds raised on short- term basis have prima facie not been used during theyear for long-term purposes by the Company.

(e) The company has not any subsidiary joint ventures or associatecompany hence reporting under clause (ix)(e) and (f) is not applicable to the company

x. (a) The Company has not raised moneys by way of initial public offeror further public offer (including debt instruments) during the year and hence reportingunder clause 3(x)(a) of the Order is not applicable.

(b) During the year the Company has not made any preferentialallotment or private placement of shares or convertible debentures (fully or partly oroptionally) and hence reporting under clause 3(x)(b) of the Order is not applicable.

xi. (a) According to information and explanation given to us no fraudby the Company and no fraud on the Company has been noticed or reported during the year.

(b) No report under sub-section (12) of section 143 of the CompaniesAct has beenfiled in Form ADT-4 as prescribed under rule 13 of Companies (Audit andAuditors) Rules 2014 with the Central Government. The same is also not required to file

(c) The management has represented us that no whistle-blower complaintshas been received by the Company during the year (and upto the date of this report)

xii. In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable.

xiii. According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the Financial Statements as requiredby the applicable Indian accounting standards.

xiv. (a) In our opinion the Company has an adequate internal auditsystem commensurate with the size and the nature of its business.

(b) We have considered the internal audit reports for the year underaudit issued to the Company during the year and till date in determining the naturetiming and extent of our audit procedures.

xv. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.

xvi. (a) In our opinion the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934. Hence reporting under clause3(xvi) (a) (b) and (c) of the Order is not applicable.

(b) According to information and explanations given to us there is onecore investment company within the Group (as defined in the Core Investment Companies(Reserve Bank) Directions 2016).

xvii. The Company has not incurred cash losses during the financialyear covered by our audit and the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors of theCompany during the year.

xix. On the basis of the financial ratios ageing and expected dates ofrealisation of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors andManagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which causes us to believe that any materialuncertainty exists as on the date of the audit report indicating that Company is notcapable of meeting its liabilities existing at the date of balance sheet as and when theyfall due within a period of one year from the balance sheet date. We however state thatthis is not an assurance as to the future viability of the Company. We further state thatour reporting is based on the facts up to the date of the audit report and we neither giveany guarantee nor any assurance that all liabilities falling due within a period of oneyear from the balance sheet date will get discharged by the Company as and when they falldue.

xx. Company has no unspent amount under CSR at the end of the financialyear hence reporting under clause 3(xx) (a) and (b) is not applicable to the company.