To the Members of Swaraj Engines Limited

Report on the Audit of the Financial Statements Opinion

We have audited the accompanying Financial Statements of Swaraj Engines Limited("the Company") which comprise the Balance Sheet as at March 31 2022 theStatement of Profit and Loss including Other Comprehensive Income the Statement of CashFlows and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas "the Financial Statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Financial Statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2022 its profit and total comprehensiveincome its changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Financial Statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the 'Auditors' Responsibilities for the Audit ofthe Financial Statements' section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia ("the ICAI") together with the ethical requirements that are relevant toour audit of the Financial Statements under the provisions of the Act and the Rules madethereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidenceobtained by us is sufficient and appropriate to provide a basis for our audit opinion onthe Financial Statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Financial Statements for the current period. Thesematters were addressed in the context of our audit of the Financial Statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters. We have determined the matter described below to be the key audit matter to becommunicated in our report:

KAM on Related Party Transactions

Information other than the Financial Statements and Auditors' Report thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report and the related annexures but does not include the financial statementsand our Auditors' Report thereon.

Our opinion on the Financial Statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the Financial Statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the Financial Statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of management for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Financial Statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Financial Statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditors' Responsibilities for the audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors' report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of the FinancialStatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditors' report to the related disclosures inthe 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 auditors'report. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the FinancialStatements including the disclosures and whether the Financial Statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Financial Statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Financial Statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the Financial Statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Financial Statements of thecurrent year and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe 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 ofthe Act and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to us wegive in Annexure B a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

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 bestof 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 theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis report are in agreement with the books of account.

(d) In our opinion the aforesaid Financial Statements comply with the AccountingStandards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of Section 164(2) of theAct.

(f) With respect to the adequacy of the internal financial controls with reference toFinancial Statements of the Company and the operating effectiveness of such controlsrefer to our separate report in Annexure A. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls withreference to Financial Statements.

(g) In our opinion the managerial remuneration for the year ended March 31 2022 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofSection 197 read with Schedule V to the Act. (h) With respect to the other matters to beincluded in the Auditors' Report in accordance with the requirements of Rule 11 of theCompanies (Audit and Auditors) Rules 2014 as amended in our opinion and to the best ofour information and according to the explanations given to us: (i) The Company does nothave any pending litigations which would impact its financial position; (ii) The Companydid not have any long-term contracts including derivative contracts for which there wereany material foreseeable losses; and (iii) There was no delay in transferring the amountsto the Investor Education and Protection Fund by the Company; (iv) (a) The management hasrepresented that to the best of its knowledge and belief no funds have been advanced orloaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other person(s) or entity(ies) includingforeign entities ("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 tothe best of its knowledge and belief no funds have been received by the Company from anyperson(s) or entity(ies) including foreign entities ("Funding Parties") withthe understanding whether recorded in writing or otherwise that the Company shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the Funding Party ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate Beneficiaries; (c) Based on such audit procedures that we considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (a) and (b) contain any materialmisstatement; and (v) 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.

The Board of Directors of the Company have proposed final dividend for the year whichis subject to the approval of the members at the ensuing Annual General Meeting. Theamount of dividend proposed is in accordance with section 123 of the Act as applicable.

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date]

Report on the Internal Financial Controls with reference to financial statements underClause (i) of sub-section (3) of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls with reference to financial statementsof Swaraj Engines 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 Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements of the Company based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting ("the Guidance Note") issued by the Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Act 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 with reference to financial statements was established and maintainedand if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

A company's internal financial control with reference to financial statements is aprocess 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 control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions 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 authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at March 31 2022 basedon the criteria for internal financial control with reference to financial statementsestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

Annexure B to the Independent Auditors' Report

[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date] (i) (a) (A) According to the information andexplanations given to us the Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant andequipment.

(B) According to the information and explanations given to us the Company hasmaintained proper records showing full particulars of intangible assets.

(b) The Company has a regular programme of physical verification of its property plantand equipment and investment property by which the property plant and equipment andinvestment property are verified by the management according to a phased programmedesigned to cover all the items over a period of three years. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its property plant and equipment and investment property. Inaccordance with the programme the Company has not physically verified property plant andequipment and investment property during the year.

(c) According to the information and explanations given to us the title deeds ofimmovable properties are held in the name of the Company.

(d) According to the information and explanations given to us the Company has notrevalued any of its Property Plant and Equipment and investment property or intangibleassets or both during the year.

(e) Based on the audit procedures performed by us and according to the informationexplanations and representations given to us no proceedings have been initiated or arepending against the Company for holding any benami property under the Benami Transactions(Prohibition) Act 1988 (45 of 1988) and rules made thereunder.

(ii) (a) According to the information and explanations given to us the inventorycomprising of finished goods raw materials stores & spares componentswork-in-progress has been physically verified at reasonable intervals by the managementduring the year. Stock-in-transit as on March 31 2022 has been verified by the managementon subsequent receipt of the goods.In our opinion the coverage and procedure of suchverification by the management is appropriate and no discrepancies of 10% or more in theaggregate for each class of inventory were noticed on such verification between thephysical inventory and the book records. We have relied on confirmations andrepresentations from third parties in case of inventory lying in their locations whereverapplicable.

(b) According to the information and explanations given to us the Company has not beensanctioned working capital limits in excess of five crore rupees in aggregate from banksor financial institutions on the basis of security of current assets at any point of timeduring the year.

(iii) According to the information and explanations given to us the Company has notmade investments in or provided any guarantee or security or granted any loans or advancesin the nature of loans secured or unsecured to companies firms Limited LiabilityPartnerships or any other parties during the year. Accordingly the reporting underClauses 3(iii)(a) to 3(iii)(f) of the Order is not applicable to the Company.

(iv) According to the information and explanations given to us the Company has notgranted any loans or made any investments or provided any guarantees or security to theparties covered under Sections 185 and 186 of the Act. Accordingly the reporting underClause 3(iv) of the Order is not applicable to the Company.

(v) Accordingto the information and explanations given to us the Company has notaccepted deposits under the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the rules framed thereunder. Accordingly the reporting underClause 3(v) of the Order is not applicable to the Company.

(vi) The maintenance of cost records has been specified by the Central Government undersub-section (1) of Section 148 of the Act for the products of the Company. We have broadlyreviewed the cost records maintained by the Company pursuant to the Companies (CostRecords and Audit) Rules 2014 as amended specified by the Central Government undersub-section (1) of Section 148 of the Act and are of the opinion that prima facie theprescribed cost records have been made and maintained. We have however not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of records of the Company the amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Goods and Services taxProvident Fund Employees' State Insurance Income-tax Cess and other material statutorydues have been regularly deposited during the year by the Company with the appropriateauthorities. According to the information and explanations given to us and on the basis ofour examination of records of the Company there were no undisputed statutory dues payablein respect of Sales tax Service tax Duty of Customs Duty of Excise and Value Added Tax.

According to the information and explanations given to us and on the basis of ourexamination of records of the Company there were no arrears of outstanding statutory duesin respect of Goods and Services tax Provident fund Employees' State InsuranceIncome-tax Sales tax Service tax Duty of Customs Duty of Excise Value Added Tax Cessand other material statutory dues as on the last day of the financial year for a period ofmore than six months from the date they became payable.

(b) Details of statutory dues referred to in sub-clause (a) above which have not beendeposited as on March 31 2022 on account of disputes are given below:

(viii) According to the information and explanations given to us there are notransactions not recorded in the books of account which have been surrendered or disclosedas income during the year in the tax assessments under the Income-tax Act 1961.Accordingly the reporting under Clause 3(viii) of the Order is not applicable to theCompany.

(ix) (a) According to the information and explanations given to us and based on theaudit procedures performed by us the Company has not obtained any loans or otherborrowings. Accordingly the reporting under Clause 3(ix)(a) of the Order is notapplicable to the Company.

(b) According to the information and explanations given to us the Company has not beendeclared a wilful defaulter by any bank or financial institution or any other lender tillthe date of our audit report.

(c) According to the information and explanations given to us and based on the auditprocedures performed by us the Company has not obtained term loan during the year.Accordingly the reporting under Clause 3(ix)(c) of the Order is not applicable to theCompany.

(d) In our opinion and according to the information and explanations given to us and onan overall examination of the Balance Sheet of the Company we report that no short-termloan is obtained by the Company during the year.

Accordingly the reporting under Clause 3(ix)(d) of the Order is not applicable to theCompany.

(e) According to the information and explanations given to us and on an overallexamination of the Financial Statements of the Company we report that the Company has nosubsidiaries associates or joint ventures. Accordingly the reporting under Clause3(ix)(e) of the Order is not applicable to the Company.

(f) According to the information and explanations given to us and based on the auditprocedures performed by us we report that the Company has no subsidiaries associates orjoint ventures. Accordingly the reporting under Clause 3(ix)(f) of the Order is notapplicable to the Company.

(x) (a) According to the information and explanations given to us the Company has notraised any moneys by way of initial public offer or further public offer (including debtinstruments) during the year. Accordingly the reporting under Clause 3(x)(a) of the Orderis not applicable to the Company.

(b) According to the information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or convertible debentures(fully partially or optionally convertible) during the year.

Accordingly the reporting under Clause 3(x)(b) of the Order is not applicable to theCompany.

(xi) (a) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company noticed or reported during theyear nor have we been informed of any such case by the management.

(b) There has been no report filed by us under sub-section (12) of Section 143 of theAct in Form ADT-4 as prescribed under Rule 13 of the Companies (Audit and Auditors) Rules2014 with the Central Government. Accordingly the reporting under Clause 3(xi)(b) of theOrder is not applicable to the Company.

(c) As represented to us by the management no whistle blower complaints were receivedby the Company during the year.

(xii) According to the information and explanations given to us the Company is not aNidhi company and the Nidhi Rules 2014 are not applicable to it. Accordingly thereporting under Clause 3(xii) of the Order is not applicable to the Company. (xiii) In ouropinion and according to the information and explanations given to us the Company hasentered into transactions with related parties in compliance with the provisions ofSection 188 of the Act. The details of such related party transactions have been disclosedin the financial statements as required by Indian Accounting Standard (Ind AS) 24 RelatedParty Disclosures specified under Section 133 of the Act.

(xiv) (a) In our opinion and according to the information and explanations given to usand based on our examination the Company has an internal audit system commensurate withthe size and nature of its business.

(b) We have considered the Internal Audit reports of the Company issued till date forthe period under audit.

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with its directors or persons connected with themduring the year and hence the provisions of Section 192 of the Act are not applicable tothe Company. Accordingly the reporting under Clause 3(xv) of the Order is not applicableto the Company.

(xvi) (a) According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly the reporting under Clause 3(xvi)(a) of the Order is not applicable to theCompany.

(b) In our opinion and according to the information and explanations given to us theCompany has not conducted any Non-Banking Financial or Housing Finance activities.Accordingly the reporting under Clause 3(xvi)(b) of the Order is not applicable to theCompany.

(c) In our opinion and according to the information and explanations given to us theCompany is not a Core Investment Company (CIC) as defined in the regulations made by theReserve Bank of India. Accordingly the reporting under Clauses 3(xvi)(c) and 3(xvi)(d) ofthe Order is not applicable to the Company.

(xvii) In our opinion and according to the information and explanations given to usthe Company has not incurred cash losses in the current financial year as well as in theimmediately preceding financial year. Accordingly the reporting under Clause 3(xvii) ofthe Order is not applicable to the Company.

(xviii)There has been no resignation of the statutory auditors during the year.Accordingly the reporting under Clause 3(xviii) of the Order is not applicable to theCompany.

(xix) According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realization of financial assets and paymentof financial liabilities other information accompanying the financial statements ourknowledge of the Board of Directors and management plans and based on our examination ofthe evidence supporting the assumptions nothing has come to our attention which causesus to believe that any material uncertainty exists as on the date of the audit report thatthe Company is not capable of meeting its liabilities existing at the date of BalanceSheet as and when they fall due within a period of one year from the Balance Sheet date.We however state that this is not an assurance as to the future viability of thecompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the Balance Sheet date will get dischargedby the Company as and when they fall due.

(xx) (a) According to the information and explanations given to us in respect of otherthan ongoing projects the Company has no unspent amount that needs to be transferred to aFund specified in Schedule VII to the Act in compliance with second proviso to sub-section(5) of Section 135 of the Act.

(b) According to the information and explanations given to us in respect of ongoingprojects the Company has no unspent amount which needs to be transferred to a specialaccount in compliance with sub-section (6) of Section 135 of the Act.