We have audited the financial statements of CARNATION INDUSTRIES LIMITED (“the Company"), which comprise the Balance
Sheet as at March 31, 2026, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in
Equity and the Statement of Cash Flows for the year ended on that date, and notes to the financial statements including a material
accounting policies and other explanatory information (hereinafter referred to as “the financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements
give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the
Company as at March 31, 2026, the loss and total comprehensive income, changes in equity and its cash flows for the year ended
on that date.
Basis for Opinion
We conducted our audit in accordance with Standards on Auditing (SAs) specified under section 143(10) of the Companies Act,
2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the 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 together with the ethical requirements that are relevant to our audit of the financial statements
under the provisions of the Companies Act, 2013 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.
Emphasis of Matter
i. We draw attention to Note 1 to the Financial Statements, regarding Change of name of the Company and Shifting of the
registered office of the Company from State of West Bengal to the National Capital Territory of Delhi which though approved
by the shareholders was not completed because of non-filing of requisite statutory forms with ROC and in case of shifting
necessary petition as required to be filed before the Regional Director.
ii. We draw attention to Note 10.1 of the Financial Statements regarding unclaimed dividend of Rs 1.42 Lakh which was required
to be transferred to Investor Education and Protection Fund (IEPF).
iii. We draw attention to Note 13.2 to the Financial Statements, in respect of alteration of authorised share capital though
approved by shareholders was not given effect to for wants of filing of necessary documents with Registrar of Companies
(ROC) and consequent to that non updating of master data.
iv. We draw attention to Note 23.1 to the Financial Statements, which describes that the Company had entered into certain
speculative transactions during the year which were not directly connected with its principal business activities. As stated
in the said Note, the net financial impact of such transactions is not material to the financial statements and no open
exposure remains outstanding as at the balance sheet date. The matter has been reviewed by the Board and management
has represented that appropriate corrective measures are being taken.
v. We draw attention to Note 23.2 of the Financial Statements regarding writing back of liabilities amounting to Rs. 233.84
Lacs and writing off assets amounting to Rs. 35.16 Lacs in the Financial Year 2024-25 and disposal of assets held for Sale
during the current Financial Year.
vi. We draw attention to Note 28(iii) of the Financial Statements regarding non satisfaction of charges in ROC registered in
favour of ICICI Bank which have since been squared off and no dues certificate has been obtained from the lender.
vii. The aggregate borrowings of the Company exceeded the limits prescribed under Section 180(1)(c) of the Companies Act,
2013 during the year, for which no shareholders' approval by way of special resolution had been obtained prior to such
borrowing. However, the Company has subsequently obtained shareholders' approval by way of special resolution at the
meeting held on 30th September 2025.
viii. The Company has granted loans exceeding the limits prescribed under Section 186(2) of the Act during the year, without
obtaining the prior approval of the shareholders by way of special resolution. However, the Company has subsequently
obtained such shareholders' approval by way of special resolution at the meeting held on 30th September 2025.
Our opinion is not modified in respect of these matters.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were 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 a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined that there are no key audit matters to communicate in our report.
Information other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the preparation of the other information. The other information comprises the
information included in the Management Discussion and Analysis and Director's Report including Annexures to Director's Report
but does not include the financial statements and our auditor's report thereon.
Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. Since, we have not obtained the Board's report prior to the date of the Auditor's report, we are unable to
conclude whether or not the other information paragraph is materially misstated with respect to this matter.
We expect to obtain the Board's Report including Annexures to Board's Report, Business Responsibility Report, Corporate Governance
and Shareholder's Information after the date of the Auditor's report, and if we conclude that there is a material misstatement
therein, we are required to communicate the matter with those charge with Governance and describe actions applicable under the
applicable laws and regulations.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
The Company's Board of Director's is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (“the Act")
with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial
performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted
in India, including the accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance
of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to
the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 Standards on Auditing 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 financial
statements.
As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the 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 control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances. Under section 143(3)(i) of the Companies Act, 2013, 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 Company's ability 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 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 financial statements, including the disclosures, and whether
the 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 financial statements of the current period 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, issued by the Central Government of India in terms of sub¬
section (11) of section 143 of the Act (“the Order"), and on the basis of such checks of the books and records of the Company
as we considered appropriate and according to the information and explanations given to us, 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 purpose of our audit;
b. Except for the matters described in Paragraph 2(i)(vi) below on reporting under Rule 11(g) of the Companies (Audit
and Auditors) Rules, 2014, 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 Financial Statements dealt with by this Report are in agreement with the books of account;
d. the aforesaid financial statements comply with the Indian Accounting Standards (Ind AS) specified under section
133 of the Act;
e. On the basis of written representation received from the directors taken on record by the board of directors, none
of the directors is disqualified as on March 31, 2026 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 financial statements of the Company
and the operating effectiveness of such controls, refer to our separate Report in Annexure B;
g. In our opinion, the managerial remuneration for the year ended March 31, 2026 has been paid/ provided by the
Company to its directors in accordance with the provisions of section 197 read with Schedule V of the Act;
h. The modifications relating to the maintenance of accounts and other matters connected there with are as stated in
Paragraph 2(i)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
i. 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:
i. The Company does not have any pending litigations which would impact its financial position.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any
material foreseeable losses.
iii. There has been delay in transferring amounts, required to be transferred, to the Investor Education and
Protection Fund by the Company. During the year, unclaimed dividend amounting to Rs. 1.42 Lacs required
to be transferred was not transferred to the Investor Education and Protection Fund.
iv. (a) The management has represented that, to the best of its knowledge and belief, no funds have been
advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities
(“Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the company (“Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The management has represented, that, to the best of its knowledge and belief, 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 the audit procedures that have been considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the representations
under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material
misstatement.
(v) The company has not declared or paid any dividend during the year.
(vi) Based on our examination which included test checks, the Company has not used accounting software for
maintaining its books of account, which have a feature of recording audit trail (edit log) facility throughout the year
as there were instances of migration to other software not having audit trail feature. Accordingly, we are unable
to comment whether all transactions for the year have been recorded in the software having audit trail (edit log)
feature.
With regard to preservation of audit trail as per the statutory requirements for record retention, comment on preservation cannot
be made since the Company has used a software for maintaining accounts for the Financial Year 2023-24 and 2024-25 which did
not have audit trail (edit log) feature throughout the relevant years.
For JAIN SARAOGI & CO LLP
Chartered Accountants
Firm Regn. No. 305004E/E300281
Partner: Ravi Kumar
Place: Kolkata Membership No. 304392
Date: 5th May, 2026. UDIN : 26304392WKBHBA4648
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