We have audited the accompanying Standalone Financial Statements of Kernex Microsystems (India) Limited
(the “Company”), which comprise the Balance Sheet as at March 31, 2025, and the Statement of Profit and Loss
(including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity
for the year ended on that date, and notes to the financial statements, including material accounting policies and
other explanatory information. (hereinafter referred to as “Standalone Financial Statements”).

In our opinion and to the best of our information and according to the explanations given to us, except for the
effects of the matter described in the “Basis for Qualified Opinion” paragraph below, the aforesaid Stand¬
alone 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, (“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, total comprehensive income, its cash flows and the changes
in equity for the year ended on that date.

Basis for Qualified opinion

We draw attention to the matters described below, the effect of which, individually or in aggregate, are mate¬
rial but not pervasive to the Standalone Financial Statements. The effects of matters described below, which
could be reasonably determined, are quantified and given therein.

a. The Company has a Wholly owned subsidiary namely Avant-Garde Infosystems Inc in USA which is
presently supporting the business of the Company by identifying the sources, negotiating for and pro¬
curing electronic components from outside India. The subsidiary in the past, was involved in the trading
of goods.

b. As per the latest unaudited financials of the subsidiary available as on 31^st March 2025, the accumulat¬
ed loss of the subsidary company for the period ended 31^st March 2025 is USD 1.894 million (the equiv¬
alent Indian Rupees being Rs. 1,617.84 lakhs as per prevailing exchange rate), Which is exceeding
the cost of investment made USD 1.822 million (Rs. 1,275.97 lakhs (at Cost)). As a result, the carrying
amount of the investment in the equity of subsidiary in the books of account of the Company amounting
to Rs. 1,275.97 lakhs (at Cost) stand's impaired fully. Ind AS 36, requires the company to provide for
impairment in respect of diminution in the value of investments by charging the amount of impairment
to the Profit & Loss Account.

c. The Company made an investment of Rs. 8.00 lakhs in KERNEX TCAS JV - a controlled entity (sub¬
sidiary) formed to execute a railway safety project, in which the Company has 80% share in the profits
and losses. In addition, the Company has also provided the long-term advance of Rs. 575.89 lakhs
(Including interest amount). As per the latest audited financials of KERNEX TCAS JV as on 31^st March
2025, the JV has total assets of Rs 718.55 lakhs and outside liabilities (other than the advance due to
the company) is Rs. 442.94 lakhs. Thus, the net assets available amounting to Rs 275.61 lakhs are not
sufficient to recover the advance given to KERNEX TCAS JV which is Rs. 575.89 lakhs (Including inter¬
est amount) as on 31^st March 2025. Accordingly in our opinion the same investments and the advance
are subject to impairment in standalone financial statements to the extent of Rs 308.28 lakhs.

Since the Company has not impaired the cost of investments in the equity of subsidiary and the advance
granted to KERNEX TCAS JV to an extent of Rs. 1,584.25 lakhs (Rs. 1,275.97 lakhs on account of diminution
in the value of the investment in equity of the wholly owned subsidiary & Rs. 308.28 lakhs on account of insuf¬
ficient funds available in KERNEX TCAS JV), the profit and other Comprehensive Income for the year ended
are overstated by the said amount. The Other Equity in the balance sheet for the year ended is overstated by
Rs.1, 584.25 lakhs.

Our conclusion on the standalone financial statements is qualified in respect of the above matters.

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Audit¬
ing (SA's) specified under section 143(10) of the Act. Our responsibilities under those Standards are further
described in the Auditor's Responsibility 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 obtained by us is sufficient and appropriate to provide a basis for
our opinion on the Standalone Financial Statements.

Emphasis of Matter

We draw attention to Note 12 and 14 of the Standalone Financial Statements, which describes
the company’s assessment towards the recoverability of the following financial assets which are
outstanding for long period of time:

a. Trade Receivables from customers Rs. 422.10 Lakhs (PY 418.34 Lakhs) and respective
Expected Credit Loss (ECL) provision for the CY Rs. 211.67 Lakhs (PY Rs.183.58 Lakhs). The
said receivable is outstanding for more than 3 years.

b. Margin money deposits with banks of Rs. 1,905.12 Lakhs (PY 1,513.31 Lakhs) provided for
customer guarantees of Rs. 3,521.18 Lakhs (PY 2,161.71Lakhs) and under arbitration /
negotiation.

Such assessments are based on current facts and circumstances and may not necessarily reflect
future uncertainties and events and the final recoverable amounts may vary for the reasons mentioned
therein.

Our conclusion on the statement is not qualified 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 Standalone Financial Statements of the current period. 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. We have determined the matters described below to be the key
audit matters to be communicated in our report.

Information Other than the Financial Statements and Auditor's Report Thereon (“Other Information”)

• The Company's Board of Directors is responsible for the other information. The other information
comprises the information included in the Report of the Board of Directors including Annexures
thereto, Management Discussion and Analysis Report but does not include the Consolidated Financial
Statements, Standalone Financial Statements and our auditor's report thereon.

• 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 and, in doing so, consider whether the other information is materially inconsistent
with the Standalone Financial Statements or our knowledge obtained during the course of our 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. We have nothing to report in this regard.

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 re¬
spect to the preparation of these Standalone Financial Statements that give a true and fair view of the finan¬
cial position, financial performance including other comprehensive income, cash flows and changes in equity
of the Company in accordance with the accounting principles generally accepted in India, including Ind AS
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 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 Standalone Financial Statements, Management and Board of Directors are 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 Board of Directors either intend to
liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Company's Board of Directors is also responsible for overseeing the Company's financial reporting pro¬
cess.

Auditor's Responsibilities for the Audit of 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. Misstate¬
ments 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 con¬
trols with reference to Standalone Financial Statements in place and the operating effectiveness of
such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting esti¬
mates and related disclosures made by the Board of Directors.

• Conclude on the appropriateness of the 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 results 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 represents 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 consider quantitative materiality and qualitative
factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate
the effect of any identified misstatements in the Standalone Financial Statements.

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 financial
controls 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 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 Section 143(3) of the Act, based on our audit we report that:

i. 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.

ii. In our opinion, except for the matters described in the “Basis of Qualified Opinion” paragraph, proper
books of account as required by law have been kept by the Company so far as it appears from our ex¬
amination of those books.

iii. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the State¬
ment of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with
the relevant books of account.

iv. In our opinion, except for the matters described in the “Basis of Qualified Opinion” paragraph, the afore¬
said Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act.

v. On the basis of the written representations received from the directors as on March 31, 2025 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.

vi. With respect to the adequacy of the internal financial controls with reference to Standalone Financial
Statements of the Company and the operating effectiveness of such controls, refer to our separate Re¬
port in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effec¬
tiveness of the Company's internal financial controls with reference to Standalone Financial Statements.

vii. With respect to the other matters to be included in the Auditor's Report in accordance with the require¬
ments 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 by the Company to its directors during
the year is in accordance with the provisions of section 197 of the Act.

viii. 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 informa¬
tion and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Stand¬
alone 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 transfered to the Investor Education and Pro¬
tection Fund by the Company

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 enti-
ty(ies), including foreign entities (“Intermediaries”), with the understanding, whether record¬
ed in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Compa¬
ny

(“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ulti¬
mate 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, 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 performed 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 used accounting software
systems for maintaining its books of account for the financial year ended March 31, 2025 which have
the feature of recording audit trail (edit log) facility and the same has operated throughout the year for
all relevant transactions recorded in the software systems. Further, during the course of our audit we did
not come across any instance of the audit trail feature being tampered with and the audit trail has been
preserved by the Company as per the statutory requirements for record retention.

2. As required by the Companies (Auditor's Report) Order, 2020 (“the Order”) issued by the Central Govern¬
ment in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified
in paragraphs 3 and 4 of the Order.

For N S V R & Associates LLP

Chartered Accountants
FRN: 0008801S/S200060

Sd/-

V Gangadhara Rao N

Partner

Membership No. 219486
UDIN: 25219486BMIRXU8330

Place: Hyderabad
Date: May 23, 2025