Satchmo Holdings Ltd Auditor Reports

TO THE MEMBERS OF SATCHMO HOLDINGS LIMITED

Report on the audit of the Standalone Financial Results Adverse

Opinion

We have audited the Standalone financial statements of SATCHMO HOLDINGS LIMITED ("the Company") which comprise the Balance Sheet as at March 31, 2025, 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 a summary of the significant accounting policies and other explanatory information.

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 Adverse Opinion paragraph below, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and due to the significance of matter described in the Basis for Adverse Opinion paragraph given below, the accompanying standalone financial statements do not give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, and its profit, changes in equity and its cash flows for the year ended on that date.

Basis for Adverse Opinion

The Company has incurred losses over the years resulting in negative net worth and negative working capital. The default in payment of dues to banks and financial institutions and creditors etc. are the identified events that, individually or collectively, may cast significant doubt on the Companys ability to continue as a going concern. The Statement does not adequately disclose this fact.

The Company has stepped back / separated from certain projects under development and has transferred those projects to other developers/ landowners through the Memorandum of Understanding (MOU) or Business Transfer Agreement (BTA). Although these transactions have reduced the liability of the Company to banks and financial institutions, the ability of the Company to continue as a going concern continues to remain uncertain in view of the negative net worth.

As the Company has not recognized this fact and has prepared the standalone financial statements on a going concern assumption basis without carrying out any adjustments, in our opinion, the Statement may not give a true and fair view. (Refer to Note 44 of the Standalone financial statements).

Other matters that require a modification to the opinion;

1) Year-end balance confirmation in respect of trade receivables, trade payables, vendor advances, advances from customers and other advances have not been provided for our verification and record for all the parties. In the absence of such confirmation, we are unable to ascertain any consequential effect of the above to the financial results for the year. As explained, necessary mails have been sent to some of the parties for confirmation. However, no replies have been received in this regard except in few cases.

2) As per the records of the Company and information and explanations provided to us, the Company has been irregular in depositing the undisputed statutory dues, including provident fund, income-tax, value-added tax, Goods and Services tax, cess, etc. The Company is yet to deposit to the Income Tax Department the tax deducted from vendors amounting Rs. 128 lakhs and is an assessee in default by virtue of Income Tax Act.

The Company also has a receivable balance of Rs. 678.39 Lakh and a payable balance of Rs. 201.42 Lakh (excluding interest and disputed VAT liability under appeal) from/ to various government authorities. Due to such statutory non-compliance, we are unable to comment on the actual recoverability and payment of the dues against such balances.

3) Necessary documents with respect to certain advance payments to vendors and receipts from vendors/customers and movement in balance during the period were not made available for our verification which include a balance payable to a former subsidiary amounting Rs 624 lakhs out of which Rs 40 lakhs was received during the year the purpose and details of which were not made available to us by the management (Refer Note No. 29 b. and 29.c. of the consolidated financial statements). Consequently, we are unable to comment on such transactions and balances.

4) Inventories amounting to Rs 1,441 Lakh (Net of "Payable to land owner for land under JDA") has not been tested impairment for ascertaining the realizable value as on 31st March, 2025. To the extent of any possible diminution of value not accounted for, the standalone financial statements may not give a true and fair view as per the requirement of Ind AS 2 (Refer to Note 7 of the Standalone financial statements).

5) The Company had written off old debit balances and also written back old payables in the year ended 31^st March, 2025 amounting Rs 129 lakhs and Rs 3342 lakhs respectively as the same are considered unrealizable and without any claim for payment over a considerable period of time. Supporting documents were mostly not made available to us as audit evidence for our verification and record in regard to such write offs/write backs as mentioned. (Refer to Note 27 of the Standalone Financial Statements)

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013 (the Act). Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse opinion.

Emphasis of Matter

We draw attention to the facts mentioned below:

a) The Company had entered into One-time Settlements (OTS) with JCF ARC ( J C Flowers Asset Reconstruction Pvt Ltd ) (assigned by YES Bank) and HDFC Limited vide Letters dated 14^th April, 2023 and 6^th June, 2023 respectively as per which, the Company had to repay the amounts mentioned in the settlement letters in a time-bound manner. In the event the Company defaulted on the mentioned timelines or any other payment terms, the said settlement approvals would stand revoked. However, the Company had defaulted on the timelines of the payment under OTS with respect to both the lenders. Subsequently, the Company had received a notice on 23^rd November, 2023 from JCF ARC revoking the above-mentioned OTS and was called upon to repay outstanding dues along with applicable interest charges, costs, etc. with effect from the date of notice aforementioned (Refer to Note 13(i) and (ii) of the Standalone financial statements).

On this basis, the Company has disclosed Rs. 8,507 Lakh under Current Borrowing (being the OTS outstanding balance of JCF ARC and HDFC) and Rs. 48,233 Lakh under Disputed Liability (being the difference between original loan and interest liability and OTS outstanding balance) as on 31st March, 2025. (Refer to Note 14(i) of the Standalone financial statements).

The Company is in communication with the lenders for seeking an extension for the balance payment therefore has not booked any further liability on the basis of such demand from JCF ARC as informed by the management.

No information / document is made available regarding the revocation in case of HDFC Limited.

The Company had, on 22^nd July, 2024, informed SEBI as per Regulation 30 of SEBI (LODR) Regulations, 2015 about the institution of proceeding under section 7 of the Insolvency and Bankruptcy Code, 2016 by JC Flower Asset Reconstruction Company (Financial Creditor) against the Company (Corporate Debtor) before the National Company Law Tribunal regarding their outstanding due against the term loan amounting Rs.38,595 Lakhs.

Based on the above, the complaint was registered with NCLT on 12^th September 2024 and the Tribunal had issued an interim Order on 1^st October, 2024 under section 7 of the Insolvency and Bankruptcy Code, 2016 for serving notice to the Respondent Company and the responsible person of Satchmo Holdings Limited which may have an impact on the going concern status of the Company in the foreseeable future. The Company was heard by the NCLT and the Order was delivered on 27^th November, 2024 where the Respondent ( the Company) was granted three weeks time to file objection and one week time granted to Petitioner ( J.C.Flowers Asset Reconstruction Pvt Ltd ) to file rejoinder. As per the Order delivered the matter was listed on 07^th January 2025 and presently, the subject matter stands listed for hearing on June 6, 2025 after adjournments on 14^th April, 2025 and 21^st April, 2025. Further information on the status of this NCLT matter was not made available.

b) The Company had, during the current financial year, signed a share purchase agreement for divesting its equity investment in Northroof Ventures Private Limited and full sale consideration has already been received in the first quarter of the financial year. However, the other conditions as per the agreement are still in the process of execution as the shares are held as lien by JC Flower Asset Reconstruction Company, a creditor. Once all the liabilities are settled, we are informed that share transfer execution shall be completed.

As of the reporting date, the balance receivable from Northroof Ventures Private Limited is Rs. 1,033 Lakhs, which has been impaired due to the negative net worth of Northroof Ventures Private Limited. (Refer to Note 10(ii) of the Standalone financial statements).

c) During the financial year, the Company had entered into a memorandum of understanding with a new developer on 28^th March, 2025 for transferring its development rights, interest and entitlements relating to projects Plaza ( situated at Ali Asker Road measuring 106513 square feet ) and Soho ( situated at Commissariat Road, near Bangalore Centre measuring 89300 square feet) and advances of Rs 300 lakhs and Rs 50 lakhs was received on 29^th March, 2025 towards the said projects Plaza and Soho respectively from the new developer. (Refer to Note 4.2 of the Standalone financial statements)

In this context it is pertinent to mention that the Company is yet to decide on the JDA Rights acquired in 2022-23 in the Project at Commissariat Road in exchange for advance receivable along with its subsidiaries for an amount of Rs. 10,311 Lakh. This Right has been classified as a Right of Use asset at the acquisition cost, and based on the management estimate, the carrying cost is below the net realizable value. The Company is yet to ascertain the period for necessary amortization. (Refer to Note 4.1. i) and ii) of the Standalone financial statements)

d) The Company has not renewed the registration of project "Rio" under the provisions of Real Estate (Regulation and Development) Act, 2016 since 31st March 2019, resulting in non-compliance under the relevant rules and regulations of the Real Estate (Regulation and Development) Act, 2016.

e) According to the information and explanation provided to us, Gratuity plan of the Company is unfunded as at 31st March, 2025 and the Company has made provision for the entire Gratuity Liability. Employee Gratuity Liability is being met as and when they fall due. As no assets are maintained by the Company, there is a liquidity risk that the Company may run out of cash resources which may further affect the financial position of the Company. (Refer to Note 32 of the Standalone financial statements)

f) Revenue relating to invoices raised on maintenance charges for a project aggregating Rs 1932 lakhs was not recognised due to uncertainty in collection of the expected consideration and ongoing reconciliation of the balances with the respective customers. (Refer to Note 17(ii) of the Standalone financial statements)

g) Certain Managerial personnel duly appointed by members have intimated the Board that they would be foregoing their remuneration from their respective date of appointment in order to comply with the provisions of section 197(1) of the Companies Act, 2013 since lenders approval prior to such appointment was not obtained. Accordingly, no managerial remuneration has been accounted for in the books of account in respect of those personnel. The board has noted the "Letter of Undertaking" received from the personnel for non-acceptance of salary and other remuneration.

Our opinion is not modified in respect of the above 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 year. 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. In addition to the matters described in the Basis for Adverse Opinion section of our report, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter	Response to Key Audit Matter
Institution of proceeding under section 7 of the Insolvency and Bankruptcy Code, 2016 by JC Flower Asset Reconstruction Company (Financial Creditor)
The Company had entered into One-time Settlements (OTS) with JCF ARC (assigned by YES Bank) and HDFC Limited vide Letters dated 14th April, 2023 and 6th June, 2023 respectively as per which, the Company had to repay the amounts mentioned in the settlement letters in a time- bound manner. The Company had defaulted on the mentioned timelines or any other payment terms, the said settlement approvals stood revoked by way of a notice on 23rd November, 2023 from JCF ARC and the Company was called upon to repay outstanding dues along with applicable interest charges, costs, etc. with effect from the date of notice aforementioned, as elaborated in clause (a) of the Emphasis of Matter paragraph .	The auditors have been seeking information from the Management on the status of the proceeding and the complaint with NCLT. The Company had shared the status of the dates of hearing before NCLT as and when adjourned.
	We had requested for the plan of action for settlement of the dues and were provided the copies of the MOUs entered with a new developer on 28th March, 2025 for transferring its development rights, interest and entitlements relating to projects Plaza and Soho. The management had informed that part of the JCF dues would be settled through consideration from the transfer and from realization out of transfer from one of their existing projects.
	The Auditors were informed of arrangement wherein the JCF matter with NCLT will be settled at the amount agreed on OTS ( which stands revoked presently ) which is lower than Rs 386 crores outstanding as recorded with NCLT. However document substantiating the aforesaid communication was not made available raising doubts about the course of action to be adopted for repayment of dues and of the continuity of the entity in the foreseeable future.

 

Maintenance income pending reconciliation included under Other Liability (Note 17)
Contract Liability of Rs 1928 lakhs under Other Liability in Note 17 to the Standalone Financials has not been recognised as revenue in the books for which reconciliation is pending. The related debit i.e., trade receivable in Note 8 shows a balance of Rs 1871 lakhs as considered good and represents the amount of consideration due.	The auditors had communicated this matter with the Head of Finance in charge of governance who had explained that the amount is in regard to maintenance charges billed on customers relating to one project and is pending reconciliation.

Responsibilities of the Management and Those Charged with Governance for the Statements

These standalone financial results have been prepared on the basis of the standalone financial statements. The Companys Board of Directors are responsible for the preparation of these financial results that give a true and fair view of the net profit for the year ended March 31, 2025 and other comprehensive income and other financial information of the Company in accordance with the recognition and measurement principles laid down in Indian Accounting Standard prescribed under Section 133 of the Act read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial results that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial results, the Board of Directors are responsible for assessing the Companys 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 intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Results

Our objectives are to obtain reasonable assurance about whether the standalone financial results as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial results.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial results, 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 control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of such controls.

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

• Conclude on the appropriateness of the Board of Directors 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 Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the 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.

• Evaluate the overall presentation, structure and content of the standalone financial results, including the disclosures, and whether the standalone financial results represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial results that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial results 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 results.

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.

Other Matters

a) During the previous financial year, the GST department had reinstated the GST registration vide form Reg 22 dated May 12, 2023. Pursuant to this, the Company has ascertained certain GST liabilities for previous years and deposited to the department. However, the Company has received an order subsequently for cancellation of GST registration on account of failing to furnish the returns for prescribed periods.

On verification of documents and according to the explanation provided to us, the Company is raising GST invoices in order to deposit GST liability to the department as and when GST registration will stand valid.

The Company had begun depositing amounts towards GST dues on announcement of Amnesty Scheme on 16th January, 2025 from the Department of Commercial Taxes, Government of Karnataka regarding waiver of interest and penalty or both relating to demands under Section 73 of the CGST Act pertaining to Financial Years 2017-18, 2018-19 and 2019-20.

b) The Company earlier on February 23, 2022 had amended the main Objects of the Companys Memorandum of Association and post amendment of the Object Clause, the Company is to predominantly focus on trading in land and plotted development, Service business comprising wide areas of facilities / manpower / catering / restaurants activities, related Internet Technology Services and long term investment and trading in equities. During the last quarter on January 28, 2025 a new Company, Satchmo Foods Private Limited was incorporated as a wholly owned subsidiary of the Company to deal in the business of manufacturing, supply, distribution of food products and services.

c) We have been informed by the management that the Company has advanced monies to a related party as per a special resolution taken by the Company in terms of the relevant provisions of the Companies Act, 2013 and necessary disclosure has been given in the financial statements. (Refer to Note 29 b of the Standalone financial statements)

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the "Annexure - A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that:

a) Except for the effects of the matters described in the Basis for Adverse Opinion paragraph above read with the Emphasis of Matter and Other Matters paragraphs, we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) Except for the effects of the matters described in the Basis for Adverse Opinion paragraph above read with the Emphasis of Matter and Other Matters paragraphs, 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 Balance Sheet, the Statement of Profit and Loss including other comprehensive income, the statement of changes in equity and statement of cash flows dealt with by this Report are in agreement with the books of account.

d) Except for the effects of the matters described in the Basis for Adverse Opinion paragraph above read with the Emphasis of Matter and Other Matter paragraphs, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder.

e) The matters stated in the Basis for Adverse Opinion section above, in our opinion, may have an adverse effect on the functioning of the Company.

f) On the basis of written representations received from the directors as on 31st March, 2025 taken on record by the Board of Directors, none of the directors is disqualified from being appointed as director in terms of Section 164(2) of the Act as on 31st March, 2025.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure -B. Our report expresses a qualified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting for the reasons stated therein.

h) In terms of the provisions of section 197(16) of the Companies Act, 2013 and according to the information, representation and explanation given to us by the management, no managerial remuneration has been paid/provided during the year apart from remuneration paid to one executive director in his operational capacity working also as Chief Financial Officer of the Company.

i) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Amendment Rules, 2021, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer note no. 34;

ii. According to the information and explanation given by the management, the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, 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, other than as disclosed in the notes to the accounts, 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; and

(c) Based on the audit procedures we have 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 (a) and (b) contain any material misstatement.

v. No dividend is declared or paid by the Company during the year and hence, compliance with section 123 of the Companies Act, 2013 is not applicable to the Company.

vi. Based on our examination which included test checks, the Company has changed the accounting software ( from SAP to Tally Prime Gold ) from 1^st April 2024 for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable to the Company with effect from April 1, 2023, and reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirement for record retention is in place (both for the previous and existing Accounting Software) for the financial year ended March 31, 2025.

For KAMG & ASSOCIATE	(Amitabha Niyogi)
Chartered Accountants	Partner
(Firms Registration No. 311027E)	Membership No 056720
Place : Bengaluru	UDIN: 25056720BMJTAO8768
Date : 30.04.2025

ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT

"Annexure A" referred to in our report to the members of Satchmo Holdings Limited under the heading Report on Other Legal and Regulatory Requirements of our report at even date.

We report that:

i. (a) (A) The Company has maintained proper records showing the necessary particulars including quantitative details and description of Property, Plant and Equipment. Further, details on location need to be incorporated.;

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

(b) According to the information and explanation given to us, the Company follows a policy of physical verification of the Property, Plant and Equipment in a phased manner over a period of three years. Some of the assets have been physically verified by the management during the year and no material discrepancies were noticed. In our opinion, the frequency of such verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) Based on our examination of records and according to the information and explanation given to us, the title deeds of the immovable properties as recorded in the books of account (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee) are disclosed in the financial statements and are held in the name of the company other than the one mentioned below.

The Company had, since 30^th March 2023, obtained a Right to Use 87,500 sq. ft. of area at Commissariat Road Property through Deed of Settlement of various advances against which the agreement for use and terms and condition are yet to be entered into with the parties.

(d) The Company has not revalued any its Property, Plant and Equipment or any intangible assets during the year.

(e) According to the information, explanations and management representations provided to us, the Company is neither holding any Benami property nor any proceeding has been initiated or is pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

ii. (a) The Company is engaged in the business of real estate development and related services and holds inventories in the form of land, developed properties and properties under development. Having regard to the nature of inventory, the management has conducted physical verification of inventory by way of verification of Joint Development Agreements (JDA), site visits conducted and certification of extent of work completion by competent persons, at reasonable intervals during the year. However, in respect of certain projects, certificates of competent authority in respect of work completion has not been provided to us. Accordingly, we are unable to comment on whether material discrepancies, if any, have been properly dealt with in the books of accounts in such cases.

(b) According to the information and explanation given to us, the Company was not sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks or financial institutions on the basis of security of current assets at any point of time during the year. Hence, filing of returns or statements to Banks or Financial Institution is not applicable to Company.

iii. According to the information and explanation given to us and on the basis of our examination of the records of the Company, the Company has not made investments in, provided any guarantee or security or granted any loans or advances in the nature of loans secured or unsecured, to companies, firms, limited liability partnerships or any other parties during the year. However, during the year, the Company has granted advances in the ordinary course of business to the following subsidiaries and other parties. In this respect, we report as below:

(a) The Company has provided unsecured advances in the ordinary course of business to its subsidiaries and other related parties.

(A) With respect to advances given to its subsidiaries, the following information was made available to us:

(Amount Rs. In Lakhs)

Name of Companies/ Parties	Relation with the Company	Amount provided during the year	Outstanding Balance as on 31.03.2025
Northroof Ventures Private Limited	Subsidiary	Nil	1,033
Satchmo Foods Private Limited	Subsidiary	16	16

(B) With respect to advances given to related parties other than subsidiaries, the following information was made available to us:

(Amount Rs. In Lakhs)

Name of Companies/ Parties	Relation with the Company	Amount provided during the year	Outstanding Balance as on 31.03.2025
Nitlogis Private Limited	Other Party	81	461

(b) The Company has given a fresh advance to a related party and an advance to a newly incorporated subsidiary during the fourth quarter of the financial year. The Company has also obtained a special resolution in respect of the advance to the related party.

Further, the Company has incurred cash losses during the year and is unable to pay its statutory liabilities. Due to such continued cash losses, such advances/ loans are prejudicial to the interest of the Company.

(c) We have not been provided the details stating the terms of advances/ loans granted. Hence, we cannot comment on the regularity of the receipts and repayments.

(d) Total amount of advances/ loans outstanding as per the financial statements is shown at Rs. 1,510 Lakhs. In the absence of necessary documents and information and explanation in the matter, we are unable to conclude whether the amount is overdue. We are not aware of the steps taken by the Company toward the recovery of these advances/ loans.

(e) In the absence of necessary information, we are unable to comment on whether the above amount outstanding has fallen due during the year. However, fresh advances/ loans were given to related parties amounting to Rs. 97 Lakhs which constitutes 6.42% of total outstanding dues.

(f) In the absence of necessary documents, advances/ loans given to related parties / Companies are without specifying any terms or period of repayment. The aggregate amount of advances/ loans granted to such related parties specified under sub-section (76) of section 2 of the Companies Act is Rs. 1,510 Lakhs which constitutes 100% of the total loans granted.

iv. According to the information and explanation given to us, the Company has complied with provisions of sections 185 and 186 of the Act. Advances amounting Rs. 16 Lakhs and Rs 81 lakhs were provided to the newly incorporated wholly owned subsidiary and other related party respectively during the current financial year which is 100% of the total loans provided during the year. Point c) under Other Matters in the Independent Auditors Report may please be referred to in this context.

v. Based on our examination of records and according to the information and explanations given to us, the Company has not accepted any deposits or amounts which are deemed to be deposits within the meaning of sections 73 to 76 of the Companies Act and the relevant rules made thereunder. Hence, reporting under clause 3(v) of the Order is not applicable.

vi. To the best of our knowledge and according to the information and explanations given to us, the Central Government has prescribed for the maintenance of the cost records under section 148(1) of the Companies Act, 2013 in respect of the products of the Company. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148 of the Act, and are of the opinion that primafacie, the necessary accounts and records have been made and maintained.

vii. (a) As per the records of the Company and according to the information and explanations provided to us, the Company is irregular in depositing the undisputed statutory dues including Goods and Service Tax, provident fund, employees state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value-added tax, cess and other applicable statutory dues to the appropriate authorities.

The following amounts were outstanding as at 31st March 2025 for a period of more than six months from the date they became payable:

Name of the statute	Nature of the dues	Amount (Rs in Lakhs)	Period to which the amount relates	Due date	Date of payment
Income Tax Act, 1961	TDS	44	April 2024 - September 2024	Various due dates	Not paid
Income Tax Act, 1961	TDS	52	Previous Years	Various due dates	Not paid
CGST Act, SGST Act & IGST Act, 2017	GST	81	Previous years	Various due dates	Not paid
CGST Act, SGST Act & IGST Act, 2017	GST	9	April 2024 September 2024	Various due dates	Not paid
Provident Fund & Misc. Provisions Act, 1952	Provident Fund	10	April 2023 September 2023	20th October 2023	Not paid
Provident Fund & Misc. Provisions Act, 1952	Provident Fund	53	Previous years	Various due dates	Not paid
Service Tax Act, 1994	Service Tax	3	Previous years	Various due dates	Not paid
KTPTCE Act, 1976	Profession Tax	Nil	Previous years	Various due dates	Not paid
Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013	NPS	2	Previous years	Various due dates	Not paid

(b) According to the information and explanations given to us, the following are the disputed statutory dues which have not been deposited by the Company as on 31st March, 2025.

Name of the statute	Nature of the dues	Period to which the amount relates	Oi	Forum where dispute is pending
Income-tax Act	Income-tax- 269 SS	AY 2009-10	330.00	Joint Commissioner (Appeals) or the Commissioner of Income tax (Appeals)
				TDS - Circle 2(1)
	TDS		6.54
KVAT Act	VAT	AY 2014-15	114	DCCT(A)
		AY 2016-17	140	CTO(A)
		AY 2017-18	30	DCCT(A)
GST Act, 2017	GST	FY 2017-18 FY	47	DCCT (A)
		2018-19 FY	122	JCCT(A)
		2019-20	24	DCCT(A)

viii. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not surrendered or disclosed any transactions not recorded in the books of accounts as income during the year in respect of tax assessments under the Income Tax Act, 1961 (43 of 1961).

ix. (a) According to the information and explanations given to us, the Company has defaulted in repayment of borrowings and in the payment of interest thereon to the bank and the financial institution as mentioned below:

Nature of Borrowings, including debt securities	Name of Lender	Amount of default (Rs./Lakhs)	Whether Principal or Interest (Rs./ Lakhs)	Period of default
Term Loan	J C Flower Asset Reconstruction Private Limited (previously with Yes Bank Limited)	24881	Principal -19,710 and Interest - 5171	More than 180 days
Loan	HDFC Limited	31859	Principal - 18,312 and Interest - 13,547	More than 180 days

(b) According to the information, representation and explanation given to us and on the basis of examination of records made available to us, the Company has not been declared a wilful defaulter by the bank and the financial institution. However, as mentioned in note no.13(i) of the financial statements, these borrowings from the bank and financial institution had become Non-Performing Assets (NPAs) and the bank and the financial institution had called upon the debt.

(c) The Company has term loans as on the balance sheet date and as per representation of the management those term loans were applied for the purpose for which the loans were obtained by the Company. However, the necessary certification in respect of the end use of such loans or advance has not been provided to us by the management and hence we cannot comment on the same.

(d) According to the information and explanation provided to us, the Company has not raised any funds on short term basis during the year. Accordingly, clause ix (d) is not applicable.

(e) According to the information, representation and explanation provided to us, the Company has not taken any funds during the year from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

(f) According to the information and explanation provided to us, the Company has not raised any loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate company.

x. (a) The Company has not raised money by way of initial public offer or further public offer (including debt instruments) during the year. Hence, reporting under clause 3 (x) (a) of the Order is not applicable to the Company.

(b) The Company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures during the year. Hence, reporting under clause 3 (x) (b) of the Order is not applicable to the Company.

xi. According to the information, representation and explanations given to us by the management,

(a) No fraud on or by the Company has been noticed or reported during the year. Accordingly, the provision of clause 3(x) of the said order is not applicable.

(b) No report under sub-section (12) of Section 143 of the Companies Act has been filed by us in Form ADT-4 as prescribed under rule 13 of the Companies (Audit and Auditors) Rules, 2014 with the Central Government.

(c) The Company has not received any whistle-blower complaints during the year.

xii. The Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us by the management, all transactions with the related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the standalone financial statements etc., as required by the applicable accounting standards. The management has provided us with extracts of the board meetings in respect of these transactions with related parties, however, the nature of such transactions and underlying documents in support of the same have not been provided to us.

xiv. According to the information and explanations given to us;

(a) The Company has an internal audit system commensurate with the size and nature of its business.

(b) The reports of the Internal Auditors for the period under audit were provided to us and was duly considered for our statutory audit purpose.

xv. According to the information and explanations given to us and as represented to us by the management, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, the provision of clause 3(xv) of the Order is not applicable.

xvi. According to the information and explanations and representation given to us:

(a) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, reporting under clause 3(xvi)(a) of the Order is not applicable to the Company.

(b) The Company has not conducted any Non-Banking Financial or Housing Finance activities. Accordingly, reporting under clause 3(xvi)(b) of the Order is not applicable to the Company.

(c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, reporting under clause 3(xvi)(c) of the Order is not applicable to the Company.

(d) The Group does not have any Core Investment Company. Accordingly, reporting under clause 3(xvi)(d) of the Order is not applicable to the Company.

xvii. The Company has incurred cash losses of Rs 1410 lakhs during the financial year and had incurred cash losses of Rs. 4,358 Lakhs in the immediately preceding financial year.

xviii. There has not been any resignation of the statutory auditors during the year. Hence the reporting under clause 3 (xviii) of the Order is not applicable to the Company.

xix. In our opinion and according to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, knowledge of the Board of Directors and management plans, we are of the opinion that material uncertainty exists as on the date of audit report that the Company may not be capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date.

xx. According to the information and explanations given to us, the provisions of section 135 of the Companies Act is not applicable to the Company. Hence, reporting under clause 3(xx) of the Order is not applicable to the Company.

For KAMG & ASSOCIATE	(Amitabha Niyogi)
Chartered Accountants	Partner
(Firms Registration No. 311027E)	Membership No 056720
Place : Bengaluru	UDIN: 25056720BMJTAO8768
Date : 30.04.2025

Annexure-B" to the Independent Auditors Report

Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Satchmo Holdings Limited (herein after referred to as "the Company") as of 31st March, 2025 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

In our opinion, to the best of our information and according to the explanations given to us, except for the effects/possible effects of the material weaknesses described in Basis for Qualified Opinion paragraph below on the achievement of the objectives of the control criteria over financial reporting, there is an urgent requirement for the management to design control procedures for recording and documentation of transactions and financial approvals of the Company and also for complying with the various provisions of the applicable acts which as a whole are directly related to the effectiveness of the Internal Control Functions over Financial Reporting of the Company, considering the essential component of internal control as stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Basis for Qualified Opinion

A material weakness is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Companys annual or interim financial statements will not be prevented or detected on a timely basis.

According to the information and explanations given to us and based on our audit procedures, the following material weaknesses have been identified in the Companys internal financial controls over financial reporting as at 31st March, 2025.

a) The Company did not have an appropriate internal control system relating to granting of unsecured advances for acquiring various immovable properties. The credit worthiness of the parties, exposure and experience in handling land procurement by third parties, asset base for providing security and guarantee, establishing segregation of duties, determining credentials of the counterparties and sufficient documentation regarding such transactions etc. should be verified at the time of authorization and disbursement of said advances.

b) The Company did not have complete system of obtaining year-end balance confirmation certificates in respect of trade receivables, trade payables, vendor advances, advance from customers and other advances.

c) The Company did not have an adequate internal control system to manage the utilization of loans and facilities obtained from the banks and other financial institutions as per the terms governing such loans and facilities and also the disclosure requirements against such loans and advances received from the banks and the financial institutions.

d) The Company did not have an appropriate internal control system to ascertain the realizable value of Inventory and also does not have a documented system of regular inventory verification.

e) The Company did not have adequate internal control for ascertaining tax assets/liabilities and payments of statutory dues including Income Tax and Goods and Service Tax and other relevant Taxes.

f) The Company did not have an appropriate internal control system to ascertain the net realizable value of financial assets and the system for conducting impairment testing to ascertain the actual value of the asset to be carried in the books of accounts.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2025 standalone financial statement of the Company, and these material weaknesses have affected our opinion on the standalone financial statement of the Company and we have issued an adverse opinion on the standalone financial statement.

For KAMG & ASSOCIATE	(Amitabha Niyogi)
Chartered Accountants	Partner
(Firms Registration No. 311027E)	Membership No 056720
Place : Bengaluru	UDIN: 25056720BMJTAO8768
Date : 30.04.2025