To the Members of AANCHAL ISPAT LIMITED

Report on the Audit of the Standalone Financial Statements

We have audited the accompanying Ind AS financial statements of AANCHAL ISPAT LIMITED (the Company), which comprise the Balance Sheet as at March 31, 2026, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and Notes to the Ind AS Financial Statements, including a summary of Significant Accounting Policies and other explanatory information (hereinafter referred to as Ind AS financial statements).

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements, give the information required by the Company 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 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, 2026; and of the profit, its cash flows for the year ended on that date.

M/S. ALDOUS COMMODITIES PRIVATE LIMITED, being an operational creditor of M/S AANCHAL ISPAT LIMITED (Corporate Debtor), had filed an application (company petition no. CP(IB) No. 1518/(KB)/2020) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 before the Honble National Company Law Tribunal (NCLT), Special Bench (COURT-II), Kolkata seeking initiation of the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. The said application was admitted by the Honble NCLT Special Bench (COURT-II), Kolkata vide its order dated 12.09.2023 (certified copy received on 13th September, 2023, and Mr. Sriram Mittal, Insolvency Professional (IBBI Registration No.: IBBI/IPA-001/IP-P02276/2021-2022/13677 was appointed as the Interim Resolution Professional (IRP) to carry out the CIRP. Subsequently, vide order dated 17.11.2023, CA Santanu Brahma has been appointed as the Resolution Professional (RP) upon application filed for replacing the erstwhile IRP, Mr. Sriram Mittal.

We draw attention to Note 39 of the accompanying financial statements, which indicates that the Company had undergone Corporate Insolvency Resolution Process (CIRP) pursuant to the order dated September 12, 2023 passed by the Honble National Company Law Tribunal (NCLT), Kolkata Bench under the Insolvency and Bankruptcy Code, 2016 (IBC). Subsequently, the Resolution Plan submitted by the Successful Resolution Applicant (SRA) was approved by the Honble NCLT vide order dated March 27, 2025 and implementation of the approved Resolution Plan is presently under progress.

As stated in the said note, installment payments due under the approved Resolution Plan aggregating to Rs. 21.50 crores due up to March 31, 2026, remain unpaid as on the reporting date. The Successful Resolution Applicant has filed an application before the Honble NCLT seeking alignment/revision of payment timelines, which is presently pending adjudication.

The Companys ability to continue as a going concern is dependent upon successful implementation of the approved Resolution Plan, generation of adequate cash flows and availability of necessary financial support. These events and conditions indicate the existence of a material uncertainty that may cast significant doubt on the Companys ability to continue as a going concern.

However, the financial statements have been prepared on a going concern basis considering the approved Resolution Plan, revival of operations and management assessment regarding future business prospects.

Basis for opinion

We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors 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 Ind AS 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 ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Emphasis of Matter

a) As per Ind AS 1, the financial statements have been prepared on a going concern basis. The Company had incurred substantial losses in earlier years; however, the Resolution Plan approved by the Honble NCLT on March 27, 2025 provides for revival of operations. The appropriateness of the going concern assumption is dependent upon successful implementation of the Resolution Plan.

b) We draw attention to Note 19 of the financial statements, regarding an amount of ? 3.00 crore received from the Successful Resolution Applicant (SRA) during the Corporate Insolvency Resolution Process (CIRP), which is currently held in fixed deposits and disclosed under Bank Balance other than cash and cash equivalents, with a corresponding classification under Other current Liabilities. Pursuant to the approval of the Resolution Plan by the Honble NCLT vide order dated March 27, 2025, the said amount is to be adjusted against the implementation obligations under the approved Resolution Plan. Pending formal allocation and utilization in accordance with the terms of the Resolution Plan, the amount continues to be reflected as a liability as at March 31, 2026. The ultimate accounting treatment and impact, if any, will depend upon the final implementation of the Resolution Plan.

c) We draw attention to Note 40 of the Statement, regarding transactions with Maina International Ltd., a related party under common control. During the year, transactions with Maina International Limited included 34.93% of total sales and 33.45% of total purchases. The Company has also entered into a job work agreement with the said party, from which the entire job work income is derived. As stated in the note, these transactions were carried out at prices represented by management to be at arms length.

d) We draw attention to Note 42 of the financial statements, wherein the Company has not recognised any Expected Credit Loss (ECL) on trade receivables under Ind AS 109 - Financial Instruments, based on managements assessment of recoverability. As disclosed, approx 1.83 crore trade receivables remain outstanding for extended periods, including amounts outstanding for more than six months and more than one year. Management has evaluated these balances and considers them to be fully recoverable. The assessment of recoverability and the consequent non-recognition of ECL involve the exercise of judgment.

e) We draw attention to Note 42 of the accompanying financial statements, relating to impairment assessment of Property, Plant and Equipment (PPE), wherein the Company has relied on managements evaluation of recoverability without carrying out a formal impairment test in accordance with the requirements of Ind AS 36 - Impairment of Assets. As indicated in the said note, certain indicators of impairment exist, including the Companys past losses and its recent completion of the Corporate Insolvency Resolution Process (CIRP) and implementation of the approved Resolution Plan. While management has performed an assessment based on operational and financial factors and concluded that no impairment is required, such assessment involves significant judgment.

f) We draw attention to Note No.22 of the accompanying statement wherein the Company has recognised income on account of recovery of amounts previously written off. For the year ended 31st March 2026, the Company has reported a profit before tax of ? 272.29 lakhs, which includes a significant component of such recoveries. While the recognition of this income is in accordance with the applicable accounting standards, including Ind AS 1 and Ind AS 109, the same is non-recurring in nature and not arising from the Companys core operations. Further, no documentary evidence in respect of recovery of bad debts amounting to ? 185 lakhs was made available to us for verification. Accordingly, the reported profit for the period is materially influenced by such recoveries and may not be indicative of the Companys underlying operational performance.

g) We draw attention to the fact that the Company has given advances to various parties for purchase of goods and services, some of them are outstanding for a prolonged period. In certain cases, such advances are not supported by formal agreements, purchase orders or confirmations, and no corresponding goods or services have been received till date. However, management has represented that these are supported by established business relationships, ongoing communications, and continuous follow-up with the respective parties. While management considers the advances to be recoverable or adjustable against future supplies/services, the timing of such adjustments and recoverability remains subject to future execution of underlying transactions. Accordingly, the recoverability of such advances is uncertain and the impact, if any, on the financial statements is not ascertainable.

h) We draw attention to the fact that the capital work-in-progress balance is outstanding for a prolonged period without any significant movement. The management is in the process of evaluating the reliability of such balances. In absence of adequate supporting evidence, the impact, if any, on the financial statements is not ascertainable.

i) We draw attention to the fact that the Company was under Corporate Insolvency Resolution Process (CIRP), pursuant to which the Honble NCLT, vide order dated March 27, 2025, approved the Resolution Plan and the financial liabilities of the financial creditors have been accounted for by the Company in accordance with the said approved Resolution Plan. During the course of audit, balance confirmations were sought from the financial creditors. However, the responses received from certain financial creditors continue to reflect the account as Non-Performing Asset (NPA) and under IBC with reference to pre-CIRP outstanding balances and do not fully reflect the adjustments made pursuant to the approved Resolution Plan. The Company, however, has accounted for the liabilities in accordance with the approved Resolution Plan, which is binding under the provisions of the Insolvency and Bankruptcy Code. Accordingly, no adjustment is considered necessary in the financial statements.

j) We draw attention to the carrying value of consumables aggregating to Rs. 5.23 crore, a portion of which is not currently in active production use and is intended to be disposed of. As explained by management, a stock audit has been conducted during the year, covering a period of one year, and no material variations were observed in the valuation of such inventory. Further, management has represented that, considering the prevailing upward trend in prices of iron and steel, the net realisable value of these consumables is expected to be higher than their carrying cost. While the Company has not carried out a detailed item-wise assessment of net realisable value as required under Ind AS 2 - Inventories, management believes that no provision for diminution is required. We are unable to comment on the appropriateness of the carrying value of these consumables.

k) We draw attention to the note no 29 of the accompanying statement wherein the Company entered into various related party transactions. Which includes unsecured loan from director aggregating to Rs. 168.90 lakhs, advance to entity in which director or relative of director exercise significant influence aggregating to Rs. 145.85 lakhs.

l) We draw attention to the fact that certain corporate action and approvals proposed by the Company and approved by the shareholders through Special resolution in EGM during the year are opposed by the Monitoring Committee constituted pursuant to the approved Resolution Plan. The management after due deliberation and taking into account the current phase of implementation of the approved resolution plan of the Company, the Board considers it prudent and appropriate, in the overall interest of the Company and in order to ensure alignment with ongoing strategic and operational priorities, to deferred the implementation of the aforesaid resolutions for the time being.

m) We further draw attention to the fact that funds aggregating to approximately Rs. 18.81 crores, required to be brought in by the Successful Resolution Applicant (SRA) under the approved Resolution Plan, were not infused within the stipulated timelines as at March 31, 2026 and the related matter is presently under consideration before the Honble NCLT.

Our conclusion is not modified in respect of 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 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 matter described below to be the key audit matter to be communicated in our report.

Valuation of Slow-moving and Non-moving Consumables Inventory

The key audit matter

How the matter was addressed in our audit

Valuation of Slow-moving and Non-moving Consumables Refer Note 5 of the financial statements. The Company is carrying consumables, stores and spares inventory aggregating to approximately Rs. 5.23 crores as at March 31, 2026. Certain inventories are old, slow-moving and non-moving in nature and have remained unused over a prolonged period. Determination of net realizable value, usability and future consumption pattern of such inventories involves significant management judgment and estimation uncertainty. Further, considering the Companys CIRP process, operational restructuring and implementation of the approved Resolution Plan, assessment of recoverability and valuation of such inventory required significant auditor attention.

Our audit procedures included, inter alia: - Obtained understanding of managements process for identification and monitoring of slow-moving and non-moving inventory; - Reviewed inventory ageing reports, movement analysis and consumption patterns; - Examined inventory records and selected supporting documents; - Discussed future utilisation plans with management; - Evaluated management assessment regarding net realizable value and recoverability; - Assessed whether any provision/write-down was required under Ind AS 2 - Inventories; - Evaluated adequacy of related disclosures in the financial statements.

Recoverability of Trade Receivables, Advances and Other Receivables

The Key Audit Matter

How the matter was addressed in our audit

Recoverability of Trade Receivables, Advances and Other Receivables Refer Note 6 and Note 11 of the financial statements. The Company has trade receivables, advances and other receivables aggregating to material amounts, including balances outstanding for a substantial period. Certain receivables and advances were not supported by confirmations, agreements or adequate documentary evidence during the course of audit. Assessment of recoverability of such balances involves significant management judgment and estimation uncertainty relating to future recoverability, expected credit losses and settlement of balances.

Our audit procedures included, inter alia: - Reviewed ageing analysis of trade receivables, advances and other receivables; - Examined ledger scrutiny, available supporting documents and accounting records; - Obtained management representations regarding recoverability of balances; - Reviewed subsequent recoveries, wherever available; - Evaluated management assessment relating to Expected Credit Loss (ECL) under Ind AS 109 - Financial Instruments; - Assessed adequacy and appropriateness of related disclosures.

Assessment of Impairment Indicators relating to Property, Plant and Equipment

The key audit matter

How the matter was addressed in our audit

Assessment of Impairment Indicators relating to Property, Plant and Equipment Refer Note 2 of the financial statements. The Company has significant balances of Property, Plant and Equipment including land, building and plant & machinery. Considering the Companys historical financial stress, CIRP proceedings under the Insolvency and Bankruptcy Code, 2016, pending implementation of Resolution Plan and operational status of certain facilities, assessment of impairment indicators and recoverable value of Property, Plant and Equipment involved significant management judgment under Ind AS 36 - Impairment of Assets. Further, determination of recoverable amount of such assets involves assumptions relating to future business operations, estimated cash flows, utilisation of manufacturing facilities and expected economic benefits from the assets.

Our audit procedures included, inter alia: - Obtained understanding of managements process for assessment of impairment indicators; - Discussed operational status of plant and future business plans with management; - Reviewed available valuation-related records, internal assessments and supporting documents; - Evaluated assumptions considered by management regarding future operations and recoverability of carrying values; - Assessed whether any impairment provision was required under Ind AS 36 - Impairment of Assets; - Evaluated adequacy and appropriateness of related disclosures in the financial statements.

Information other than the financial statements and auditors report thereon

The Companys Management is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexure to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include the Ind AS financial statements and our auditors report thereon.

Our opinion on the Ind AS 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 Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Ind AS financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

We have not reviewed the other information and accordingly, we are not able to report in this regard.

Managements Responsibility and Those charged with Governance for the Financial Statement

The Management is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of the Ind AS financial statements that give a true and fair view of the financial 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 the Indian Accounting Standards prescribed under Section 133 of the Act read with relevant rules issued there under. 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the IND AS financial statement, management is 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Management is responsible for overseeing the Companys financial reporting process.

Auditors Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the IND AS financial statement 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 IND AS financial statement.

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 IND AS financial statement, 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 managements 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 IND AS financial statement or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the IND AS financial statement, including the disclosures, and whether the IND AS financial statement 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 Ind AS financial statements of the current period and are therefore the key audit matters.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the IND AS financial statement of the current period and are therefore the key audit matters. We describe these matters in our auditors 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 the 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 and except for the effects, if any, of the matters described in the basis for opinion paragraph. We give in the Annexure A on the matters specified in paragraph 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, except for the possible effect of the matter described in the Basis for Opinion Paragraph above all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books except for the possible effects of the matters described in basis of opinion section above and the matters stated in the paragraph (i)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

c) The Balance Sheet and the Statement of Profit and Loss, and the cash flow statement dealt with by this Report are in agreement with the books of account.

d) Except for the possible effects of the matters described in basis of opinion section above, in our opinion, the aforesaid financial statements comply with the Ind AS Specified under Section 133 of the Act.

e) On the basis of written representations received from the directors as on 31 March, 2026, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2026, from being appointed as a director in terms of Section 164(2) of the Act. However, the Honble National Company Law Tribunal (NCLT), Kolkata Bench, vide its order dated September 12, 2023, admitted the Company under the Corporate Insolvency Resolution Process (CIRP), pursuant to which the existing Board of Directors was suspended, and the powers vested in them were transferred to the Resolution Professional (RP) for managing the affairs of the Company. The RP managed the affairs of the Company until March 27, 2025. A new Board was duly constituted with effect from April 10, 2025, and thereafter took over the responsibility of managing the Companys affairs.

f) 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.

g) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended. In our opinion and according to the information and explanations given to us, the managerial remuneration for the year ended March 31, 2026 has been paid / provided by the Company to its directors in accordance with the provision of Section 197 read with Schedule V to the Act.

h) The matters described in the basis for opinion section above and material uncertainty related to going concern section above, in our opinion, may have an adverse effect on the functioning 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) Rules, 2014, in our opinion and to the best of our Information and according to the explanations given to us: i. The Company has, except the for the possible effect of the matter described in the Qualified opinion Paragraph above disclosed the impact of pending litigation on its financial position in its 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 is no amount 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, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from the borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person or entity, including foreign entity (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 manners 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 (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (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 one (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement. v. No dividend is declared or paid during the year. vi. Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility throughout the year ended March 31, 2026, 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 having been tampered with. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, preservation of audit trail as per statutory requirements has been considered for the period from that date onwards.

	For Rajesh Jalan & Associates
	Chartered Accountants
	(Firm Registration No. : 326370E)
	Sd/-
	(Rajesh Jalan)
Place : Kolkata	Partner
Date : 27 th April, 2026	Membership No. 065792
	(UDIN:26065792OCHAPE6553)

ANNEXURE A

(Referred to in paragraph 1 under Report on other Legal and Regulatory Requirements section of our report of even date)

1. (a)(i) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment and relevant details of Right-of-Use assets. (ii) The Company does not have any intangible assets. Accordingly, reporting under clause 3(i)(a)(B) of the Order is not applicable. (b) According to the information and explanations given to us and based on our examination of the records, the Company has a regular programme of physical verification of its Property, Plant and Equipment, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, such verification was carried out during the year and no material discrepancies were noticed on such verification. (c) According to the information and explanations given to us and based on the examination of records of the Company, the title deeds of all immovable properties disclosed in the financial statements are held in the erstwhile name of the Company, namely Vinitia Projects Private Limited, being the old name of the Company subsequently changed to Aanchal Ispat Limited (CIN: L27106WB1996PLC076866). (d) According to the information and explanations given to us and based on the audit procedures conducted by us, the company has not revalued its Property, Plant and Equipment during the year. (e) According to the information and explanation given to us, no proceedings have been initiated during the year or are pending against the Company as at March 31, 2026 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

2. (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except for inventories held with third parties. In our opinion, the coverage and procedure of such verification is appropriate, considering the nature and scale of the Companys operations. No material discrepancies (i.e., 10% or more in aggregate for each class of inventory) were noticed on such verification. For inventories lying with third parties, the Company has obtained substantial confirmations. As informed by the management, a stock audit was conducted on May 27-28, 2025, by an independent auditor appointed by the new management. The report indicates that post-resolution inventory records as of that date are generally consistent with the books of account. However, this subsequent development does not affect the accounting treatment already applied as of 31 March 2026. Further, we draw attention to the fact that the inventory includes certain consumable items which are not in regular use and are intended to be disposed of in due course. The management has represented that such inventories have been valued in accordance with the applicable accounting standards. (b) The Company had been sanctioned working capital limits in excess of ?5 crore, in aggregate, from a bank on the basis of security of current assets. Pursuant to the Resolution Plan approved by the Honble National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016, the sanctioned facility was restructured and the liability towards the bank was reduced to ?47.25 crore from ?82.69 crore. Based on the information and explanations provided to us, the Company is not required to submit quarterly returns or statements to the bank subsequent to the implementation of the Resolution Plan.

3. The Company has not made any investments in, provided guarantees or securities to companies, firms, Limited Liability Partnerships or other parties covered under clause 3(iii) of the Order during the year. Further, the Company has granted advances to a related party during the year, which are not in the nature of loans. Accordingly, reporting under clause 3(iii)(a) to 3(iii)(f) of the Companies (Auditors Report) Order, 2020 relating to loans or advances in the nature of loans is not applicable to the Company. However, according to the information and explanations given to us and based on our examination of the records, the Company has provided long-term advances to a related party company, namely Penguin Creations Private Limited, during the year. The aggregate amount of such advances granted during the year was ?85.75 lakhs and the balance outstanding as at March 31, 2026 was ?181.79 lakhs.

4. The company has compiled with the provisions of Section 185 and 186 of the companies Act 2013 in respect of loans granted, investments made and guarantees and securities provided as applicable.

5. The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

6. As informed to us, the cost audit for the financial year ended March 31, 2026 is under process and the Cost Audit Report was not made available to us as on the date of this report. Accordingly, we are unable to comment upon observations, if any, contained therein.

7. (a) According to the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues, including provident fund, employees state insurance, income tax, Goods and Services tax, cess and other statutory dues, as applicable, and no statutory dues which have remained outstanding as at the last day of the financial year concerned for a period of more than six months from the date they became payable with the appropriate authorities. However certain statutory liabilities payable pursuant to the approved Resolution Plan under the Insolvency and Bankruptcy Code, 2016 aggregating to approximately Rs-85 lakhs remained unpaid as at March 31, 2026. (b) According to the information and explanations given to us and based on our examination of records, there are no statutory dues referred to in sub-clause (a) which have not been deposited on account of any dispute. However, certain dues continue to appear on the GST and Income-tax portals which, as represented by the management, include liabilities that have been settled, extinguished, restructured or otherwise dealt with pursuant to the Resolution Plan approved by the Honble National Company Law Tribunal (NCLT). The management has represented that necessary applications/communications have been made with the respective authorities for updation and reconciliation of such records. Pending completion of such reconciliation and consequential action by the concerned authorities, the nature and status of such dues, including whether any portion thereof may ultimately be treated as disputed, settled or otherwise not payable, cannot presently be determined.

8. As explained and informed us there was no transactions unrecorded income that have been surrendered or disclosed as income during the year in the tax assessment under the income Tax Act, 1961 (43 of 1961).

9. (a) According to the information and explanations given to us and based on our examination of records, pursuant to the Resolution Plan approved by the Honble National Company Law Tribunal (NCLT), instalments aggregating to Rs. 21.50 crores (Rs. 14.00 crores and Rs. 7.50 crores respectively) were scheduled to be paid during the year. However, such instalments remained unpaid as at March 31, 2026, except for an amount of Rs. 2.69 crores invested by the Successful Resolution Applicant (SRA) through acquisition of 95% stake in the Company. The SRA has filed an application before the Honble NCLT seeking alignment of payment timelines under the Resolution Plan with the order of the Honble National Company Law Appellate Tribunal (NCLAT) dated August 11, 2025. The matter is presently pending adjudication before the Honble NCLT. Pending adjudication of the matter, we are unable to conclusively determine whether the nonpayment constitutes a default as at March 31, 2026. (b) According to the information and explanations given to us, including management representations, and based on our audit procedures, nothing has come to our attention that causes us to believe that the Company has been declared a willful defaulter by any bank, financial institution or any other lender during the year. However, we have not received independent confirmation from banks or financial institutions in this regard. (c) During the year, the Company has received unsecured loans from director aggregating to approximately Rs. 1.68 crores. Such loans are interest free. (d) In our opinion and according to the information and explanation given to us, funds raised by the company on short term basis have not been utilized for long term purpose. (e) According to the information and explanations given to us and on an overall examination of the financial statements of the company, the Company has not taken any funds from any entity or person on account of or to meet the obligation of its subsidiaries. (f) According to the information and explanations given to us, the company has not raised any loans during the year on the pledge of securities held in the subsidiaries.

10. (a) The company has not raised moneys 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. (b) According to the information and explanations given to us and based on our examination of the records, the Company has made preferential allotment of equity shares during the year pursuant to resolution plan approved by the National Company Law Tribunal. In our opinion, the requirements of Section 42 and Section 62 of the Companies Act, 2013, to the extent applicable, have been complied with, considering the overriding effect of the approved resolution plan. Further, the funds raised, have been applied for the purposes for which they were raised.

11. (a) No fraud by the company and no material fraud on the company has been noticed or reported during the year. (b) No report under sub-section (12) of section 143 of the Companies Act has been filed in form ADT-4 as prescribed under rule 13 of the Companies Rules 2014 with the central government, during the year and up to the date of this report. (c) As represented to us by the management, there are no whistle blower complaints received by the company during the year. However, during the year, the Company has received certain investor complaints which have been resolved.

12. In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3 (xii) of the Order are not applicable to the Company.

13. In our opinion, and according to the information and explanation given to us, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

14. (a) In our opinion and according to the information and explanations given to us, the Company is required to have an internal audit system under Section 138 of the Companies Act, 2013. The Company has represented to us that such an internal audit system exists and is commensurate with the size and nature of its business. (b) As informed to us, the Company has an internal audit system, and internal audit was conducted during the year.

15. According to the information and explanations given to us, the Company has entered into non-cash transactions with a related party by way of book adjustments, which involve persons connected with the directors of the Company. Based on the audit procedures performed and the review of relevant documents, such transactions appear to be in compliance with the provisions of Section 192 of the Companies Act, 2013.

16. (a) In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause a), b) c) of the Order are not applicable to the Company and hence not commented upon. (b) As informed to us there is no core Investment Company within the group, hence provisions of the clause not applicable.

17. The company have incurred cash loss during the year as well as in the immediately preceding financial year.

18. There have been no resignations of the statutory auditors of the company during the year.

19. According to the information and explanations given to us and based on our examination of records, the Successful Resolution Applicant (SRA) has not made payments aggregating to ?21.50 crore towards instalments stipulated under the Resolution Plan approved by the Honble National Company Law Tribunal (NCLT). Further, funds aggregating to approximately ?18.81 crore, required to be infused by the SRA under the Resolution Plan, had not been brought in within the stipulated timelines as at March 31, 2026. The SRA has filed an application before the Honble NCLT seeking alignment of payment timelines under the Resolution Plan with the order dated August 11, 2025 passed by the Honble National Company Law Appellate Tribunal (NCLAT). The matter is presently pending adjudication before the Honble NCLT. Based on our examination of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, and other information accompanying the financial statements, nothing has come to our attention which causes us to believe that any material uncertainty exists as on the date of this report indicating that the Company is not capable of meeting its liabilities existing at the balance sheet date as and when they fall due within a period of one year from the balance sheet date.

20. The provisions of Section 135 towards corporate social responsibility are not applicable on the company. Accordingly, the provisions of clause 3(xx) of the Order is not applicable.

21. The reporting under clause (xxi) is not applicable in respect of audit of standalone financial statements of the Company. Accordingly, no comment has been included in respect of said clause under this report.

	For Rajesh Jalan & Associates
	Chartered Accountants
	(Firm Registration No. : 326370E)
	Sd/-
	(Rajesh Jalan)
Place : Kolkata	Partner
Date : 27 th April, 2026	Membership No. 065792
	(UDIN:26065792OCHAPE6553)

ANNEXURE B

(Referred to in paragraph 2(f) under Report on other Legal and Regulatory Requirements section of our report of even date)

Report on the Internal Financial Controls 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 AANCHAL ISPAT LIMITED (the Company) as of March 31, 2026 in conjunction with our audit of the Ind AS 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. 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.

Because of the matters described in our main paragraphs and notes to the accounts, the Company needs to further strengthen its internal financial controls system over financial reporting of the Company.

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.

Basis for Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2026, 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.

Other matters

Without modifying our opinion, we draw attention to the fact that certain control processes relating to documentation and monitoring of advances, recoverability assessment of receivables, inventory management, maintenance of supporting records and periodic review of long outstanding balances require further strengthening. Management has represented that corrective measures are being undertaken as part of implementation of the approved Resolution Plan and strengthening of governance processes.

During the course of our audit, we observed certain areas requiring strengthening of internal financial control processes relating to documentation, confirmation and monitoring of receivables and advances, inventory management controls and review of long outstanding balances. However, based on audit procedures performed by us, such matters did not result in a material weakness in the internal financial controls over financial reporting as at March 31, 2026.

Our opinion is to be read together with the Other Matter paragraph above relating to areas where internal control processes require further strengthening.

	For Rajesh Jalan & Associates
	Chartered Accountants
	(Firm Registration No. : 326370E)
	Sd/-
	(Rajesh Jalan)
Place : Kolkata	Partner
Date : 27 th April, 2026	Membership No. 065792
	(UDIN:26065792OCHAPE6553)