Ashiana Ispat Ltd Auditor Reports

To the Members of Ashiana Ispat Limited

Report on the Audit of the Financial Statements

QUALIFIED OPINION

We have audited the accompanying Standalone IND AS Financial Statements of Ashiana Ispat Limited (the Company), which comprise the Balance sheet as at March 31, 2025, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of material 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 possible effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid financial statements give the information required by the Companies Act, 2013, as amended (the Act) in the manner so required and give a true and fair view in conformity with the Indian accounting standards (Ind AS) specified under Sec 133 of the Act read with the Companies (Indian Accounting Standards) rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, its loss including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

BASIS FOR QUALIFIED OPINION

1. We draw attention to Note No. 48 of the financial statements, The company has requested confirmation for the balances of Trade Payables amounting to Rs.1,910.06 lakhs, Trade Receivables amounting to Rs.3,706.42 lakhs and Advances to Supplier amounting to Rs.3,396.98 lakhs from the respective parties. However, the company has not received any confirmation from the parties. Further, Independent confirmations were also sought for Trade Receivables, Trade Payables and Advances to Supplier on test check basis as part of the audit procedures to assess the accuracy of figures of Trade Receivables, Trade Payables and Advances to Supplier, however no responses have been received till the date of report. In the absence of confirmations for balances, we were unable to obtain sufficient and appropriate audit evidence regarding these balances. As a result, we could not verify the completeness, existence, and accuracy of these balances as reported in the financial statements. In our opinion this matter is material but not pervasive to the financial statements

2. The Company has made advances to suppliers outstanding as at 31 st March,2025 amounting to Rs. 3,396.98 lakhs. The company has not provided us with any supporting documents or evidence in respect of these advances. In the absence of adequate documentary evidence, we are unable to verify the authenticity, completeness, and business purpose of the advances, and consequently, we are unable to comment on the recoverability of these amounts as reflected in the financial statements. In our opinion this matter is material but not pervasive to the financial statements

3. As represented by the Management, physical verification of inventory was carried out by the management as on March 31, 2025. However, the Company did not provide stock movement reconciliation up to the date of the audit, nor were any arrangements made for independent physical verification of inventory. Consequently, we are unable to comment on the current status and condition of the inventory. In our opinion this matter is material but not pervasive to the financial statements We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. 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 financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our Qualified opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note No. 52 of the financial statements, The Company approached SBI under the One Time Settlement (OTS) scheme. Following negotiations, SBI agreed to settle the outstanding loan of Rs. 4,749.47 lakhs at Rs.4,310.00 lakhs. The Company has repaid this amount in the financial year 2025-26 from advances received against the sale of company assets.

We also draw attention to Note No. 53 of the financial statements, The Company was unable to meet its financial obligations towards banks and financial institutions and was classified as a Non-Performing Asset (NPA) during the period. These events and conditions indicate the existence of material uncertainty regarding the companys ability to continue as a going concern. However, Since substantial assets including Factory land & Building, Plant & Machinery and other assets have been sold, a material uncertainty exists that may raise significant doubt about the companys ability to continue as a going concern.

Emphasis of Matters

We Draw attention to the following matters in the Notes to the Financial Statements:

1) We draw attention to Note No. 46 of the financial statements, Trade Receivables amounting to Rs. 660.80 lakhs are due from companies undergoing proceedings under the Corporate Insolvency Resolution Process (CIRP) with the National Company Law Tribunal (NCLT). The companys claim has been admitted and accepted by the NCLT. However, management of the Company believes and acknowledges that these companies are financial worthy and have sufficient net worth and has financial capabilities. Therefore, it was classified as Disputed trade receivables considered as good. Our Opinion is not Modified in the said matter.

2) We draw attention to Note No. 47 of financial statements, A creditor has filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, before the Honble National Company Law Tribunal (NCLT) against the company, seeking recovery of an outstanding amount of Rs.187.00 lakhs. The claim was disposed by the Honble NCLT, Jaipur but it was again opened, and the respondent Ashiana Ispat Limited filed the reply before Honble NCLT, Jaipur raising the question on the maintainability of the case and matter is pending before the Honble NCLT, Jaipur. Our Opinion is not Modified in the said matter.

3) We draw attention to Note No.49 of the financial statements, During the year, the Company assessed the recoverable value of its plant and machinery in accordance with the provisions of Indian Accounting Standard (Ind AS) 36 Impairment of Assets, due to the plant being non-operational since the end of the second quarter of the financial year 2024 25. The prolonged disruption in production, arising from relocation and ongoing modifications, had adversely impacted the economic value of the plant. In view of this, the Company engaged a registered valuer to determine the fair value of its assets. The valuer determined the Fair Value at Rs. 908.00 lakhs as against book value of Rs. 2,677.06 lakhs. Further during the FY 2025-26 the company in order to pay its liability with SBI entered into an agreement to sell the entire Plant & Machinery at Rs. 710.00 lakhs accordingly an impairment loss of Rs.1,967.06 lakhs was recognised during the F. Y 2024-25. Our Opinion is not Modified in the said matter.

4) We draw attention to Note No. 50 of the financial statements, The companys production came to a standstill at the end of the second quarter of the financial year 2024 25 due to the relocation of certain sections of the plant to its own land. This relocation required significant modifications, which disrupted the production of iron bars. The ongoing modifications have resulted in a closure of operations, leading to financial losses during the year. Our Opinion is not Modified in the said matter.

5) We draw attention to Note No. 51 of the financial statements, The total outstanding borrowings from banks and financial institutions as of March 31, 2025, amounted to Rs.6,954.02 lakhs, including Rs. 4,749.47 lakhs due to the State Bank of India (SBI). The Company has defaulted on repayment obligations, resulting in the classification of these borrowings as Non-Performing Assets (NPA) by the respective lenders. The management is actively engaged in discussions with the lenders for restructuring the loan facilities and taking necessary steps to regularize the accounts. Further, the Company has settled the loan of SBI under a One-Time Settlement (OTS) scheme and repaid the amount in accordance with the agreed terms. Consequently, no provision has been made for interest accrued on loans other than SBI, if any, up to March 31, 2025. Our Opinion is not Modified in the said matter.

We draw attention to Note No. 52 of the financial statements, The Company approached SBI under the OneTime Settlement (OTS) scheme. Following negotiations, SBI agreed to settle the outstanding loan of Rs. 4,749.47 lakhs at Rs. 4,310.00 lakhs. The Company has repaid this amount in the financial year 2025-26 from advances received against the sale of company assets. This event has been recognized as a subsequent adjusting event in the financial statements for the year ended March 31, 2025, and an amount of Rs. 439.47 lakhs has been recognized as Other Income in the Statement of Profit and Loss for the same period. Our Opinion is not Modified in the said matter.

6) We draw attention to Note No. 53 of the financial statements, The Company was unable to meet its financial obligations towards banks and financial institutions and was classified as a Non-Performing Asset (NPA) during the period. These events and conditions indicate the existence of material uncertainty regarding the companys ability to continue as a going concern. However, the management is actively addressing these concerns and is confident of arranging sufficient liquidity through restructuring of existing loan terms, monetization of non-core assets, collections from sale of inventory, mobilization of additional funds, and other strategic initiatives. Based on the current financial position, future business plans, available financial resources, and other relevant factors, management has assessed that the Company will be able to continue as a going concern. Accordingly, these financial statements have been prepared on a going concern basis. As stated in Material Uncertainty Relating to Going Concern Section of the Report, since substantial assets including Factory land & Building, Plant & Machinery and other assets have been sold, a material uncertainty exists that may raise significant doubt about the companys ability to continue as a going concern.

7) We draw attention to Note No. 54 of the financial statements, The Company entered into an agreement with M/s Kamdhenu Limited on December 26, 2002, whereby the Company became the prior user, adopter and proprietor of the mark AL KAMDHENU GOLD, the company was also granted the rights to use the trademark KAMDHENU for a period of 99 years. Subsequently, in January 2021, a fresh license agreement was executed, allowing the Company to use the trademarks KAMDHENU/ KAMDHENU NXT for a period of 80 years.

During the year, Kamdhenu Limited attempted to wrongfully terminate the companys rights to use the trademarks KAMDHENU/ KAMDHENU NXT via a letter dated September 19, 2024. In response to this, the Company is pursuing appropriate legal remedies against Kamdhenu Limited and extensively pursuing its mark AL KAMDHENU GOLD. The Company believes that there shall be no impact on the operations of the company due to the wrongful acts of Kamdhenu Limited. Our Opinion is not Modified in the said matter.

8) We draw attention to Note No. 55 of the financial statements, The Company is involved in ongoing litigation with Kamdhenu Limited regarding the protection of the companys rights over its trademark AL KAMDHENU GOLD. The Company has filed a suit bearing no. CS(COMM) 130/2025 before the Delhi High Court. The Company is actively pursuing its rights and will update stakeholders as and when necessary. Our Opinion is not Modified in the said matter

9) We draw attention to Note No. 56 of the financial statements, During the year, Kotak Mahindra Bank filed a case against the Company alleging involvement in fraudulent activities. The Company firmly denies these allegations and is actively pursuing the matter. Management is confident that the proceedings lack merit and anticipates that the case will be dismissed. Our Opinion is not Modified in the said matter.

10) We draw attention to Note No. 57 of the financial statements, During the year, complaints were filed with the Securities and Exchange Board of India (SEBI) regarding the companys preferential allotment of equity shares amounting to Rs. 211.75 lakhs. The complainants have alleged fraudulent activities and non-payment of refunds related to the said allotment. The Company has submitted detailed responses to SEBI, denying the allegations and providing the necessary clarifications. The Company affirms that no amount was received towards the preferential allotment and, on the contrary, the amount received was in the nature of a short-term loan. As at the date of these financial statements, the matter remains under regulatory review, and the management is of the view that it will be resolved in favour of the Company. The Company has appropriately disclosed this amount under Short-Term Borrowings in the Balance Sheet. Our Opinion is not Modified in the said matter.

11) We draw attention to Note No. 58 of the financial statements, During the year, the Company accepted Short-term loans amounting to Rs. 211.75 lakhs from various parties, which was in contravention of the provisions of Sections 73 to 76 of the Companies Act, 2013, and the Companies (Acceptance of Deposits) Rules, 2014.

Further, certain advances from customers amounting to Rs. 12.26 lakhs have remained outstanding for more than 365 days and, in accordance with Rule 2(1)(c)(xii)(a) of the Companies (Acceptance of Deposits)

Rules, 2014, such amounts fall within the definition of deemed deposits. Accordingly, these also constitute non-compliance with the aforesaid provisions of sections 73 to 76 of the companies Act, 2013.

The Company is in the process of obtaining necessary legal and regulatory clarifications and is taking appropriate steps to regularize the said non-compliances. These amounts have been disclosed under

Short-Term Borrowings and Current Liabilities in the financial statements as applicable. Our Opinion is not Modified in the said matter.

12) We draw attention to Note No. 59 of the financial statements, During the year, due to financial constraints, the company has not deposited statutory dues, including Employee Provident Fund (EPF) amounting to Rs. 6.76 lakhs, Employee State Insurance (ESI) amounting to Rs. 1.62 lakhs, and Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) amounting to Rs. 11.76 lakhs. Our Opinion is not Modified in the said matter.

13) We draw attention to Note No. 60 of the financial statements, During the year, as the banks classified the companys loan accounts as Non-Performing Assets (NPA), the Company had no access to its banking facilities. Consequently, to meet its day-to-day operational requirements and expenses during the period when the bank accounts remained inoperative, payments were made through the group companies of the

Company.

Our Opinion is not Modified in the said matter.

14) We draw attention to Note No. 61 of the financial statements, In accordance with applicable IND AS-2 the valuation of inventories of Raw material and consumables is made at the lower of cost or net realizable value (NRV), as against the earlier policy of valuation at cost. As a result, thereof the value of inventories was reduced by Rs. 417.17 lakhs. Our Opinion is not Modified in the said matter.

15) We draw attention to Note No. 63 of the financial statements, During the year, due to financial constraints, the Company was unable to fully comply with the provisions of the Companies Act, 2013 including Section 177 relating to appointment of Audit Committee, Nomination and remuneration committee and Stakeholders committee and appointment of Women Director and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company is taking necessary steps to regularize the shortcomings and ensure compliance with the applicable provisions of the Companies Act,2013 and SEBI regulations. Our Opinion is not Modified in the said matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the financial year ended March 31, 2025. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matters described in the Basis of Qualified Opinion and Emphasis of Matter Sections ,We have determined the matters described below to be the key audit matters :

Sr. Description of Key Audit Matter No.	How our audit addressed the key audit matters
1. Management override of controls:
a) Short term loans of (Rs. 211.75 lakhs)	Our audit procedure included the followings:
The Company has received short term loans without proper documentation.	Verification of receipts through banking channels, on a test-check basis.
As a result thereof complaints were filed with the Securities and Exchange Board of India (SEBI) alleging that the amount was paid towards preferential allotment of shares.	Inquiry with management regarding the nature and purpose of such advances. Examination of relevant legal documents, correspondences, and board minutes including Verification of Document relating to complaints filed with SEBI.
(Refer Note No.57 of the Financial Statements)
b) Inventory Valuation and verification:	Our Audit procedure included the followings:
As on 31.03.2025 The Company held inventory amounting to Rs.2,307.93 lakhs.	Obtaining and reviewing the report of physical verification of inventory conducted by management.
The Inventory is periodically verified by the management; however, the company has neither provided records relating to reconciliation and physical verification of inventory at the time of audit.	Verification of Sale, Purchase Invoices and GRN etc.
Management override could lead to misstatement of financial results.	Evaluating the reasonableness and basis of valuation adopted by the Company.
	Evaluating the adequacy of disclosures made in the financial statements.
c) Non-compliance with SEBI (LODR) and other statutory requirements:	Our Audit procedure included the followings:
The Company has not complied with certain provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, Companies Act 2013 including Section 177 relating to appointment of Audit Committee,	Reviewing the compliance report prepared by the Company Secretary.
	Assessing managements explanations for delays and non-compliances.
	Considering the implications of such non- compliance on the financial statements and audit opinion.
Nomination and remuneration committee and Stakeholders committee and appointment of Women Director and Section 73 to 76 Acceptance of Deposits and other regulatory requirements,
(Refer note no.63 of the Financial Statements)
d) Trade Receivables amounting to Rs.3,706.42 lakhs:	Our Audit procedure included the followings:
The companys trade receivables include several long-outstanding balances, some exceeding three years.	External confirmations from customers
The Company has not implemented an effective control mechanism for monitoring or following up on overdue accounts, nor has it initiated any legal recovery action.	Examination of Sales invoices, GRN and other supporting Documents.
The risk of misstatement due to management override in assessment of recoverability is therefore significant.	Examining available supporting documents for subsequent receipts and reconciliations.
(Refer Note No.48 of the Financial Statements)
e) Advance to Suppliers amounting to Rs.3,396.98 lakhs:	Our Audit Procedures Included the followings:
The Company has given substantial amount as advances without proper documentation.	Obtaining the list of parties to whom advances were made and reconciling the balances with the ledger accounts.
In the absence of adequate records, there exists a significant risk relating to the authenticity business completeness, and rationale of such advances,indicating a potential management override of controls and a risk of material misstatement in the financial statements.	Making inquiries with management regarding the nature and purpose of such advances.
	Seeking External Confirmation from the concerned parties.
	Verifying available documentation, if any, and assessing whether the advances were made through proper banking channels.
	Evaluating the adequacy of disclosures made in the financial statements in respect of these advances; and
Given the magnitude of the balance and the lack of adequate documentation, we considered this matter to be of significance in our audit.	Considering the implications of the absence of supporting documentation on the overall audit opinion.
2. Claims and exposures relating to taxation and litigation :	Our audit procedures included the following:
a) The Company has disclosed in Note No. 32 of the financial statements, contingent liabilities of Rs 31.40 lakhs in respect of disputed claims/ levies under income tax	We obtained understanding, evaluated the design, and tested the operating effectiveness of the controls related to the identification, recognition and measurement of provisions for disputes, potential claims and litigation, and contingent liabilities.
Taxation and litigation exposures have been identified as a key audit matter due to: ignificance of these amounts and large number of disputed matters with Income Tax authorities.	We obtained details of legal, and tax disputed matters and evaluation made by the management and assessed managements position through discussions on both the probability of success in significant cases, and the magnitude of any potential loss.
Significant judgement and assumptions required by management in assessing the exposure of each case to evaluate whether there is a need to set up a provision and measurement of exposures as well as the disclosure of contingent liabilities.	We assessed the relevant disclosures made in the financial statements for compliance in accordance with the requirements of Ind-37. Verify of the facts from the department portal.
We focused on this matter because of the potential financial impact on the financial statements. Additionally, the treatment of taxation and litigation cases require significant judgement due to the complexity of the cases, timescales for resolution and involvement of various authorities.

Information Other than the Financial Statements and Auditors Report Thereon

The companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report but does not include the financial statements and our auditors report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Financial Statements

The companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these 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 (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

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 the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the financial statements, 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.

Those Board of Directors are also responsible for overseeing the companys financial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We are also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements 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 financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the financial year ended March 31, 2025 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.

Other Matter

The audit of the financial statements of the Company for the year ended March 31, 2024, was carried out and reported by the erstwhile statutory auditors Khiwani & Co., Chartered Accountants, having firm registration no. 002589N, who had expressed Qualified opinion on those financial statements vide their report dated May 30, 2024, whose report have been furnished to us and which have been relied upon by us for the purpose of audit of the financial statements.

Our opinion is not modified in respect of the above matter.

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 Act, we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

(a) We have sought and, except for the matters described in the Basis for Qualified Opinion section above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

(b) Except for the possible effects of the matter described in the Basis for Qualified Opinion section above, 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.

(c) The Company does not have any branch offices and accordingly, the provisions of Section 143(8) of the Act relating to audit of branch accounts are not applicable.

(d) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

(e) In our opinion and according to the information and explanation given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion and Emphasis of Matter sections in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended

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

(g) Except for the matters as described above under the Basis for Qualified opinion and Emphasis of Matter sections we have not come across any matter of financial transactions which have any adverse effect on the functioning of the company.

(h) With respect to the adequacy of the internal financial controls with reference to financial statements and the operating effectiveness of such controls, refer to our separate Report in

Annexure B to this report.

(i) In our opinion, the managerial remuneration for the year ended March 31,2025 has been paid/provided by the company to its directors in accordance with the provisions of Section 197 read with Schedule V to the act.

(j) 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, 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 financial statements, Refer Note No. 47, 54, 55, 56 & 57 of the financial statement. ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. iii. There was no amount which are 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 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 persons or entities, including foreign entities (Intermediaries), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, 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 such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement. v. The company has not declared or paid any dividend during the year. vi. Based on our examination, the company has not used accounting software for maintaining its books of accounts which has a feature of recording audit trail (edit log) facility. (Refer Note No. 64 of the financial statements)

	For KHIWANI SOOD & ASSOCIATES
	Chartered Accountants
	FRN: 040433N
Place: New Delhi	CA. Rajesh Kumar Khiwani
Date: November 22, 2025	Partner
UDIN: 25081792BMNWBC3242	M.No. 081792

Annexure efAff to the Independent Auditors Report of even date on the Financial Statements of

Ashiana Ispat Limited

Referred to in paragraph 1 under the heading gReport on Other Legal and Regulatory Requirementsh of our report of even date

In terms of the information and explanations sought by us and given by the company and the books of account and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that: (i). (a) (A) The Company has not updated its records to show full particulars, including quantitative details and situation of Property, Plant and Equipment. (B) The Company has not capitalized any intangible assets in the books of the Company and accordingly, the requirement to report on clause 3(i)(a)(B) of the Order is not applicable to the Company (b). According to the information and explanations given to us, The Company has a program of verification of Property, Plant and Equipment so as to cover all the items once in every three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, the physical verification was done by the valuer along with the management to determine the Fair Market Value from 16 th July, 2025 to 18 th July, 2025. (c) The Company has not provided us with the title deeds of its immovable properties (other than leasehold properties). As informed to us, the gross carrying value of such properties is Rs. 134.01 lakhs as at 31 st March 2025. In the absence of the relevant title deeds, we are unable to comment on whether these properties are held in the name of the Company as at the balance sheet date. (d) According to the information and explanations given to us, during the year the Company has revalued its property, plant and equipment and recognized impairment loss amounting to Rs. 1,967.06 lakhs.

(e) According to the information and explanations given to us and records provided, no proceedings have been initiated during the year or are pending against the Company as at March 31, 2025, for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made there under.

(ii). (a) Based on the information and explanations provided to us and according to the records of the Company, physical verification of inventory has been conducted by the management at the year end. There was no material discrepancies noticed, between the physical inventory taken by management with the inventory as appearing in books of account

(b) As disclosed in Note No. 41 of the financial statements, the Company has been sanctioned working capital limits in excess of Rs. 5 crores in aggregate from banks on the basis of security of current assets. Based on the audit procedures carried out and according to the information and explanations given to us, the Company has submitted quarterly returns/statements with the banks only up to the quarter ended September 30, 2024. For the remaining period of the year, no such returns/statements were submitted. Accordingly, we are unable to comment on whether the quarterly returns/statements for the full year are in agreement with the books of account of the Company. However, the details of the return/statements submitted till September which are not in agreements are given below:

Quarter EndingName	the Particulars of Amount as			per Amount as reported Amount of
	Bank	Securities Provided	Books Accounts lakhs)	of in the quarterly (in return/ statement lakhs)	Difference in (%)
th June, 2024	Bank of India and Yes Bank	& Debts	Books 364.69	955.25	02%
th Sep, 2024	ate Bank of India and Yes Bank	& Debts	Books 355.48	851.42	26%

(iii). According to the information and explanation given to us, the company has not made any investment and provided any guarantee or security or granted any loans or advances in nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties during the year. Accordingly, paragraph 3(iii) (a), (b), (c), (d), (e) and (f) of the

Order is not applicable to the Company.

(iv). According to the information and explanations given to us and on the basis of our examination of the records, the Company has not given any loans, or provided any guarantee or security as specified under Section 185 of the Companies Act, 2013 and the Company has not provided any guarantee or security as specified under Section 186 of the Companies Act, 2013.

(v). The Company has accepted deposits in contravention of the sections 73 to 76 act and the companies (Acceptance of Deposit Rules 2014) (as amended). The company has received deposits amounting to Rs. 211.75 Lakhs and further an amount of Rs. 12.26 Lakhs is considered as deemed deposit under sections 73 to 76 act and the companies (Acceptance of Deposit Rules 2014) (as amended). (vi). The Central Government has prescribed the maintenance of cost records under sub-section (1) of section 148 of the Companies Act, 2013 for products/services of the Company. According to the information and Explanation given to us, the Company has not maintained such cost records during the year. Accordingly, the Company is not in compliance with the said provisions.

(vii). (a) Undisputed statutory dues including goods and services tax (GST), provident fund, employees state insurance, sales tax, service tax, duty of custom, duty of excise, value added tax, cess and other statutory dues have not been regularly deposited with the appropriate authorities. According to the information and explanations given to us and based on audit procedures performed by us, undisputed amounts payable in respect of these statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable are given below:

Name of the Statute	Nature of the dues	Amount (in Lakh) Period
Employees State Insurance Act, 1948		1.62	-25
Employee Provident Fund Act, 1952		6.76	-25
Income Tax Act, 1961 and TCS		11.76	-25

(b) According to the information and explanations given to us and the records of the company examined by us, there are no dues for Income Tax or Duty of Customs or Goods and Service Tax or Cess or such other statutory dues which have not been deposited on account of any dispute except as given below:

Name of the Statute Nature of the dues Amount (Lakh)	Period		Forum where dispute is pending
Income Tax Act, 1961Income Tax	1.16	2013- 14	CIT(Appeal)
Income Tax Act, 1961Income Tax	22.37	2014-15	CIT(Appeal)
Income Tax Act, 1961Income Tax	2.69	2015-16	CIT(Appeal)
Income Tax Act, 1961Income Tax	5.18	2018-19	CIT(Appeal)

(viii) . In our opinion, based on audit procedures and according to the information and explanations given to us, the Company has not surrendered or disclosed any transaction, previously unrecorded in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year. Accordingly, the requirement to report on clause 3(viii) of the Order is not applicable to the Company. (ix). (a) In our opinion, based on audit procedures and according to the information and explanations given to us, the Company has defaulted in repayment of loan or other borrowings or any interest due thereon to lenders as under:

Nature of borrowings including debt securities	Name of lender	Amount not paid on due date (In Lakhs)	Whether principal or interest	No. of Days Delay	Remarks, if any
Term Loan	State Bank of India	4,749.46	Intt. & Principal	189	Refer Note No.52 of the Financial Statements
Term Loan	Yes Bank	604.53	Intt. & Principal	115	Interest not Provided (Refer
Term Loan	ICICI Bank	46.46	Intt. & Principal	96	Note No.51 of the Financial Statements)
Term Loan	Kotak Mahindra Bank	920.27	Intt. & Principal	177
Bill Discounting	Bank of	545.49	Intt. &	102

Short Term Borrowings	Maharashtra Fedbank Financial Services Ltd.	5.88	Principal Intt. & Principal	111
Short Term Borrowings	Money Wise Financial Services Pvt Ltd.	45.45	Intt. & Principal	172
Short Term Borrowings	Tata Capital Ltd.	36.47	Intt. & Principal	127

(b) 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 been declared a wilful defaulter by any bank or financial institution or government or government authority (c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, during the audit year, the company has not been granted a fresh term loan. Accordingly, clause 3(ix)(c) of the Order is not applicable (d) On an overall examination of the financial statements of the Company, no funds raised on short-term basis have been used for long-term purposes by the Company. (e) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries or joint ventures as defined under the Companies Act, 2013. Accordingly, clause 3(ix)(e) of the Order is not applicable. (f) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries or joint ventures as defined under the Companies Act, 2013. Accordingly, clause 3(ix)(f) of the Order is not applicable.

(x). (a) The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). (b) 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 made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xi). (a) Based on examination of the books and records of the Company and according to the information and explanations given to us, no fraud by the Company or on the Company has been noticed or reported during the course of the audit except, i) We draw attention to Note No. 56 of the Financial Statements, During the year, Kotak Mahindra Bank filed a case against the Company alleging involvement in fraudulent activities. The Company firmly denies these allegations and is actively pursuing the matter. Management is confident that the proceedings lack merit and anticipates that the case will be dismissed.

ii) We draw attention to Note No. 57 of the Financial Statements During the year, complaints were lodged with the Securities and Exchange Board of India (SEBI) regarding the companys preferential allotment of equity shares amounting to Rs. 211.75 lakhs. The complainants have alleged fraudulent activities and non-payment of refunds related to the allotment. The company has submitted detailed responses to SEBI, denying the allegations and providing necessary clarifications. The Company affirms that no amount was received towards the preferential allotment and, on the contrary, the amount received was in the nature of a short-term loan. As at the date of these financial statements, the matter remains under regulatory review, and the management is of the view that it will be resolved in favour of the Company. The Company has appropriately disclosed this amount under Short-Term Borrowings in the Balance Sheet. (b) According to the information and explanations given to us and based on our audit procedures, no report under sub-section (12) of Section 143 of the Act has been filed by the auditors in Form ADT-4 as prescribed under Rule 13 of the Companies (Audit and Auditors) Rules, 2014 with the Central Government. (c) As represented to us by the management, there are no whistle blower complaints received by the Company during the year.

(xii). According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause 3(xii) of the Order is not applicable.

(xiii) In our opinion, and according to the information and explanations given to us during the course of audit, the Company has not complied with the requirements of Section 177 of the Companies Act, 2013, as it has not constituted an Audit Committee as required. Further, with respect to Section 188 relating to related party transactions, the applicable transactions and their details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv). (a) Based on the information and explanations provided to us and our audit procedures, in our opinion, the Company does not have an internal audit system commensurate with the size and nature of its business.

(b) No internal audit was conducted during the year, and accordingly, no internal audit report was available for our consideration.

(xv). In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected to its directors and hence, provisions of Section 192 of the Act are not applicable to the Company

(xvi). (a) The provisions of section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934) are not applicable to the Company. Accordingly, the requirement to report on clause (xvi)(a) of the Order is not applicable to the Company (b) The Company is not engaged in any Non-Banking Financial or Housing Finance activities. Accordingly, the requirement to report on clause (xvi)(b) of the Order is not applicable to the Company. (c) The Company is not a Core Investment Company as defined in the regulations made by Reserve Bank of India. Accordingly, the requirement to report on clause 3(xvi) of the Order is not applicable to the Company. (d) Based on the information and explanations provided by the management of the Company, the Company is not part of any group (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016 as amended). Accordingly, the requirements of clause 3(xvi)(d) are not applicable. (xvii). The Company has incurred cash losses amounting to Rs. 1,448.91 lakhs in the current financial year;

However, it had not incurred any cash losses in the immediately preceding financial year. (xviii). There has been no resignation of the statutory auditors during the year.

(xix). According to the information and explanations given to us and on the basis of our examination of the financial ratios, ageing and expected realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, and our knowledge of the Board of Directors and management plans and based upon basis of our Qualified Opinion, Material Uncertainty Related to Going Concern , Emphasis of Matters & Key Audit Matters sections of our report , there exists a material uncertainty that may cast significant doubt on the companys ability to meet its liabilities as and when they fall due within a period of one year from the balance sheet date.

xx). In our opinion and according to the information and explanations given to us, the provision of the section 135 corporate social responsibility of companies act 2013 is not applicable to the company. Accordingly, clause 3(xx)(a). (b) of the Order is not applicable (xxi). The company does not have any subsidiaries or holding companies. Accordingly, clause 3(xxi) of the Order is not applicable.

	For KHIWANI SOOD & ASSOCIATES
	Chartered Accountants
	FRN: 040433N
Place: New Delhi	CA. Rajesh Kumar Khiwani
Date: November 22, 2025	Partner
UDIN: 25081792BMNWBC3242	M.No. 081792

ANNEXURE efBff to the Independent Auditors Report of even date on the Financial Statements of

Ashiana Ispat Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the

Companies Act, 2013 (gthe Acth)

We have audited the internal financial controls with reference to financial statements of Ashiana Ispat Limited

(the Company) as of March 31, 2025, in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managementfs 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 the 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 with reference to these financial statements 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 as specified under section 143 (10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by ICAI. 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 with reference to these financial statements 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 with reference to these financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to these financial statements, 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 judgement, 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 qualified audit opinion on the companys internal financial controls with reference to these financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

A companys internal financial controls with reference to financial statements 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 controls with reference to financial statements 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements

Inherent Limitations of Internal Financial Controls with Reference to Financial Statements

Because of the inherent limitations of internal financial controls with reference to financial statements, 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 with reference to financial statements to future periods are subject to the risk that the internal financial control with reference to financial statements 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 possible effects of the matter described in the Basis for Qualified Opinion section of our report the Company has, in all material respects, established adequate internal financial controls with reference to Financial Statements and such internal financial controls with reference to Financial Statements were operating effectively as at 31st March, 2025, based on the criteria for internal financial control with reference to Financial Statements 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.

BASIS FOR QUALIFIED OPINION

In addition to the matters described in the basis for qualified opinion, Emphasis of Matter and Key Audit Matter sections of our Report. We Report the following as basis for qualified opinion:

1. During the year, the Company has received loans without any proper Documentation amounting to Rs.211.75 Lakhs.

2. During the year, the Company has given Rs 3,396.98 as advances to Supplier without proper documentation.

3. The Company did not have sufficient internal control with reference to financial statement.

	For KHIWANI SOOD & ASSOCIATES
	Chartered Accountants
	FRN: 040433N
Place: New Delhi	CA. Rajesh Kumar Khiwani
Date: November 22, 2025	Partner
UDIN: 25081792BMNWBC3242	M.No. 081792