balasore alloys ltd share price Auditors report

TO THE MEMBERS OF BALASORE ALLOYS LIMITED

Report on the Audit of the Standalone Financial Statements Qualified Opinion

We have audited the accompanying standalone financial statements of Balasore Alloys Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a summary of the significant accounfing policies and other explanatory informafion.

In our opinion and to the best of our informafion and according to the explanafions given to us, except for the possible effects of the matters described in the Basis for Qualified Opinion secfion of our report, the aforesaid standalone financial statements give the informafion required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounfing Standards prescribed under secfion 133 of the Act read with the Companies (Indian Accounfing Standards) Rules, 2015, as amended, ("Ind AS") and other accounfing principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, the losses including other comprehensive loss, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We draw attenfion to Note no 47 of the financial statement, the Company during the year the Company has received funds from one of the foreign companies amounfing to USD 64.58 million equivalent to 52,831.41 Lakhs. The Company has shown the same as long term borrowings under non-current liabilities. The Company is in process of geffing approval from RBI under ECB route, and pending such approval no interest has been charged in the books on account of such ECB. Due to non boking of interest amounfing to 1659.35 Lakhs for the year ended March 31, 2023 respecfively, the profit and loss for year ended March 31, 2023 is overstated to that extent, and reserve and surplus for the year is overstated to the extent of 1659.35 Lakhs.

We conducted our audit of the standalone financial statements in accordance with the Standards on Audifing (SAs) specified under secfion 143(10) of the Act. Our responsibilifies under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements secfion of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Insfitute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilifies 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 qualified audit opinion on the standalone financial statements.

Emphasis of Matter

a) We draw attenfion to Note No.41 of the standalone financial statements regarding slow implementafion of underground mining project at its capfive mines situated at Sukinda, Odisha. As represented by the management, since substanfial pre-development acfivifies have been completed and considering the revision in design of underground mining which shall be funded by mix of internal accruals, promoters contribufion and financial fie- ups and will be completed in due course. Hence no adjustment has been carried out for carrying value of capital work in progress of 10,075.79 Lakhs and advances to vendors amounfing to 15,503.08 Lakhs given in earlier years at this stage.

b) We draw attenfion to Note No.43 of the standalone financial statements which indicates that the Company has incurred operafing losses as on March 31, 2023 and in previous year ended March 31, 2022, disconnecfion of

power by NESCO("TPNODL"), shut down of plant, and Companys current liabilities exceeds its current assets. These conditions, along with other matters as stated in said note indicate that a material uncertainty existed that may cast significant doubt on the Companys ability to continue as a going concern. However as mentioned in Note 46, 47 and 48 of the financial statements, during the second half of the year significant events tool place like funds has been infused in the company, power being restored in plant and plant production being started. Considering the same, the accounts have been prepared on going concern basis.

c) We draw attention to Note No.42 of the standalone financial statements regarding certain advances of 7963.92 Lakhs which are outstanding for more than one year on account of supply against materials and services. For the reasons stated therein, management is confident of gettng supplies or refund and therefore, there is no need to make any adjustment at this stage.

d) We draw attention to Note No.40 of the standalone financial statements regarding trade receivable of 8,181.96 Lakhs which are outstanding for more than one year from its due date. For the reasons stated therein, management is confident of realizing the amount and therefore, no adjustment has been made in the financial statements.

e) The confirmations of trade receivables, trade payables, advances to suppliers and advances from customers are subject to confirmation and reconciliation. Hence any material impact as on the reporting date cannot be ascertained.

f) Bank confirmation of 9 banks have not been made available to us, where book balance as at March 31, 2023 is amounting to 152.32 Lakhs. As per information and explanation given to us these banks have become dormant and no statement/confirmation from such banks are available.

g) We draw attention to note no 39, trade receivable includes ^ 2,293.06 Lakhs receivable from a customer for more than one year. Further, during the year, customer has got an arbitration award in the International Court of Arbitration against company and seeking additional compensations for the costs incurred by it on company behalf amounting to Rs. USD 30,35,249 equivalent to 2,495.49 Lakhs. As per information and explanation given to us, the Company is in process of filing legal suit against the said order.

h) We draw attention to Note no 45 of the financial statements, the Company during the year has received a notice from DDM Jajpur for suspension of the mining operation of the Company. The Company has submitted the compliances report as per the terms of Stage-1 clearance and submitted the application for Stage-ll Clearance, before the DFO, subsequently approved by PCCF vide letter dated 08.12.2022, which is under process at the Central Govt/ MoEF level. Hence any material effect due to this cannot be ascertained presently.

Our opinion is not modified in respect of above matters.

Going Concern

We draw attention to Note No.43 of the Standalone Financial Statements which indicates that the Company has incurred operating losses as on March 31, 2023, disconnection of power by NESCO, shut down of plant, and Companys current liabilities exceeds its current assets. These conditions, along with other matters as stated in said note indicate that a material uncertainty existed as on March 31, 2023 that may cast significant doubt on the Companys ability to continue as a going concern. However as mentioned in Note 46, 47 and 48 of the financial statement, before signing of this report, significant events tool place like funds has been infused in the company, power being restored in plant and plant production being started, hence accounts have been prepared on going concern basis.

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 matters to be communicated in our report.

Sr. No.	Key Audit Matter (KAM)	Auditors Response
1.	Contingent Liabilities: (refer Note no 36 to 39 of the Standalone Financial Statements)	Our audit procedures in relation to managements identification/ judgements/estimation of contingent liabilities includes the following:
	There are number of legal, regulatory and tax cases against the Company. High level of judgement is required in estimating the level of provisioning required. There is an inherent risk that all legal exposures are not identified and considered for disclosures and provisioning for financial reporting purpose on a timely basis making ita significant matterforouraudit.	• Obtaining an understanding of and assessing the design, implementation and operating effectiveness of companys key controls around the recording and assessment of contingent liabilities;
		• Meting companys legal team to understand the ongoing and potential legal/tax matters impacting the company.
		• Read the Board minutes for an update on the status of significant legal cases and assess whether any constructive obligation had arisen in individual cases based on available records.
		• Understanding relevant historical judgment set in the similar cases as well as reading legal opinions from external lawyers/ experts, when obtained bythe management;
		• Performed the substantive procedures on the underlying calculations for the provisions recorded for completeness and accuracy.
		• Reviewing the accounting and disclosure of legal exposures.
		Our testing as described above showed that managements judgment/estimation/assessment in relation to the contingent liabilities are reasonable and does not require additional provisioning. The disclosure made with respect to the contingent liabilities are adequate.

 

2.	Revenue Recognition (Refer Note No.19 and Para lB(m) Of the significant accounting policies of Standalone Financial Statements).
	Revenue is recognized when the control of the underlying products has been transferred to customer along with the satisfaction of the companys performance obligation under a contract with customer.	Our audit procedures to assess the appropriateness of revenue recognized included the following; Our audit procedures, considering the significant risk of misstatement related to revenue recognition, included amongst other;
	The company focuses on revenue as a key performance measure which could create an incentive for revenue to be recognized before completion of the performance obligation.	• Obtaining an understanding of an assessing the design, implementation and operating effectiveness of the Companys key internal controls overthe revenue recognition process.
	There is a significant risk related to inappropriate recognition of the revenue and hence was determined to be a key audit matter.	• Examination of significant contracts entered into close to year end to ensure revenue recognition is made in correct period.
		• Testing a sample contracts from various revenue streams by agreeing information back to contracts and proof of delivery as appropriate and ensure revenue recognition policy is in accordance with principles of Ind AS 115.
		• Assessing the adequacy of Companys disclosure in accordance with requirement of Ind AS 115.
		Our testing as described above showed that revenue has been recorded in accordance with terms of underlying contracts and accounting policy in this area. The disclosures made relating to revenues are in agreement with Ind AS 115.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including annexures to Boards Report, Corporate Governance and Shareholders Information, but does not include the standalone financial statements and our Auditors report thereon.

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

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

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged With Governance for the Standalone Financial Statement

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 standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive loss, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, Board of Directors 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 Board of Directors are responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes

our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

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

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness ofsuch 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 standalone 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 standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the statements of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal 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.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit we report that:

a) Except for the matter described in the Basis for Qualified Opinion section above, we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) Except for the matter described in the Basis for Qualified Opinion secfion above, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examinafion of those books.

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

d) Except for the matter described in the Basis for Qualified Opinion, in our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Secfion 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) The matter described in Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the funcfioning of the Company.

f) On the basis of the written representafions received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Secfion 164 (2) of the Act.

g) With respect to the adequacy of the internal financial controls over financial reporfing of the Company and the operafing effecfiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses a modified opinion on the adequacy and operafing effecfiveness of the Companys internal financial controls overfinancial reporfing.

h) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of secfion 197(16) of the Act, as amended, in our opinion and to the best of our informafion and according to the explanafions given to us, the remunerafion paid by the Company to its directors during the year is not in accordance with the provisions of secfion 197 of the Act. The Company has not taken approval from its lenders to comply with the provisions of Secfion 197 of the Companies Act, 2013.

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, as amended, in our opinion and to the best of our informafion and according to the explanafions given to us:

i. The Company has disclosed the impact of pending lifigafions on its financial posifion in its standalone financial statements as referred to in Note no.36 to 39 to the Standalone Financial Statement.

ii. The Company has made provision, as required under the applicable law or accounfing standards, for the material foreseeable losses, ifany, on long-term contracts including derivafive contracts.

iii. The Company has not yet transferred the amount, which were required to be transferred, to the Investor Educafion and Protecfion Fund by the Company:

Instance of Delay	In Lakhs	Due Date for Transfer	Actual Date of Transfer
Unpaid/unclaimed dividend for 2012-13	13.61	16-09-2020	Not yet paid
Unpaid/unclaimed dividend for 2013-14	16.41	23-09-2021	Not yet paid
Unpaid/unclaimed dividend for 2014-15	16.33	24-09-2022	Not yet paid

iv) (a) We have received representafion from the Management 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 during the year (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or enfity, including foreign enfity ("Intermediaries"), with the understanding, whether recorded in wrifing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or enfifies idenfified 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. Hence on the basis of representation received from the management we opine that no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested during the year (either from 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 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) We have received representation from the Management 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 during the year, 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. Hence on the basis of representation received from the management we opine that no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity during the year, 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) As per the representation received from the management, we opine on (i) and (ii) of Rule 11(e), as provided under (a) and (b) above.

v) The Company has not declared or paid any dividend during the year, therefore compliance of the provision under section 123 of the Companies Act, 2013 is not applicable.

vi) Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

2. As required by the Companies (Auditors Report) Order, 2016 ("the Order") issued by the Central Government in terms ofSection 143(11) ofthe Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 ofthe Order.

AterfexUn^-AtOtttltietAbditovs^ RepOt in filings required to be made to the stock exchanges during the year under preview as follows:

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 Balasore Alloys Limited ("the Company") as of March 31, 2023 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 (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

A Companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with 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 Over Financial Reporting

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

Qualified Opinion on adequacy (and therefore operating effectiveness) of Internal Financial Reporting

According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 31, 2023:

a) The Company did not have an appropriate internal control system for obtaining periodic balance, confirmations of trade receivables, trade payables and advances to suppliers and advances from customers which could potentially impact the financial position and operating statement.

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

In our opinion, except for the possible effects of the material weakness described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting where operating effectively as of March 31, 2023, 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.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March, 2023 financial statements of the Company, and these material weaknesses do not affect our opinion on the financial statements of the Company.

Qualified Opinion on operating effectiveness of Internal Financial Controls Over Financial Reporting and unmodified opinion on adequacy of such controls

According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified in the operating effectiveness of the Companys internal controls over financial reporting as at March 31, 2023:

a. The Companys internal financial controls over effective monitoring of action points and internal controls as less effective.

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

In our opinion, the Company has, in all material respects, maintained adequate internal financial controls over financial reporting as of March 31, 2023, based on, for example, 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, and except for the possible of the material weaknesses described above on the achievement of the objectives of the control criteria, the companys internal financial controls over financial reporting were operating effectively as of March 31, 2023.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in my audit of the March 31, 2019 financial statements of the Company, and these material weaknesses have affected our opinion on the standalone financial statements of the Company and we have issued a qualified opinion on the standalone financial statements.

Annexure - B to the Auditors Report

The Annexure referred to in Independent Auditors Report to the members of the Company on the standalone Ind AS financial statements for the period ended March 31, 2023, we report that:

(i) (a) (A) The Company has maintained proper records showing full parficulars, including quanfitafive details and situafion of Property, Plant and Equipment.

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

(b) The fixed assets were physically verified during the year under audit by the Management in accordance with a regular programme of verificafion which, in our opinion, provides for physical verificafion of all the fixed assets at reasonable intervals. According to the informafion and explanafion given to us, no material discrepancies were noficed on the such verificafion.

(c) According to the informafion and explanafion given to us, and the records examined by us, and based on the examinafion if the registered sale deeds provided to us, fitle deeds comprising all the immovable properfies of lands which are freehold, are held in the name of the Company as at the balance sheet date except certain porfion of the land. In respect of immovable properfies of land that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements for the said lands and building thereof are in the name of the Company, except certain building which is pending for fitle clearance. As per available data, the details are as hereunder:

Total No of Cases	Freehold/Leasehold	Gross Block as at March 31, 2023 (Amount in Lakhs)	Net Block as at March 31, 2023 (Amount in Lakhs)
3 (three)	Freehold	10.01	10.01

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

(e) As per informafion and explanafion given to us, no proceedings have been inifiated during the year or are pending against the Company as at March 31, 2023 for holding any benami property under the Benami Transacfions (Prohibifion) Act, 1988 (as amended in 2016) and rules made thereunder.

(ii) a) The inventory has been physically verified by the management during the year. In our opinion, the frequency

of verificafion by the management is reasonable and the coverage and procedure for such verificafion is appropriate. Inventories lying with third parfies have substanfially been confirmed by them as at year end. No discrepancies of 10% or more in aggregate for each class of inventory (including inventories lying with third parfies) were noficed.

b) As disclosed in note 15 to the Standalone Financial Statements, the Company has working capital limits in excess of 5 Crores in aggregate from banks during the year. Based on the records examined by us in the normal course of audit of the financial statements based on informafion and explanafion given to us, no quarterly returns / statements were filed by the Company with such banks. Hence we cannot comment on the same.

(iii) a) During the year, the Company has not granted loans, provided advances in the nature of loans, stood guarantee

or provided security to companies, firms, Limited Liability Partnerships or any other parfies other than what

has been paid or provided in earlier years. The details of loans and guarantees to other parties given or provided in earlier years are given below.:

In lakhs

	Guarantees	Loans
Aggregate amount granted/ provided during the year
- Others	-	-
Balance outstanding as at balance sheet date in respect of above cases
- Others	354.57	1,746.68

b) According to information and explanation given to us and based on the audit procedures performed by us, we are of the opinion that the guarantee provided (guarantee provided during the year aggregating to Rs. Nil, and balance guarantee outstanding as the balance sheet date 354.57 Lakhs) are prejudicial to the companys interest on account of the fact that the guarantees have been given without geffing any guarantee commission. In case of loan given the terms and conditions under which loan has been given are, prima facie, not prejudicial to the interest ofthe company.

c) In respect of loans granted to one company, the schedule of repayment of principal and payment of interest has not been stipulated in the agreement. Hence, we are unable to make a specific comment on the regularity of repayment of principal and payment of interest in respect of such loan.

d) As the repayment schedule is not stipulated, hence we cannot comment whether any amount of loan given to body corporate and its interest are overdue for over ninety days.

e) There were no loans to a body corporate, firms, Limited Liability Partnerships or any other parties which was fallen due during the year, that have been renewed or extended or fresh loans granted to settle the overdues of existing loans given to the same parties.

f) As disclosed in note 4 to the Standalone Financial Statements, the Company has granted loan in earlier years, either repayable on demand or without specifying any terms or period of repayment to a body corporate. Out of these, no loan has been granted to a promoters or related parties as defined in clause (76) of Section 2 of the Companies Act, 2013.

(iv) In In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of sections 185 and 186 of the Companies Act, 2013 to the extent applicable.

(v) The Company has not accepted any deposit from the public covered under Section 73 to 76 ofthe Companies Act, 2013. Therefore, the provisions of paragraph 3(v) of the Order is not applicable to the Company.

(vi) According to the information and explanations given to us, in our opinion, the Company have, prima facie, made and maintained the prescribed cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government under subsection (1) of Section 148 of the Companies Act, 2013. We have, however, not made a detailed examination of the cost records with a view to determining whether they are accurate or complete.

(vii) a) According to the records of the Company, undisputed statutory dues including Provident Fund, Employees

State Insurance, Income Tax, Sales Tax and Service Tax, Goods and Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and any other statutory dues have not been regularly deposited with appropriate authorities. According to the information and explanation given to us, undisputed amount in respect of statutory dues referred above outstanding as at March 31, 2023 for a period more than six months from the date they become payable are as under:

Nature of Statue	Nature of Dues	Amount ( in Lakhs)	Period to which the amount relates	Remarks, if any
The Income Tax Act, 1961 (including interest)	Income Tax	271.54	AY 2014-15	Not Yet Paid
		2,366.15	AY 2015-16
		743.12	AY 2016-17
		4,775.48	AY 2017-18
		4,049.11	AY 2018-19
The Income Tax Act, 1961	Tax Deducted at Source	1256.50	October 2019 up- till August 2022	Not Yet Paid
Goods and Service Tax Act	Goods and Service Tax	1017.20	April 2019 up-till August 2022	Not Yet Paid
The Income Tax Act, 1961	Dividend Distribution Tax	143.87	FY 2017-18	Not Yet Paid
The Income Tax Act, 1961	Dividend Distribution Tax	76.73	FY 2018-19	Not Yet Paid
West Bengal State Tax on Professions, Trades, Callings, and Employments Act, 1979 And The Odisha State Tax on Professions, Trades, Callings and Employments Act 2000	Profession Tax	18.22	February 2020 up- till August 2022	Not Yet paid
Employees Provident Fund & Miscellaneous Provisions Act, 1952	Provident Fund	515.52	October 2019 up-till August 2022
Employees State Insurance Act, 1948	ESI	10.97	February 2020 up- till August 2022

b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of sales tax, service tax, and entry tax as at 31 March 2023 which have not been deposited with statutory authorities on account of a dispute pending are given as below:

Sr No.	Name of the Statute	Nature of dues	Amount ( in Lakhs)	Period to which the amount	Forum where dispute is pending
1.	Central Sales Tax Act, 1956 and Orissa Sales Tax Act	Sales Tax/VAT (including interest and penalty)	70.92	1997-98	Sales Tax Appellate
			525.39	2019-20	Additional Commissioner
3.	Chapter V of Finance Act, 1994	Service Tax	655.58	2004-2012	Central Excise & Service Tax Appellate Tribunal
4.	The Central Excise Act, 1944	Wrong availment of Cenvat credit	424.96	April, 2005 to March 2010 2015-16 to 2017-18	CESTAT, Kolkata Commissioner Appeals
5.	The Central Excise Act, 1944	Excise Duty	87.26	April 2016, to June 2017	CESTAT, Bhubneshwar
6.	Income Tax Act 1961	Income Tax	21,505.17	AY 2013-14 to AY 2020-21	CIT(A) Appeals, Bhubaneshwarand ITAT

(viii) As per information and explanation given to us, we have not come across any such any transactions which was not recorded in the books of account have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

(ix) a) According to the records of the Company examined by us and the information and explanations given to us and records of the Company examined by us, the Company has defaulted in repayment of loans or borrowings to banks and financial institutions for which the lender wise details (principal only) are as given below:

Bank Name/Financial Institution	Amount of default as per balance sheet date in Lakhs	Period of default	Date of NPA
Bank Name
State bank of India, Balasore Branch	2,116.59	August 2020 March 2023	November 28, 2020
State Bank of India	7.15	November 2020 to March 2023	-
State Bank of India	10.22	November 2020 to March 2023	-
Financial Institution
Toyota Financial Services Limited	9.46	November 2020 to March 2023	-

b) According to the information and explanations given to us and on the basis of our audit procedures, we report that the Company has not been declared Wilful Defaulter by any bank or financial institution or government or any government authority.

c) In our opinion, and according to the information and explanations given to us, the company has not taken any term loan during the year under audit.

d) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the standalone financial statements of the Company, we report that the Company has not raised any funds during the year for short term basis from banks or financial institutions.

e) According to the information and explanations given to us and on an overall examination of the standalone 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, associates or joint ventures.

f) According to the information and explanations given to us and procedures performed by us, we report that the

Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

(x) a) The Company has not raised moneys by way of initial public offer or further public offer (including debt

instruments) during the year and hence reporting under clause 3(x)(a) of the Order is not applicable.

b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause 3(x)(b) of the Order is not applicable

(xi) a) Based upon the audit procedures performed and the information and explanations given by the management,

we report that no fraud by the Company or on the company by its officers or employees 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-4as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the date of this report.

c) As per information and explanation given to us, the Company has not received any whistle-blower complaints during the year, hence reporting under this clause is not applicable.

(xii) In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company and hence the paragraph 3(xii) is not applicable;

(xiii) According to the information and explanations given to us and based on examination of the record of the company, transactions entered into by the company with the related parties are not in compliance with section 177 and 188 of Companies Act, 2013, as the approval of the audit committee has not been obtained in respect oftransactions with related parties.

(xiv) a) In In our opinion the Company has an adequate internal audit system commensurate with the size and the

nature of its business.

b) We have considered, the internal audit reports for the year under audit, issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures.

(xv) In our opinion during the year the Company has not entered into any non-cash transactions with its Directors or persons connected with its directors, and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

(xvi) a) In our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of

India Act, 1934. Hence, reporting under clause 3(xvi)(a), (b) and (c) of the Order is not applicable.

b) In our opinion, there is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under clause 3(xvi)(d) of the Order is not applicable.

(xvii) The Company has incurred cash losses during the financial year amounting to (20,008.67) Lakhs as well as in the immediately preceding financial year amounting to (1912.94) Lakhs

(xviii) There has been no resignation of the statutory auditors during the year and accordingly requirement to report on Clause 3(xviii) of the Order is not applicable to the Company.

(xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realisation 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 on our examination of the evidence supporting the assumptions, it has come to our attention, which causes us to believe that material uncertainty, as mentioned in the "Going Concern" paragraph of our report, existed as at March 31, 2023, indicating that Company was not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. However as informed, significant events took place during the year like funds has been infused in the company, power being restored in plant and plant production being started, hence accounts have been prepared on going concern basis. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will not get discharged by the Company as and when they fall due.

(xx) The Company does not fall into the limits prescribed under section 135 of the Companies Act, 2013 for the applicability of Corporate Social Responsibility expenditure during the year, and hence paragraph 3(xx) is not applicable.

(xxi) 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 ofsaid clause underthis report.