electrosteel castings ltd share price Auditors report

To The Members of Electrosteel Castings Limited

Report on the Audit of the Standalone Financial Statements Qualified

Opinion

We have audited the standalone financial statements of Electrosteel Castings Limited ("the Company"), which comprise the balance sheet as at March 31, 2023, and 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 then ended, and notes to the financial statements, including a summary of significant accounting policies and other notes for the year ended on that date (hereinafter referred to as "financial statements").

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 Paragraph, the aforesaid financial statements give the information required by the Companies Act, 2013 (the ‘Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its profit including other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

Attention is invited to the following notes of the accompanying financial statements: a) Note no. 48 regarding cancellation of coal block allotted to the company in earlier year and adjustments required to be carried out in respect of the claim received so far and carrying value of the property, plant and equipment, capital work in progress, inventory and balance lying under other heads of account for the reasons stated therein; and b) Note No. 9.1 in respect of companys investment in ESL Steel Limited (ESL), the pledge of which was invoked by the lenders of ESL and the same was set aside by Honble High court at Calcutta and mortgage of Land at Elavur plant in favour of one of the lenders of ESL who had assigned their rights to another party and symbolic possession of the land had been taken by the said party. The matter has been disputed by the company and is currently pending before DRAT and Honble High Court at Madras. c) Pending finalization of the matters dealt with in (a) and (b), impacts thereof are presently not ascertainable and as such cannot be commented upon by us.

We conducted our audit in accordance with the Standards on Auditing (‘SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the financial statements section of our report. We are independent of the Company in accordance with the

Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI) 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 ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

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 of the current year. 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 for qualified opinion section, we have determined the matters described below to be the Key Audit Matters to be communicated in our report:

Key Audit Matters	Addressing the key audit matters
Claims, Litigations and disclosure of contingent liabilities (as described in note 28, 48, 49 and 53(I) of the financial statements)
The company is exposed to number of significant claims and litigations including taxation and related provisions of relevant laws and regulation and interpretations. This includes income tax refund of Rs. 62,10.24 lakhs carried forward as liabilities as on March 31, 2023 as dealt with in Note no. 28 and contingent liabilities as disclosed in Note no. 53(I). The assessment of the likelihood and quantum of any liability with respect to these matters are matter of judgmental due to the uncertainty.	Our Audit procedures based on which we arrived at the conclusion regarding reasonableness of provision/ disclosure made include the following:
We considered this to be a key audit matter, since the accounting and disclosure of claims and litigations is complex and judgmental, and the amount involved are or can be material to the financial statements.	• Understood, assessed and tested the design and operating effectiveness of key controls surrounding assessment of litigations relating to the relevant laws and regulations.
	• Understood, assessed and tested the design and operating effectiveness of key controls surrounding assessment of tax litigations relating to the relevant laws and regulations and the internal control environment relating to the identification, recognition and measurement of provisions for disputes, potential claims and litigations and contingent liabilities;
	• Testing the internal control environ- ment relating to the identification, recognition and measurement of provisions for disputes, potential claims and litigations and contingent liabilities;
	• Analysed significant changes/ updates from previous periods and obtained a detailed understanding of such items. Assessed recent judgements passed by the court authorities affecting such change;
	• Discussed the status of significant known actual and potential litigations with the management and noted material information placed before the board for such cases;
	• Evaluated managements assessments by understanding precedents set in similar cases and assessed the reliability of the managements past estimates/judgements;
	• Reliance has been placed on such legal interpretation and opinion provided on the matter;
	• Assessment of the adequacy of managements assumptions and estimates related to the recognized provision for disputes and disclosure of contingent liabilities in the financial statements or otherwise references made in the Auditors Report wherever relevant and appropriate; and
	• Examined external legal opinions and other evidence to corroborate managements assessment of the risk profile in respect of legal claims.
Verification of Inventory and Valuation thereof (as described in note 13 and 3.8 of the financial statements)
The total inventory of the Company amounts to Rs. 16,93,72.62 lakhs (as on March 31, 2023) which forms about 21.00% of the total assets of the Company.	Our Audit procedures based on which we arrived at the conclusion regarding reasonableness of determination of year- end inventory and valuation thereof include the following:
This includes bulk materials such as coal, coke, iron ore etc., which are susceptible to handling loss, moisture loss/gain, spillage etc. and determination of the same requires estimation based on experience and technical expertise.	• The Company deployed an Independent agency for veri3cation of Bulk Materials during which we were present to oversee the process of the verification;
We determined this to be a matter of significance to our audit due to quantum of the amount and estimation involved.	• We reviewed the report submitted by external agency and obtained reasons/explanation for variations observed by them with respect to book stock;
	• The materiality for variations after considering the reasonable allowance for volumetric measurement were duly considered; and
	• We examined the valuation process/ methodology and checks being performed at multiple levels to ensure that the valuation is consistent as per the policy followed in this respect.
Recoverability of Government Grant (as described in note 19.4 of the financial statements)
The Company has been entitled for various sales tax incentives under industrial promotion scheme issued by the State Government. The company had complied with the condition of the Scheme and incentives were accounted for in the books in earlier years. A sum of Rs. 58,83.07 lakhs are outstanding as on March 31, 2023. Further such incentive for the period from July 01, 2017 to March 31, 2019 for reasons stated in Note no. 53(ii)(a) has not been recognised.	Our Audit procedures based on which we arrived at the conclusion regarding reasonableness of accounting and disclosure include the following:
We determined this to be a matter of significance to our audit due to quantum of the government grant outstanding, compliance requirement of the scheme and also because of recovery pattern of the same.	• Evaluating eligibility requirement of the schemes and compliances by the company;
	• Understanding and testing the design and operating effectiveness of controls as established by the management in recognition and assessment of the recoverability of the grant; and
	• Considering the relevant notification to ascertain the basis for determination, completion of performance obligation and assessing the appropriateness of the government grant and timing of recognition and past receipts of the grants.

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 Report of the Directors and the annexures thereto (namely Management Discussion and Analysis, Report on performance and financial position of the subsidiaries and joint ventures, Report on Corporate Governance, Annual Report on CSR Activities, Business Responsibility and Sustainability Report, Conservation of energy, technology absorption, foreign exchange earnings and outgo and remuneration and other specified particulars of employees) 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 the 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 on the other information that we have obtained prior to the date of this auditors report, 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 the Management and those charged with governance for the Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the state of affairs (financial position), Loss (financial performance including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement 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 Responsibility 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 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system 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; and

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. Materiality is the magnitude of misstatements in the 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 results 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 3ndings, including any significant de3ciencies 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 of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

The comparative financial information of the Company for the year ended March 31, 2022 have been taken from the standalone financial statements for the year ended on that date which were audited by the predecessor auditor who expressed a qualified opinion on these financial statements. We have placed reliance on the report dated May 10, 2022 given by the predecessor auditor for the purpose of these standalone financial statement and our report thereupon.

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 section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. Further to our comments in the annexure referred to in the paragraph above, as required by Section 143(3) of the Act, we report that:

a) 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) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

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

d) Except for the possible effects of the matter described in the Basis for Qualified Opinion Paragraph, in our opinion, the aforesaid financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) The matter described in the Basis for Qualified Opinion Paragraph, in the event of being decided unfavorable, in our opinion, may have an adverse effect on the functioning of the company;

f) On the basis of the written representations 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 Section 164 (2) of the Act;

g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above; and

h) With respect to the adequacy of the internal financial controls with reference to financial statements in place and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal control with reference to financial statements.

3. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. Except for the matters dealt with in the Basis for Qualified Opinion paragraph impact whereof are presently not ascertainable, the Company has disclosed the impact of pending litigations (other than those already recognized in the financial statements) on its financial position as required in terms of the Ind AS and provisions of the Companies Act, 2013 – Refer Note no. 53(i) to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts – Refer Note no. 46 to the financial statements;

iii. There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from 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) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on the audit procedures and generally accepted auditing practices followed in terms of SAs that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement; and

v. The dividend declared or paid during the year by the company is in compliance with Section 123 of the Companies Act, 2013.

vi. As stated in Note no. 22.8 of the financial statements, the Board of Directors of the company has proposed dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend proposed is in accordance with Section 123 of the Companies Act, 2013, as applicable.

vii. 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.

4. With respect to the reporting under section 197(16) of the Act to be included in the Auditors Report, In our opinion and according to the information and explanations given to us, the remuneration (including sitting fees) paid by the Company to its Directors during the current year is in accordance with the provisions of section 197 of the Act and is not in excess of the limit laid down therein.

For Lodha & Co, Chartered Accountants Firms ICAI Registration No.:301051E

	R. P. Singh
	Partner
Place : Kolkata	Membership No. : 52438
Date : May 17, 2023	UDIN: 23052438BGXSCC8585

ANNEXURE "A" TO THE AUDITORS REPORT TO THE MEMBERS OF ELECTROSTEEL CASTINGS LIMITED

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

i) a. The Company has maintained proper records showing full particulars, including quantitative details and situations of Property, Plant and Equipments and Intangible Assets except in case of furniture and fixture.

b. The Company has a program of verification to cover all the items of Property, Plant and Equipment in a phased manner over a period of three years which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to this program, a comprehensive and detailed verification of Property, plant and Equipment and Capital Work in Progress was carried out for certain locations except for Property, Plant and Equipment located at Parbatpur Coal Block for reasons stated in Note no. 48 by engaging the services of an Independent firm of professional and no such verification has been carried out in this year. As informed, no material discrepancies were noticed on such verification.

c. According to the information and explanations given to us, the records examined by us and based on the registered sale deed/ transfer deed / conveyance deed / court orders approving schemes of arrangements / amalgamations, confirmation from Security Trustees provided to us and other documents provided to us, we report that, the title deeds, comprising of all the immovable properties of land and building are held in the name of the Company as on the balance sheet date except certain land for which title deeds are yet to be executed as detailed below: (Refer Note no. 5.7 of the financial statements).

(Rs. In Lakhs)

Particulars	Property held since when	Held in the name of	Whether promoter, director or their relative or employee	Gross Block
Freehold Land	2008-2009 to 2014-2015	Various owners having small plots	No	3,35.81
Freehold Land	April 01, 2014	Mahadev Vyapaar Private Limited	No	18,89.04
Freehold Land	October 01, 2020	Srikalahasthi Pipes Limited	No	3,51,50.37
Leasehold Land	October 01, 2020	Srikalahasthi Pipes Limited	No	3,60.15

d. The company is not following revaluation model of accounting and has not revalued any of its Property, Plant and Equipment (including Right-of-Use Assets) and Intangible Assets during the year. Accordingly, the reporting under Clause 3 (i)(d) of the Order is not applicable to the Company.

e. As per the information and explanation given to us and as represented by the management, no proceedings have been initiated during the year or are pending against the Company as at March 31, 2023 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder. Accordingly, further reporting under Clause 3 (i)(e) of the Order is not applicable to the Company.

ii) a. As informed, the inventories of the Company except for Finished goods at Khardah and Bansberia Unit, materials in transit, stock lying with third parties and inventories lying at parbatpur coal block for reasons stated in Note no. 48 have been physically verified by the independent firm of professionals along with the management at reasonable intervals during the year. In our opinion and according to the information and explanations given to us, the frequency of such verification is reasonable, and procedure followed for such verification is appropriate. As the Companys inventory of raw materials comprises mostly of bulk materials such as coal, coke, iron ore, etc. requiring technical expertise for quantification, the Company has hired an independent agency for the physical verification of the stock of these materials. The discrepancies noticed on physical verification between the physical stock and book stock of inventories to the extent verified during the year, were not 10% or more in aggregate for each class of inventory and the same have been properly dealt with in the books of account as per the policy followed in this respect. b. According to the information and explanation given to us the company has been sanctioned working capital limit in excess of Rupees Five Crores on the basis of securities of Current Assets of the company. On the basis of examination of returns/statements submitted by the Company to the banks in this respect, as provided to us for the purpose, these were in agreement with the unaudited books and records and the financial statements prepared therefrom by the management.

iii) According to the information and explanation given to us and based on the documents examined, the Company has advanced loans to five companies other than subsidiaries and Joint Ventures. Further, the company has also provided financial guarantees to its subsidiaries against various working capital facilities availed from banks. a. In our opinion and according to the information and explanation given to us, the company has not provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured to companies, firms, limited liability partnerships or any other parties during the year apart from the details given below:

(Rs. In Lakhs)

Particulars	Guarantees	Loans
Aggregate amount granted/ provided during the year:
Subsidiaries	55,87.62	–
Others	–	1,75,00.00
Balance outstanding as on balance sheet dates in respect of above cases
Subsidiaries	55,87.62	–
Others	–	1,09,35.00

b. In our opinion and according to the information and explanation given to us, the terms and conditions of the granting of all the loans and guarantees provided during the year are prima facie not prejudicial to the companys interest.

c. In respect of loans granted during the year, the schedule of repayment of principal and payment of interest has been stipulated and the repayments are regular

d. In respect of loans granted by the company, there is no overdue amount remaining outstanding at the Balance Sheet date.

e. In our opinion, no loans granted by the company that have fallen due during the year, have been renewed or extended or fresh loan granted to settle the over dues of existing loans given to the same parties.

f. In our opinion and according to the information and explanation given to us, the company has not granted any loans which are either repayable on demand or without specifying any terms or period of repayment. Further, company has not granted any advances in the nature of loans. Accordingly, further reporting under Clause 3(iii)(f) of the Order is not applicable to the Company.

iv) In our opinion and according to the information and explanation provided to us, the company has not granted any loans or provided any guarantees or security to the parties covered under Section 185 of the Act. Further, the Company has complied with the provisions of Sections 186 of the Companies Act, 2013 in respect of loans granted, investments made and guarantees and securities provided, as applicable.

v) The Company has not accepted any deposits during the year and does not have any unclaimed deposits as at March 31, 2023 from public covered under Sections 73 to 76 or any other relevant provisions of the Act and rules framed thereunder and therefore, the provisions of clause 3(v) of the Order is not applicable to the company.

vi) We have broadly reviewed the books of account maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 148 (1) of the Act in respect of the Companys products to which the said rules are made applicable and are of the opinion that prima facie, the prescribed records have been maintained. We have however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

vii. a. According to the information and explanations given to us, during the year, the Company has generally been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Goods and Service Tax, Service tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues as applicable to it. Further, there were no undisputed amounts payable in respect of these statutory dues in arrear as at March 31, 2023 for a period of more than six months from the date they become payable.

b. Details of statutory dues referred to in (a) above which have not been deposited as on March 31, 2023 on account of any dispute are given below:

Name of Athe Statute	Nature of Dues	Amount (Rs. in lakhs)	Period to which the Amount relates	Forum where dispute is pending
Sales Tax Act	Sales Tax/ VAT	0.25	2010-2011	Commercial taxes Tribunal, Ranchi
		41,83.69	2007-2009, 2015-2016, 2017-2018	West Bengal Appellate & Revisional Board
		3,03.10	2013-2015	Additional Commissioner, Commercial Taxes, West Bengal
		55.91	2014-2016	Joint Commissioner (Appeal) Sales Tax, Dhanbad Circle, Dhanbad
		13.24	2009-2010	Honble Jharkhand High Court
		1.62	2012-2013	Deputy Commissioner, Sales Tax, Bokaro Circle, Bokaro
		7,93.14	2000-2001, 2003-2005	Sales Tax Appellate Tribunal, Hyderabad
		2,00.98	2011-2012, 2013-2014	Sales tax Appellate Tribunal, Vishakhapatnam
		1,51.60	2000-2001, 2010-2011	High Court of Andhra Pradesh
		2,78.23	2012-2013, 2014-2015	Assistant Commissioner, Chittor
Andhra Pradesh Tax on Entry of Goods into Local Area Act 2001	Entry Tax	2,11.66	2014-2015 to 2017-2018	Appellate Deputy Commissioner, Tirupathi
West Bengal Tax on Entry of Goods into Local Area Act 2001	Entry Tax	84,34.08	2011-2012 to 2017-2018	West Bengal Taxation Tribunal
Goods and Service Tax Act 2017	GST	62.24	Transitional credit	Honble High Court of Jharkhand
	GST	18.44	2017-2018	The assistant Commissioner- CGST & CX Khardah Division
	GST	3.43	2019-2020	Adjudicating Authority
Central Excise Act	Excise Duty	11.86	2005-2006	Customs, Excise and Service Tax Appellate Tribunal, Kolkata
	Excise Duty	10.77	2008-2009	Additional director General, Director of revenue Intelligence, New Delhi
	Excise Duty	19,10.34	2002-2003 to 2004-2005, 2005-2007	Commissioner of Goods and Service Tax & Cx Khardah Division Kolkata North Commissionerate
	Excise Duty	54.45	2006-2008	Customs, Excise and Service Tax Appellate Tribunal, Hyderabad
	Service Tax	20.29	2004-2005 to 2007-2008	Honble Madras High Court
	Service Tax	1,18.89	2006-2012	Commissioner of GST & Central Excise, Appeals II, Chennai
	Service Tax	4,70.86	2007-2008 to 2011-2016	Customs, Excise and Service Tax Appellate Tribunal, Kolkata
	Service Tax	3,77.76	2002-2003 to 2006-2007	CGST & CX Kolkata North Commissionerate
	Service Tax	5,78.49	2006-2017	Commissioner of Central Excise, Tirupathi
The Income Tax Act, 1961	Income Tax	6,41.47	2017-2018 and 2018-2019	CIT (Appeals), Income Tax

viii) In our opinion and on the basis of information and explanations given to us and as represented by the management, we have neither come across nor have been informed of transactions which were previously not recorded in books of account and that 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. In our opinion and on the basis of information and explanations given to us by the management, we are of the opinion that the Company has not defaulted in repayment of loans or other borrowings or in payment of interest thereon to financial institutions and banks.

b. According to the information, explanations and representation given to us by the management, 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 on the basis of information and explanations given to us by the management, the term loan taken during the year were applied for the purpose for which the loans were obtained.

d. According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the financial statements of the company, we report that fund raised on short term basis have not been utilized for long term purposes.

e. According to the information and explanations given to us and as per the audit procedure performed by us, 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 associates. Accordingly, further reporting under Clause 3(ix)(e) of the Order is not applicable to the Company.

f. According to the information and explanations given to us and as per the audit procedure performed by us, we report that the company has not raised any loans during the year on the pledge of securities held in its subsidiaries. Accordingly, further reporting under Clause 3(ix)(f) of the Order is not applicable to the Company.

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

b. As stated in Note no. 22.7 of the financial statement, in our opinion and according to the information and explanations given to us, the company has complied with the provisions of Section 42 and Section 62 to the extent applicable for preferential allotment of Share Warrants to Promoter/ Promoter group and has utilized funds so raised for the purposes for which they were raised. Other than this, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xi. a. During the course of our examination of books of account carried out during the year in accordance with generally accepted auditing practices in India, we have neither come across incidence of any material fraud by or on the company, noticed or reported, nor have we been informed of any such case by the management.

b. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us and representation received from the management, no report under Section 143(12) of the Act, in Form ADT-4, as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 has been filed with the Central Government. Accordingly, reporting under Clause 3(xi)(b) of the Order is not applicable to the Company. c. As represented to us by the management and as far as ascertained from examination of books of and records in accordance with generally accepted auditing practices in India, there are no whistle blower complaints received by the company during the year. Accordingly, paragraph 3(xi)(c) of the Order is not applicable to the Company.

xii) The Company is not a Nidhi company and hence reporting under paragraph 3(xii) of the Order is not applicable to the Company.

xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties as disclosed in financial statements are in compliance with Section 177 and 188 of the Act where applicable and details thereof have been disclosed in the Financial statements as required by the applicable accounting standards.

xiv) a. The Internal audit of the Company has been carried out by a firm of Chartered Accountants. The system followed, in our opinion, is generally commensurate with the size and nature of its business.

b. Further, we have considered, during the course of our audit, the reports of the internal auditor for the period under audit, issued to the Company during the year and till the date of our audit, in determining the nature, timing and extent of our audit procedures in accordance with the guidance provided in SA 610 "Using the work of Internal Auditors".

xv) According to the information and explanations given to us and as represented to us by the management and based on our examination of the records, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is 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) of the Order is not applicable to the company.

b. The Company has not conducted any Non-Banking Financial or Housing Finance Activities without a valid certificate of registration as required under Reserve Bank of India Act, 1934. Hence, reporting under clause 3(xvi)(b) of the Order is not applicable.

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

d. In our opinion and based on the representation received by us from the management, 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 to the company.

xvii) On the basis of overall examination of the financial statement, the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xviii) There has been no resignation of the statutory auditors of the Company during the year and accordingly reporting under clause 3(xviii) of the Order is not applicable.

xix) 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, Management plans as provided to us and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is 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. 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 and assumptions as represented to us 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 get discharged by the Company as and when they fall due for payment.

xx) In our opinion and according to the information and explanation given to us, there is no unspent amount under sub-section (5) of Section 135 of the Act pursuant to any project. Accordingly, reporting under clause 3(xx) of the Order is not applicable to the Company.

xxi) The reporting under Clause 3(xxi) of the Order is not applicable in respect of audit of standalone financial statements. Accordingly, no comment in respect of the said clause has been included in this report.

For Lodha & Co,

Chartered Accountants

Firms ICAI Registration No.:301051E

	R. P. Singh
	Partner
Place : Kolkata	Membership No. : 52438
Date : May 17, 2023	UDIN: 23052438BGXSCC8585

ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph (f) under ‘Report on Other Legal and Regulatory Requirements of our report the Members of Electrosteel Castings Limited of even date)

Report on the Internal Financial Controls with reference to financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls with reference to financial statements of Electrosteel Castings Limited ("the Company") as of March 31, 2023 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and effcient 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 with reference to 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") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 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 system with reference to 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 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 audit opinion on the Companys internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control 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 acceptedaccountingprinciples.Acompanysinternalfinancialcontrolwith 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 over Financial Reporting

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.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 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.

For Lodha & Co,

Chartered Accountants

Firms ICAI Registration No.:301051E

	R. P. Singh
	Partner
Place : Kolkata	Membership No. : 52438
Date : May 17, 2023	UDIN: 23052438BGXSCC8585