Hindusthan National Glass & Industries Ltd Auditor Reports

To the Members of

Hindusthan National Glass & Industries Limited Report on the Audit of the Financial Statements

CORPORATE INSOLVENCY PROCEEDINGS AS PER INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC)

The Honble National Company Law Tribunal, Kolkata Bench (hereinafter referred to as "the NCLT") had admitted an insolvency and bankruptcy petition filed by a financial creditor against Hindusthan National Glass & Industries Limited (hereinafter referred to as "the Company") on 21st October 2021 and had appointed Resolution Professional (hereinafter referred to as "the RP") who has been vested with management of affairs and powers of the Board of Directors with direction to initiate appropriate action contemplated with provisions of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the Code") and other related Rules. The detailed proceedings that have happened till the date of signing of this report has been described in Note no. 1 on "Corporate Information".

QUALIFIED OPINION

We have audited the accompanying financial statements of Hindusthan National Glass & Industries Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2024, 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 material accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid financial statements give the information required by the Companies Act, 2013 as amended from time to time (hereinafter referred to as "the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards notified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time, (hereinafter referred to as the "Ind AS") and other accounting principles generally accepted in India, of the State of Affairs of the Company as at 31st March 2024 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 a) Refer Note No. 2.20.3 of the financial statements which states that during the year the Company has written back interest amounting to Rs. 1,825.52 lakhs on the principal overdue outstanding balance of Micro and Small Enterprises as on October 21, 2021 (CIRP Date) for the period up to 31st March, 2023 provided as per the requirements of Micro, Small and Medium Enterprises Development Act, 2006. Also, such interest for the current year has neither been ascertained nor provided for in the financial statements. Impacts on account of such non-provision of interest (including legal implications, if any) has not been ascertained by the management, therefore we are unable to comment on the impact of the same on profit before tax and equity for the year ended 31st March, 2024. b) Refer Note No. 2.40 of the financial statements which states that the company has accumulated losses, and its net worth has been eroded. The company has incurred net losses in the earlier year(s), the companys current liabilities exceed its current assets, and the company has a high debt-equity ratio (Debt being Rs. 2,26,369.01 lakhs and Equity being Rs. (83,229.31) lakhs) as at 31st March, 2024. In our opinion, based on the above, the company does not appear to be a going concern. Pending approval of the Resolution Plan as stated in Note No. 1.1 of the financial statements, the status of the Company being Going Concern and impact arising therefrom as such cannot be commented upon by us. c) Refer Note no. 2.49 of the financial statements, regarding the initiation of Corporate Insolvency Resolution Process ("CIRP") and appointment of transactional auditors by the RP for conducting the transaction audit as per section 43 to 50 and 66 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the Code"). The transaction auditor vide their report dated 9th September, 2022 has identified certain transactions to be classified under section 66 of the Code and accordingly the RP has filed an application under section 66 of the Code with the NCLT, the final decision and outcome thereof as such is pending as on the date. Thereby, future course of action and impact on this being dependent on the decision of the NCLT presently cannot be commented upon by us. d) Refer Note no. 2.18.7 of the financial statements, regarding appropriation of payments made by the Company during the period March, 2019 to September, 2021 by the Lead Banker against outstanding loans and adjustments by the management and interest calculations thereon. In the absence of any balance confirmation from the lenders and consequent reconciliation with the outstanding balances, impact thereof, if any, on the reported figures, cannot be ascertained. Also, Refer Note No. 2.47 of the financial statements regarding the pending reconciliations of admitted claims of financial creditors, operational creditors and others with the books of accounts, impact if any that may arise has not been ascertained and/ or considered in the preparation of the financial statements for the year ended 31st March, 2024. e) As stated in Note no. 2.18.9 of the financial statements, regarding the non-accounting of interest of Rs. 48,773.78 lakhs as calculated by the company on outstanding borrowings (including Non-Convertible Debentures) post initiation of Corporate Insolvency Resolution Process (‘CIRP) with effect from 21st October, 2021 under Section 14 of the Code. f) As stated in Note no. 2.18.8 of the financial statements, the company has restated the ECB borrowings of USD 641.27 lakhs at foreign currency exchange rate of Rs. 74.7635 per USD as on 21st October, 2021 (date of initiation of CIRP) as against exchange rate of Rs. 83.3739 per USD as on 31st March, 2024 and thereby the exchange loss of Rs. 5,521.57 lakhs (including Rs. 741.93 lakhs for the current year) have not been recognized in the books of accounts. Interest outstanding on the said ECB borrowings amounting to USD 120.30 lakhs has also not been restated, and the impact of the same is currently not ascertainable. g) Rs. 1,238.42 lakhs were set aside in FY 2019-20 by the Members of the Lenders Consortium towards corpus fund for meeting legal expenses, out of which, claim amounting to Rs. 131.24 lakhs have been accounted for based on the details submitted by the lead bank in earlier year, however proper supporting, documents etc. from the bank are not available. The remaining amount of Rs. 1,107.18 lakhs is lying unadjusted in the books of accounts (Refer Note no. 2.7.B.1) as on 31st March, 2024, which is subject to confirmation from the bank. h) Note No. 2.52 of the financial statements, regarding non-reconciliation of certain debit and credit balances with individual details and confirmations etc. Adjustments/ impact if any, as stated in the said note including those arising on approval of the resolution plan pending ascertainment thereof has not been given effect to in the financial statements. i) Impact with respect to point no. (c) to (h) are currently not ascertainable pending approval of resolution plan and completion of CIRP Process.

We conducted our audit in accordance with the Standards on Auditing (hereinafter referred to as "the SAs") specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the "Auditors Responsibilities for the Audit of the Financial Statements" section of our report. We are independent of the company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (hereinafter referred to as "the ICAI") together with the ethical requirements that are relevant to our audit of financial statements under the provisions of the Act and Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and 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.

EMPHASIS OF MATTER

We draw attention to Note no. 2.34.1 of the financial statements, which describes the impact of fire in the Companys Sinnar Unit causing severe damage to various property, plant and equipment, work-in-progress and spares etc. disrupting the day-to-day operations of the Unit and the impact of the same as estimated by the management on the Companys financial statements amounting to Rs. 10,158.23 lakhs including Rs. 9,969.57 lakhs, Rs. 152.96 lakhs and Rs. 35.70 lakhs on account of property, plant and equipment, work-in-progress and some spares respectively. Our opinion is not modified in respect of this matter.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the financial year ended 31st March 2024. 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 matter 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.

We have fulfilled the responsibilities described in the "Auditors Responsibilities for the audit of the Financial Statements" section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The result of our audit procedures, including the procedures performed to address the matters below, provide the basis for our qualified opinion on the accompanying financial statements.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORS REPORT THEREON

The Companys Directors and the RP are responsible for the other information. The other information comprises the information included in the Companys annual report but does not include 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, 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 FINANCIAL STATEMENTS

The financial statements of the Company for the year ended 31st March 2024 have been taken on record by the RP while discharging the power of the Board of Directors of the Company which were conferred on him in terms of the provision of section 17 of the Code. For the said purpose as explained in note no. 1.1 of the financial statements, the RP has relied upon the certification, representations, statements and other relevant information provided by the Directors and other Officers of the Company in relation to these financial statements.

The Companys Directors and the RP are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS. 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 statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors and RP are responsible for assessing the ability of the Company to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors and RP either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Directors and RP are also responsible for overseeing the financial reporting process of the Company.

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in 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 Act, we are also responsible for expressing our opinion on whether the company has an adequate internal financial controls system in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of managements use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

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

(a) We have sought and except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; (b) Except for the effects of the matter described in the Basis of Qualified Opinion paragraph above and matters stated in paragraph 2 B(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, 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 Statement of Cash Flows dealt with by this Report are in agreement with the books of account; (d) Except for the matter referred to in "Basis for Qualified Opinion" section of our report, in our opinion, the aforesaid financial statements comply with the Ind AS.

(e) The matter described in the Basis for Qualified Opinion paragraph above, 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 and taken on record by the Board, none of the Directors are disqualified as on 31st March 2024, from being appointed as a director in terms of section 164(2) of the Act. However, considering the fact, that the Company has defaulted in payment of Interest on Non-Convertible Debentures from the dates mentioned in Note No. 2.18.9(E) of the financial statements, in our opinion, all the Directors are disqualified from being appointed as Director in terms of Section 164 (2) of the Act.

(g) The observation relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2A(b) above on reporting under section 143(3)(b) of the Act and paragraph 2B(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

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

(i) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended: In our opinion, and to the best of our information and according to the explanations given to us, the company has not paid any managerial remuneration during the financial year other than the sitting fees to its Independent Directors which is in accordance with the provisions of section 197(5) read with Rule 4 of Companies (Appointment & Remuneration of the Managerial Personnel) Rule, 2014 (as amended) of the Act. B. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed (other than those already recognized in the accounts) the impact of pending litigations on its financial position in its financial statements - Refer Note No. 2.36.A of the financial statements. ii. The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts. The Company has not entered into any derivative contracts. iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. iv. a. The RP and the Directors has represented that, to the best of their knowledge and belief, as disclosed in note no. 2.61 of the financial statements, during the year no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding whether recorded in writing or otherwise, that the intermediary shall, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate beneficiaries) or provide any guarantee, security or the like on behalf of the ultimate beneficiaries. b. The RP and the Directors has represented, that, to the best of its knowledge and belief, as disclosed in note no. 2.62 of the financial statements, during the year no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. c. Based on such audit procedures that we have considered reasonable and appropriate in the circumstances, nothing has come to our attention that cause us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) as provided under paragraph 2B(iv) (a) & (b) above, contain any material misstatement. v. The Company has not declared any dividend in previous financial year which has been paid in current year. Further, no dividend has been declared in the current year. Accordingly, the provision of section 123 of the Act is not applicable to the company. vi. Based on our examination which included test checks, the Company has used accounting softwares for maintaining its books of account, which have a feature of recording audit trail (edit log) facility both at the application and database level and the same has operated throughout the year for all relevant transactions recorded in the respective software except for payroll which is processed through Microsoft Excel and hence feature of recording of audit trail (edit log) is not available in this regard. Further, during the course of our audit, we did not come across any instance of audit trail feature being tampered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from 1st April, 2023, reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended 31st March, 2024.

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of Hindusthan National Glass & Industries Limited of even date) i. (a) In respect of the Property, Plant and Equipment and Intangible Assets of the Company; A. The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment; B. The Company has maintained proper records showing full particulars of intangible assets; (b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has a regular program of physical verification of its Property, Plant and Equipment. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification; (c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee) disclosed in the financial statements are held in the name of the company; (d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year; (e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder; ii. (a) The inventories excluding inventories lying with third parties, in few of the units and in transit have been physically verified by the management at reasonable intervals during the year. In our opinion and according to the information and explanations given to us, the procedures & coverage of physical verification of inventory followed by management are reasonable and adequate in relation to the size of the Company and the nature of its business. The discrepancies noticed on verification between the physical stock and the book stock for each class of inventory, wherever ascertained were not more than 10%; (b) The Company has not been sanctioned/ renewed any working capital loan limits in excess of five crores rupees, in aggregate, from banks or financial institutions during the year on the basis of security of current assets being under the CIRP process, hence reporting under Clause 3(ii)(b) is not applicable. The Company, however has been submitting the monthly Stock and Debtors Statement to the original lenders based on the original sanction letters. The details of the quarter end statements submitted is as follows:

* Differences are primarily due to the variation in valuation methodology of inventory. In Stock Statement the Company consider Cost of Production of previous quarter whereas in books such inventories are carried at lower of cost or Net Realisable Value (NRV) as per the accounting policy of the Company. The Company has not been using any drawing power under its working capital limit for current as well as in the previous few years and hence the impact of the same is not there. iii. According to the information and explanations given to us, during the year the Company has not made any investments in, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties. Accordingly, clause 3 (iii) (a) to (f ) of the Order are not applicable to the Company; iv. According to the information and explanations given to us and on the basis of our examination of the records of the company, the Company has complied with the provisions of section 186 of the Act, with regard to the investments held.

As the company has not granted any loan to Directors or to the parties wherein Directors are interested provision of section 185 is not applicable to the company. v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits or amounts which are deemed to be deposits within the meaning of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder to the extent notified, hence, reporting under clause (v) of paragraph 3 is not applicable; vi. According to the information and explanations given to us, the maintenance of cost records under section 148(1) of the Act has not been prescribed and as such, hence, reporting under clause (vi) of paragraph 3 of the Order is not applicable; vii. According to the information and explanations given to us and on the basis of our examination of the books of accounts, and records: a. The Company has generally been regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, duty of customs, goods and services tax, cess and other statutory dues to the appropriate authorities. There are no undisputed statutory dues outstanding as at 31st March 2024 for a period of more than six months from the date they became payable except for the followings:

(Rs. in lakhs)

b. The details of sales tax, service tax, duty of excise, goods and service tax, value added tax, entry tax and other statutory dues which have not been deposited on account of dispute and the forum where the dispute is pending as on 31st March 2024 are as under:

(Rs. in lakhs)

viii. According to the information and explanations given to us and on the basis of examination of the records of the company, the company has not surrendered or disclosed any transactions, previously unrecorded in the books of accounts, as income during the year in the tax assessments under the Income Tax Act, 1961. Accordingly, the requirement to report on clause 3(viii) of the Order is not applicable to the Company;

(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company has defaulted in repayment of loans or other borrowings and interest thereon to the banks, financial institutions and other lenders during the year, accordingly, the period and amounts of defaults are as hereunder: i. The below table discloses the default of the company in repayment of Term loans:

(Rs. in Lakhs)

*Up to 21st October 2021 i.e., date of initiation of CIRP ii. The below table discloses the default of the company in repayment of CC and Working Capital loans (including Letter of Credit devolved in the earlier years):

(Rs. in Lakhs)

iii. The below table discloses the default of the company in payment of interest on term loans availed by the Company:

(Rs. in Lakhs)

*Up to 21st October 2021 i.e., date of initiation of CIRP iv. The below table discloses the default of the company in payment of interest on working capital loans availed by the Company:

Annexure A to the Independent Auditors Report

*Up to 21st October 2021 i.e., date of initiation of CIRP v. The below table discloses the default of company in redemption of Debentures issued to Life Insurance Corporation of India:

(Rs. in Lakhs)

vi. The below table discloses the default of the company in payment of interest on Debentures availed by the Company:

(Rs. in Lakhs)

*Up to 21st October 2021 i.e., date of initiation of CIRP

Note: Above mentioned default dues have not been repaid subsequently till the date of this audit report.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been declared a willful defaulter by any bank or financial institution or other lender; (c) According to the information and explanations given to us and on the basis of our examination of the records of the company, no term loans has been availed by the Company and accordingly, reporting under paragraph 3(ix)(c) of the Order is not applicable; (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 the Company has not availed any funds on short-term basis and accordingly, reporting under paragraph 3(ix)(c) of the Order is not applicable; (e) The Company does not have any Subsidiary, Associate or Joint Venture, hence, reporting under clause (ix)(e) of paragraph 3 of the Order is not applicable;

(f ) The Company does not have any Subsidiary, Associate or Joint Venture, hence, reporting under clause (ix)(f ) of paragraph 3 of the Order is not applicable; x. (a) The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, clause 3(x)(a) of the Order is not applicable to the Company; (b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, clause 3(x)(b) of the Order is not applicable to the Company; xi. (a) During the course of our examination of books of accounts and records carried out in accordance with generally accepted auditing practices in India and according to the information and explanation given to us, we have neither come across any instance of material fraud by the Company or material fraud on the Company nor have we been informed of any such cases by the management;

(b) According to the information and explanations given to us and based on our examination of the books and records of the Company, no report under sub-section (12) of Section 143 of the Act has been filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government. Accordingly, reporting under clause (xi)(b) of paragraph 3 of the Order is not applicable to the Company; and (c) According to the information & explanations and representations by the management and based on our examination of the books of account and other records of the Company, no whistle blower complaints received during the year (and up to the date of report) by the company. Accordingly, reporting under clause (xi)(c) of paragraph 3 of the Order is not applicable to the Company. xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company, hence reporting under clause (xii) of paragraph 3 of the Order is not applicable; 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 are in compliance with sections 177 and 188 of the Act, where applicable, and details of such transactions have been disclosed in the financial statements as required by the applicable Indian Accounting Standards; xiv. (a) The Company has appointed a firm of Chartered Accountants to carry out the internal audit of the Company. In our opinion and according to the information and explanation given to us, the internal audit system is commensurate with the size and nature of its business; and (b) We have considered, during the course of our audit, the reports of the internal auditor 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 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 the company has not entered into any non-cash transactions with directors or persons connected with him and hence, reporting under clause (xv) of paragraph 3 of the Order is not applicable; xvi. According to the information and explanations given to us and based on our examination of the books and records of the Company: (a) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934); (b) The Company has not conducted any Non-Banking Financial or Housing Finance activities during the year without obtained a valid Certificate of Registration (CoR) from the Reserve Bank of India as per the Reserve Bank of India Act, 1934; (c) The Company is not a Core Investment Company as defined in the Core Investment Companies (Reserve Bank) Directions, 2016, as amended from time to time, issued by the Reserve Bank of India. Accordingly, the requirement to report on clause 3(xvi)(c) of the Order is not applicable to the Company; (d) Based on the representations received 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. xvii. On the basis of our examination of books of accounts and according to the information and explanation provided to us by the management, the Company has not incurred cash losses in the current financial year however, the company had incurred cash loss of Rs. (12,230) lakhs in the immediately preceding financial year; xviii. There has not been any resignation of the statutory auditors during the year, hence, reporting under clause (xviii) of paragraph 3 of the Order is not applicable; xix. According to the information and explanations given to us and based on the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the

financial statements, the auditors knowledge of the Board and the Management plans and based on our examination of the evidences, we are of the opinion that material uncertainty exists as on the date of the audit report, on the ability of the Company in 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; (Refer Note no 2.64 to the financial statements and point no. (b) of Basis for Qualified Opinion paragraph & clause 3(ix) of this Report). xx. The Company has incurred losses in the three immediately preceding financial years, as such it is not required to spend any money on account of Corporate Social Responsibility u/s 135 of the Act, hence, reporting under clause (xx) of paragraph 3 of the Order is not applicable; xxi. The reporting under paragraph 3(xxi) of the Order is not applicable as the Company does not have any Subsidiary, Associate and Joint Venture.

(Referred to in paragraph 2 A (h) under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of Hindusthan National Glass & Industries 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 Hindusthan National Glass & Industries Limited ("the Company") as of 31st March 2024 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 WITH REFERENCE TO FINANCIAL STATEMENTS

The Companys Directors and RP are responsible for establishing and maintaining internal financial controls based on the internal control with reference to financial statements 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 (hereinafter referred to as the "Guidance Note") issued by the Institute of Chartered Accountants of India (hereinafter referred to as the "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 Act.

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 issued by ICAI and the Standards on Auditing specified under section 143(10) of the Act, 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 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 the 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 the 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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

A companys internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

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

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 respect to financial statement and such internal financial controls with reference to financial statements were operating effectively as at 31st March 2024, 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.