mideast int stl Auditors report

To The Members of Mideast Integrated Steel Limited

Report on the audit of standalone Financial Statements Qualified Opinion

1. We have audited the accompanying standalone financial statements of M/s Mideast Integrated Steel (" the Company") which comprises the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (Including other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and the summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").
2. 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 standalone 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 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("IndAS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and total comprehensive loss (comprising of the lossand other comprehensive loss), changes in equity and its cash flows for the year ended on thatdate.

Basis for Qualified Opinion

3. We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone 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 ofIndia(ICAI) together with the independence requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAls Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financialstatements.

Qualifications in the Audit Report

1. The Company have Property, Plant and Equipment (PPE) amounting to Rs. 630.69 crores as on 31st March 2023against which only list of assets have been provided and we have relied upon the values of the assets provided by the management. Periodical Physical verification has not been carried out. We have not verified the assets physically. Further, the Plant is not in operation for more than 4 year due to which the recoverable amount may be less than the carrying amount of PPE and also company has not performed the impairment testing as per Ind AS-36.Hence, we are not able to ascertain the carrying value of PPE and depreciation charged for the year. However, the management has provided the certified amount of WDV amounting to Rs. 630.69 crores as on 31.03.2023.
2. Company have fixed assets under capital work in progress amounting to Rs 24.46 crores as on 31st March 2023 which has not been capitalized since more than 6 years as the company is unable to complete the project.
3. The company has an investment of Rs. 179.88 crores in its subsidiary MaithanIspat Ltd. Management has not perform the impairment testing, Hence we are unable to comment on the carrying value as at the balance sheet date and the consequential impact on the profit/loss for the year had the company performed such impairment assessment. However as per the latest audited financials, the MaithanIspat Ltd has shown significant growth in the revenue for the year ended 31-3-23.
4. Company has inventory amounting to Rs. 56.50 crores as on 31st March 2023 which includes inventory of Raw Materials, Finished Goods and Stores and Spares Stock. Due to non- availability of sufficient information regarding quantity and value of inventory we are unable to comment upon the correctness of reported value of inventory. However, the company provided the certificate of physical verification of inventory by the management amounting to Rs. 56.50 crores as on 31March 2023.
5. Company has total receivable of Rs 36.98 Crores (RP Receivable Rs. 26.11 Crores (Maithan

24.57 crores)), out of which major receivables has no movement. However, the company has neither made any provision for non- moving debtor nor initiating any litigation. Also, the impairment testing has not been performed, hence we cannot comment upon the actual recoverability from the reported trade receivable. Further, the balance confirmation has also not been received.

6. Balance confirmations have not been provided to us for bank accounts, loans and fixed deposits. However, in some cases company has provided the bank statements for our review. Further, physical copies of deposits has not been provided by the company. Hence, we cannot comment upon the genuineness of the deposits.
7. Further, The UCO Bank A/c no -17840210002803 has been closed by the Company in July2021, however, the books of accounts still have the bank ledger along with the balance of Rs. 136466/.
8. There is an unpaid dividend amount of Rs 2.5 crores which pertains to financial year 2013-14. The same should have been transferred into Investor Education and Protection Fund, however, has not been done by the Company. This amount is yet kept in the Unpaid Dividend account with the bank.
9. During the Financial year the company has had transactions with its related parties, and has a net inter-company receivables being loans and advances given amounting to Rs.231.15 Crores as at 31st March 2023. The management has not carried out the impairment assessment as required by Ind AS 36.

Hence, we cannot comment on the carrying value of these receivables, along with the related impairment, if any, and consequential impact thereof on the profit/loss for the year, had the Company performed such impairment assessment.

10. Balances of Debtors, creditors, advances received from customers &advances given to supplier and deposits received & given are subject to confirmations and reconciliations. We could not verify the reported numbers due to non-availability of sufficient information and records. Hence, we cannot comment upon the correctness of the reported numbers..
11. As on 31st March, 2023 the company has Balances with government authorities amounting to Rs. 14.01 crores on account of deposit under Excise Act, VAT and Service Tax. In this regard, we have not been provided supporting document. Hence, We cannot comment on the deposits and its recoverability.
12. The has taken External Commercial Borrowing (ECB) from Banyantree Bank Ltd, Mauritius which became bad due to default in the repayment of loan and interest thereof. The Banyantree bank (Now Silver bank) has filed case before the NCLT against the MISL As per the NCLT order dated 31.05.2023, the MISL has agreed to pay the entire claimed amount of Rs. 12.97 crores plus interest and penalty therein. However, MISL has not made the provision for the difference amount which is required to be paid in addition to payable amount shown in the books.
13. The company has Unsecured loan from promoters amounting to Rs. 33.87 crores as on 31st March 2023, out of which Rs.27.97 crores is standing since long and no any details or information has been provided for our review and verification. Further, the terms and condition of the loan, repayment terms and loan agreement has not been provided.
14. MISL has advances received from customers amounting to Rs. 387.35 Crores(RP Advances Rs.

1. 72 Crores) as on 31st March, 2023. Out of which no movement in the major proportion of advances for more than 365 days. Since, the advances has not been appropriated against supply of goods or provision of services within a period of three hundred and sixty five days (365 days) from the date of acceptance of such advance. Hence, the same will be treated as deposit as per the As per the rule 2 (c) (xii) (a) of companies Act.

However, management has given certificate stating that advance amounting to Rs. 372.68 crores is under dispute and case is under sub-judice before Honble High Court of Mumbai.

However, company has neither complied with the provision of deposits u/s 73 to 76 of Companies Act, 2013 nor met the disclosure of deposit in the form DPT-3, which needs to be file before ROC.

1. The company has shown provision for employee benefit expenses mainly Gratuity and Leavee Encashment amounting to Rs. 5.02 crores as on 31st March 2023 against which basis of such provision and relevant document of employees has not been provided. Further, during the year company has reversed the provision of Rs. 3.08 crores out of the provision reported as on 31st March, 2022 amounting to Rs. 6.75 crores for Gratuity and Rs. 1.38 crores for leave encashment. However, basis for the reversal has not been provided for our verification.

Company does not have the actuarial valuation report. Hence, we cannot comment upon the correctness of reported numbers of the provisions and reversal thereof during the year.

2. The company has Statutory due payable amounting toRs. 80.19 crores as on 31st March, 2023.Company has not provided the sufficient information and supporting details against the liability of statutory dues, due to which we cannot comment upon the correctness of the reported numbers. Further, due to non-availabilityadequate information of statutory we cannot comment upon the correctness of the reported Statutory liabilities in the financials.
3. The company is generally not regular in depositing the statutory dues and making the compliance on time.The Goods & Service Tax GST) returns have not been filed by the Company since November, 2020. Further, due to non-availability of proper records of filings of TDS, ESI/PF and other statutory returns, we cannot comment upon the actual position of default and future liability on account of such defaults in the filing of statutory returns.
4. Disputed dues in respect of Central Excise, Service Tax, Sales Tax, Entry Tax, Income Tax & GST have not been deposited with appropriate authorities and no provision has been made for the same in the financials. Undisputed statutory dues in respect of Provident fund, employees state insurance, Income Tax, TDS, Sales Tax, Service tax, Custom duty, Excise duty, Value added tax, Cess, GST and other statutory dues, if any, applicable to it, has not been deposited with the appropriate authorities. Further The Goods & Service Tax (GST) returns have not been filed by the Company since November 2020. We could not verify the details of statutory dues, due to non-availability of sufficient documents and information for the reporting period.
5. In pursuance to the judgement dated 2nd August, 2017 of Honorable Supreme Court of India, in the matter of Writ Petition (Civil) No. 114 of 2014 between Common Cause v/s Union of India & Others, there is a compensation imposed of Rs 924.75 crores along with interest on the company for excess production of Iron Ore during 2000-01 to 2010-11. The Company was supposed to make the payment of this compensation along with the interest on or before 31st December 2017, failing which the mines of the Company are closed down wef 1st January 2018. The Company has filed a Curative petition (Civil) on 28th March 2018, before the Honorable Supreme Court of India challenging the Judgement and which we have been informed is still pending. Hence, the company has not made provision for the same in the books of accounts. However, in our opinion since this compensation has been crystalized and accordingly, a provision for this liability should have been made in the books. Management has confirmed over mail that Rs. 415.79 crores has been deposited against the order.

Further, based on the financials company is not having any business activity to generate the revenue in future and also after considering the provision for the above liability the net worth of the company would be negative, considering the same company may not be a going concern.

6. The company has a net deferred tax liability in the books amounting to of Rs 73.95 crores ason 31st March 2023 against which thebasis for the liability and supportingdocument/information has not been provided, due to which we cannot comment upon thecorrectness of the same.
7. Company has appointed Internal Auditor of the company vide letter dated 10-12-2022 as per the requirement of the Companies Act, read with Rule 13, However Internal audit reports were not made available to us for our review.
8. The expenses for Finance cost, Water charges and Electricity duty etc have not been fully provided for, in the books of accounts during the year, by the Company. In the absence of the quantum of these expenses, we are unable to determine the impact on the profit for the Company, had these expenses been fully provided for in the books for the year.

Emphasis of Matter

1. An application under Section 9 of the Arbitration and Conciliation Act, 1996 (as amended) has been filed by SREI Equipment Finance Limited, in August 2021, in relation to a Loan-Cum- Hypothecation Agreement dated 8 September 2016, whereby the Company had taken a loan for purchase of a Metso Crusher 600 TPH Engine amounting to Rs.7.92 crores. The petitioner has claimed an outstanding sum of Rs.4.40 crores in the said application. The Companys books of accounts show a liability of Rs 3.60 crores as at 31st March, 2023. The matter was pending before Sole Arbitrator and by an order dated 11th August, 2023 the Learned National Company Law Tribunal (Kolkata Bench) has allow a Resolution Plan filed by one NARCL (National Asset Reconstruction Company Limited ). The matter is to beard in the next hearing and the date of next hearing has not been received.
2. We draw attention to Note 30 of the financials, which describe Rs 718 crores plus interest, due to a party in respect of unreconciled amounts as per an arbitration award. The Company is disputing most of such claims and has filed an appeal against the arbitration award before the Bombay High Court. The same has been admitted by the High Court in December 2019. The matter is subjudice.
3. We have relied on the list of legal cases and the contingent liability, as given to us by themanagement. We are not aware of, nor have been informed of any other matter filed against thecompany. Further, company has provided guarantee in respect of obligations of a subsidiary company amounting to Rs. 782.95 crores against which actual financial position of the subsidiary has not been provided. Company has conveyed that, One Time Settlement (OTS) has been done with the consortium of Banks led by State Bank of India relating to the loan / facility that was availed by Maithan.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. There are no matters determined to be the key audit matters to be communicated in our report.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report. Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include m standalone financial statements and our auditors reportthereon. Our opinion on the standalone financial statement does not cover the other information and we do not express any form of assurance conclusion thereon.

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

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

Since we have not been provided with the other information we will not be able to report on the same.

Responsibility of Management and Board of Director for the standalone annual financial results

These standalone annual financial results have been prepared on the basis of the standalone Ind AS financial statements.

The Companys Management and the Board of Directors are responsible for the preparation and presentation of these standalone annual financial results that give a true and fair view of the net profit/(loss) and other comprehensive income and other financial information in accordance with the recognition and measurement principles laid down in Indian Accounting Standards prescribed under Section 133 of the Act and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone annual financial results that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone annual financial results, the Management and the Board of Directors are 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Annual Financial Results

Our objectives are to obtain reasonable assurance about whether the standalone annual financial results as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone annual financial results.

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

• Identify and assess the risks of material misstatement of the standalone annual financial results, 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 whether the Company has adequate internal financial controls with reference to standalone annual Ind AS 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 in the standalone annual financial results made by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors 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 ability of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone annual financial results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone annual financial results, including the disclosures, and whether the standalone annual financial results represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone annual financial results that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone annual financial results 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 standalone annual financial results.

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

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

Report on Other Legal and Regulatory Requirements

0. As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by Central Government of India in term of sub-section (11) of Section 143 of the Companies Act, 2013, we enclose in "Annexure A" a statement on the matter specified in paragraphs 3 and 4 of the order.
1. As required by Section 143(3) of the Act, based on our audit, subject to the qualified opinion give above, we report that:

1. 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.
2. 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.
3. The Balance Sheet, the Statement of Profit and Loss including other comprehensive income, Statement of change in Equity and Cash Flow Statement dealt with by this Report are in agreement with the books of account.
4. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act, read with Rule 7 of the Company (Accounts) Rule, 2014.
5. On the basis of written representations received from the directors as on 31 March, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2023, from being appointed as a director in terms of Section 164(2) of the Act.
6. With respect to the adequacy of the internal financial controls over financial reporting of the company and operating effectiveness of such controls, refer to our separate report in "Annexure B".
7. 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, we report as under with respect to other matters to be included in the Auditors Report in accordance with the provision of section 197 of the Act.

8. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rule, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us, subject to the qualified opinion given above:-

i. The Company has disclosed the impact of pending litigations on its financial position in the standalone financial statement.

material foreseeable losses, if any, on long-term contracts including derivative contracts.

iii. There has been a delay in transferring amounts to the Investor Education and Protection Fund by the Company, of Rs. 2.50 crores pertaining to the unpaid dividends for the financial year 2013-14.

iv.a. The management has represented that, to the best of its knowledge and belief, to the standalone financial statements, 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 Intermediaries 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; and

b.The management has represented, that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, 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;

1. Based on such audit procedures, we have considered reasonable and appropriate in the circumstances, nothing has come to their notice that has caused them to believe that the representations under sub- clause (i) and (ii) contain any material mis-statement.

5. The Company has not declared and paid any dividend during the year. Therefore, reporting in this regard is not applicable to the Company.

For Ashok Shyam & Associates Chartered Accountants

Firm Registration No011223N

(Ashok B Gupta)

Partner M. No.089858

Date :07.12.2023 UDIN: 23089858BGUZEW5689

Place:New Delhi

Annexure - A to The Independent Auditors Report – 31^st March, 2023

(Referred to in our report of even date)

1. (a)(A)

(B)

The company has not provided the proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

The company does not have any intangible assets.

(b) As per the information and explanation given to us, the property, plant and equipment have not been physically verified by the management during the year.

(c)

(d)

We have not been able to verify the title deeds of all the immovable properties. Further, certain assets are charged against the loans taken by the Company. However, details were not available for our verification.

The company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets, if any, or both during the year.

(e) As per the information and explanation given to us, no proceedings have been initiated or are pending against the company for holding any Benami Property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. However, we have not been able to verify the same separately.

2. (a)As per the management certificate provided to us, Inventory has been physically verified by the management during the year.

(b) During the year, the company has not been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks or financial institutions on the basis of security of current asset.

3. As per the information and explanation given to us, during the year, the company has not made investments in, nor has provided guarantee or security, however has granted loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties.

The aggregate amount during the year, and balance outstanding at the balance sheet date with respect to such loans or advances to subsidiaries, joint ventures and associates and Other parties is as follows:

	Loans/ Advances (In crores)	Advances in nature of loans/ advances (in crores)
Agreegate amount granted/provided during the year

cellpadding=2>

Subsidiary	Nil	Nil
Other related party	Nil	0.12
Others	Nil	NIL
Balance Outstanding as at balance sheet date in respect of above cases
Subsidiary	Nil	NIL
Other related party	Nil	231.15
Others	Nil	Nil

4. (iv)

According to information and explanation given to us, the company has, in respect of loans, investments, guarantees, and security provisions, complied with section 185 and 186 of the Companies Act, 2013.

5. There aredeposits (advance from customers against which supply of goods or provision of services has not been provided within a period 365 days) accepted by the company. Hence the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules are applicable but the same are not complied with.
6. Pursuant to the rules made by the Central Government, the maintenance of Cost Records have been prescribed us. 148(1) of the Companies Act, 2013. We are of the view that prima face the prescribed accounts and records have not been maintained. However, Plant is not in operation for more than 4 years.
7. (a) (a) According to the books and records as produced and examined by us in accordance with generally accepted auditing practices in India and also management representations,undisputed statutory dues in respect of Provident fund, employees state insurance, Income Tax, Sales Tax, Service tax, Custom duty, Excise duty, Value added tax, Cess, GST and other statutory dues, if any, applicable to it, are generally not deposited with appropriate authorities.

(b) According to the records of the Company, the disputed dues in respect of Central Excise, Service Tax, Sales Tax, Entry Tax, Income Tax & GST as at March 31st, 2023 have not been deposited with appropriate authorities and no provision has been made for the same in the financials. Details are as follows:

	31.03.2023 (in cr)	31.3.2022 (in cr)
(i) Central Excise, Customs and Service Tax*	133.019	131.187
(ii) Sales Tax and Entry Tax*	26.991	27.611
(iii) Income Tax*	5.776	5.776
(iv) GST*	90.230	90.230

*Note: The number reported in the above table has been provided by the company which are not verified by us due to non- availability of complete supporting details.

8. As per the information and explanation given to us by the management, there are no transactions which are not recorded in the books of accounts. Further, as informed by the management, nothing has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961), however, we have not been able to verify the same independently and have relied on the managements confirmation.
9. (a)The company has defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender. The details are as under:-

Note: The number reported in the above table has been provided by the company which are not verified by us due to non- availability of complete supporting details.

1. In the absence of information, we are unable to comment if the company has been declared a wilful defaulter.
2. As per the information and explanation given to us, no term loans were raised during the year, hence this clause is not applicable.
3. As per the information and explanation given to us, no funds has been raised during the year. Hence, this clause is not applicable.
4. The company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures
5. The company has not raised loans during the year on the pledge of securities held in its subsidiaries. joint ventures or associate companies.

1. (a)During the year, there were no moneys raised by way of initial public offer or further public offer (including debt instruments), hence the clause is not applicable.

(b) The company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year.

2. (a)During the course of our examination of the books of account carried in accordance with the generally accepted auditing standards in India, we have neither come across any instance of fraud on or by the Company, either noticed or reported during the year, nor have we been informed of such case by the Management.

1. No report under sub-section (12) of section 143 of the Companies Act has been filed by us in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government;
2. As per the information and explanation given to us by the management, there are no whistleblower complaints received during the year by the company. We have independently not verified the same and have relied on the management representation.

1. The Company is not a Nidhi Company, hence the provisions of this clause are not applicable.
2. In As per the information and explanation given to us, except for the effects of the matter described in the Basis for Qualified Opinion section of our report and in our CARO report, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, where applicable, and the details have been disclosed in the financial statements, etc., as required by the applicable accounting standards.
3. As per Section 138 of the Companies Act, read with Rule 13, the Company, for the financial year 2023, is required to have an internal audit system in place. Company has appointed the internal auditor but the internal audit report has not been provided to us.
4. As per the information and explanation given to us, the company has not entered into any non-cash transactions with directors or persons connected with him.
5. (a) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934).

1. The company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India.
2. As per the information and explanation given to us, the Group does not have more

than one CIC as part of the Group.

1. The company has incurred cash losses amounting to Rs. 105.51 crores in the reporting financial year.
2. There has been no resignation of the statutory auditors during the year. However, previous auditors was retired during the year.
3. On the basis of the financial ratios, aging and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, in the capacity of the Statutory Auditor, we are of the opinion that there may be material uncertainty which exists as on the date of the audit report that the company may not be capable of meeting its liabilities existing at the date of the balance sheet as and when they fail due within a period of one year from the balance sheet date.
4. As per the information and explanation given to us, there is no unspent amount to be transferred to a Fund specified in Schedule VII to the Companies Act within a period of six months of the expiry of the financial year in compliance with second proviso to sub- section (5) of section 135 of the said Act. Hence the clause is not applicable.

For Ashok Shyam & Associates Chartered Accountants

Firm Registration No.01223N

(Ashok B Gupta) Partner

M. No.089858

UDIN:089858BGUZEW5689 Date :07.12.2023

Place : New Delhi

Annexure - B to The Independent Auditors Report – 31^st March, 2023 (Referred to in our report of even date)

REPORT ON THE INTERNAL FINANCIAL CONTROLS U/S143 (3) (I) OF THE ACT

We have audited the internal financial controls over financialreporting of Mideast Integrated Steels Limited (the ‘Company) as of31^stMarch, 2023 in conjunction with our audit of the financial statements of the Company for the year ended on thatdate.

MANAGEMENTS RESPONSIBILITY FOR INTERNALFINANCIAL CONTROLS

The Companys management is responsible for establishingand maintaining internal financial controls based on theinternal controls over financial reporting criteria establishedby the Company considering the essential components ofinternal controls stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issuedby the Institute of Chartered Accountants of India ("ICAI").These responsibilities include the design, implementationand maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficientconduct of its business, including adherence to Companyspolicies, the safeguarding of its assets, the prevention anddetection of frauds and errors, the accuracy and completenessof the accounting records, and the timely preparation of reliablefinancial information, as required under the Companies Act, 2013 ("the Act").

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on the Companysinternal financial controls over financial reporting based onour audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standardson Auditing, issued by ICAI and deemed to be prescribed undersection 143(10) of the Act to the extent applicable to an auditof internal financial controls, both applicable to an audit ofInternal Financial Controls and, both issued by the ICAI. ThoseStandards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if such controls operated effectively in allmaterial respects.Our audit involves performing procedures to obtain auditevidence about the adequacy of the internal financialcontrols system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls overfinancial reporting included obtaining an understanding of internal financial controls over financial reporting, assessingthe risk that a material weakness exists, and testing andevaluating the design and operating effectiveness of internalcontrols based on the assessed risk. The procedures selecteddepend on the auditors judgment, including the assessment ofthe risks of material misstatement of the financial statements,whether due to fraud or error.We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on theCompanys internal financial control system over financialreporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVERFINANCIAL REPORTING

A companys internal financial controls over financial reportingis a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation offinancial statements for external purposes in accordance withgenerally accepted accounting principles in India ( The " India GAAP).

A companys internalfinancial control over financial reporting includes thosepolicies 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 authorization 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 FINANCIALCONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controlsover financial reporting, including the possibility of collusionor improper management override of controls, materialmisstatements due to error or fraud may occur and not bedetected. Also, projections of any evaluation of the internalfinancial controls over financial reporting to future periodsare subject to the risk that the internal financial controls overfinancial reporting may become inadequate because of changesin conditions, or that the degree of compliance with the policiesor procedures may deteriorate.

OPINION

In our opinion, the Company has, in all material respects, an adequate internal financial control system over financial reporting however they need to be strengthened and comprehensively documented, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by ICAI.

For Ashok Shyam & Associates Chartered Accountants

Firm Registration No 011223N

(Ashok B Gupta) Partner

Date :07.12.2023 M. No.089858

Place :New Delhi UDIN: 089858BGUZEW5689