nova iron steel ltd Auditors report

To the Members of Nova Iron and Steel Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the standalone financial statements of Nova Iron and Steel Limited ("the Company"), which comprise the balance sheet as at 31 March 2023, and the statement of Profit and Loss, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant 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 of Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2023, and its profit, changes in equity and its cash flows for the year ended on that date.

Basis of Qualified Opinion

a) The Company has not been able to produce property, plant and equipment register with proper records like date of purchase, useful life. Further, the management, during the year, has not conducted physical verification of property, plant and equipment. In the absence of such physical verification exercise, we cannot comment on the reconciliation of assets register with books of account and its consequential effects on the carrying value of property, plant and equipment of the Company.

b) The Company has not established any operating procedure to identify suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006). In the absence of sufficient information, we cannot comment on the disclosure made under Note No. 23 of the accompanying financial statements regarding dues to suppliers registered under MSMED Act, 2006 and possible effects, if any, on financial results of the company on account of interest on delayed payments to such suppliers.

c) The Company has not facilitated us with direct confirmations from outstanding trade receivables of Rs. 80.68 lakhs, trade payables of Rs. 8,630.32 lakhs, pending security deposits of Rs. 376.74 lakhs and advances to suppliers of Rs. 3,541.46 lakhs including capital advances of Rs. 294.61 lakhs. Accordingly, we cannot comment on the carrying value of such items in the financial statements and consequently unable to form an opinion so far as these balances are concerned.

d) The Company is required to recognise loss allowance for expected credit loss on financial assets based on Expected Credit Loss (ECL) approach of lifetime expected credit losses or 12-months expected credit losses depending on credit risk. The Company has not measured such expected credit losses on financial assets. Further, so far as trade receivables are concerned, the company has not prepared any provision matrix to determine loss allowances on such trade receivables. Hence, we cannot comment on the impact of non-measurement loss allowances, if any, on the accompanying financial statements.

e) We draw your attention to Note No. 17 of the accompanying financial statements with regard to borrowings. The companys outstanding borrowings as at 31-March-2023 are Rs. 33,070.88 lakhs in respect of which confirmations from the respective lenders have not been facilitated. Further, due to non-availability of loan agreements and other audit evidence, we cannot comment on the adjustments, if any, that may be required to carrying value of the aforesaid balances in the financial statements along with impact on finance costs, classification into current and non-current borrowings, secured and unsecured borrowings and related disclosures as required under Schedule - Ill to the Companies Act, 2013 and applicable Ind AS.

f) We draw your attention to Note No 8 of the accompanying financial statements regarding loan given to Shivalikview Steel Trading Pvt. Ltd. We have not been facilitated with loan agreement (which provides for terms and conditions, purpose, interest rate, repayment schedule) and confirmation of carrying amount of such loan. In the absence of sufficient audit evidence, we cannot comment on the carrying value of such loan, interest income and disclosure u/s 186(4) of the CA, 2013.

g) We draw your attention to Note No. 17 of the accompanying financial statements of the company with respect to secured borrowings of Rs. 9,577.18 lakhs outstanding as at 31-March-2023. The lenders approached "sole arbitrator" in the event of default in repayment of loan by the company. The sole arbitrator made an award on 19-May-2022 directing the company to repay Rs. 80.00 lakhs per month and Rs. 70.00 lakhs per month to Flawless Holdings and Industries Limited and Evergrowing Iron and Finvest Limited respectively, to pay penal interest @ 3% per annum over and above original interest rate of 8.50% per annum. However, the company has not complied with such award as it has not repaid the sums as directed under award so made.

h) The companys borrowings from related party M/s Bhushan Power and Steel Limited, are carried at Rs. 15,158.79 lakh. The management is contesting the borrowings and disputing the payment of the same. The management could not arrange sufficient document / information in support of the borrowing. Further, we have not been facilitated with direct external confirmation. However, we have been provided with the demand notice received from the lender. In the absence of sufficient and appropriate audit evidence, we are unable to comment on the possible effects that borrowings may have upon finance cost on account of non-recognition of interest expense on such borrowings and contingent liability on account of the dispute.

i) We draw your attention to Note No. 48.05 of the accompanying financial statements with regard to the impairment of non-financial assets. The Company has not produced the basis for how it has made assessment of impairment testing at the end of the reporting period. Therefore, we cannot comment on the possible effect of provision for impairment, if any, on the financial results of the company.

j) The Company has not established any operating procedure to identify transaction with companies which have been strike off under CA, 2013. Therefore, in the absence of sufficient information, we cannot comment on the appropriateness of disclosure made under Note No 45(b) of the accompanying financial statements.

k) We draw your attention to Note No 48.04 of the accompanying financial statements with respect to vacant office of Chief Financial Officer (CFO). The Company has not appointed CFO which is mandatory required to be appointed u/s 203 of CA, 2013. Further, the company shall attract penalties / fine u/s 203(5) of CA, 2013 for contravention of aforesaid legal compliance, the quantum of which cannot be ascertained as the contravention is continuous in nature.

l) We draw your attention to Note No 10 of the accompanying financial statements with respect to security deposits of Rs. 389.74 lakhs provided by the company and Note No 19 of the accompanying financial statements with respect to security deposits of Rs. 100.99 lakhs received by the company.

The Company, in the absence of sufficient information, were not able to comply with the requirements of Ind AS 109 in measuring such deposits at amortised cost. Accordingly, we cannot comment on the carrying amount of these balances and their consequential impact on financial position of the company.

m) We draw your attention to Note No 34 of the accompanying financial statements with respect to pending litigations and contingent liabilities of the Company. The Company has not provided us with the communication with its external legal counsel for pending litigations. Accordingly, in the absence of sufficient information, we cannot comment on the possible effects of pending litigations against the company including necessity of provisions required to be made.

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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

a) We draw your attention to Note No. 41(e) of the accompanying financial statements wherein j valuation technique used to determine fair value has been disclosed. The Company has not conducted any specific valuation exercise to determine fair value in accordance with Ind AS 113 rather used valuations conducted as per Rule 11UA of the Income Tax Rules, 1962.

b) We draw your attention to Note No 13(a) of the accompanying financial statements which describes that one of the bank accounts of the Co. is dormant. Accordingly, we have not been provided bank statement and balance confirmation of the same. In the absence of such information, we cannot comment on the adjustments, if any that may be required to carrying value of such bank balance.

c) We draw your attention to Note No 5(e) of the accompanying financial statements with respect to capitalisation of certain items of stores and spares by the Company. The Company has not provided us with the details of such items and the basis on which capitalisation has been made in current year.

Our opinion is not modified in respect of these matters.

Material uncertainty relating to going concern

We draw attention to Note No 47 in the financial statements with regard to the assessment of going concern of the company. The Companys accumulated losses are Rs. 8,882.03 lakhs as at 31 March, 2023 and, as of that date, the Companys current liabilities exceeded its current assets by Rs. 7,753.80 lakhs giving rise to apprehension of the companys ability to maintain going concern. Nevertheless, the financial statements of the company have been prepared on going concern assumption for the reasons stated in the note supra. Our opinion is not modified in this respect.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter	How our audit addressed the key audit matter
a) Assessment of litigations and related disclosure of contingent liabilities	Our audit procedure included the followings:
Refer to Note No 34 to the standalone financial statements which describes contingent liabilities.	(a) We understood, assessed the effectiveness of controls surrounding the assessment of litigations.
As at 31 March 2023, the company has exposure towards litigations relating to various matters set out in the aforesaid notes.	(b) We discussed with management about the pending material litigations, their possible effects on the financial position of the company and their current status.
Significant management judgement is required to assess such matters to determine probability of occurrence of material outflow of economic resources and whether a provision should be recognised, or a disclosure should be made.	(c) We performed an independent exercise to identify possible material litigation which may not have been disclosed to us.
As the ultimate outcome of the matters are uncertain and the positions taken by the management are based on their best estimates and judgements, it is considered to be a key audit matter.	(d) We evaluated the managements assessment around those matters that are not disclosed or not considered as contingent liability.
	(e) We assessed the adequacy of the companys disclosure.
b) Arbitration award	Our audit procedures include the following:
Refer to Note No 17 of the accompanying financial statements, the Company has availed secured loans from Flawless Holdings and Industries Limited and Evergrowing Iron and Finevest Ltd (herein after called as "claimants").	(a) Review of award and other terms and conditions of the award;
The outstanding balances are Rs. 5,069.87 lakhs and Rs. 4,507.30 lakhs respectively.	(b) Competence of the sole arbitrator;
The company failed to repay the outstanding sum and the claimants invoked arbitration and appointed retired justice as sole arbitrator.	(c) adherence / compliance of the award so made; and
The arbitrator made a common award on 19- May-2022 and directed the company as follows:	(d) Effects of the non-compliance (if any) of the award so made.
(i) To repay Rs. 80.00 lakhs per month and Rs. 70.00 lakhs per month each to claimants;
(ii) To pay penal interest of 3% per annum till the full repayment of borrowings in addition to original interest rate of 8.5% per annum (effective interest rate 11.50%)
(iii) To register a charge with Registrar of the Company (RoC) on assets of the company.

Information Other than the Financial Statements and Auditors Report Thereon

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

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

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether 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 Standalone 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 standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the 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 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 Board of Directors is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the companys financial reporting process. Auditors Responsibilities for the Audit of the Financial Statements

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

As pari 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 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.

Report on Other Legal and Regulatory Requirements

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 Companies Act, 2013, we give in the "Annexure A" statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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, the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid Ind AS standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015 as amended, except for the departure from certain Indian Accounting Standard as disclosed under the aforesaid financial statements and related qualification under Basis of Qualified Opinion section of our report.

e) The observations or comments on the financial transactions or matters which may have adverse effect on the functioning of the company have been reported under Basis of Qualified Opinion and Emphasis of Matter section of our report.

f) On the basis of the 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.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure "B".

h) In our opinion, the management remuneration for the year ended 31 March, 2023 has been paid / provided by the company to its director in accordance with the provisions of Section 197 read with Schedule V to the Act.

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

(i) The Company has disclosed pending litigation under contingent liabilities under note no 34 of the aforesaid financial statements.

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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

(iv) (i) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the company or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(ii) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries; and.

(iii) Based on such audit procedures as 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 (iv) (i) and (iv) (ii) contain any material mis-statement.

(iv) The company has neither declared nor paid any dividend during the year.

(v) 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.

For and on behalf of

MNRS & ASSOCIATES

Chartered Accountants

FRN: 018340N

Neeraj Kumar Agarwal

Partner

M.No: 503441

UDIN; 23503441BGXYQU5670

Place: New Delhi

Date: 30 June 2023

Annexure A to the Independent Auditors Report of Even Date on the Standalone Financial Statements of Nova Iron and Steel Limited

Based on audit procedures performed for the purpose of reporting a true and fair view on the financial statement of the company taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that-

(i) (a) (A) The company is not maintaining proper records showing full particulars, including quantitative details and situation of property, plant, and equipment.

(B) The company does not have intangible assets. Accordingly, the provisions of clause 3(i) (a) (B) of the Order are not applicable.

(b) The property, plant and equipment have not been physically verified by the management of the company at reasonable intervals. Therefore, we cannot comment on the provisions of clause 3(i) (b) of the Order.

(c) The title deeds of all the immovable properties (other than properties where the company is a lessee and the lease agreements are duly executed in favour of the lessee) disclosed in note no. 5 to the standalone Ind AS financial statements are held in the name of the company, except those as indicated in the below mentioned cases as at 31^st March, 2023 for which title deeds/ lease arrangement are not in the name of the Company:

Description of property	Gross carrying value (In Rs. Lakhs)	Held in (he name of	Whether promoter, director or their relative or employee	Period held	Reason
Land	33.47	Mr Sunil Gupta	No	Mine 2012 till date	Not available
Land	160.87	Mr R.K. Rastogi	No	Since 2012 till date	Not available

(d) The company has not revalued its property, plant and equipment (including right-of-use assets) during the year ended 31^st March, 2023. Accordingly, the provisions of clause 3(i) (d) of the Order are not applicable.

(e) There are no proceedings that have been initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

(ii) (a) The inventories have not been physically verified by the management of the company at reasonable intervals. Therefore, we cannot comment on the provisions of clause 3(ii) (a) of the Order.

(b) The company has not been sanctioned any working capital limits during the year. Accordingly, the provisions of clause 3(ii) (b) of the Order are not applicable.

(iii) (a) During the year the company has provided loans to other parties and the details of which are given below:

Particulars	Amount (In Rs. Lakhs)
Aggregate amount granted/ provided during the year:	418.00
(i) Any other parties
Balance outstanding as at balance sheet date in respect of above cases:	491.16
(i) Any other parties

(iii) (b) The company has not provided us with sufficient audit evidences with respect to loans provided and investments made to ascertain terms and conditions of the transactions, repayment schedule, interest rates. Therefore, we cannot comment on the provisions of clause 3(iii) (b) of the Order.

(iii) (c) The company has not provided us with sufficient audit evidences with respect to loans provided by the Company. Therefore, we cannot comment on the provisions of clause 3(iii) (c) of the Order.

(iii) (d) The company has not provided us with sufficient audit evidences with respect to loans provided by the Company. Therefore, we cannot comment on the provisions of clause 3(iii) (d) of the Order.

(iii) (e) The company has not provided us with sufficient audit evidences with respect to loans provided by the Company. Therefore, we cannot comment on the provisions of clause 3(iii) (e) of the Order.

(iii) (f) The company has not provided us with sufficient audit evidences with respect to loans provided by the Company. Therefore, we cannot comment on the provisions of clause 3(iii) (f) of the Order.

(iv) The company has not provided us with sufficient audit evidences with respect to loans provided by the Company and investments made. Therefore, we cannot comment on the provisions of clause 3(iv) of the Order

(v) The company has neither accepted any deposits from the public nor accepted any amounts which are deemed to be deposits within the meaning of sections 73 to 76 of the Companies Act, 2013 and the rules made thereunder, to the extent applicable. Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) Maintenance of cost records has been specified by the Central Government u/s 148(1) of the Companies Act, 2013. Further, based on the communication with the cost auditor of the Company, the specified accounts and records have been made and maintain.

(vii) (a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues including Goods and Services Tax, provident fund, employees state insurance, income tax and any other statutory dues applicable to it, except certain statutory dues as below:

Name of the Statute	Nature of the Dues	Amount (In Rs Lakhs)	Period	Due Date	Date of Payment
Employee Provident Fund and Miscellaneous Provisions Act, 1952	Provident Fund	0.15	Sep-Oct, 2021	Oct-Nov, 2021	Unpaid
Employee Provident Fund and Miscellaneous Provisions Act, 1952	Provident Fund Demand payable in respect of summon	15.37	October, 2015 - March, 2021	January 2022	Unpaid
Goods and Services tax Act, 2017	IGST - on Reverse charge mechanism	6.38	April, 2022 - July 2022	May, 2022	Unpaid
Goods and Services tax Act, 2017	IGST payable	0.73	Feb - March, 2022	April, 2022	Unpaid
Goods and Services tax Act, 2017	CGST payable	0.61	Feb - March, 2022	April, 2022	Unpaid
Goods and Services tax Act, 2017	SGST payable	0.14	Feb - March, 2022	April, 2022	Unpaid

(b) There are no statutory dues as referred to in sub-clause (a) pending on account of any dispute except those mentioned hereunder:

Name of the Statute	Nature of the Dues	Amount (In Rs. Lakhs)	Period	Forum where dispute is pending
Excise Duty	MODVAT credit disallowed	72.62	AY 2004-05	CESTAT
Excise Duty	Demand	2.90	AY 2007-08	Central Commissioner of Excise
Excise Duty	Demand	57.58	Oct 1999 to Mar 2004	Central Commissioner of Excise
Excise Duty	Demand	126.70	April 2007 to July 2011	Central Commissioner of Excise
VAT	Demand	530.60	AY 2003-04	Additional Commissioner of Commercial Tax
VAT	Demand	594.08	AY 2004-05	Additional Commissioner of Commercial Tax
Entry Tax	Demand	5.05	AY 2006-07	Additional Commissioner of Commercial Tax
Income Tax	Demand	659.25	AY 2018-19	CIT(A)
Income Tax	Demand	299.05	AY 2017-18	CIT(A)
Income Tax	Demand	397.87	AY 2016-17	CIT(A)
Income Tax	Demand	0.59	AY 2014-15	CIT(A)
Income Tax	Demand	16.34	AY 1995-96	CIT(A)
Income Tax	Demand	298.87	AY 2007-08	CIT(A)
Income Tax	Demand	20.56	AY 1994-95	CIT(A)
Income Tax (TDS)	Demand	445.00	AY 2019-20	CIT(A)

(viii) There are no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961). Accordingly, the provisions of clause 3(viii) of the Order are not applicable.

(ix) (a) The Company has not provided us with sufficient audit evidences with respect to borrowings of the Company. Therefore, we cannot comment on the provisions of clause 3(ix) (a) of the Order except for defaults as below:

Nature of borrowings	Name of the lender	Amount not paid on due dale (In Rs. Lakhs)	Whether principal and interest	No. of days delay or unpaid	Remarks
Loans from related parties	Bhushan Power and Steel Limited	15,158.79	Principal and interest		Refer note 17 of the accompanying financial statements
Loan from other parties	Evergrowing Iron & Finvest Ltd.	205.24	Principal		Based on the arbitrage award made on the Company by the sole arbitrator.
Loan from other parties	Flawless Holdings & Ind. Ltd.	19.50	Principal		Based on the arbitrage award made on the Company by the sole arbitrator.
Loan from other parties	Baba Lease and Investments Pvt. Ltd.	217.30	Principal		Based on the application filed by the lender u/s 7 of the IBC, 2016.

(b) The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority. Accordingly, the provisions of clause 3(ix) (b) of the Order are not applicable.

(c) The company has not availed any term loan during the year. Accordingly, the provisions of clause 3(ix) (c) of the Order are not applicable.

(d) The company has not raised funds on short term basis during the year. Accordingly, the provisions of clause 3(ix) (d) of the Order are not applicable.

(e) The company does not have any subsidiary, associates, or joint ventures. Accordingly, the provisions of clause 3(ix) (e) of the Order are not applicable.

(f) The company does not have any subsidiary, associates, or joint ventures. Accordingly, the provisions of clause 3(ix) (f) of the Order are not applicable.

(x) (a) The company has not raised moneys by way of initial public offer or further public offer (including debt instruments). Accordingly, the provisions of clause 3(x) (a) of the Order are not applicable.

(b) The company has not made any preferential allotment or private placement of shares or fully, partly or optionally convertible debentures in terms of section 42 and 62 of the Companies Act, 2013. Accordingly, the provisions of clause 3(x) (b) of the Order are not applicable.

(xi) (a) No fraud by the company or on the company by its officers or employees has been noticed or reported during the year. Accordingly, the provisions of clause 3(xi) (a) of the Order are not applicable.

(b) During the year, no report u/s 143(12) of the Companies Act, 2013 has been filed in Form ADT - 4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

(c) The company does not have adequate whistle blower process to handle anonymous complaints. Consequently, we have not received any whistle-blower complaint. Accordingly, we are unable to comment on the provisions of clause 3(xi) (c) of the Order.

(xii) The Company is not a Nidhi Company. Accordingly, the provisions of clause 3(xii) of the Order are not applicable.

(xiii) All transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013 and details of such transactions have been disclosed in the accompanying financial statements of the company as required by the applicable Indian Accounting Standards (Ind AS).

(xiv) (a) Based on the communication with the Internal Auditor of the Company, the company has an internal audit system commensurate with the size and nature of its business.

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

(xv) The company has not entered into any non-cash transactions with the directors or person connected with him. Accordingly, the provisions of clause 3(xv) of the order are not applicable.

(xvi) (a) The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of clause 3(xvi) (a) of the Order are not applicable.

(b) The company has not conducted any Non-Banking Financial or Housing Finance activities during the year. Accordingly, the provisions of clause 3(xvi) (b) of the Order are not applicable.

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

(d) In our opinion, there is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016). Accordingly, the provisions of clause 3(xvi)

(d) of the Order are not applicable.

(xvii) The company has not incurred any cash losses during the year. However, the company has incurred cash losses in immediately preceding financial year. The cash losses incurred in previous year to Rs. 80.91 lakhs.

(xviii) There has been no resignation of the statutory auditors of the Company during the year. Accordingly, the provisions of clause 3(xviii) of the Order are not applicable.

(xix) The Companys accumulated losses are Rs. 8,882.03 lakhs as at 31 March, 2023 and, as of that date, the Companys current liabilities exceeded its current assets by Rs. 7,753.80 lakhs giving rise to apprehension of the companys ability to maintain going concern. Nevertheless, the financial statements of the company have been prepared on going concern assumption for the reasons stated in the note no 47 of the accompanying financial statements.

We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due. The management has, however, prepared the financial statements on going concern basis.

(xx) (a) The company is not covered under the provisions of the Section 135 of the Companies Act, 2013. Accordingly, the provisions of clause 3(xx) (a) of the Order are not applicable.

(b) The company is not covered under the provisions of the Section 135 of the Companies Act, 2013. Accordingly, the provisions of clause 3(xx) (b) of the Order are not applicable.

(xxi) The provisions of the clause 3(xxi) of the Order are applicable to the consolidated financial statements of the holding (parent) company. The accompanying financial statements not being the financial statements of holding (parent) company, the provisions of the said clause of the Order are not applicable.

For and on behalf of

MNRS & ASSOCIATES

Chartered Accountants

FRN: 018340N

Neeraj Kumar Agarwal

Partner

M. No: 503441

UDIN: 23503441BGXYQU5670

Place: New Delhi

Date: 30 June 2023

Annexure B to the Independent Auditors Report of Even Date on the Standalone Financial Statements of Nova Iron and Steel Limited

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

We have audited the internal financial controls over financial reporting of Nova Iron and Steel Limited ("the Company") as of 31 March 2023 in conjunction with our audit of the standalone 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 efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

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

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors 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 over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

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

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Qualified Opinion

We draw your attention to the Basis of Qualified Opinion and "Emphasis of Matter paragraph of our report of even date on standalone financial statements of the company. Further attention is invited to the qualified / adverse comments on the reports under Companies (Auditors Report) Order, 2020.

Subject to aforesaid qualification / adverse comments which have arisen out of material weakness in the financial control over financial reporting over the years, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of 31 March 2023.

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

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

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the 31 March 2023 and the effects of these material weaknesses on our opinion on the standalone financial statements of the Company has been disclosed under Basis of Qualified Opinion section of our report.

For and on behalf of

MNRS & ASSOCIATES

Chartered Accountants

FRN: 018340N

Neeraj Kumar Agarwal

Partner

M.No: 503441

UDIN: 23503441BGXYQU5670

Place: New Delhi

Date: 30 June 2023