Palco Metals Ltd Auditor Reports

To,

The Members of,

PALCO METALS LIMITED
(CIN: L27310GJ1960PLC000998)

Report on the Audit of the Standalone Financial Statements
Opinion

We have audited the Standalone financial statements of PALCO METALS LIMITED ("the Company"), which
comprise the Standalone balance sheet as at March 31, 2025, the Standalone statement of Profit and Loss, and
Standalone statement of cash flows for the year then ended, and notes to the Standalone 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, 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 accounting principles generally accepted in India, of the
state of affairs of the Company as at March 31, 2025, and profit and its cash flows for the year ended on that
date.

Basis for Opinion

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 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 of India together with the ethical requirements that are relevant to our audit of the Standalone
financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and the 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

We draw attention to Total Income during the year 31^st March 2025 of the financial statements, which shows
that there is no Operating revenue generated dining the year ended 31^st March 2025. 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 Standalone financial statements of the current period. These matters were addressed in the context of
our audit of the Standalone financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. We have determined no matters 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 Annexure to Boards Report, Business Responsibility Report, Corporate Governance and
Shareholders Information, but does not include the Standalone financial statements and our auditors report
thereon.

Our opinion on the Standalone financial statements does not cover the other information and we do not express
any form 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 materially inconsistent with the
Standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears
to be materially misstated.

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

Managements Responsibility for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect
to the preparation of these Standalone financial statements that give a true and fair view of the financial
position, financial performance 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 Standalone financial statement that give a true and fair view and are free
from material misstatement, whether due to fraud or error.

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

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from

fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these Standalone financial statements.

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

• Identify and assess the risks of material misstatement of the Standalone financial statements, whether due
to fraud or error.

• 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, as well as evaluating the overall presentation of the
Standalone financial statements.

• 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.

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

Materiality is the magnitude of misstatements in the Standalone financial statements that, individually or in
aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the
financial statements may be influenced. We consider quantitative materiality and qualitative factors in

(i) Planning the scope of our audit work and in evaluating the results of our work; and

(ii) To evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit 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 Standalone 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

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

(d) In our opinion, the aforesaid Standalone financial statements comply with the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of the written representations received from the directors as on March 31, 2025 taken on record
by the Board of Directors, none of the directors is disqualified as on March 31, 2025 from being appointed as a
director in terms of Section 164 (2) of the Act;

(f) 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"; Our report expresses
an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls
over financial reporting;

(g) 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 remuneration paid by the Company to its directors during the year is in accordance
with the provisions of section 197 of the Act; and

(h) 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 the impact of pending litigations on its financial position in its
Standalone financial statements

ii. The Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term contracts including derivative
contracts.

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

iv. a) The management has represented that, to the best of its knowledge and belief that, 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 person(s) or entity(ies), 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 management has represented, that, to the best of its knowledge and belief that, no funds
have been received by the company from any person(s) or entity(ies), 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; and

c) Based on such audit procedures that have been considered reasonable and appropriate in the
circumstances, nothing has come to their notice that has caused us to believe that the
representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above,
contain any material mis-statement.

v. No dividend has been declared or paid during the year by the Company.

vi. Based on our examination, which included test checks, the company has used accounting
software for maintaining its books of accounts for the financial year ended March 31, 2025
which has a feature of recording audit trail (edit log) facility. However, the same has not
operated throughout the year for all the relevant transactions recorded in the software. Further
during the course of our audit we could not establish the systematic and chronological order
of transactions recorded during the year.

Annexure "A" to the Independent Auditors Report (Continued)

(Referred to paragraph under ‘Report on other legal and regulatory requirements section of the
Independent Auditors Report of even date to the members of PALCO METALS LIMITED
on the Standalone financial statements for the year ended March 31,2025)

Based on the audit procedures performed for the purpose of reporting a true and fair view on the
Standalone financial statements of the Company and 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 report that:

i. In respect of the Companys Property, Plant & Equipment and Intangible assets:

(a) The Company does not have any Fixed assets. Thus, paragraph 3(ii) of the order is not
applicable to the company.

ii. In respect of the Companys Inventories:

(a) The Company does not hold any physical inventories as company is not engaged in any
manufacturing activity. Thus, paragraph 3(ii) of the order is not applicable to the
company.

iii. In respect of loans granted and taken to / from parties covered in the register-maintained u/s
189 of the Companies Act, 2013

The Company has made investments in, provided guarantee or security and granted loans or
advances in the nature of loans, secured or unsecured, to companies, firms, limited liability
partnerships or any other parties during the year, in respect of which:

(a) Based on the audit procedures carried on by us and as per the information and explanations
given to us, the Company has not granted any loans to subsidiaries.

(b) According to the information and explanations given to us and based on the audit procedures
conducted by us, we are of the opinion that the terms and conditions of the loans given are, not
prejudicial to the interest of the Company.

(c) According to the information and explanations given to us and on the basis of our examination
of the records of the Company, in the case of loans given, the repayment of principal and payment
of interest has not been stipulated and the repayments or receipts have been irregular.

(d) According to the information and explanations given to us and on the basis of our examination
of the records of the Company, there is no overdue amount for more than ninety days in respect of
loans given.

(e) According to the information and explanations given to us and on the basis of our examination
of the records of the Company, there is no loan given falling due during the year, which has been
renewed or extended or fresh loans given to settle the overdue of existing loans given to the same
party.

(f) 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 given loans repayable on demand which was
without specifying any terms or period of repayment.

iv. In respect of loans, investments and guarantees u/s. Section 185 and 186 of the Companies
Act, 2013.

In our opinion and according to information and explanation given to us, in respect of loans,
investments, guarantees and security, the Company has complied with the provisions of sections
185 and section 186 of the Companies Act, 2013.

v. In respect of deposits from public:

In our opinion, and according to the information and explanations given to us, the Company has
not accepted any deposits or there is no amount which has been considered as deemed deposit
within the meaning of sections 73 to 76 of the Act and the Companies (Acceptance of Deposits)
Rules, 2014 (as amended). Accordingly, reporting under clause 3(v) of the Order is not applicable
to the Company.

vi. In respect of maintenance of cost records:

Pursuant to rules made by the Central Government for the maintenance of cost records under sub-
section (1) of section 148 of the Companies Act 2013 in respect of certain manufacturing
activities, as informed to us, the Company is not required to maintain cost records.

vii. In respect of statutory dues:

(a) In our opinion, and according to the information and explanations given to us, undisputed
statutory dues including goods and services tax, provident fund, employees state
insurance, income-tax, duty of customs, duty of excise, value added tax, cess and other
material statutory dues, as applicable, have generally been regularly deposited with the
appropriate authorities by the Company, Further, no undisputed amounts payable in
respect thereof were outstanding at the year-end 31^st March 2025 for a period of more than
six months from the date they became payable.

(b) According to the information and explanations given to us, there are no statutory dues
referred to in subclause (a) above that have not been deposited with the appropriate
authorities on account of any dispute.

viii In respect of tax assessments under Income Tax Act, 1961:

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 surrendered or disclosed any transactions,
previously unrecorded as income in the books of account, in the tax assessments under the
Income-tax Act, 1961 as income during the year.

ix. In respect of dues to financial institution / banks / debentures:

According to information and explanation given to us,

(a) The company has not defaulted in repayment of loans or other borrowings or in the payment of
interest thereon to any lender.

(b) The company has not been declared wilful defaulter by any bank or financial institution or
other lender;

(c) All the term loans were applied for the purpose for which the loans were obtained.

(d) The company has not raised funds on short term basis which have been utilized for long term
purposes.

(e) The company has not taken any funds from any entity or person on account of or to meet the
obligations of its subsidiaries, associates or joint ventures.

(f) The company has not raised any loans during the year on the pledge of securities held in its
subsidiaries, joint ventures or associate companies.

x. In respect of application of money raised by Initial public offer, further public offer
(including debt instruments) and term loans.

According to the information and explanations given to us,

a) The company has not raised moneys by way of initial public offer or further public offer
(including debt instruments) during the year and hence reporting under clause 3(x)(a) of
the order is not applicable.

b) The company has not made any preferential allotment or private placement of shares or

convertible debentures (fully, partially or optionally convertible) during the year and
hence reporting under clause 3(x)(b) of the order is not applicable.

xi. In respect of fraud:

(a) According to the information available with us, no fraud by the company and no fraud on the
company has been noticed or reported during the year.

(b) According to the information available with us, no report under sub-section (12) of section 143
of the Companies 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; during the year and up
to the date of this report.

(c) As represented to us by the management, there were no whistle-blower complaints received
during the year and hence reporting under clause 3(xi)(c) of the order is not applicable.

xii. In respect of Nidhi Company

The Company is not a Nidhi Company has complied and hence reporting under clause (xii) of the
order is not applicable.

xiii. In Respect of Related parties Transactions

In our opinion and according to the information and explanations given to us, the transactions with
related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013, where
applicable, and the details of the related party transactions have been disclosed in the Standalone
financial statements as required by the applicable Indian Accounting Standards.

xiv. In respect of Internal Audit System:

(a) Based on information and explanations provided to us and our audit procedures, in our opinion,
the Company has an internal audit system commensurate with the size and nature of its business;

(b) We have considered the internal audit reports of the Company issued till date for the period
under audit.

xv. In Respect of Non-Cash transactions with Directors:

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 so compliance under
section 42 of the Companies Act, 2013 need not complied with.

xvi. In respect of registration under section 45-IA of RBI:

According to the information given to us and based on our examination of the 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 . Hence reporting under this clause not applicable to the company.

b) According to the information given to us, the company has not conducted any Non-
Banking Financial or Housing Finance activities without a valid Certificate of Registration
(CoR) from the Reserve Bank of India as per the Reserve Bank of India Act, 1934. Hence
reporting under this clause not applicable to the company.

c) According to the information given to us, the company is not a Core Investment Company
(CIC) as defined in the regulations made by the Reserve Bank of India. Hence reporting
under this clause not applicable to the company.

d) According to the information given to us, there is no Core Investment Company (CIC)
within the Group (as defined in the core investment companies (Reserve Bank of India)
Directions, 2016) and accordingly reporting under this clause not applicable to the
company.

xvii. In Respect of Cash Losses :

According to the information and explanations given to us and based on our examination of the
records of the company, the company has incurred cash losses in the current financial year
whereas no cash loss in the immediately preceding financial year.

The cash losses foy the current year amounted to Rs. 30.87 Lac

xviii. In Respect of change in Statutory Auditor:

There has been no change in the Statutory Auditors of the company. Accordingly, paragraph
3(xviii) of the order is not applicable.

xix. In Respect of material uncertainty exists on date of audit report:

According to the information and explanations given to us and based on our examination of the
financial ratios, ageing and expected dates of realisation of financial assets and payment of
financial liabilities, other information accompanying the Standalone financial statements, our
knowledge of the Board of Directors and management plans, no material uncertainty exists as on
the date of the audit report that company is not capable of meeting its liabilities existing at the date
of balance sheet as and when they fall due within a period of one year from the balance sheet date.

xx. In Respect of unspent amount under section 135(5):

According to the information and explanations given to us, the Company does not fulfil the criteria
as specified under section 135(1) of the Act read with the Companies (Corporate Social
Responsibility Policy) Rules, 2014 and according, reporting under clause 3(xx) of the Order is not
applicable to the Company.

xxi. In Respect of qualifications and adverse remarks:

Based on our examination of the Companies (Auditors Report) Order CARO reports of the
holding/subsidiary/joint venture/associate companies, there are no qualifications or adverse
remarks by the respective auditors in those reports.

Annexure "B" to the Independent Auditors Report

(Referred to in paragraph (f) under ‘Report on other legal and regulatory requirements section
of our report to the Members of PALCO METALS LIMITED of even date)

Report on the internal financial controls over financial reporting under clause (I) of sub - section 3of
section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of PALCO METALS LIMITED
("the Company") as at March 31, 2025, 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 board of directors of the Company 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, the safeguarding
of its assets, the prevention and detection of fraud sand 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 internal financial controls over financial reporting of the
Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of
Chartered Accountants of India and the standards on auditing prescribed under Section 143(10) of the
Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those standards and
the guidance note require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether adequate internal financial controls over financial reporting were
established and maintained and if such controls operated effectively in all material respects. Our audit
involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls
system over financial reporting and their operating effectiveness. Our audit of internal financial controls over
financial reporting included obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors
judgment, including the assessment of the risks of material misstatement in the Standalone 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 control 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 Standalone 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

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
Standalone 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

(iii) 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 Standalone financial
statements.

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 of 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.

Opinion

In our opinion and according to the information and explanations given to us, the Company has, in all
material respects, an adequate internal financial control system over financial reporting and such internal
financial controls over financial reporting were operating effectively as at March 31, 2025, based on the
internal control over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting issued by the Institute of Chartered Accountants of India.

For: KPSJ&ASSOCIATES LLP

(Chartered Accountants)

FRN: 124845W/W100209

 

SD/-

Kedar Ram Laddha

(Partner)

M.NO: 101886

UDEV: 25101886BMIERF3153

Place: Ahmedabad

Date: 30/05/2025