Sanco Industries Ltd Auditor Reports

To

Mr. Arunava Sikdar Resolution Professional

(Appointed under Insolvency & Bankruptcy Code 2016)

Sanco Industries Limited

Report on the audit of the Standalone Financial Statements Qualified Opinion

We have audited the accompanying Standalone Financial Statements of SANCO INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2025, and the Statement of Profit and Loss (including Other Comprehensive Income), statement of changes in equity and statement of cash flows for the year then ended, and notes to financial statements including material accounting policies and other explanatory information (hereinafter referred to as "the Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (the Act) in the manner so required give a true and fair view, except on matters specified in the para below, in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2025, and its Loss and Total Comprehensive Income, changes in equity and its Cash Flows for the year ended on that date.

Basis for Qualified Opinion

We conducted our audit in accordance with the Standard 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 Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the financial statements give true and fair view except on the followings matters:

1. Company, at present, is under the Corporate Insolvency Resolution Pro cess,(" CHIP") in

terms of provisions of Insolvency & Bankruptcy Code, 2016("IB

Z) since

Independent Auditors Report on the Standalone Financial Statements of SANCO INDUSTRIES LIMITED for the year ended 31 March 2025 (Contd)

29.07.2022 vide order of the Honble National Company Law Tribunal, New Delhi. The Company has received various claims which are in excess of the amounts in the books of accounts by INR 3,662.08 lakhs. No provisioning of the same has been made in the books of accounts as at the date of Balance Sheet as the same is pending for the final order of NCLT. Summary of differences is as follows:

	Claim Amount Admitted by IRP/RP (INR in Lakhs)		RH
Secured Financial Creditors (Banks)	6,784.43	4,490.98	2,293.45
Employees	3.15	1.72	1.43
Govt Dues (PF& ESI)	53.62	20.06	33.56
GST Tax Demand	996.27	-	996.27
VAT Demand	293.74	-	293.74
Operational Creditors	380.64	346.75	33.89
National Stock Exchange of India	9.74	-	9.74
Total	8,521.59	4,859.51	3,662.08

2. Company has not made available to us the statement of Investments along with the supporting document amounting to INR 338.50 lakhs, in the absence of which we are unable to comment on the existence and market value of the asset as at the date of Balance Sheet.

3. Company has not made available to us balance confirmation pertaining to amount receivables and payables under the following head as at the date of Balance Sheet:

i) Receivables

a. Trade Receivable - INR 4,838.85 lakhs

b. Advances to Supplier - INR 238.01 lakhs

c. Advances to Creditor for Expenses - INR 33.21 lakhs

d. Loans & Advances (Others) - INR 525.08 lakhs

e. Security & Deposits -11.34 lakhs

ii) Payables

a. Creditors - INR 777.73 lakhs

b. Secured Loan - 220.69 lakhs

c. Expenses Payable - 18.84 lakhs

d. Unsecured Loan - 793.85 lakhs

4. Cash in hand - That there was a cash balance of Rs. 18,967.56 as per the balance sheet as on CIRP date i.e. 29.07.2022. The said balance of Cash had not been handed over to the IRP/RP. However, no provision in respect of the same had been made in the books of the Company and the same balance is continued to be shown in balance sheet as on 31.03.2024.

Independent Auditors Report on the Standalone Financial Statements of SANCO INDUSTRIES LIMITED for the year ended 31 March 2025 (Contd)

5. Company under the management of Resolution Professional appointed under the Insolvency & Bankruptcy Code 2016, has obtained valuation of Plant and machinery and Land and building from an external entity in the previous financial year. Plowever, findings of the same have not been made available to us for consideration. Accordingly, we are unable to comment on the existence and valuation of these assets.

6. The company has not provided us with the net realizable value of inventory, and no physical verification of inventory has been conducted. Accordingly, we are unable to comment on the valuation and existence of inventory.

7. As per GSTR-2B of the Company, Expense of Rs 49,80,085 dated 30-11-2024 (Input Tax Credit (ITC) of Rs 3,79,836.99 each under SGST and CGST) has been reflected in respect of Union Bank of India. However, the said amount has not been claimed in the GST returns or accounted for in the books of accounts. As represented by the resolution professional, no corresponding expense was incurred or paid by the Company in relation to this credit, hence we are unable to opine on the aforementioned.

Emphasis of Matter

We draw attention to Note 31 of Standalone Financial Statements wherein Company has current ratio of 0.03 and debt-equity ratio of -9.47 and further to Note 33(a), 33(b), 33(e) wherein it is specified that the financial statements are prepared on going concern as the CIR process is still going on. However, the prospects of the company, as such, would be determined on the completion ofCIRP.

Our Opinion is not modified in respect of this matter.

Information other than the Financial Statements and Auditors Report thereon

The Companys Board of Directors is responsible for the other information. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

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

If, based on the work we have performed on the other information obtained prior to the date of this auditors report, we conclude that there is a material misstatement of this other information,

we are required to report that fact. Reporting under this section is not applicable as no other information is obtained at the date of this auditors report.

Responsibilities of Management for the Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 20)3 width respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance (including other Comprehensive Income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 , as amended.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013, 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 statements 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, 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 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 Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

?€? Identify and assess the risk of material misstatement of the Standalone 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.

Independent Auditors Report on the Standalone Financial Statements of SANCO INDUSTRIES LIMITED for the year ended 31 March 2025 (Contd)

?€? Obtain an understating of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial control 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 the 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 entitys 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 standalone 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 Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieve 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 reasonable knowledgeable user of the Standalone 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 standalone 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

1. Pursuant to the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Anncxure "A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act, based on our audit 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 purpose 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 and records.

c. The Balance Sheet, the Statement of Profit and Loss, (including other comprehensive income), Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid standalone Financial Statements comply with the Indian Accounting Standards specified under section 133 of the Act, being IND AS, read with Rule 7 of the Companies (Accounts) Rules, 2014,

e. we could not get any written representations from the directors as on 31 sl March 2025 and unable to comment on whether any director is disqualified or not as on 31 March 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 Annexurc "B".

g. 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 and management representations provided to us:

i. the Company, at present, is under the Corporate Insolvency Resolution Process ("CIRP") in terms of provisions of Insolvency & Bankruptcy Code, 2016("IBC/the Code") since 29.07.2022 vide order of the ITonble National Company Law Tribunal, New Delhi.

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2025;

iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2025.

3. Pursuant to the Companies (Audit and Auditors) Rules, 2014, issued by the Central Government of India in terms of rule 11 of the Act, we report that,

i. 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 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 ("Intermedia ries"), with the understanding, whether recorded in writing or otherwise, that the Intermedia directly or indirectly lend or invest in other persons or entities identif

whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

ii. 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 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

iii. Based on such audit procedures that we have considered reasonable and appropriate in the circumstances; nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) contain any material misstatement.

iv. During the year, the Company has neither declared nor paid any dividend. Accordingly, compliance u/s 123 of the Companies Act,2013 is not applicable to the company.

4. We have carried out an examination in accordance with the Implementation Guidelines on Reporting on Audit Trail by Auditors under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (Revised 2024 Edition) issued by the Institute of Chartered Accountants of India. Whereby, we have performed test checks for the company whose Standalone Financial Statements have been audited under the Act, we report that the company has used accounting softwares for maintaining its books of account for the financial year ended March 31,2025 which has a feature of recording audit trail (edit log) facility and the said audit trail has operated throughout the year for all the relevant transactions recorded in the said software. Further, based on the results of specific audit checks performed during the course of our audit, we did not come across any instance of audit trail feature being tampered with. Additionally, the audit trail has been preserved by the company as per the statutory requirements for record retention.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2025.

For K. G. Sharma & Co. Chartered Accountants

Partner

Membership No.: 089416

UDIN: 25089416BMKULW8210 Place: Delhi Date: 17-05-2025

Independent Auditors Report on the Standalone Financial Statements of SANCO INDUSTRIES LIMITED for the year ended 31 March 2025 (Contd)

ANNEXURE A TO INDEPENDENT AUDITORS REPORT

As referred to in our Independent Auditors report of even date to the members of M/s SANCO INDUSTRIES LIMITED on the Financial Statements as on and for the year ended 3 l sl March 2025, we report that:

i.

a. The Company has not provided us proper records showing full particulars, including quantitative details and situation of property, plant and equipment. Hence we cannot comment on the proper records of Fixed Asset Register.

b. According to the information and explanation given to us and physical verification of property, plant and equipment was conducted by Resolution Professional during the previous financial year. We have not been provided the copy of report. Additionally, no reconciliation was prepared of physical assets verified vis-a-vis books assets. Hence, we are unable to comment on whether any discrepancy was noted or not. Furthermore we unable on the existence and valuation of plant and machinery.

c. According to the information and explanations given to us the title deeds of immovable properties disclosed in the standalone financial statements is held in the name of the Company. However title deeds of immovable properties are not made available to us.

d. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not revalued its property, plant and equipment (including right of use assets) or intangible assets or both during the year.

e. According to information and explanations given to us and on the basis of our examination of the records of the Company, there are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.

ii.

a. The inventory has not been physically verified by the Resolution Professional appointed under the Insolvency & Bankruptcy Code, 2016 during the year. Further, no reconciliation was prepared of physical inventory vis-a-vis books inventory. Hence, we are unable to comment on the valuation and existence of the inventory in the absence of the physical verification report and valuation report.

b. According to the information and explanations given to us, the Company has not been sanctioned working capital limits from banks or financial institutions in excess of INR 5 crores. Accordingly, clause 3(ii)(b) of the Order is not applicable.

iii. According to the information and explanations given to us and on the basis of our examination of the records of the Company, during the year, the Company has has not made investments in, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties. Accordingly, paragraph 3(iii) is not applicable to the company. We further report that bank guarantees given as a part of contractual obligations of the company towards its normal course of business are not considered as guarantees given in the nature of loans for the purpose of reporting under this clause.

iv. According to the information and explanations given to us and on the basis of our examination of records of the Company, the Company has neither made any investments, nor provided any guarantee or security or granted any loans or advances to the parties as specified under section 185 and 186 of the Act. Accordingly, clause 3(iv) of the Order is not applicable.

Independent Auditors Report on the Standalone Financial Statements of SANCO INDUSTRIES LIMITED for the year ended 31 March 2025 (Contd)

v. In our opinion and according to the information and explanations given to us, the company has not accepted any deposit from the public & no amounts has been deemed to be deposits in accordance with the provisions of the sections 73 to 76 or any other relevant provisions of the Act, and the rules framed thereunder during the year.

However, Company has outstanding loans in contravention of the aforementioned sections, details of which are as follows:

Name of the party	Relationship	Amount	Remark
Anurag Gupta	Relative of Director	48.50	Outstanding Loan from Relative of Directors of a Public Limited Comapany in contraventionn of Sec 73 to Sec 76 of Companies Act 2013 read with Deposit Rules.
Mansi Gupta	Relative of Director	25.00
Rita Gupta	Relative of Director	240.00
Shakuntla Gupta	Relative of Director	138.50
M/S Sanco Enterprises Private Ltd	Relative of Director	45.00
Mr, Sanjay Gupta	Director	270.93
Mr. Sanjay Gupta HUF	Relative of Director	8.50
Mr. Sidhant Gupta	Relative of Director	17.43
Total	793.85

vi. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under sub-section (1) of Section 148 of the Companies Act, 2013, for any of the services rendered or goods sold by the Company. Accordingly, clause 3(vi) of the Order is not applicable.

vii.

a. The Company does not have liability in respect of service tax, duty of excise and sales tax during the year since effective July 01, 2017, these statutory dues has been subsumed into goods and services tax.

According to the information and explanations given to us and on the basis of our examination of the records of the Company, in our opinion, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including goods and services tax, provident fund, employees state insurance, income-tax, duty of customs, value added tax, cess and other statutory dues have not been regularly deposited by the Company with the appropriate authorities, delays of which are material.

According to the information and explanations given to us and on the basis of our examination of the records of the Company, undisputed amounts payable in respect of goods and services tax, provident fund, employees state insurance, income-tax, duty of customs, value added tax, cess and other statutory dues in arrears as at March 31, 2025 for a period of more than six months from the date they became payable.

S.IMo,	Name of the Liability	Amount
1	Provident Fund	12.54
2	ESI	7.51
3	Central Sales Tax Payable (HPJ	13.52
4	Income Tax Payable	303.92

b. According to the information and explanations given to us and on the basis of our examination of the records of the Company, no statutory dues relating to goods and services tax, provident fund, employees state insurance, income-tax, cess and other statutory dues have been in arrears as on March 31,2025 on account of any dispute, except as follows:

Independent Auditors Report on the Standalone Financial Statements of SANCO INDUSTRIES LIMITED for the year ended 31 March 2025 (Contd)

	Name of the status	Nature of dues	Forum where dispute is panding	period to which amount relates	Amount
1	Income Tax Act, 1961	Income Tax	CIT (Appeals)	AY 14-5 ^	63.33 (Order passed in favour of company)
2	Income Tax Act, 1961	Income Tax	CIT (Appeals)	AY 12-13	Copy of assessment order not provided by management
3	Income Tax Act, 1961	Income Tax	CIT (Appeals)	AY 17-18	Copy of assessment order not provided by management

Additionally, there are certain demands under income tax law being reflected on income tax portal which has not been recognized by company in the books of accounts. We have not been provided with the supporting documents which may help us to assess whether the demand is under dispute or not. Hence, we cannot comment on the same. The details are as follows:

Assessment year	date of demand	Accrued interest	Outstanding	Section code
2020	03-Mar-25		41,96,53,380	144
2020	03-Mar-25	-	3,380	144
2019	13-Mar-24	-	3,39,71,580	147
2021	27-Iun-23	75,01,956	2,67,92,713	270A
2015	05-Aug-16	24,44,845	37,61,380	1431a
2009	30-Dec-ll	72,102	54,254	1433
2012	30-Dec-19	41,96,309	1,15,42,848	147
2013	27-Mar-18	80,135	1,70,580	250
2017	27-Jan-22	14,052	7,02,677	270A
2018	27-Sep-24	-	31,82,75,830	270A
2021	27-Jun-23	5,600	20,000	272A(l)(d)
2017	21-]an-22	79,420	39,71,084	271AAC(1)
2010	28-Feb-13	42,012	38,970	1433
2017	27-Apr-21	93,26,920	9,32,69,270	143(3)
2016	09-Aug-17	4,16,846	6,73,331	1431a
2018	07-Mar-24	2,07,25,621	29,60,80,330	147
	Total	4,49,05,818	1,20,89,81,607

Further, there are certain demands under goods and service tax law being reflected on GSTN portal which has not been recognized by company in the books of accounts. We have not been provided with the supporting documents which may help us to assess whether the demand is under dispute or not. Hence, we cannot comment on the same. The details are as follows:

2017-2018	06-02-2025	^ 88,91,234	\u2019 "88,91,234	74	CGST/SGST
2017-2018	04-04-2025	88,91,234	88,91,234	74	CGST/SGST
2017-2018	19-10-2020	30,000	-	73	IGST/CGST/SGST
2017-2018	01-04-2021	2,49,756	-	Others	IGST/CGST/SGST
2018-2019	01-04-2021	14,302	-	Others	IGST/CGST/gpr

Independent Auditors Report on the Standalone Financial Statements of SANCO INDUSTRIES LIMITED for the year ended 31 March 2025 (Contd)

2019-2020	01-04-2021	16,855	-	Others	IGST/CGST/SGST
2017-2018	06-07-2024	20,18,018	16,47,362	73	IGST
2018-2019	06-07-2024	41,11,741	39,34,680	73	IGST
2019-2020	06-07-2024	1,04,352	1,20,639	73	IGST
2017-2018	06-02-2025	5,27,71,023	5,27,71,023	74	IGST
2017-2018	18-02-2022	55,644	55,644	129	IGST
	Total	7,63,11,816	7,71,54,159

viii. 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. Accordingly, reporting requirements in relation to paragraph 3(viii) are not applicable to the company.

ix.

a. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has defaulted in repayment of loans and borrowings and in the payment of interest thereon to lenders.

name of bank	nature of due	amount	due date	satus
South India Bank (CC A/c)	Principal & Interest	1,363.76	Various dates	The Companys bank account has become Non-Performing Asset (NPA) as per banking rules and regulations.
South India Bank (Interim Finance)	Principal & Interest	34.37	Various dates	The Companys bank account has become Non-Performing Asset (NPA) as per banking rules and regulations.
UBI Delhi (CC A/C)	Principal & Interest	3,127.21	Various dates	The Companys bank account has become Non-Performing Asset (NPA) as per banking rules and regulations.
UBI Delhi (Interim Finance)	Principal & Interest	84.01	Various dates	The Companys bank account has become Non-Performing Asset (NPA) as per banking rules and regulations.
Aditya Birla Finance Limited	Principal & Interest	44.23	Various dates	The Company is irregular in paying the outstanding amount.
Loan Against LIC	Principal & Interest	176.46	Various dates	The Company is irregular in paying the outstanding amount.
Total		4,830.04

b. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been declared a wilful defaulter by any bank or financial institution or government or government authority.

c. 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 neither obtained term loan nor had any outstanding balance at the beginning of the year. Accordingly clause (ix)(c) of the Order is not applicable.

d. According to the information and explanation given to us and on the basis of our examination of the records of the Company, we believe the Company ha raised on short-term basis for long-term purposes.

Independent Auditors Report on the Standalone Financial Statements of SANCO INDUSTRIES LIMITED for the year ended 31 March 2025 (Contd)

e. According to the information and explanations given to us and on an overall examination of the standalone financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries or joint venture as defined under Companies Act, 2013.

f. According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries or joint venture (as defined under Companies Act, 2013).

x.

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

b. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, clause 3(x)(b) of the Order is not applicable.

xi.

a. The Resolution Professional, appointed by The Honble National Company Law Tribunal, has got Transaction Audit performed by an external entity and the findings of same have not been shared with us citing the confidentiality imposed by the provisions of Insolvency & Bankruptcy Code 2016. Accordingly, we are unable to comment on whether the fraud by the Company or on the Company was committed or reported during the year.

b. According to the information and explanations given to us, no report under sub-section (12) of Section 143 of the Companies Act, 2013 has been filed by the auditors in Form ADT-4 as prescribed under Rule 13 of the Companies (Audit and Auditors) Rules, 2014 with the Central Government.

c. As represented to us by the management, there are no whistle blower complaints received by the Company during the year.

xii. According to the information and explanations given to us, the Company is not a nidhi company. Accordingly, clause 3(xii) of the Order is not applicable.

xiii. In our opinion and according to the information and explanations given to us, the transactions with the related parties are not in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable and however the details of the related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

xiv.

a. In the absence of complete information and explanations and based on our audit procedures, we are unable to comment on whether the Company has an adequate internal audit system considering the size and nature of its business.

b. No Internal audit report has been made available to us for consideration.

xv. In our opinion, during the year the company has not entered into any non-cash transactions with its directors or persons connected with its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the company.

xvi.

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

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

c. The Company is not a Core Investment Company (CIC) as defined in the j^felTOns made by the Reserve Bank of India. Accordingly, clause 3(xvi)(c) of the Orderfo/hot applicable.

h( **8? H

Independent Auditors Report on the Standalone Financial Statements of SANCO INDUSTRIES LIMITED for the year ended 31 March 2025 (Contd)

d, According to the information and explanations given to us, there is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016). Accordingly, the clause 3(xvi)(d) of the Order is not applicable.

xvii. The Company has incurred cash losses of INR 39.69 lakhs in the current financial year and INR 55,01 lakhs in the immediately preceding financial year.

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

xix. The Company, at present, is under the Corporate Insolvency Resolution Process ("CIRP") in terms of provisions of Insolvency & Bankruptcy Code, 2016("IBC/the Code") since 29.07.2022. The Company has already defaulted on loans repayment. According to the limited information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements and management plans and based on our examination of the evidence supporting the assumptions, we believe that 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. We further state that our reporting is based on the facts up to the date of the audit report.

xx. The company was not having net worth of rupees five hundred crore or more or turnover of rupees one hundred crore or more or net profit of five crores or more during the immediately preceding financial period and hence provision of section 135 of the Companies Act are not applicable to the Company during the financial period. Accordingly, paragraph 3 (xx)(a) & 3 (xx) (b) are not applicable to the company.

xxi. The Company is holding company of Sanjita Polmet Limited. No signed Financials Statements with the Auditors report have been made available to us. Hence, we are unable to comment on whether there was any qualification or adverse remark was made by their respective auditor.

For K. G. Sharina & Co.

Chartered Accountants

Firm iiegistration number: 005240N

S.K. Jain Partner

Membership No.: 089416

UDIN: 25089416BMKULW8210 Place: Delhi Date: 17-05-2025

Independent Auditors Report on the Standalone Financial Statements of SANCO INDUSTRIES LIMITED for the year ended 31 March 2025 (Contd)

ANNEXURE B TO INDEPENDENT AUDITORS REPORT

As referred to in our Independent Auditors Report to the members of SANCO INDUSTRIES LIMITED ("the Company") on the Standalone Financial Statements for the year ended 31 sl March 2025

Report on the Internal Financial Controls Over Financial Reporting uinlcr Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SANCO INDUSTRIES LIMITED (the "Company") as of March 31 sl ,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 (the "ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective 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 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 ICAI 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 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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We could not get sufficient and appropriate audit evidences 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 design reasonable assurance regarding the reliability of financial reporting and the prepar statements for external purposes in accordance with generally accepted accoun

ovide

Independent Auditors Report on the Standalone Financial Statements of SANCO INDUSTRIES LIMITED for the year ended 31 March 2025 (Contd)

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 authorizations of the management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, internal financial controls being managed through employees deputed from parent company including chief financial officer of the company, 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 controls 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, to the best of our information and according to the explanations given to us, we are not in position to comment on whether the Company has an adequate internal financial controls system over financial reporting and whether such internal financial controls over financial reporting were operating effectively as at March 31 st 2025, based on "the Internal Financial Controls 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 K. G. Sharma & Co. Chartered Accountants

Firm (registration number: 005240N

S.K. Jain Partner

Membership No.: 089416 UDIN: 25089416BMKULW8210 Place: Delhi Date: 17-05-2025

SANCO INDUSTRIES LIMITED