SEL Manufacturing Company Ltd Auditor Reports

To

The Members of SEL Manufacturing Company Limited
Report on the Audit of the Financial Statements
Qualified Opinion

We have audited the accompanying financial statements of SEL Manufacturing Company Limited ("the Company"),
which comprise the Balance Sheet as at 31^st March, 2025 the Statement of Profit and Loss (including other
comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on
that date and a summary of significant accounting policies and other explanatory information (hereinafter referred
as "the Financial Statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the
possible effects of our observations described in the Basis for Qualified Opinion Pargraph below, the aforesaid
financial statements read with Paragraph Material Uncertainty relating to Going Concern and paragraph Emphasis of
Matters described below give the information required by the Companies Act, 2013 (" the Act") in the manner so
required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section
133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended ("Ind AS") and other
accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March, 2025, the
loss and total comprehensive loss, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We refer to:

1. Note No. 58 of the audited financial statements, as per Indian Accounting Standard 36 on Impairments of
Assets, the Company is required to determine impairment in respect of Property, Plant & Equipment and
Capital Work in Progress as per the methodology prescribed under the said Ind AS. However the
Management of the Company has not done impairment testing for the reasons explained in the said note. In
the absence of any working for impairment of the Property, Plant & Equipment and Capital Work in Progress
as per Ind AS 36, the impact of impairment, if any on the Ind AS financial statements is not ascertainable.

We further report that the financial impact of matter stated in the Basis for Qualified Opinion cant be measured
reliably for the year ended 31^st March 2025.

We conducted our audit of the Financial Statements in accordance with the Standards on Auditing specified under
section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditors
Responsibilities for the Audit of the Financial Statements section of our report. We are independent auditors of the
Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI)
together with the independence requirements that are relevant to our audit of the financial statements under the
provisions of the Act and the Rules made there under and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinion on the Financial Statements.

Material Uncertainty relating to Going Concern

We draw your attention:

- As per resolution plan approved and implemented in financial year 2020-21, the company was stipulated to
bring Rs. 6,500 lakhs for working capital and operational needs within first year of operation against which
the company brought only Rs. 2,500 lakhs which created shortfall in working capital funds and affected the
performance of the company.

- The company is incurring continuous losses since the implementation of resolution plan and had incurred
total cumulative losses of Rs. 64,090 lakhs in last four years since implementation of resolution plan.

- Analytical Ratios of the company, as reported in note no. 53 of the Financial Statements, are reflecting tight
liquidity, poor solvency as well as losses. The Current Ratio of 0.04:1 as at March 31, 2025 as against 0.10:1
as at March 31, 2024 clearly reflects squeezing of liquidity during the year. The liquidity ratios and Solvency
Ratios of the company are deteriorated over previous years.

- The Company has a debt obligation of around Rs. 18,743 lakhs for the financial year 2025-26. Further Debt
obligations are supposed to be paid out of available funds which will further add to the liquidity crunch of
the company.

- As at year end, the current liabilities of the company are exceeding its current assets, which reflect erosion
of Working Capital funds of the Company.

- Refer to Note no. 54 and 55 to the audited financial statements, the Companys performance is sub-optimal
and falls short of expectations. The Company is currently operating at a deficit and experiencing severe
liquidity stress. The major plants of the company were remained shut down for whole of the year under
consideration. Due to financial constraints, the company has started job work operations at one of its unit
instead of pursuing its own manufacturing activities and major source of operating income during the year
under consideration is from job work. This dire financial predicament has rendered the Company incapable
of fulfilling its various financial obligations. The company had defaulted in quarterly installment due from
30th September, 2023 to 31^st March, 2025 amounting to Rs. 12,129 lakhs and also had not paid the interest
due for the period July 2023 to March 2025 amounting to Rs. 11,345 lakhs.

- Refer to Note no. 57 to the financial statements, the shareholders of the Company have passed the
resolution regarding the Initiation of Corporate Insolvency Resolution Process under Section 10 (including
any modification or re-enactment thereof), if any, of the Insolvency and Bankruptcy Code, 2016 in its Extra
Ordinary General Meeting held on 13th October, 2023.

- Further the company had decided to suspend pending capital projects which otherwise requires additional
funds to complete the pending capital projects.

Given the present circumstances, it concerns the companys ability to meet its contractual/financial obligations w.r.t
repayment of principal and interest on secured borrowings and arranging funds for ensuring normal operations as
well as for pending capital projects.

The above factors indicate the existence of a material uncertainty that may cast significant doubt on the companys
ability to continue as going concern and therefore company may be unable to discharge its liabilities in the normal
course of business unless some concrete efforts are made by the company to come out of financial crisis by infusing
interest free long term funds and increasing the volume of operations as well as profits of the company.

Emphasis of Matter

We draw attention to the following matters:

(1) As reported vide Note no. 48 of the audited financial statements regarding the balance confirmations of
Trade Receivables, Capital Advances, Advance to Suppliers & Trade Payables. During the course of
preparation of financial statements, letters through ordinary posts have been sent to various parties by the
company with a request to confirm their balances out of which few parties have confirmed their balances to
Company.

Our opinion is not modified in respect of the matter.

Key Audit Matters

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

Information Other than the Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the preparation and presentation of its report herein after
called 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 Financial
Statements and our Auditors Report thereon. The Management Discussion and Analysis, Boards Report including
Annexure to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information is
expected to be made available to us after the date of this auditors report.

Our opinion on the financial statements does not cover the Management Discussion and Analysis, Boards Report
including Annexure to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders
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 identified
above when it becomes available and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained during the course of audit, or otherwise appears to be
materially misstated.

When we read the Management Discussion and Analysis, Boards Report including Annexure to Boards Report,
Business Responsibility Report, Corporate Governance and Shareholders Information, based on the work performed
if we conclude that there is a material misstatement therein, we are required to communicate the matter to those
charged with governance and describe actions applicable in the applicable laws and regulations.

Responsibilities of Management and Those Charged with Governance for the 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 financial statements that give a true and fair view of the financial
position, financial performance including other comprehensive income, cash flows and changes in equity of the
Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting
Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued there under. This
responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the
Act for safeguarding 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 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.

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

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our
opinion on whether the company has 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.

Materiality is the magnitude of misstatements in the 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 financial statements of the current Year and are therefore the key audit
matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

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

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

d. In our opinion, the aforesaid financial statements comply with the Ind AS specified under section 133 of the
Companies Act, 2013, read with relevant rules issued thereunder.

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

f. The modifications relating to the maintenance of accounts and other matters connected therewith are as
stated in the paragraph 2 above.

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. 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.

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 as amended in our opinion and to the best of our information and
according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements
- Refer Note no. 37(a) to the 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 were no amounts which were 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, 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 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 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, no funds have been received
by the Company from any person 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 by or on behalf of the Funding Party
("Ultimate Beneficiaries") or provide any guarantee, security or the like from or on behalf of the Ultimate
Beneficiaries;

(c) 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 (i) and (ii) of Rule
11(e), as provided under (a) and (b) above, contain any material misstatement.

v. The company has not declared or paid any dividend (including interim and final dividend) during the year.

vi. Based on our examination, which included test checks, the Company has used accounting software for
maintaining its books of account, which has a feature of recording audit trail (edit log) facility and the same has
operated throughout the year for all relevant transactions recorded in the respective software. Further, for the
periods where audit trail (edit log) facility was enabled and operated throughout the year for the respective
accounting software, we did not come across any instance of the audit trail feature being tampered with and the
audit trial has been preserved by the Company as per the statutory requirements for record retention.

Annexure - A to the Independent Auditors Report

Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements section of our report of

even date. We report that:

(i) In respect of the Companys Property, Plant and Equipment and Intangible Assets :

(a) (A) The Company has maintained proper records showing full particulars, including quantitative details and
situation of Property, Plant and Equipment and relevant details of right-of-use assets.

(B) The Company has maintained proper records showing full particulars of Intangible assets.

(b) The Company has a regular programme of physical verification of its Property, Plant and Equipment and right-
of-use assets so to cover all the assets once every three years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets. Pursuant to the programme, certain Property,
Plant and Equipment were due for verification during the year and were physically verified by the Management
during the year. According to the information and explanations given to us, no material discrepancies were
noticed on such verification.

(c) According to the information and explanation given to us and on the basis of our examination of the records of
the Company, the title deeds of all the immovable properties (other than properties where the company is the
lessee and the lease agreements are duly executed in favour of the lessee) disclosed in the financial statements
included under Property, Plant and Equipment are held in the name of the Company as at the balance sheet
date.

(d) According to the information and explanation given to us, the Company has not revalued its Property, Plant and
Equipment (including Right of Use Assets) or intangible assets or both during the year.

(e) No proceedings have been initiated during the year or are pending against the Company as at March 31, 2025
for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016)
and rules made thereunder.

(ii) (a) According to information and explanation given to us, the physical verification of inventory has been
conducted at reasonable intervals by the management and no discrepancies were noticed on such physical
verification of inventories carried out by the management as compared to the book records. In our opinion the
coverage and procedure of such verification by the management is appropriate.

(b) The Company has not been sanctioned working capital limits in excess of Rs. Five crores, in aggregate, at
any points of time during the year, from banks or financial institutions on the basis of security of current
assets and hence reporting under clause 3(ii)(b) of the order is not applicable.

(iii) The Company 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 during the year.

(a) The Company has not provided loans or advances in the nature of loans or stood guarantee, or provided
security to any other entity during the year, and hence reporting under clause 3(iii)(a)(A) and 3(iii)(a)(B)of
the Order is not applicable.

(b) The Company has neither made investments nor provided guarantees or security or granted loans and
advances in the nature of loans during the year. Hence, reporting under clause 3(iii)(b) is not applicable.

(c) The Company has not granted loans and advances in the nature of loans. Hence, reporting under clause
3(iii)(c) is not applicable.

(d) The Company has not granted loans and advances in the nature of loans and therefore, reporting under
clause 3(iii)(d) is not applicable.

(e) The Company has not granted any loan or advance in the nature of loan and therefore, reporting under
clause 3(iii)(e) is not applicable.

(f) The Company has not granted any loans or advances in the nature of loans either repayable on demand
or without specifying any terms or period of repayment and therefore, reporting under clause 3(iii)(f) is not
applicable.

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

(v) The Company has not accepted deposits or amounts which are deemed to be deposits in contravention of the
directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant
provisions of the Companies Act and the rules made thereunder, where applicable. No order has been passed
by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other
Tribunal.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by
the Central Government for the maintenance of cost records under Section 148(1) of the Companies Act and
are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.
We have, however, not made a detailed examination of such records with a view to determine whether they
are accurate or complete.

(vii) (a)According to the information and explanation given to us and the books and records examined by us, we

state that undisputed statutory dues including Goods and Services tax, provident fund, employees state
insurance, income-tax, cess and Punjab State Development Tax and Other Statutory Dues have not been
regularly deposited by the company with the appropriate authorities and there have been serious delays in
a large number of cases. According to the information and explanation given to us, there were undisputed
amounts payable in respect of Goods and Services Tax, Provident fund and Other Statutory Dues were
outstanding, at the year end, for a period of more than six months from the date they became payable.

Name of the Statute	Nature of the Dues	Amount (Rs in lakhs.)	Period to Which the Amount relates	Due Date	Date of Payment	Remarks, if any
The Employees Provident Funds and Miscellaneous Provisions Act	Employees & Employers Provident Fund Contribution	23.98	July 2023	15th of the next month	Not yet deposit
The Employees Provident Funds and Miscellaneous Provisions Act	Employees & Employers Provident Fund Contribution	21.29	Aug. 2023	15th of the next month	Not yet deposit
The Employees Provident Funds and Miscellaneous Provisions Act	Employees & Employers Provident Fund Contribution	17.87	Sep. 2023	15th of the next month	Not yet deposit
The Employees Provident Funds and Miscellaneous Provisions Act	Employees & Employers Provident Fund Contribution	7.15	Aug. 2024	15th of the next month	Not yet deposit
Punjab Labour Welfare Fund Act	Labour Welfare Fund Employees & Employers Contribution	1.39	April 2023 to Sept. 2023	31.10.2023	Not yet deposit
Punjab Labour Welfare Fund Act	Labour Welfare Fund Employees & Employers Contribution	0.48	Oct. 2023 to March. 2024	30.04.2024	Not yet deposit
Goods and Services Tax Act	Interest on reversal of Input Tax Credit	11.77	March 2023	30.04.2023	Not yet deposit	-
Goods and Services Tax Act	Interest on reversal of Input Tax Credit	25.57	March 2024	30.04.2024	Not yet deposit	-
Goods and Services Tax Act	Reverse Charge Mechanism (Madhya Pradesh)	0.10	March 2024	30.04.2024	Not yet deposit
Goods and Services Tax Act	Reverse Charge Mechanism (Madhya Pradesh)	0.99	June 2024	31.07.2024	Not yet deposit
Punjab Water Resources, Regulation and Management Act	Ground Water Extraction Charges	2.04	April 2024 to June 2024	20th of the next month	Not yet deposit

(b)There are no statutory dues referred to in sub clause (a) which have not been deposited on account of
any disputes.

(viii) According to the information and explanation given to us, there were 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.

(ix) a) In our opinion and according to the information and explanation given to us, the Company has defaulted in
repayment of loans or other borrowings or in the payment of interest thereon to the lenders as given below:

Name of the lender and Nature of Borrowing	Principle (Amount in lakhs)	Overdue Since	Interest (Amount in lakhs)	Overdue Since
Bank of Maharashtra (Term Loan)	319.44	30.09.2023	291.54	31.07.2023
Bank of Baroda (Term Loan)	349.84	30.09.2023	318.75	31.07.2023
Central Bank of India (Term Loan)	77.62	30.09.2023	70.54	31.07.2023
Exim Bank of India (Term Loan)	9.44	30.09.2023	8.62	31.07.2023
Indian Bank (Term Loan)	2,450.18	30.09.2023	2,244.10	31.07.2023
Indian Overseas Bank (Term Loan)	480.98	30.09.2023	413.53	31.07.2023
Karur Vysya Bank (Term Loan)	47.93	30.09.2023	43.73	31.07.2023
Pheonix Arc Private Limited (Term Loan)	311.61	30.09.2023	284.33	31.07.2023
Punjab & Sind Bank (Term Loan)	285.89	30.09.2023	200.88	31.07.2023
Punjab National Bank (Term Loan)	1,133.04	30.09.2023	1,030.41	31.07.2023
SBER Bank (Term Loan)	66.79	30.09.2023	60.93	31.07.2023
State Bank of India (Term Loan)	4,986.22	30.09.2023	4,892.34	31.07.2023
UCO Bank (Term Loan)	489.31	30.09.2023	457.08	31.07.2023
Union Bank of India (Term Loan)	1,120.62	30.09.2023	1,020.28	31.07.2023

However, refer to the note no. 55, the Company filed an application before the Honble National Company Law Tribunal (NCLT), Chandigarh
Bench regarding the issue of declassification etc. The Honble National Company Law Tribunal (NCLT), Chandigarh Bench has passed an
interim ex parte order vide dated 16th August, 2023 with direction, granting a complete moratorium to the company in the payment of
amounts as per the plan including payment of deferred amount and interest of term loan and all other payments to the banks, till the next
date of hearing.

b) In our opinion and according to the information and explanation given to us, the Company (under
old/previous management prior to liquidation) has been declared wilful defaulter by Bank of Maharashtra
on 16.11.2022. In addition, the Company had also received a notice during the financial year 2022-23 from
India Exim Bank for appearance before "Willful Defaulter Committee" in earlier year for replying on the
willful defaulter notice.

c) In our opinion and according to the information and explanation given to us, the Company has not taken any
term loans during the year.

d) In our opinion and according to the information and explanation given to us, the company had not raised any
short term funds during the year. Hence, reporting under this clause is not applicable.

e) In our opinion and according to the information and explanation given to us, the Company has no
subsidiaries, associates or joint ventures. Hence, reporting under this clause is not applicable.

f) In our opinion and according to the information and explanation given to us, the Company the Company has
no subsidiaries, associates or joint ventures. Hence, reporting under this clause is not applicable.

(x) a) In our opinion and according to the information and explanation given to us, the Company has not raised
money 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) In our opinion and according to the information and explanation given to us, 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) a) According to the information and explanation given to us, No fraud by the Company or no fraud on the Company
has been noticed or reported during the year.

b) 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 upto the date of this report.

c) In our opinion and according to the information and explanation given to us, no whistle-blower complaints have
been received during the year by the Company.

(xii) In our opinion, the Company is not a Nidhi Company and hence reporting under clause 3(xii) of the order is not
applicable.

(xiii) According to the information and explanation given to us and based on our examination of the records of the
Company, all transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act,
where applicable and the details of related party transactions have been disclosed in the financial statements etc. as
required by the applicable accounting standards.

(xiv) a) In our opinion and according to the information and explanation given to us, the Company has an internal audit
system commensurate with the size and nature of its business.

b) We have considered the reports of the Internal Auditors for the period under Audit.

(xv) According to the information and explanation given to us and based on our examination of the records of the
Company, the Company has not entered into any non-cash transactions with directors or persons connected with its
directors and hence reporting under clause 3(xv) of the order is not applicable.

(xvi) In our opinion and according to the information and explanation given to us, the Company is not required to be

registered under Section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934) and hence reporting under
clause 3(xvi)(a),(b),(c) and (d) of the order is not applicable.

(xvii) In our opinion and according to the information and explanation given to us, the Company had incurred cash losses
amounting to Rs. 3,698 lakhs in the financial year and Rs. 9,780 lakhs in the immediately preceeding financial year.
We further states that cash losses have been arrived at without adjusting the financial impact of matter stated in
paragraph 1 of Basis for Qualified Opinion paragraph.

(xviii) There has been no resignation of statutory auditors of the Company during the year; hence reporting under clause
3(xviii) of the order is not applicable.

(xix) Refer to note no. 53 of the financial statements alongwith ageing and expected dates of realisation of financial
assets and payment of financial liabilities, other information accompanying the financial statements and on the basis
of our observations mentioned in paragraph (Material Uncertainty Related to Going Concern), we are of the opinion
that material uncertainty exists as on the date of the audit report indicating that the 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 our opinion and according to the information and explanation given to us, the provisions of Section 135(5) of
Companies Act are not applicable to the Company; hence reporting under clause 3(xx) of the order is not applicable.

"Annexure - B" to the Independent Auditors Report

(Referred to in Paragraph 2(f) under the "Report on other legal and regulatory requirements" section of our
report to the members of SEL Manufacturing Company Limited of even date)

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 SEL Manufacturing Company Limited
("the Company") as of 31^st March, 2025 in conjunction with our audit of the financial statements of the Company for
the year ended on that date.

Managements Responsibility for Internal Financial Controls

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 ("ICAI"). These responsibilities include the
design, implementation and maintenance of adequate internal financial controls that were operating effectively for
ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the
safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable financial information, as required under the 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 Institute of Chartered
Accountants of India ("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 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 controls 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 controls 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 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, 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.

Disclaimer of Opinion

The system of internal financial controls over financial reporting with regard to the company were not made
available to us to enable us to determine if the company has established adequate internal financial control over
financial reporting and whether such internal financial controls operating effectively as on 31^st March, 2025.

Basis for Qualified Opinion

In our opinion and according to the information and explanations given to us and based on our audit of Financial
Statements, in respect of the matters disclosed in paragraphs under "Basis for Qualified Opinion", "Material
Uncertainty relating to Going Concern" and "Emphasis of Matter" of our main Independent Auditors Report which
came to our notice during the course of audit of financial statements indicates material weaknesses in the internal
financial controls over financial reporting as at 31^st March, 2025.

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 or
interim financial statements will not be prevented or detected on timely basis.

Qualified Opinion

In our opinion, the matters disclosed in above paragraphs under "Basis for Qualified Opinion" indicate material
weaknesses in the internal financial controls over financial reporting.

We have considered the disclaimer of opinion as well as material weaknesses identified and reported in Qualified
Opinion paragraph in determining the nature, timing, and extent of audit tests applied in our audit of the financial
statements of the Company for the year ended 31^st March, 2025 and the disclaimer and material weaknesses do not
affect our opinion on the financial statements of the Company.

For Kamboj Malhotra & Associates

Chartered Accountants

Firm Reg. No. 015848N

 

(CA Manik Malhotra)

Partner

M.No.: 094604

UDIN: 25094604BMKZUG3043

 

Place: Ludhiana

Date: 30.05.2025