SRU Steels Ltd Auditor Reports

To,
The Members of SRU Steels Limited

Report on the audit of the Standalone Financial Statements

Qualified Opinion
We have audited the accompanying standalone financial statements of SRU Steels Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2026, 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 then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the effects and possible effects of the matters described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, of the state of affairs of the Company as at March 31, 2026, and its loss (including other comprehensive income), changes in equity, and its cash flows for the year ended on that date.

Basis for Qualified Opinion

1. Inability to Verify Inventory (Excess Valuation): The management has not provided any confirmation, representation, or physical verification records regarding the inventory stocks as of March 31, 2026. Consequently, we were unable to perform alternative audit procedures to obtain sufficient appropriate audit evidence regarding the existence, condition, and valuation of the inventory. We are unable to determine whether any adjustments to these amounts are necessary.

2. Non-Provision of Interest Expense (Ind AS Departure): The Company has availed unsecured loans from directors and relatives. However, it has not provided for interest on these loans. This non-recognition of interest expense constitutes a departure from Ind AS 109. Had the interest been recognized, the financial liabilities would have been higher, and the reported profit would have been correspondingly lower.

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3. Non-Recognition of Interest Income (Ind AS Departure): The Company has granted loans and advances to various entities and individuals but has failed to recognize interest income on these disbursements. This departure from Ind AS 109 means that, had the interest been accrued, the financial assets and reported profit would have been higher.

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

Emphasis of Matter

We draw attention to the following matters in the notes to the standalone financial statements. Our qualified opinion is not further modified in respect of these matters:

1. Statutory Non-Compliance (Section 186): The Company has granted loans and advances to individuals, which is in direct violation of the provisions and limits specified under Section 186 of the Companies Act, 2013.

2. Utilization of Rights Issue Proceeds: The Company issued right shares to eligible shareholders to raise funds for specific purposes. On the basis of the documents available, the Company has made advance payments to suppliers, investments in shares and securities, and payments for general business purposes out of these proceeds.

3. Pending Confirmations: The financial statements reflect outstanding balances related to trade receivables, trade payables, loans, and advances that are currently subject to confirmations and reconciliations.

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.

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, total comprehensive income, changes in equity and cash flows of the Company in accordance with Ind AS. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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.

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 statement on the matters specified in paragraphs 3 and 4 of the Order.

2. (A) As required by section 143(3) of the Act, we further 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, 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 Ind AS financial statements comply with the applicable

Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the directors as on March 31, 2026, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2026, 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.

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

a) The Company has disclosed the impact of pending litigations as at 31 March, 2026 on its financial position in its financial statements - Refer Note N of Notes to Accounts.

b) The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.

c) There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the company during the year ended on 31st March, 2026.

d) 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 ("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;

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:

- 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 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) contain any material mis-statement.

e) There is no dividend declared or paid during the year by the Company. So, there is no need to comply with section 123 of the Companies Act, 2013.

f) Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account for the financial year ended March 31, 2026 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 software. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with and the audit trail

has been preserved by the company as per the statutory requirements for record retention.

(C) In our opinion and according to the information and explanations given to us, the remuneration paid by the company is in accordance with the provisions of section 197 of the Act. The remuneration paid any director is not in excess of the Limit laid down under section 197 of the Act.

FOR BHIMANI SHAH & CO.
CHARTERED ACCOUNTANTS
FRN NO. 1192W
KUNAL T SANGHAVI
PARTNER
M.NO. 173487

PLACE: AHMEDABAD
DATE: 08/09/2026

UDIN :- 26173487TKSIJU2139

ANNEXURE A TO THE AUDITORS REPORT
(Referred to in Paragraph 1 under Report on Other Legal and Regulatory Requirements of our report of even date)

- (i) Property, Plant and Equipment: The Company has not maintained proper records showing full particulars, including quantitative details and situation of Property, Plant, and Equipment. Further, the records made available to us during the course of our audit. Due to the non-availability of these records, we were unable to physically verify the assets or determine whether any physical verification was conducted by the management. Consequently, we are unable to comment on the existence of the assets or whether any material discrepancies exist. Furthermore, the original title deeds of immovable properties were not produced before us for verification; therefore, we are unable to confirm whether they are held in the name of the Company.

- (ii) Inventory (Stock): The management has not provided any confirmation or representation regarding the physical verification of the stock (inventory) during the year. Consequently, we are unable to comment on the frequency of verification, the coverage, or any material discrepancies that might exist between the physical stock and the book records.

- (iii) Loans and Investments: The Company has granted loans to others aggregating to Rs. 15,82,735/- during the year, with a balance outstanding of Rs. 19,34,02,619. These are repayable on demand and carry no stipulation for interest.

- (iv) Compliance with Section 185 and 186: In our opinion and according to the information and explanations given to us, the Company has granted loans and advances to individuals which is in direct violation of the provisions of Section 186 of the Companies Act, 2013.

- (v) Deposits: The Company has not accepted any deposits from the public during the year within the meaning of Sections 73 to 76 of the Act.

- (vi) Cost Records: The maintenance of Cost Records under section 148(1) of the Companies Act, 2013 is not applicable to the Company.

- (vii) Statutory Dues: There are no undisputed statutory dues outstanding for more than six months. Disputed statutory dues aggregating to Rs. 1,179.35 lacs remain unpaid, including Income Tax Demands pending before the CIT(A) and the Punjab & Haryana High Court.

- (viii) Unrecorded Income: The Company has not surrendered or disclosed any previously unrecorded transactions as income in tax assessments during the year.

- (ix) Borrowings: The Company has not defaulted in repayment of loans or borrowings and has not been declared a willful defaulter by any financial institution.

- (x) Share Allotment: The Company has not raised moneys by way of further public offer or made any preferential allotment/private placement during the year.

- (xi) Frauds: No fraud by the Company or on the Company has been noticed or reported during the course of the audit.

- (xii) Nidhi Company: The Company is not a Nidhi Company.

- (xiii) Related Party Transactions: Transactions with related parties comply with sections 177 and 188 of the Act, and details have been appropriately disclosed in the Ind AS financial statements.

- (xiv) Internal Audit: The Company has an internal audit system commensurate with its size and nature of business.

- (xv) Non-cash Transactions: The Company has not entered into any non-cash transactions with its directors or connected persons.

- (xvi) RBI Registration: The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

- (xvii) Cash Losses: The Company has not incurred cash losses in the current and immediately preceding financial year.

- (xviii) Statutory Auditors: There has been no resignation of the statutory auditors during the year.

- (xix) Material Uncertainty: Based on financial ratios and the expected realization of financial assets, nothing has come to our attention to indicate that a material uncertainty exists regarding the Companys capability to meet its liabilities falling due within one year.

- (xx) CSR: Section 135 of the Companies Act, 2013 does not apply to the Company.

FOR BHIMANI SHAH & CO.
CHARTERED ACCOUNTANTS
FRN NO. 1192W
KUNAL T SANGHAVI
PARTNER
M.NO. 173487

PLACE: AHMEDABAD
DATE: 08/09/2026

UDIN :- 26173487TKSIJU2139

ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT
(Referred to in our Independent Auditors Report of even date on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013)

1. Auditors Responsibility

We have audited the internal financial controls over financial reporting of SRU Steels Limited as of March 31, 2026, in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

2. Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company, considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the ICAI.

3. Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Ind AS. It includes policies and procedures that ensure records accurately reflect transactions, receipts and expenditures are properly authorized, and unauthorized acquisition or use of company assets is prevented or detected.

4. Inherent Limitations

Because of the inherent limitations of internal financial controls, including the possibility of management override or collusion, material misstatements due to error or fraud may occur and not be detected. Projections of any evaluation of the internal financial controls to future periods are subject to the risk that the controls may become inadequate due to changes in conditions.

5. Opinion

In our opinion, subject to the material weaknesses related to the lack of management confirmation on physical inventory controls and the internal

control failures leading to non-compliance with Section 186, the Company has, in all material respects, an adequate internal financial controls system over financial reporting, and such controls were operating effectively as at March 31, 2026, based on the criteria established by the Company considering the essential components of internal control stated in the ICAI Guidance Note.

FOR BHIMANI SHAH & CO.
CHARTERED ACCOUNTANTS
FRN NO. 119020W
KUNAL T SANGHAVI
PARTNER
M.NO. 173487

PLACE: AHMEDABAD
DATE: 08/09/2026

UDIN :- 26173487TKSIJU2139