uttam galva Auditors report

To

The Members

M/s Uttam Galva Steels Limited Opinion

We have audited the accompanying Standalone Ind AS Financial Statements of M/s Uttam Galva Steels Limited

("the Company"), which comprises of the Balance Sheet as at 31^st March, 2021, the Statement of Profit and Loss and (including Other Comprehensive Income), the Cash Flow Statement, and the Statement of Changes in Equity for the year then ended, and Notes to the Standalone Financial Statements, including a summary of significant 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 Standalone Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021, and loss (including other comprehensive income), its changes in equity and its cash flows for the year then ended.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013 (the Act). 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 financial statements under the provisions of the Companies

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

Emphasis of Matters

We draw your attention to Note No. 39 of the Standalone Financial Statements. The Honble National Company Law Tribunal (NCLT), Mumbai bench, had admitted the petition for initiating Corporate Insolvency Resolution Process (CIRP) against the company under section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) vide its Order dated 1^st October, 2020 and appointed Mr. Milind Kasodekar as the Interim Resolution Professional in terms of the IBC. Subsequently Mr. Milind Kasodekar was confirmed as the Resolution Professional (RP) in the 1^st Committee of Creditors (COC) meeting held on 4^th November 2020.

Our opinion remains unmodified in respect of the matters above.

Key Audit Matters

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

We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters	How our audit addressed the key audit matter
1) Evaluation of Contingent Liabilities	Our audit procedures include the following:
(Refer Note 30 of the Standalone Financial Statements)	• Assessing the appropriateness of the managements judgment in estimating the value of claims against the company not acknowledged as debts.
Claims against the company not acknowledged as debts are disclosed in Standalone Financial Statements. The existence of the payments against these claims requires management judgment to ensure disclosure of most appropriate values of contingent liabilities.	• We have obtained details of completed tax assessments and demands/claims raised up to 31st March 2021 from management.
	• We assessed the completeness of details of these claims through discussion with senior management personnel.
	• We have also reviewed the outcome of the disputed cases at various forums.
	• We have also assessed the appropriateness of presentation of the contingent liabilities in the Standalone Financial Statements.
2) Recoverability of Subsidy under Package Scheme of Incentive	Our audit procedures include the following:
(Refer Note 10, 21 and 32 of the Standalone Financial Statements)	• We obtained applications made claim under Industrial Packaging scheme.
As at 31st March, 2021,Current Assets include Receivables under IPS Subsidy/ Mega Incentive Scheme relating to VAT and GST recoverable amounting to ^ 70.98 crores subject to receipt of Government approval from relevant authority.	• We assessed the completeness of details of these claims through discussion with senior management personnel.
	• We have involved our internal experts to review the nature of the amounts recoverable, the sustainability and the likelihood of recoverability
3) Evaluation of Exceptional Items	Our audit procedures include the following:
(Refer Note 29 of the Standalone Financial Statements)	• Assessing the appropriateness of the managements judgement in estimating the amounts recognized in Profit and Loss.
During the year, the company has recognized the following to the Statement of Profit and Loss as exceptional items:	• We have also assessed the appropriateness of presentation of these exceptional items in the Standalone Financial Statements in accordance with requirements of Ind AS.
1. Provision on advances to vendors amounting to ^ 5.73 crores as the vendor is undergone to CIRP, hence these amounts are no longer recoverable.
2. Provision for diminution in the value of Investments held with Uttam Galva North America (Subsidiary) aggregating to ^ 34.97 crores.
3. Provision totaling to ^ 0.46 Crores in relation to LC Margin Deposit held with PMC Bank, due to inability to exercise full control over these balances until the resolution plan for PMC Bank is provided by the RBI.
4. Provision for diminution in value of Investment held with PMC Bank amounting to ^ 0.10 crores.
4) Provision of Finance cost of Borrowing from banks and FIs and receipt of loan recall notice from secured lenders	Our audit procedures include the following:
(Refer Note 27 of the Standalone Financial Statements)	• Updating our understanding of Companys procedure and financial control about recognition of finance costs.
The Company has recognized the interest expenses on borrowings from the secured lenders amounts to ^ 47.37 Crores based on the interest rates provided in the agreements between the secured lenders and the Company.	• Verifying, on test check basis, the computation of interest with reference to principal amount, rate of interest, additional or penal interest as per the agreements, as applicable.
The company has defaulted in repayment of dues to financial institutions and banks as per Annexure IIRs. attached. The secured lenders have classified the Companys accounts as Non-performing Asset (NPA) for non-payment of installments and stopped recognizing the interest income in their books of account, hence accordingly not confirmed the amount of interest due from the Company.	• Verifying the monthly bank statements on test check basis.
(Refer Note 17(iii) of the Standalone Financial Statements)	• Direct balance confirmations of principal amount due from the selected lenders as at 31st March, 2021 could not be obtained due to COVID-19 lockdown and therefore, the existing arrangements have been relied upon to the extent possible.
The Company has received the loan recall notice from secured lenders amounting to ^ 7155.08 crores.	• Ensuring the completeness of disclosure and presentation of borrowings and borrowing costs as per applicable Ind AS.
We considered this matter as key audit matter due to significant amount of finance costs incurred, which comprises major part of the total expenditure of the Company.	• We state that the amount of interest on loans not charged
	by the Banks and Financial Institutions due to the default by the Company on repayment has led to under reporting of financial costs, and in the absence of complete information, the proper amount could not be ascertained.
5) Unhedged Foreign Currency Exposure due to ECBs and FCL	Our audit procedures for assessing the risk of the unhedged foreign currency exposures included, but were not limited to the following:
(Refer Note 17 (iii) of the Standalone Financial Statements) As on 31st March, 2021 the company has exposure to foreign exchange risk as a result of borrowings from Banks and FIs of $ 241.94 Million.	• Assessing the appropriateness of the amounts as recognized in Profit and Loss.
The existence of such exposure has resulted in exchange gain of ^ 47.46 crores on Translation of Foreign Currency on Reporting date due to the volatility of USD-INR exchange rates.	• We have also assessed the appropriateness of presentation of these exceptional items in the Standalone Financial Statements in accordance with requirements of Ind AS.
	• We consider this matter as a key audit matter due to significant amount of foreign exchange loss incurred by the company on Foreign Currency Loan and the global impact of COVID-19 pandemic on the Currency Exchange Rates
6) Revaluation of Land	Our audit procedures include the following:
The carrying value of Land as per Note 1 ("Property, plant and equipment") of the Standalone Financial Statements as on 31st March, 2021 stands at ^ 1067.12 crores.	• We obtained an understanding from the management, assessed and tested the design and operating effectiveness of the Companys key controls over the assessment and fair valuation of material Property, plant and equipment.
As per Note 1.01(b) of the Significant notes to accounts - The financial statements are prepared under the historical cost convention, except for certain financial instruments, and Land, which are measured at fair values at the end of reporting period. The company follows Revaluation Model for Land.	• We evaluated the Companys process regarding assessment and fair valuation by involving auditors valuation experts to assist in assessing the appropriateness of the valuation model.
	We are unable to obtain a recent report on the valuation of land by an expert due to lockdown caused by COVID-19 pandemic and hence, the Company has retained the carrying value.
7) Delay in Adoption of Ind AS 116 Leases	Our audit procedures on adoption of Ind AS 116 include:
The application and transition to this accounting standard is complex and is an area of focus in our audit since the Company has leases with different contractual terms.	• Assessed the Companys evaluation on the identification of leases based on the contractual agreements and our knowledge of the business.
Ind AS 116 introduces a new lease accounting model, wherein lessees are required to recognise a right-of-use (ROU) asset and a lease liability arising from a lease on the balance sheet. The lease liabilities are initially measured by discounting future lease payments during the lease term as per the contract/ arrangement. Adoption of the standard involves significant	• Requested for Lease Agreements to check the applicability of Ind AS 116 based on the tenure of the lease and renewal clause provided in the Agreements, however, due to the lockdown on account of COVID-19 pandemic, only the basic details of the Lease could be identified and hence, application of Ind AS 116 could not be done since the Computation of the Discounting rate, recognition of the ROU etc. was not possible due to unavailability of generic information on the leases and monthly invoices.
and estimates including, determination of the discount rates and the lease term. Additionally, the standard mandates detailed disclosures in respect of transition.	• The Company has proposed to apply the Ind AS upon access to proper data and Agreements after relaxation of the COVID-19 Lockdown.
	• We agree with the Managements evaluation, since the overall impact during the term of lease on the Profit and Loss and the Assets and Liability balances created at the time of initial recognition will be Nil
8) Recoverability of investments in and loans/ advances given to certain subsidiaries and Joint ventures and financial guarantees given on behalf of certain subsidiaries	Our audit procedures included the following:
(Refer Note 4(i), Note 4(iv) and Note 38 of Standalone Financial Statements)	• We have obtained and read managements assessment for identification of indicators of impairment.
• As on 31st March, 2021 investment in Subsidiary, Joint Ventures and Associates are valued at ^ 39.75 Crores after adjustment for diminution in Value of Investments of ^ 69.46 crores	• We performed test of controls over impairment process through inspection of evidence of performance of these controls.
• As on 31st March, 2021 the Company has recognised 100% of the amount of Advance given to its subsidiaries as Provision for Diminution in Value of Advances aggregating to ^ 61.98 crores since the subsidiaries are incurring losses and their net worth is lower than the cost of investment.	• Assessed the impairment model prepared by the management and the assumptions used by:
• Assessment of the recoverable amount of the investments in and loans/advances including interest thereon given to these subsidiaries and joint ventures and financial guarantees given on behalf of these subsidiaries has been identified as a key audit matter due to:	- assessing the cash flow forecasts through analysis of actual past performance and comparison to previous forecasts;
i. Significance of the carrying amount of these balances.	- testing the mathematical accuracy and performing sensitivity analyses of the models;
ii. The assessment requires management to make significant estimates concerning the estimated future cash flows, qualitative assessments of the status of the project and its future depending on balance work to be performed or approvals to be received, associated discount rates and growth rates based on managements view of future business prospects.	- understanding the commercial prospects of the assets/ projects, and comparison of assumptions with external data sources;
iii Changes to any of these assumptions could lead to material changes in the estimated recoverable amount, impacting both potential impairment charges and also potential reversals of impairment taken in prior years.	• We assessed the competence, capabilities and objectivity of the experts used by the Management in the process of evaluating impairment models.
9) Non-Applicability of IND AS 109	Our audit procedures included the following:
(Refer Note 13 & 33 of the Standalone Financial Statements of FY 20-21) During the Financial Year ended 31st March 2019, ArcelorMittal Luxembourg and ArcelorMittal India Pvt. Ltd. had made payments of US$ 169.04 Mios and ^ 4,922.30 crores to secured financial lenders to clear the foreign currency loans, over-due Rupee Term Loan and Working Capital Loan together with	• Obtained an understanding of the measurement of these loans and inter corporate deposits and tested the reasonableness of the significant judgement applied by the management.
interest, acting as a lender providing financial support to the Company due to financial difficulty. No interest has been charged on the said financial support during the year. In addition, ArcelorMittal India Pvt. Ltd. has also provided Inter Corporate Deposit amounting to ^ 362.63 crores as long-term funding on which no interest has been charged.	• Evaluated the design of key internal control mechanisms relating to measurement and also tested the operating effectiveness of the aforesaid controls.
Ind AS 109 specifically deals with cases with respect to accounting of Financial Instruments on off-market terms. The company has elected not to follow the principles of IND AS 109 with respect to the accounting of interest-free financial support. Had the company followed the accounting treatment of IND AS 109, the company would be required to measure the financial liabilities at its fair value. However, the overall impact on the Profit and Loss Statement and Balance Sheet over the tenure of the amount extended at current estimates would be NIL.	• Assessed the design, implementation, and operating effectiveness of managements key internal controls over classification, valuation, and valuation models of the specified loans.
	• Obtained an understanding of the guidelines as specified in Ind AS 109 Financial Instruments, various regulatory updates and the Companys internal instructions and procedures in respect of accounting and classification.

Information Other than the Financial Statements and Auditors Report Thereon

The Companys Management is responsible for preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include the Standalone Financial Statements and our auditors report thereon.

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

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Managements Responsibility for the Standalone Financial Statements

The Companys Management under the direction of Resolution Professional 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, 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.

The company has gone into Corporate Insolvency Resolution Process ("CIRP") vide order of the National Company Law Tribunal, Mumbai Bench ("NCLT") dated 1^st October, 2020, under the provisions of the Insolvency & Bankruptcy Code 2016 ("Code"). Pursuant to the Order, the powers of the Board of Directors stand suspended and such powers are exercisable by Mr. Milind Kasodekar, who has been appointed as Interim Resolution Professional by aforesid NCLT order and was consequently confirmed as Resolution Professional by the Committee of Creditors (COC) in its meeting held on 4^th November, 2020.

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 judgements 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 Ind AS 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, Management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Management is responsible for overseeing the Companys financial reporting process.

Auditors Responsibility for the Audit of the Standalone Financial Statements

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

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

• Identify and assess the risks 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.

• 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 with reference to Standalone Financial Statements 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 the 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 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 achieves fair presentation.

Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditorsRs. 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, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act 2013, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The Company has no branch office that is to be audited under section 143(8) of the Act and hence the company is not required to conduct audit under section 143(8) of the Act;

d) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash flow statement, and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

e) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with the Companies (Accounts) Rules, 2014 except for matters specified in Emphasis of Matter.

f) On the basis of written representation received from the directors as on 31^st March 2021 taken on record by the Resolution Professional, none of the directors are disqualified as on 31^st March, 2021 from being appointed as a director in terms of Section 164(2) of the Act.

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

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

i. The Company has disclosed the impact of pending litigations on its financial position as per Note 30 of the Standalone Financial Statement.

ii. The Company has made provision, as required under the applicable law or Indian Accounting Standards (Ind AS), for material foreseeable losses, and as required on long-term contracts including derivative contracts as per Notes to the Standalone Ind AS Financial Statement.

iii. The Company is not required to transfer any amount to the Investor Education and Protection Fund during the year.

i) With respect to the matter to be included in the AuditorsRs. Report under Section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director in excess of the limit laid down under Section 197 of the Act is approved by Special Resolution. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

Annexure - A to Independent Auditors Report

The Annexure ARs. referred to in Independent Auditors Report

to the Members of the Company on the Standalone Financial

Statements for the year ended 31^st March, 2021, we report

that:

(i) (a) According to the information and explanation

given to us and based on the records produced before us, we are of the opinion that the Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) According to the information and explanation given to us and based on the records produced before us, the title deeds of immovable properties are held in the name of the company.

(ii) According to the information and explanation given to us, the Company was unable to conduct the physical verification exercise of Inventory due to the Covid-19 pandemic situation.

(iii) According to the information and explanation given to us, the Company has not granted any secured & unsecured loan to Companies, Firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act whose repayment is overdue for more than ninety days during the year. Hence this clause is not applicable to the Company.

(iv) According to the information and explanation given to us, we are of the opinion that in respect of loans, investments, guarantees, and security, provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.

(v) According to the information and explanation given to us, the company has not accepted any deposits within the meaning of Section 73 to 76 of the Act and the rules framed there under.

(vi) According to the information and explanation given to us, the Company has maintained cost records as specified by the Central Government under subsection (1) of section 148 of the Act.

(vii) (a) According to the information and explanations

given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident fund, EmployeesRs. State Insurance,

Income-tax, Goods and Services tax, duty of Customs, Cess and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, EmployeesRs. State Insurance, Income- tax, Goods and Services tax, duty of Customs, Cess and other material statutory dues were in arrears as at 31^st March,2021, for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us and the record produced before us, the disputed amount payable in case of Income Tax, Goods & Service Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax or Cess is as per Annexure IRs. attached.

(viii) According to the information and explanation given to us and based on the records provided before us, the company has defaulted in repayment of dues to financial institutions and banks as per Annexure IIRs. attached.

(ix) According to the information and explanation given to us and the record produced before us, the company has not raised any money by way of initial public offer or further public offer and by way of any term loan.

(x) During the course of our examination of the books of account carried in accordance with the generally accepted auditing standards in India, we have neither come across any instance of fraud on or by the Company by its officers or employees, either noticed or reported during the year, nor have we been informed of such case by the Management.

(xi) According to the information and explanation given to us and the record produced before us, managerial remuneration paid by the Company is in accordance with requisite approvals mandated by the provisions of section 197 read with Schedule V of the Companies Act, 2013.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company as prescribed under section 406 of the Companies Act, 2013. Hence the provision of this clause is not applicable to the company.

(xiii) According to the information and explanation given to us and the record produced before us, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013, where applicable and the details have been disclosed in the Standalone Financial Statements, as required by the applicable Indian Accounting Standards.

(xiv) According to the information and explanation given to us and the record produced before us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Hence the provision of this clause is not applicable to the company.

(xv) According to the information and explanation given to us and the record produced before us, the company has not entered into any non-cash transactions with

directors or persons connected with him. Hence the provision of this clause is not applicable to the company.

(xvi) According to the information and explanations given to us, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Annexure - B to the Independent AuditorsRs. Report

Report on the Internal Financial Controls under Clause

(i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

Opinion

We have audited the internal financial controls with reference to Standalone Financial Statements of Uttam Galva Steels Limited ("the Company") as of 31^st March, 2021 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements and such internal financial controls were operating effectively as at 31^st March, 2021, based on the internal financial controls with reference to Standalone Financial Statements 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 "Guidance Note").

Managements Responsibility for Internal Financial Controls

The Companys Management under the direction of Resolution Professional is responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to Standalone Financial

Statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. 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 (hereinafter referred to as "the Act").

AuditorsRs. Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to the Standalone Financial Statements based on our audit. We conducted our audit in accordance with the Guidance Note 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 with reference to Standalone Financial Statements. 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 with reference to Standalone Financial Statements were established and maintained and whether 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 with reference to Standalone Financial Statements and their operating effectiveness. Our audit of internal financial controls with reference to Standalone Financial Statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls with reference to Standalone Financial Statements.

Meaning of Internal Financial Control with reference to Standalone Financial Statements

A companys internal financial control with reference to Standalone Financial Statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Financial Statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control with reference to Standalone Financial Statements 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 Standalone Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management of the company under the direction of Resolution Professional 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 with reference to Standalone Financial Statements

Because of the inherent limitations of internal financial controls with reference to Standalone Financial Statements, 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 with reference to Standalone Financial Statements to future periods are subject to the risk that the internal financial controls with reference to Standalone Financial Statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

ANNEXIJRE I

Details of disputed statutory dues as on 31^st March, 2021.

Sr. No. Nature of duty	Period	Amount (in	From where dispute is pending
1 Service Tax	Oct-06 to Nov-09	13,15,490	Deputy Commissioner of Central Excise
2 Excise Duty	Mar-12 to 28th May-12	17,77,180	Central Excise & Service Tax Appellate Tribunal
3 Service Tax	Mar-11 Jun-11 Aug-11 & Sep-11	25,02,879	Central Excise & Service Tax Appellate Tribunal
4 Service Tax	Jan-11 Feb-11 Apr-11 May- 11 Jul-11 Oct-11 to Dec-11.	24,15,279	Central Excise & Service Tax Appellate Tribunal
5 Service Tax	Jan-12	8,60,833	Central Excise & Service Tax Appellate Tribunal
6 Excise Duty	May-07 to Sep-09	2,76,12,314	Additional Commissioner of Central Excise
7 Custom Duty	Financial Year 2008-09	11,67,80,968	Central Excise & Service Tax Appellate Tribunal
8 Income-tax	Financial Year 2015-16	13,26,708	Commissioner of Income-tax (Appeal)
9 Income-tax	Financial Year 2013-14	73,87,865	Commissioner of Income-tax (Appeal)
10 Sales Tax	Financial Year 2009-10	93,51,90,267	Sales Tax Tribunal (STT) Bench IV, Mumbai
11 Sales Tax	Financial Year 2010-11	1,25,02,64,797	Sales Tax Tribunal (STT) Bench IV, Mumbai
12 Sales Tax	Financial Year 2015-16	58,41,97,380	Joint Commissioner (JC) of Sales Tax (Appeals), Konkan Bhavan, CBD Belapur, Navi Mumbai.
13 Sales Tax	Financial Year 2012-13	64,42,55,744	Honble Bombay High Court, Mumbai.
14 Sales Tax	Financial Year 2013-14	57,64,80,580	Honble Bombay High Court, Mumbai.
15 Sales Tax	Financial Year 2014-15	59,87,50,735	Honble Bombay High Court, Mumbai.
	Total	4,75,11,19,019

ANNEXIJRE II

Details of Term Loan Principal and Interest overdue as on 31^st March,2021.

Name of Lender	Default in		Default from
	Principal Repayment (^)	Interest Accrued & Due(^)	Principal Repayment (^)	Interest ro
Punjab National Bank	22.99	4.36	June-2019	June-2019
Bank of Baroda	8.75	1.88	June-2019	June-2019
Vijava Bank	67.34	10.62	June-2019	June-2019
Syndicate Bank	34.69	6.88	June-2019	June-2019
Oriental Bank of Commerce	74.22	12.42	June-2019	June-2019
Indian Overseas Bank	36.98	6.67	June-2019	June-2019
State Bank of India	152.34	15.21	June-2019	June-2019
Phoenix ARC	60.00	11.31	June-2019	June-2019
ArcelorMittal India Pvt ltd	4922.30		June-2020	-
State Bank of India-FCL		2.45		June-2019
Bank of India ECB US$ 30 Mios	82.56	10.39	July-2019	January-2019
Bank of Baroda-ECB US$ 15 Mios	41.28	5.01	July-2019	January-2019
Punjab National Bank - ECB US$ 25 Mios	63.29	7.96	July-2019	January-2019
Union Bank of India ECB US$ 25 Mios	66.67	8.10	July-2019	January-2019
Indian Bank ECB US$ 20 Mios	55.04	6.93	July-2019	January-2019
Canara Bank ECB US$ 30 Mios	80.27	9.75	July-2019	January-2019
Indian Overseas Bank-ECB US$ 25 Mios	68.80	8.35	July-2019	January-2019
ICICI Bank Limited ECB US$ 28 Mios	77.05	9.36	July-2019	January-2019
AMNS Luxembourg Holdings SA	1240.50		June-2020	-
Total	7155.08	137.64