Zenith Steel Pipes & Industries Ltd Auditor Reports

To

the Members of

Zenith Steel Pipes & Industries Limited

Report on the Audit of the Standalone Financial Statements Qualified

Opinion

1. We have audited the accompanying standalone financial statements of Zenith Steel Pipes & Industries Limited (the Company), which comprise the Standalone Balance Sheet as at 31 March 2026, and the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year ended on that date, and notes to the Standalone Financial Statements, including a summary of material accounting policy information 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, subject to the effect of the matters described in the Basis for Qualified opinion paragraph below 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 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 March 2026, the Profit and Other Comprehensive Loss, Changes in Equity and its Cash Flows for the year ended on that date.

Basis for Qualified Opinion

1. With reference to Note No. 35 of the Standalone Financial Statement, the Company has not complied with the provisions of Section 74 and other applicable provisions of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 with respect to the,

(a) Non-repayment of public deposits and the interest thereon on the respective due dates, (b) Non-maintenance of prescribed liquid assets to the extent required under the said Rules, and (c) Non-compliance with the orders passed by the Company Law Board (CLB) in connection with the above matters.

In our opinion, these constitute a material non-compliance with the provisions of the Act and may result in regulatory implications for the Company. Had the Company complied with the aforesaid provisions, the reported liabilities, interest obligations, and disclosures in the standalone financial statements would have been different.

2. With reference to Note No. 43 of the Standalone Financial Statement, balances relating to Trade Payables, Trade Receivables, Loans, Advances, Deposits, Intergroup balances, Current Liabilities, Borrowings from others, etc., are subject to reconciliation and confirmation. The management has not sent direct balance confirmations to the respective parties, citing pending reconciliations. In the absence of such confirmations and reconciliations, we are unable to obtain sufficient appropriate audit evidence to verify the accuracy, completeness, and recoverability/payability of these balances as at the reporting date. Consequently, we are unable to determine whether any adjustments are required in respect of the stated balances in the accompanying standalone financial statements.

3. With reference to Note No. 50 to the Standalone Financial Statement, the Company has made a provision of Rs. 41.07 lakhs in respect of certain current bank accounts which are non- operative

and have been frozen by regulatory authorities. In the absence of relevant bank statements and year-end balance confirmations for these accounts, we were unable to obtain sufficient appropriate audit evidence to verify the completeness and accuracy of the balances reported in respect of these accounts. Accordingly, we are unable to determine whether any adjustments may be required to the carrying amount of these balances and the related impact, if any, on the standalone financial statements for the year ended 31 March 2026.

4. We draw attention to Note No. 47 to the Standalone Financial Statement, which states that the Company has incurred significant accumulated losses exceeding its share capital and reserves, and its net worth has been fully eroded as at 31 March 2026. These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Companys ability to continue as a going concern. However, the Standalone Financial Statements have been prepared on a going concern basis based on the reasons stated by the management in the said note. In our opinion, the material uncertainty exists, and accordingly, the use of the going concern basis of accounting in the preparation of the Standalone Financial Statements is not adequately supported.

5. We draw attention to Note No. 49 to the Standalone Financial Statement, which states that the Company has valued its inventories at Rs. 594.51 lakhs as at 31 March 2026 using the weighted average cost method. However, we were not provided with adequate information and necessary supporting documentation to verify the basis of valuation, including evidence supporting the quantities, condition, and cost allocation of inventories. Accordingly, we are unable to determine whether any adjustments are necessary in respect of the carrying amount of inventories stated in the Standalone Financial Statements. The consequent impact, if any, on the profit/loss and financial position for the year ended 31 March 2026 is also not ascertainable.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India (ICAI). Our responsibilities under those SAs 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 (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the Standalone Financial Statements.

Emphasis of Matter

2. We draw attention to the following matters forming part of the notes to the Standalone Financial Statements:

1. We draw attention to Note No. 45 to the Standalone Financial Statement, which describes that the Company has entered into a Memorandum of Understanding (MOU) with Tribus Real Estate Pvt. Ltd. (TREPL) for taking over the Companys secured bank loans amounting to Rs. 15,894,92 lakhs. The note further describes the transfer of assignment of debt by Invent Assets Securitization & Reconstruction Private Limited to India SME Asset Reconstruction Company Limited. The Company has represented that Rs. 9,295.00 lakhs, being the principal amount outstanding, is payable towards full and final settlement of the assigned debt and that the proposed development arrangement relating to the Khopoli land & building is under discussion with the developer, from which sufficient funds are expected to be realized for settlement of the aforesaid obligations.

2. We draw attention to Note No. 48 of the Standalone Financial Statement, which describes that the Company was prohibited from accessing the securities market for a period of three years by an order issued by the Securities and Exchange Board of India (SEBI) dated 31.03.2021, for violations of certain provisions of the SEBI Act, 1992 and SEBI Regulations relating to the issue of Global Depositary Receipts (GDR). Subsequently, the Company had filed an appeal against the said order, and vide order dated 21.02.2023, the appellate authority modified the original SEBI order by reducing the penalty and limiting the debarment period to the time already served. SEBI has further filed a civil appeal before the Honble Supreme Court on 07.08.2023, which has been admitted as on 02.01.2024. As of the reporting date, no further communication has been received.

3. We draw attention to Note No. 46 of the Standalone Financial Statement, which describes that the Consortium of Banks has initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, for recovery of outstanding dues amounting to Rs. 19,319.00 lakhs as on 31.01.2014. The Banks have taken symbolic possession of certain immovable properties of the Company located at its Khopoli unit on 29.05.2014 and have filed an application for taking physical possession of the said assets. The loan has since been assigned to Invent Assets Securitization and Reconstruction Private Limited as on 31.03.2018. During the year, the Invent Assets Securitization & Reconstruction Private Limited assigned debt to India SME Asset Reconstruction Company Limited. The matter is currently pending before the Debt Recovery Tribunal (DRT), Pune, and the next hearing has been adjourned to 30.06.2026.

4. We draw attention to Note No.51 of the Standalone Financial Statement, which discloses that the Company has written back certain provision for expenses/balances totaling to Rs. 2034.15 lakhs during the FY 2025-26 and has recognized under Other Income as "Provision Written Back."

5. We draw attention to Note No.65 of the Standalone Financial Statement, regarding the suspected fraud identified by the Company during Q3 of FY 2025-26 involving unauthorized access to bank payment process by a consultant engaged by the Company, wherein the estimated amount involved based on preliminary investigation and available records is approximately Rs.758 Lakhs relating to various prior periods. The note further states that the Company has recovered certain land and residential properties aggregating to Rs.131.07 lakhs towards compensation against the aforesaid loss, which has been accounted for under "Exceptional Item" with corresponding recognition under "Other Receivables".

Since the investigation and internal review are ongoing, the final financial impact, if any, is yet to be determined.

Our opinion is not modified in respect of these matters.

Key Audit Matters

3. 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 year ended. 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 KAM to be communicated in our report.

Key Audit Matter	Auditors Response
Evaluation of income tax provision	In view of significance of matter, we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence:
The Company is required to estimate its income tax liabilities in accordance with the tax laws applicable in India. Further, there are matters of interpretation in terms of application of tax laws and related rules to determine current tax provision and deferred taxed.	• testing the design and operating effectiveness of the companys key controls over identifying uncertain tax position and matters involving litigations/disputes.
The Company has material tax positions and litigations on a range of tax matters. This requires management to make significant judgements to determine the possible outcome of uncertain tax provisions and litigations and their consequent impact on related accounting and disclosures in the Standalone Financial Statements.	• obtaining details of tax positions and tax litigations for the year and as at 31st March 2026 and holding discussions with designated management personnel.
Refer Note No. 34 to the Standalone Financial Statements.	• assessing and analysing select key correspondences with tax authorities and inspecting external legal opinions obtained by management for key uncertain tax positions and tax litigations.
	• evaluating underlying evidence and documentation to determine whether the information provides a basis for amounts reserved / not reserved in the books of account.
	• Involving our tax specialists and evaluating managements underlying key assumptions in estimating the tax provisions and estimate the possible outcome of tax litigations; and in respect of tax positions and litigation, assessing the computation of provisions and consequent impact on related accounting and disclosures in the Standalone Financial Statements.
Net realizable value (NRV) of Inventory	In view of the significance of the matter we applied the following audit procedures in this area, among others, to obtain sufficient audit evidence:
The total inventory of the Company amounting to Rs. 594.51 lakhs (as on 31 March 2026) forms about 4.08% of the total assets of the Company.	• Assessed the appropriateness of the accounting policy for inventories as per relevant Indian accounting standards.
This includes materials such as HR Coil, fuel, Iron ore etc, which are susceptible to handling loss, moisture loss/gain, spillage etc. and determination of the same requires estimation based on experience and technical expertise.	• Verified inventory ageing report by testing samples, selected using statistical sampling method.
Such judgment includes Companys expectations for future sale, inventory liquidation plans and future selling prices less cost to sell & modification cost.	• Tested the moving weighted average rate computation of inventory samples, selected using statistical sampling method.
In view of the above, assessment of NRV and its consequential impact, if any on the carrying value of inventories has been identified as a key audit matter.	• The company has procedure of physical verification of inventories at regular intervals.
Refer Note No. 49 to the Standalone Financial Statements.
Allowance for credit losses	Our audit procedures related to the allowance for
The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to industries the Company deals with and the geographical location where it operates.	credit losses for trade receivables included the following, among others:
In calculating expected credit loss, the Company has also considered credit reports and other related credit information for its customers to estimate the probability of default in future.	We tested the effectiveness of controls over the
We identified allowance for credit losses as a key audit matter because the Company exercises significant judgment in calculating the expected credit losses.	• development of the methodology for the allowance for credit losses, including consideration of the current and estimated future economic conditions
Refer Note No. 60 to the Standalone financial statements.	• completeness and accuracy of information used in the estimation of probability of default and
	• Computation of the allowance for credit losses.
	For a sample of customers:
	We tested the input data such as credit reports and other credit related information used in estimating the probability of default by comparing them to external and internal sources of information.
	We tested the mathematical accuracy and computation of the allowances by using the same input data used by the Company.
	Evaluation of impairment risk and assessing whether triggers exist for any investment based on consideration of external and internal factors affecting the value and performance of the investment.
Investment impairment assessment	Our audit procedures included:
The Company has investments in subsidiaries. These investments are accounted for at cost less impairment. If an impairment exists, the recoverable amounts of the above investment are estimated in order to determine the extent of the impairment loss, if any.	• Obtained management assessment of recoverable amount for investments where impairment risk is identified.
Determination of triggers for impairment in value of these investments and recoverable amount involves significant estimates and judgements.	• Evaluated the mathematical accuracy of the cash flow projection and assessed the underlying key assumptions in managements valuation models used to determine recoverable amount considering external data, including assumptions of projected EBITDA, revenue growth rate, terminal growth rates, discount rates, and assessed the sensitivity of the assumptions on the impairment assessment and assessed the forecasts against the historical performance.
	Assessed the appropriateness of the related disclosures in the standalone financial statements.

Other Information

4. The Companys Management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Companys Annual report but does not include the Standalone Financial Statements and our Auditors Report thereon. The Other Information is expected to be made available to us after the date of this Auditors Report.

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

5. In connection with our audit of the Standalone 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 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.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements.

6. The Companys Management and Board of Directors are 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, including other comprehensive income, changes in equity and cash flows of the Company in conformity with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other accounting principles generally accepted in India. 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 software for ensuring compliance with applicable laws and regulations including those related to retention of audit logs; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that

give a true and fair view and are free from material misstatement, whether due to fraud or error.

7. In preparing the Standalone Financial Statements, the Management of the Company and the Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

8. 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 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 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.

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 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.

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 Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.

Report on Other Legal and Regulatory Requirements

9. 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 paragraphs 3 and 4 of the Order, to the extent applicable.

10. 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 except for matters stated in paragraph 10(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended);

c. The Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive Income, the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account;

d. In our opinion and to the best of our information and explanation given to us, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act read with the relevant rules thereunder;

e. On the basis of the written representations received from the directors as on 31 March 2026 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 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 with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure B. Our report expresses a Qualified Opinion on the internal financial controls over Standalone Financial Statements of the Company for the year.

g. 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 is not in excess of the limit laid down under Section 197 of the Act.

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 (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 as at 31 March 2026 on its financial position in its Standalone Financial Statements. Refer Note No. 34 to the Standalone 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 has been no amount required to be transferred as on 31 March 2026, to the Investor Education and Protection Fund by the Company;

iv.

a. The Management has represented that to the best of their knowledge and belief, as disclosed in Note No.68(viii) to the Standalone Financial Statement, 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 entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b. The Management has represented, that, to the best of their knowledge and belief, as disclosed in Note No.68 (ix) to the Standalone Financial Statement, no funds have been received by the Company from any person(s) or entity(ies), including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

c. Based on such audit procedures that were considered reasonable and appropriate in the circumstances, performed by us, nothing has come to our notice that has caused us to believe that the representations under sub-clause 10(h)(iv)(a) and 10(h)(iv)(b) contain any material misstatement.

v. The company has not declared or paid any Dividend during the year.

vi. Based on our examination which included test checks, the Company has used an accounting software for maintaining its books of accounts for the year ended 31^st March, 2026, which has a feature of recording audit trail (edit log) facility except in respect of three units, where the accounting software did not have the audit trail feature. The audit trail (edit log) facility has been operated throughout the year for relevant transactions in the accounting software for the aforementioned unit. . Further, during the course of our examination, we did not come across any instance of audit trail feature being tampered with for the unit for which audit trail feature had been enabled and operating.

Additionally, the audit trail for prior years has been preserved by the Company as per the statutory requirements for record retention for the one unit throughout the entire financial year to the extent it was enabled and recorded in the respective years.

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, to the members of Zenith Steel Pipes & Industries Limited ("the Company"), on the Standalone Financial Statements for the year ended 31 March 2026.)

To the best of our information and according to the explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, we state that:

i. In respect off the Companys Property, Plant and Equipment and Intangible Assets:

a) The Company has not maintained proper records showing full particulars including quantitative details and situation of Property, Plant and Equipment (PPE).

The Company has not maintained proper records showing full particulars of intangible assets.

b) The Company has a regular programme of physical verification of its PPE by which all the PPE are verified once in a year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and nature of its assets. In our opinion and according to the information and explanation given to us, no material discrepancies were noticed by the management on such physical verification.

c) In our opinion and according to information and explanations given to us, and on based on our examination of records of the Company, we report that, the title deeds in respect of buildings and factory buildings disclosed in the Standalone Financial Statements included under Property, Plant and Equipment are held in the name of the Company (Refer Note no 2.1) as at the balance sheet date except as under:

Description of property	Gross carrying value (Rupees in Lakhs)	Held in name of	Whether promoter, director or their relative or employee	Period held - Since	Reason for not being held in the name of company
Free Hold Property	329.50	Tungabhadra Holdings Pvt Ltd	No	2010	Disputed under land regulatory authorities records

d) In our opinion and according to the information and explanations 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) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, no proceedings have been initiated or are pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) (formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

ii.

(a) The inventories, except goods-in-transit and stocks lying with third parties, were physically verified during the year by the Management at reasonable intervals. In our opinion the coverage and procedure of such verification by the Management is appropriate having regard to the size of the Company and the nature of its operations. No discrepancies were noticed on verification between the physical stocks and book record that were 10% or more in the aggregate for each class of inventories.

(b) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been sanctioned working capital limits in excess of five crore rupees, in aggregate, at any point 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. In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any investments in, provided guarantee and granted loans, secured or unsecured, to its related parties during the year. Hence, the provisions of sub-clause (a) to (f) are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any investments, nor granted any loans or provided any guarantees or securities to parties covered under Section 185 of the Companies Act,2013 and the Company has not provided any loan, guarantee or security as specified under Section 186 of the Companies Act, 2013. Further, the Company has complied with the provisions of section 186 of the Companies Act, 2013 in respect of investments made.

v. In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, in respect of compliance by the Company with the directive issued by the Reserve Bank of India, the provisions of section 73 to 76 of the companies Act, 2013 read with Rules made thereunder with regard to repayment of deposits and interest on due date, maintenance of liquid assets to the extent required are not complied with and the Company has also not fully complied with the orders passed by the Company Law Board.

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 Act in respect of the companys products to which the said rules are made applicable and are of the opinion that prima facie, the prescribed records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

vii. (a) In our opinion and according to the information and explanations given to us and the records of the Company examined by us except for dues in respect of Dividend Distribution Tax, Tax Deducted at Source, Profession Tax, Tax Collected at Source, Provident Fund, Labour Welfare Fund and Excise Duty, the Company is generally regular in depositing the undisputed statutory dues including Custom Duty, Cess and any other statutory dues. The following balances remained in arrears as at the last day of the financial year for a period exceeding six months from the date they become payable:

S .No. Nature of Due	Amount lakhs)	Outstanding (Rs.in
1. Income Tax Deducted at Source		30.24
2. Provident Fund		28.19
3. Professional Tax		1.19
4. Maharashtra Labour Welfare Fund		0.01
5. Dividend Distribution Tax		359.08
6. Interest on Dividend Distribution Tax		549.39

b) In our opinion and according to the information and explanation given to us and the records of the Company examined by us, there were no disputed dues in respect of Service Tax. The particulars of dues of Customs Duty, Excise Duty, Sales Tax, and Value added tax and Income Tax as at 31 March 2026, which have not been deposited on account of disputes are as follows:

Name of the Statute	Nature of Dues	Period to which the matter pertains to	Forum where dispute is pending	Amount (Rs in lakhs)
CustomAct,1962	Custom Duty	1985-86	High Court	3.45
		1998-99	Tribunal	82.00
Central ExciseAct,1959	Excise Duty	1995-96	Commissioner Appeal	129.78
Central Sales Tax Act,1956	Central Sales Tax	1995-96	Tribunal	78.88
Maharashtra Value Added Tax,2002	Value added Tax	2006-07	Joint Commissioner Appeal	439.30
		2007-08	Joint Commissioner Appeal	2,577.63
		2011-12	Tribunal	50.98
		2012-13	Joint Commissioner Appeal	330.80
Income Tax Act, 1961	Income Tax	2013-14	CIT(Appeal)	21.02
		2017-18	CIT(Appeal)	35.43

viii. In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, we confirm that we have not come across any transactions not recorded in the books of account which 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 explanations given to us and the records of the Company examined by us, the Company has been defaulting in payments to the banks since August 2012. The Company has entered into an agreement with Tribus Real Estate Pvt. Ltd. for taking over the Companys dues to the banks as reflected earlier in the Company books on terms agreed to between the Company and Tribus Real Estate Pvt. Ltd. Consequently, there are no Bank loan/outstanding in the Books of the Company as this has been transferred to Tribus Real Estate Pvt. Ltd during earlier years.

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

c) In our opinion and according to the information and explanations given to us, the Company has utilized the money obtained by way of loans during the year for the purpose for which they were obtained.

d) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the Standalone Financial Statements of the Company, we report that no funds are raised on short-term basis by the Company, Accordingly, reporting under paragraph 3(ix)(d) of the Order is not applicable to the Company.

e) According to the information and explanations given to us and on an overall examination of the Standalone Financial Statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries. The Company does not have an associate or a Joint Venture. Accordingly, reporting under paragraph 3(ix)(e) of the Order is not applicable to the Company.

f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries. The Company does not have an associate or a Joint Venture. Accordingly, reporting under paragraph 3(ix)(f) of the Order is not applicable to the Company.

x. a) In our opinion and according to the information and explanations given to us and based on our examination of the records of the Company, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments). Accordingly, Clause (x)(a) of Order is not applicable to the Company.

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

xi. a) In our opinion and according to the information and explanations given to us, considering the principles of materiality outlined in SAs, an instance of suspected fraud on the Company was identified by the company amounting approximately to Rs.758 lakhs relating to various prior periods. (Refer Note No. 65 to the Standalone Financial Statement)

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

c) According to the information and explanations given to us, the Company has not received any whistle blower complaints during the year.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause 3(xii) of the Order is not applicable to the Company.

xiii. According to information and explanations 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 the Act where applicable and the details of such transactions have been disclosed in the Standalone Financial Statements as required by the applicable accounting standards.

xiv. (a) In our opinion and based on our examination, the Company has an internal audit system commensurate with the size and nature of its business.

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

xv. According to information and explanations given to us, the Company has not entered into any

non-cash transactions with directors or persons connected with him and hence clause 3(xv) of the Order is not applicable to the Company.

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

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

(c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, clause 3 (xvi)(c) of the Order is not applicable.

(d) In our opinion, there is no core investment company within the Group (as defined in the Core Investment Company (Reserve Bank) Directions, 2016) and accordingly reporting under paragraph 3 (xvi) (d) of the Order is not applicable to the Company.

xvii. Based on the overall review of Standalone Financial Statements, the Company has not incurred cash losses in the current financial year and in the immediately preceding financial year. Accordingly, the provisions stated under paragraph 3(xvii) of the Order is not applicable to the Company.

xviii. There has been no resignation of the statutory auditors during the year. Accordingly, clause 3(xviii) of the Order is not applicable to the Company. The predecessor statutory auditors completed their term and post our appointment as the statutory auditors of the Company for the financial year 2025-26 in the Annual General Meeting of the Company held on 30^th September, 2025, we had sought no-objection certificates from the predecessor statutory auditors, which were duly received by us.

xix. According to the information and explanations given to us and on the basis of the financial ratios, (also refer note no. 67 to the Standalone Financial Statement) ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the Standalone Financial Statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report 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. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx. In our opinion and according to the information and explanations given to us, there provisions of Section 135 of the Companies Act, 2013 are not applicable to the Company. Accordingly, clauses 3(xx)(a) and 3(xx)(b) of the Order are not applicable to the Company.

xxi. The reporting under paragraph 3(xxi) of the Order is not applicable in respect of audit of Standalone Financial Statements. Accordingly, no comment in respect of the said paragraph has been included in the report.

Annexure B to the Independent Auditors Report

(Referred to in paragraph 10 (f) under Report on Other Legal and Regulatory Requirements section of our report to the members of Zenith Steel Pipes & Industries Limited of even date.)

Report on the Internal Financial Controls with reference to Standalone Financial Statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013(the Act).

We have audited the internal financial controls with reference to Standalone Financial Statements of Zenith Steel Pipes & industries Limited (the Company) as of 31 March 2026 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

Managements responsibilities 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 (the Guidance Note) 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 Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to Standalone Financial Statements based on our audit. We conducted our audit in accordance with the Guidance Note issued by ICAI and the Standards on Auditing (SA) prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to the Standalone Financial Statements. Those SAs and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether internal financial controls with reference to Standalone Financial Statements was 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 system 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 internal financial controls with reference to Standalone Financial Statements, 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 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 system with reference to Standalone Financial Statements.

Meaning of Internal Financial Controls 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 -

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

ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the Standalone Financial Statements.

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 the Standalone Financial Statements to future periods are subject to the risk that the internal financial control 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.

Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at 31 March, 2026:

a) The Company does not have an approved delegation of authority matrix, which leads to uncertainties regarding decision-making authority and responsibility within the organization. This deficiency may result in unauthorized transactions, inefficient processes, and increased risk of errors or fraud, as there are no clearly defined parameters for approving and executing financial transactions and other significant actions.

b) The Company does not have a Risk Control Matrix (RCM). Without a comprehensive assessment of the RCM, the company may not effectively identify, assess, or mitigate risks associated with its financial and operational processes. This oversight can impair the ability to implement appropriate controls, increasing the risk of financial misstatements, operational inefficiencies, and non-compliance with regulatory requirements.

c) The Company has certain control lapses in regards to secretarial compliance.

d) The Company does not have an appropriate internal control system for identification and allocation of overheads to inventory. This could potentially result in material misstatements in the Companys consumption, inventory and expense account balances

e) The Company does not have a system to obtain balance confirmation from all parties. Without periodic balance confirmations, there is an increased risk of inaccuracies in the

Companys Standalone Financial Statements. This deficiency may lead to discrepancies between the companys records and those of its external parties, potentially resulting in unidentified errors

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 a timely basis.

In our opinion, to the best of our information and according to the explanations given to us, the Company has maintained, in all material respects, an adequate internal financial controls system with reference to Standalone Financial Statements and such internal financial controls with reference to the Standalone Financial Statements were operating effectively as at 31 March 2026 based on the internal financial control with reference to Standalone Financial Statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI, except for the possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Companys internal financial controls over financial reporting were operating effectively as of 31 March 2026.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the Standalone Financial Statements for the year ended 31 March 2026 of the Company, and these material weaknesses do not affect our qualified opinion on the Standalone Financial Statements of the Company.