We have audited the accompanying Standalone Ind AS financial
statements of KIOCL Limited ("the Company") which comprises
the Standalone Balance Sheet as at 31^st March 2025, the Standalone
Statement of Profit and Loss (including Other Comprehensive
Income), the Standalone Statement of Cash Flows for the year
then ended and the Standalone Statement of Changes in Equity
for the year then ended, and Notes to the Standalone Financial
Statements, including material accounting policies and other
explanatory information (herein after referred to as "Standalone
Ind AS financial statements").

In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid Standalone Ind AS
financial statements give the information required by the Companies
Act, 2013 ("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 Companies Act, 2013 read with the
Companies (Indian Accounting Standards) Rules, 2015, as amended,
("Ind AS") and other accounting principles generally accepted in
India, of the state of affairs of the Company as at 31^st March 2025, the
Loss including Other Comprehensive Income, the changes in equity
and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Ind AS financial
statements in accordance with the Standards on Auditing (SAs)
specified under section 143(10) of the Companies Act, 2013.
Our responsibilities under those SAs are further described in the
Auditor's Responsibilities for the Audit of the Standalone Ind AS
Financial Statements section of our report. We are independent
of the Company in accordance with the Code of Ethics issued by
the Institute of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the Standalone
Ind AS financial statements under the provisions of the Companies
Act, 2013 and the Rules there under, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and
the Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion on the Standalone Ind AS financial statements.

Emphasis of Matters

1. Kudremukh Mining Operations

Attention is drawn to Note No. 3.1 along with foot note

thereto and Note No. 28.3.4 of the Standalone Ind AS financial

statements on the Kudremukh mine site from where iron ore
was extracted by KIOCL Limited and has been suspended due
to the order of the Hon'ble Supreme Court in 2006 and all the
assets located therein are either disposed of or transferred to
Pellet Plant. Owing to disputes relating to land and pending
issues on surrender of mines, the buildings in the township
are reduced to 'NIL' value. The Company is of the view that
pending the decision of the Government of Karnataka, since
Lakhya dam therein is the main water source for the pellet
plant, the asset continues to be shown under PPE.

The freehold land of 114.31 hectares together with movable
assets located therein, has been proposed by the Company
to be handed over to Forest Department, Government of
Karnataka but the value of the land continues to be shown
in the books of accounts pending the permission for such
handover from Govt., of India.

2. Blast Furnace Unit (BFU)

Attention is drawn to Note No.1.10, Note No. 3.1 along
with additional information thereto and Note No. 28.3.7 of
the Standalone Ind AS financial statements on Blast Furnace
Unit (BFU) which is not in operation since 2009, since it is not
economically viable in running the unit. As per the valuation
report provided by the Independent Valuer, the recoverable
amount in each class of BFU are more than the carrying
amount and hence, no impairment loss is recognised.

3. Right to Use (ROU) Asset- The allotment of land by M/s
Karnataka Industrial Areas Development Board (KIADB)
at Mangalore and Doddaballapura.

Attention is drawn to Note No. 3.3 along with additional
information thereto and Note No. 28.1.2 and Note No 28.2.5

The Company was allotted 52.87 Acres of land at Mangalore
in 2008 for the purpose of building a Railway siding and
17,483 Sq.mtrs at Doddaballapura in 2016 for the purpose of
setting up an R & D Centre. As per the terms and conditions
of the agreement (leased land at Mangalore) the company
was supposed to start construction of the Railway siding
within 4 years from the date of allotment of land, failing which
the Company would have to pay the difference in the cost
of the land from the date of allotment to the actual date of
construction. However, the company is in discussion with M/s
KIADB for revising the entire lease agreement. As far as the
Leased land at Doddaballapura, the company has written to
KIADB for removing encroachments to enable them to use
the leased land which is yet to be done by KIADB.

The ultimate outcome of the matters is uncertain and the
positions taken by the management are based on the
application of their best judgement, the Company is of the

view that pending the decision of the M/s KIADB, the asset
continues to be shown under ROU.

4. Mining Rights in Devadari Range in Bellary District for
Mining of Iron Ore and Manganese Ore.

Attention is drawn to Note No.1.6, Note No.1.9, Note No.4.1
and Note No.28.3.5 in connection with Mining Rights shown
in Note No.4.1 - "Mining Rights" under "Other intangible
Assets". The Mining Rights was reserved by GOK to the
Company during 2017. The Company had already obtained
necessary statutory clearances and also executed and
registered Lease deed in 2023 in this regard. This Mining
Right was capitalized by the Company during 2023-24 after,
satisfying the criteria set forth in the Accounting Standard Ind
AS 38 (Para 21) in that the said expenditure demonstrates that
the expected future economic benefits that are attributable
to the asset will flow to the company and that the cost of the
asset could be measured reliably.

In this connection, reference is invited to the Note No.28.3.5,
wherein the matters leading to Government of Karnataka
non execution of forest lease agreement, for handing over of
diverted forest land to KIOCL for commencement of Mining
activities for which the Company during this year had also
filed a Writ in the Karnataka High Court, seeking a direction
to Forest Department (GOK) to execute the FLA enabling the
company to commence its mining activities. Pending this, the
company is yet to commence mining activities.

We draw reference to Note No.1.6, where it has been stated
that intangible assets are amortized over their respective
estimated useful lives on a straight-line basis, from the date
that they are available for use and that as stated in Note
No.1.9 that no amortization is charged on the Mining Rights,
before the start of the commercial production, the Mining
Rights has not been amortized, as they are not available for

use and commercial production has not commenced for the
reasons stated in the above para.

5. Stoppage of Pellet Plant

Attention is invited to Note No.28.3.15 on the stoppage of
Pellet Plant during the year. The Company had shut down
the operations and received Job work for continuing the
operations, from December 2024.

6. Non-Fulfilment of Director and Committee Constitution
Requirements

We draw attention to Note 28.3.18 of the accompanying
Standalone Ind AS financial statements regarding the
Company not having independent directors as required
under the provisions of the Companies Act, 2013 and Listing
Regulations so as to constitute its Audit Committee as on
date. As stated therein, these financial statements were
approved by the Board of Directors of the Company.

The Company also does not have a Woman Director as
required by the provisions of Companies Act, 2013.

Consequently, the Company has not complied with the
provisions of the Companies Act, 2013 and Listing Regulations.

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
Standalone Ind AS financial statements of the current period.
These matters were addressed in the context of our audit of the
Standalone Ind AS 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.

Information Other than the Standalone Ind AS Financial
Statements and Auditor's Report thereon

1. The Company's Board of Directors is responsible for the
preparation of the other information. The other information
comprises the information included in the Management
Discussion and Analysis, Board's Report including Annexures
to Board's Report, Corporate Governance and Shareholder's
Information, but does not include the Standalone Ind AS
financial statements and our auditor's report thereon.

2. Our opinion on the Standalone Ind AS financial statements
does not cover the other information and we do not express
any form of assurance conclusion thereon.

3. In connection with our audit of the Standalone Ind AS 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 Ind AS financial
statements, or our knowledge obtained during the course
of our 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.

Management's Responsibilities for the Standalone Ind
AS Financial Statements

1. The Company's Board of Directors is responsible for the
matters stated in section 134(5) of the Companies Act 2013,
with respect to the preparation of these Standalone Ind
AS financial statements that give a true and fair view of the
financial position and financial performance, changes in
equity and cash flows of the Company in accordance with the
Accounting Principles generally accepted in India, including
the Accounting Standards (Ind AS) specified under section
133 of the Act, read with relevant rules issued thereunder and
other accounting principles generally accepted in India and
in compliance with Regulation 33 of the Listing Regulations.
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.

2. In preparing the Standalone Ind AS financial statements,
management is responsible for assessing the Company's
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.

3. The Board of Directors are responsible for overseeing the
Company's financial reporting process.

Auditor's Responsibilities for the Audit of the
Standalone Ind AS Financial Statements

1. Our objectives are to obtain reasonable assurance about
whether the Standalone Ind AS financial statements as a
whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's 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 Ind
AS financial statements.

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

• Identify and assess the risks of material misstatement
of the Standalone Ind AS 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 controls relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)
(i) of the Act, we are also responsible for expressing our
opinion on whether the Company has adequate internal
financial controls system in place and the operating
effectiveness of such controls.

• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.

• Conclude on the appropriateness of management's 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 Company's ability
to continue as a going concern. If we conclude that

a material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures
in the Standalone Ind AS financial statements or, if such
disclosure is inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained
up to the date of our auditor's 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 Ind AS financial statements,
including the disclosures, and whether the Standalone
Ind AS financial statements represent the underlying
transactions and events in a manner that achieves
fair presentation.

3. 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.

4. 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.

5. From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the Standalone Ind AS financial
statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor's
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 under the directions, specific directions and
sub-directions issued by the Comptroller and Auditor
General of India in terms of Sub-section (5) of Section 143
of the Companies Act 2013, we are enclosing our report
in "Annexure A".

2. As required by the Companies (Auditor's Report) Order, 2020
("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 B" a statement on the
matters specified in paragraphs 3 and 4 of the Order, to the
extent applicable our report.

5. A. 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 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, the aforesaid Standalone Ind AS
financial statements comply with the Accounting
Standards (Ind AS) specified under section 133
of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014, Companies (Indian
Accounting Standards) Rules, 2015, as amended;

(e) As per notification number G.S.R. 463(E) dated
5^th June, 2015 issued by Ministry of Corporate
Affairs, section 164(2) of the Act regarding the
disqualifications of Directors is not applicable to
the Company, since it is a Government Company;

(f) The modifications relating to the maintenance
of accounts and other matters connected
therewith are as stated in the paragraph 3.A(b)
above on reporting under Section 143(3)(b) of
the Act and paragraph 3.B(f) below on reporting
under Rule 11(g) of the Companies (Audit and
Auditors) Rules, 2014.

(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 C".

(h) As per notification number G.S.R. 463 (E) dated 5^th
June 2015 issued by Ministry of Corporate Affairs,
section 197 of the Act regarding remuneration to
director is not applicable to the Company, since it
is a Government Company;

B. With respect to the other matters to be included in
the Auditor's 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:

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

(iii) Based on the audit procedures that have
been considered reasonable and appropriate
in the circumstances, nothing has come to
our notice that has caused us to believe that
the representations under sub-clause (i) and
(ii) of Rule 11(e), as provided under (a) and (b)
above, contain any material mis-statement.

(e) The company has not paid any dividend
during the year.

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

For G BALU ASSOCIATES LLP

Chartered Accountants
FRN:000376S/S200073

Sd/-

Place: Bengaluru CA R. RAVISHANKAR

Date: 28-05-2025 Partner

UDIN: 25026819BMHBRT4356 Membership No.:026819