AANCHAL ISPAT LIMITED

Report on the Audit of the Standalone Financial Statements

We have audited the accompanying Ind AS financial statements of AANCHAL ISPAT LIMITED (“the Company” or “the Corporate Debtor”), which comprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and Notes to the Ind AS Financial Statements, including a summary of Significant Accounting Policies and other explanatory information (hereinafter referred to as “Ind AS financial statements”).

Opinion

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 Company 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 of the state of affairs of the Company as at March 31, 2025; and of the loss, its cash flows for the year ended on that date.

M/S. ALDOUS COMMODITIES PRIVATE LIMITED, being an operational creditor of M/S AANCHAL ISPAT LIMITED (“Corporate Debtor”), had filed an application (company petition no. CP(IB) No. 1518/( KB) /2020) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 before the Hon’ble National Company Law Tribunal (“NCLT”), Special Bench (COURT -II), Kolkata seeking initiation of the Corporate Insolvency Resolution Process (“CIRP”) of the Corporate Debtor. The said application was admitted by the Hon’ble NCLT Special Bench (COURT -II), Kolkata vide its order dated 12.09.2023 (certified copy received on 13th September, 2023, and Mr. Sriram Mittal, Insolvency Professional (IBBI Registration No.: IBBI/IPA-001/IP- P02276/2021-2022/13677 was appointed as the Interim Resolution Professional (“IRP”) to carry out the CIRP. Subsequently, vide order dated 17.11.2023, CA Santanu Brahma has been appointed as the Resolution Professional (“RP’) upon application filed for replacing the erstwhile “IRP’, Mr. Sriram Mittal.

During the CIRP, the Resolution Professional received a resolution plan from MR. MUKESH GOEL, which was duly approved by the Committee of Creditors (CoC) with the required majority. The said resolution plan was filed before the Hon’ble NCLT, Special Bench (COURT-II), Kolkata through Interlocutory Application No. IA (IBC) (PLAN) No. 9/ (KB) /2024, and was approved vide order dated 27.03.2025. As per the approved Resolution Plan, the management and control of the Company were handed over to the Resolution Applicant with effect from 28th March 2025, in accordance with the Implementation Schedule specified in the Resolution Plan. Subsequently, a Monitoring Committee was constituted on 23rd April 2025, and the Resolution Professional demitted office upon implementation of the Resolution Plan.

As per the Resolution Plan all the past claims against the Company have been settled and finalized vide the approval of the Resolution Plan, in terms of the law laid in Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited & Ors (SC). Thus, all past claims that do not form part of the Resolution Plan stands extinguished.

Basis for opinion

We conducted our audit of the 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 Standards are further described in the Auditor’s Responsibilities for the Audit of the 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 Ind AS financial statements under the provisions of the Companies Act, 2013 and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Emphasis of Matter

a) As per Ind AS-1 “Presentation of Financial Statements”, the financial statements have been prepared on a going concern basis. The Company had substantial accumulated losses in past years and based on financial ratios, asset realization expectations, and other accompanying information, material uncertainty existed over its ability to continue as a going concern. However, during the year, the resolution plan submitted by the Successful Resolution Applicant was approved by the Hon’ble NCLT, Kolkata Bench on 27th March 2025. The plan provides for substantial waiver of liabilities and revival of operations, and accordingly, the financial statements are prepared on a going concern basis. We further state that our reporting is based on the facts up to the date of this report, and we do not guarantee or assure the discharge of all liabilities falling due within one year from the balance sheet date.

b) We draw attention to Note 39 of the financial statements, the Company did not have a Company Secretary and Chief Financial Officer during the financial year under review. However, the appointments for both positions have been made in April 2025 after formation of new Board of directors. The absence of such Key Managerial Personnel during the period may have impacted regulatory compliance and internal controls.

c) We draw attention to Note 37 of the financial statements, which describes that the Company’s net worth, though positive, has exhibited a continuous declining trend over the past five financial years due to recurring losses and/or low profitability. The management has prepared a revival plan under the NCLT-approved resolution plan dated 27 March 2025, and believes that the financial performance is expected to improve.

d) We draw attention to Note 37 of the Statement, which describes that the Hon’ble National Company Law Tribunal (NCLT) has approved the resolution plan for the Company under the Insolvency and Bankruptcy Code, 2016, vide its order dated March 27, 2025. The implementation of the resolution plan is in progress, and its impact on the financial statements is dependent on various factors including approvals from regulatory authorities and successful execution of the plan. Further as a part of the CIRP proceedings under the Insolvency and Bankruptcy Code, 2016, registered valuers determined the fair value and liquidation value of the company’s assets as ^3,282.45 lakhs and ^2,435.88 lakhs, respectively. These valuations were for the purpose of insolvency resolution and have not been accounted for in the books.

e) We draw attention to Note 38 of the financial statements, which explains that ?3 crore was received from the Resolution Applicant during the CIRP period as Performance Security in accordance with the terms of the resolution process. As of the reporting date, the amount has been disclosed as a liability pending adjustment under the NCLT-approved resolution plan.

f) We draw attention to Note 41 of the accompanying financial statements, wherein the Company has written off ^5528.40 lakhs towards non-recoverable trade receivables, loans, and advances and revalue the various inventories due to obsolescence/damage/non-usability of inventories during the year, based on management’s assessment of their recoverability and as part of the resolution process. These balances had been subject to audit qualification in earlier years. The write-off has now been accounted for in the current year’s financial statements and disclosed as part of exceptional items except inventories which is recognized through Profit & Loss A/c.

g) We draw attention to Note No.40 of the accompanying statement which describes transaction of purchase and sales undertaken by the Company with Maina International Limited, a related party under common control. As stated in the said note, these transactions were conducted at prices stated to be at Arm’s length.

h) We draw attention to Note 42 of the financial statements, which describes the basis on which the Company has not recognized any Expected Credit Loss (ECL) on trade receivables, as the bad debts have already been written off and the remaining receivables are considered fully recoverable.

i) We draw attention to Note 42 of the financial statements, which explains the reclassification and re-measurement of a quoted investment from amortised cost to fair value in accordance with Ind AS 109. This change has been made to reflect the appropriate classification of the investment based on its characteristics and business model.

j) We draw attention to the fact that the Company has not carried out impairment testing of its Property, Plant and Equipment (PPE) in accordance with the requirements of Ind AS 36 -Impairment of Assets, despite indicators of impairment being present. The Company has incurred significant losses in the past, has faced continued financial stress, and was under Corporate Insolvency Resolution Process (CIRP) during the year.

k) We draw attention to the fact that the company has deducted TDS on provision of balance CIRP cost of Rs.71.95 lakhs booked under the NCLT-approved resolution plan.

l) There were delays in disclosures under Regulation 30 (CIRP disclosure), Regulation 29 (Board Meeting intimation), and Regulation 44 (AGM voting results), attracting penalties from BSE Ltd. These penalties remain unpaid as on date.

Our conclusion is not modified in respect of above matters.

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 matter described below to be the key audit matter to be communicated in our report.

Information other than the financial statements and auditors’ report thereon

The Company’s Management 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 Annexure to Board’s Report, Business Responsibility Report, Corporate Governance and Shareholder’s Information, but does not include the Ind AS financial statements and our auditor’s report thereon.

Our opinion on the Ind AS 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 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 Ind AS financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

We have not reviewed the other information and accordingly, we are not able to report in this regard.

Management’s Responsibility and Those charged with Governance for the Financial Statement

The Management is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of the Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards prescribed under Section 133 of the Act read with relevant rules issued there under. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 IND AS financial statement, 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.

The Management is responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the IND AS financial statement 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 IND AS financial statement.

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 IND AS financial statement, 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 Companies Act, 2013, 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 IND AS financial statement 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 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 IND AS financial statement, including the disclosures, and whether the IND AS financial statement 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 Ind AS financial statements of the current period and are therefore the key audit matters.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the IND AS financial statement 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 the other Legal and regulatory Requirements

1. 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 and except for the effects, if any, of the matters described in the basis for opinion paragraph. We give in the Annexure A on the matters specified in paragraph 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 appears from our examination of those books except for the possible effects of the matters described in basis of opinion section above and the matters stated in the paragraph (j)(vi) below on reporting under Rule11(g) of the Companies (Audit and Auditors) Rules, 2014.

c. The Balance Sheet and the Statement of Profit and Loss, and the cash flow statement dealt with by this Report are in agreement with the books of account.

d. Except for the possible effects of the matters described in basis of opinion section above, in our opinion, the aforesaid financial statements comply with the Ind AS Specified under Section 133 of the Act.

e. On the basis of written representations received from the directors as on 31 March, 2025, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2025, from being appointed as a director in terms of Section 164(2) of the Act. However, the Hon’ble National Company Law Tribunal (NCLT), Kolkata Bench, vide its order dated September 12, 2023, admitted the Company under the Corporate Insolvency Resolution Process (CIRP), pursuant to which the existing Board of Directors was suspended, and the powers vested in them were transferred to the Resolution Professional (RP) for managing the affairs of the Company. The RP managed the affairs of the Company until March 27, 2025. A new Board was duly constituted with effect from April 10, 2025, and thereafter took over the responsibility of managing the Company’s affairs.

f. The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2(b) above on reporting under Section 143(3)(b) of the Act and paragraph (j)(vi) 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 B”.

h. With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act, as amended. In our opinion and according to the information and explanations given to us, no remuneration has been paid by the Company to its directors during the year. Accordingly, the provisions of Section 197 of the Companies Act, 2013 are not applicable.

i. The matters described in the basis for opinion section above and material uncertainty related to going concern section above, in our opinion, may have an adverse effect on the functioning of the company.

j. 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:

i. As The Resolution plan is approved by the Hon’ble NCLT Kolkata Bench on 27.03.2025, The Company does not have any pending litigation which would impact on its financial position in its standalone financial statement.;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There is no amount required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. a) The management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from the borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person or entity, 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 manners whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, 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 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 one (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. No dividend is declared or paid during the year.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31 March 2025.

For Rajesh Jalan & Associates Chartered Accountants (Firm Registration No. : 326370E)

Sd/-

(Rajesh Jalan)

Place: Kolkata Partner

Date: 30/05/2025 (UDIN: 25065792BMJBRF1807)