Auditor Report of Mideast Integrated Steels Ltd.

Mar 31, 2024

1. We have audited the accompanying standalone financial statements of M/s Mideast Integrated Steel (“ the
Company”) which comprises the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss
(Including other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash
Flows for the year ended on that date, and the summary of the significant accounting policies and other
explanatory information (hereinafter referred to as “the standalone financial statements”).

2. In our opinion and to the best of our information and according to the explanations given to us, except for
the effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid
standalone financial statements give the information required by the Companies Act, 2013 (*the Act) in
the manner so required and give a true and fair view, in conformity with the 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 March 31, 2024, and total comprehensive loss (comprising of the loss and
other comprehensive loss), changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

3. We conducted our audit of the standalone financial statements in accordance with the Standards on
Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are
further described in the Auditor''s 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 independence requirements that
are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules
made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the ICAl''s Code of Ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial
statements.

Qualifications in the Audit Report

1) The Company have Property, Plant and Equipment (PPE) amounting to Rs. 594.38 crores as on 31st March
2024. We have not verified the assets physically. Company has provided Physical Verification report of
Orissa Zone only and not for other Locations. Further, Quantity mentioned in Physical Verification report
provided for Orissa zone does not align with Fixed Asset Register shared with us.

Further, the Plant is not in operation for more than 4 years due to which the recoverable amount may be
less than the carrying amount of PPE and also company has not performed the impairment testing as per

Ind AS-36. Hence, we are not able to ascertain the carrying value of PPE and depreciation charged for the
year.

2) Company has inventory amounting to Rs. 47.98 crores as on 31stMarch 2024 which includes inventory of
Raw Materials, Finished Goods and Stores and Spares Stock. Due to non-availability of sufficient
information regarding value of inventory we are unable to comment upon the correctness of reported value
of inventory. However, the company has provided the certificate ofphysical verification of inventory by the
third party which includes the Quantity of Raw Materials and Finished Goods only and not of Stores and
Spares as on 31.03.2024 which is approx 12% of the value of Inventory.

Moreover, as the plant is not in operation for more than 04 year due to which the recoverable amount may
be less than the carrying amount, company has not valued the Inventory as per IND AS 2.

3) Company has total receivable of Rs 44.98 Crores (RP Receivable Rs. 30.21 Crores (Maithan), out of which
major receivables has no movement. However, the company has neither made any provision for non- moving
debtor nor initiating any litigation. Also, the impairment testing has not been performed, hence we cannot
comment upon the actual recoverability from the reported trade receivable. Further, the balance
confirmation of related party has been received and other than related party is not received.

4) Physical copies of deposits have not been provided to us by the company. Hence, we cannot comment upon
the genuineness of the deposits. We have found that few Fixed deposits are in the name of Individuals but
the same are recorded in the assets of the company. Balance confirmation from bank received from
company.

5) As per the Balance confirmation of ICICI Bank A/c No 059205002008 Effective Available amount showing
Debit balance by Rs. 115.43 Cr.

6) There is an unpaid dividend amount of Rs 2.5 crores which pertains to financial year 2013-14. The same
should have been transferred into Investor Education and Protection Fund, however, has not been done by
the Company. This amount is yet kept in the Unpaid Dividend account with the bank.

7) Balances of Debtors, Creditors, advances received from customers & advances given to supplier and
deposits received & given are subject to confirmations and reconciliations. We could not verify the reported
numbers due to non-availability of sufficient information and records. Hence, we cannot comment upon the
correctness of the reported numbers.

8) The company has Unsecured loan from promoters amounting to Rs. 38.54 crores as on 31st March
2024, out of which Rs.27.97 crores are outstanding since long and no any details or information has
been provided for our review and verification. The terms and condition of the loan, repayment terms
and loan agreement has not been provided to us.

9) MISL has advances received from customers amounting to Rs. 333.16 Crores (RP Advances Rs. 15.89
Crores) as on 31st March, 2024. Out of which no movement in the major proportion of advances for more
than 365 days. Since, the advances has not been appropriated against supply of goods or provision of
services within a period of three hundred and sixty-five days (365 days) from the date of acceptance of such
advance. Hence, the same will be treated as deposit as per the As per the rule 2 (c) (xii) (a) of companies
Act.

However, company has neither complied with the provision of deposits u/s 73 to 76 of Companies Act, 2013
nor met the disclosure of deposit in the form DPT-3, which needs to be file before ROC.

10) The company has Tax & Regulatory due payable amounting to Rs. 72.46 crores as on 31st March, 2024.Out
of total dues Rs. 72.39 Cr is disputed Dues as per the Management Representation letter given by the
Company. Disputed dues are in respect of Central Excise, Service Tax, Sales Tax, VAT, Welfare Cess, Work
Contract Tax, Income Tax, Entry Tax, Professional Tax, TDS, TCS District Mineral Fund, National Mineral
Fund Employee State Insurance, Provident Fund, Royalty, Exgratia, User Fee & GST have not been
deposited with appropriate authorities.

Further The Goods & Service Tax (GST) returns have not been filed by the Company since November 2020
and GST of Delhi (ISD Return) and Odissa also got suspended during the year by the department. OKAY

11) In pursuance to the judgement dated 2nd August, 2017 of Honorable Supreme Court of India, in the matter
of Writ Petition (Civil) No. 114 of 2014 between Common Cause v/s Union of India & Others, there is a
compensation imposed of Rs 924.75 crores along with interest on the company for excess production of Iron
Ore during 2000-01 to 2010-11. The Company was supposed to make the payment of this compensation
along with the interest on or before 31st December 2017, failing which the mines of the Company are closed
down w. e. f 1st January 2018. The Company has filed a ''Curative petition'' (Civil) on 28th March 2018,
before the Honorable Supreme Court of India challenging the Judgement and which we have been informed
is still pending. Hence, the company has not made provision for the same in the books of accounts. However,
in our opinion since this compensation has been crystalized and accordingly, a provision for this liability
should have been made in the books. Management has confirmed over mail that Rs. 415.79 crores have been
deposited against the order.

Further, based on the financials company is not having any business activity to generate the revenue in
future and also after considering the provision for the above liability the net worth of the company would
be negative, considering the same company may not be a going concern.

12) Company has written Back Rs. 115.57 Cr which includes Sundry Creditor, Employee Liability, Advance
from customer, Security deposit and Written off Rs. 10.85 Cr which includes Sundry Debtor, Employee
advance and other amounts which are now not payable and receivable from companies ’ point of view.
Company has not provided balance-confirmation from these parties.

13) Company has booked accrued Income ofRs. 4.99 Cr during the current year which relates to F.Y. 2022-23
and F.Y. 2023-24 no supporting documents for the same has been provided to us for our verification. GST
invoice has also not raisedfor the Income booked.

Emphasis of Matter

1) An application under Section 9 of the Arbitration and Conciliation Act, 1996 (as amended) has been filed
by SREIEquipment Finance Limited, in August 2021, in relation to a Loan-Cum- Hypothecation Agreement
dated 8 September 2016, whereby the Company had taken a loan for purchase of a Metso Crusher 600 TPH
Engine amounting to Rs.7.92 crores. The petitioner has claimed an outstanding sum ofRs.4.40 crores in the
said application. The Company’s books of accounttsBshow a liability of Rs 3.60 crores as at 31^st March,

2023. The matter was pending before Sole Arbitrator and by an order dated 11^th August, 2023 the Learned
National Company Law Tribunal (Kolkata Bench) has allow a Resolution Plan filed by one NARCL
(National Asset Reconstruction Company Limited). The matter is to beard in the next hearing and the date
of next hearing has not been received.

2) We draw attention to Note 30 of the financials, which describe Rs 718 crores plus interest, due to a party in
respect of unreconciled amounts as per an arbitration award. The Company is disputing most of such claims
and has filed an appeal against the arbitration award before the Bombay High Court. The same has been
admitted by the High Court in December 2019. The matter is subjudice.

3) We have relied on the list of legal cases and the contingent liability, as given to us by the management. We
are not aware of, nor have been informed of any other matter filed against the company. Further, company
has provided guarantee in respect of obligations of a subsidiary company amounting to Rs. 782.95 crores
against which actual financial position of the subsidiary has not been provided. Company has conveyed
that, One Time Settlement (OTS) has been done with the consortium of Banks led by State Bank of India
relating to the loan /facility that was availed by Maithan.

4) Bank has deducted TDS on Fixed -Deposit @ 20% because of non-submission of PAN in Central Bank of
India resultant Company is unable to claim TDS of the same.

5) As on 31st March, 2024 the company has Balances with government authorities amounting to Rs. 14.02
crores on account of deposit under Excise Act, VAT and Service Tax. In this regard, we have not been
provided supporting document. Hence, we cannot comment on the deposits and its recoverability.

6) Company has not provided the details of Creditors registered under MSME. Hence, we are unable to
comment upon whether company is following the provision of MSME Act

7) There are fixed assets shown under capital work in progress in the books of the Company Rs. 24.46 Cr,
since more than 4 years. In our opinion, the Company needs to ascertain the completion date of the same
and accordingly capitalize the assets where applicable.

8) During the financial year the company has had transactions with its related parties, and has a net inter¬
company receivables being loans and advances given amounting to Rs.222.34 Crores as at 31st March

2024. The management has not carried out the impairment assessment as required by Ind AS 36.

Hence, we cannot comment on the carrying value of these receivables, along with the related impairment,
if any, and consequential impact thereof on the profit/loss for the year, had the Company performed such
impairment assessment.

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, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. There are no matters determined to be the key audit matters to be
communicated in our report.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

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. Business Responsibility Report, Corporate Governance and
Shareholder''s Information, but does not include m standalone financial statements and our auditor''s report
thereon. Our opinion on the standalone financial statement does not cover the other information and we do
not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
standalone financial statements or our knowledge obtained 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.

Since we have not been provided with the other information, we will not be able to report on the same.

Responsibility of Management and Board of Director for the standalone annual financial results

These standalone annual financial results have been prepared on the basis of the standalone Ind AS financial
statements.

The Company''s Management and the Board of Directors are responsible for the preparation and presentation
of these standalone annual financial results that give a true and fair view of the net profit/(loss) and other
comprehensive income and other financial information in accordance with the recognition and measurement
principles laid down in Indian Accounting Standards prescribed under Section 133 of the Act 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 of the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of appropriate accounting policies;
making judgments and estimates that are reasonable and prudent; and the design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for ensuring accuracy
and completeness of the accounting records, relevant to the preparation and presentation of the standalone
annual financial results that give a true and fair view and are free from material misstatement, whether due
to fraud or error.

In preparing the standalone annual financial results, the Management and the Board of Directors are
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 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 responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Annual Financial Results

Our objectives are to obtain reasonable assurance about whether the standalone annual financial results 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 annual financial results.

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 annual financial results, 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 whether the Company has adequate internal financial controls with reference to
standalone annual Ind AS 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 in the standalone annual financial results made by the Management and Board of
Directors.

• Conclude on the appropriateness of the Management and Board of Directors 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 ability of the Company 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 annual financial results 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 standalone annual financial results, including
the disclosures, and whether the standalone annual financial results represent the underlying transactions
and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone annual financial results that, individually or
in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the
standalone annual financial results 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 annual financial results.

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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by Central Government
of India in term of sub-section (11) of Section 143 of the Companies Act, 2013, we enclose in “Annexure
A” a statement on the matter specified in paragraphs 3 and 4 of the order.

2. As required by Section 143(3) of the Act, based on our audit, subject to the qualified opinion give above,
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 Balance Sheet, the Statement of Profit and Loss including other comprehensive income, Statement
of change in Equity and Cash Flow Statement dealt with by this Report are in agreement with the books of
account.

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under
section 133 of the Act, read with Rule 7 of the Company (Accounts) Rule, 2014.

e) On the basis of written representations received from the directors as on 31 March, 2023 taken on record
by the Board of Directors, none of the directors is disqualified as on 31 March, 2023, from being appointed
as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the company
and operating effectiveness of such controls, refer to our separate report in “Annexure B”.

g) 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 to the best of our information and according to the explanations given to us, we report as
under with respect to other matters to be included in the Auditor’s Report in accordance with the provision
of section 197 of the Act.

h) 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) Rule, 2014, as amended in our opinion and to the best of our
information and according to the explanations given to us, subject to the qualified opinion given above: -

i. The Company has disclosed the impact of pending litigations on its financial position in the standalone
financial statement.

ii. The Company has made provision, as requiredunder the applicable law or accounting standards, for

material foreseeable losses, if any, on long-term contracts including derivative contracts.

iii. There has been a delay in transferring amounts to the Investor Education and Protection Fund by the
Company, of Rs. 2.50 crores pertaining to the unpaid dividends for the financial year 2013-14.

iv. a. The management has represented that, to the best of it''s knowledge and belief, to the standalone
financial statements, 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 persons or entities,
including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or
otherwise, that the Intermediaries 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; and

b. The management has represented, that, to the best of it''s knowledge and belief, other than as disclosed in
the notes to the accounts, no funds have been received by the Company from any persons or entities,
including foreign entities ("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, we have considered reasonable and appropriate in the circumstances,
nothing has come to their notice that has caused them to believe that the representations under sub-clause
(i) and (ii) contain any material mis-statement.

v. The Company has not declared and paid any dividend during the year. Therefore, reporting in this regard
is not applicable to the Company.

For, ASHOKSHYAM & ASSOCIATES
Chartered Accountants
FRN: - 011223N

(Ashok B Gupta)

Partner

Membership No.089858
UDIN: - 24089858BKBIXF3863
Place: -New Delhi
Date: 30/07/2024

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Mar 31, 2018

Report on the Financial Statements

We have audited the accompanying financial statements of M/s Mideast Integrated Steels Limited (“the Company”), which comprise the Balance Sheet as at March 31,2018, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under section 133 of the Companies Act 2013 and the Companies (Indian Accounting Standards) Rules, 2015 (‘Ind AS Rules’) and its amendments. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Companies Act 2013. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence, on a test basis, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2018;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act 2013, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. We have inquired into the matters specified under section 143(1) and based on the information and explanations given to us, there is no matter to be reported under this section.

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

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

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

c) The Balance Sheet, Statement of Profit and Loss including Other Comprehensive Income, and Cash Flow Statement dealt with by this Report are in agreement with the books of accounts;

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards notified under section 133 of the Companies Act 2013, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;

e) In our opinion and based on the information and explanations given to us, there are no financial transactions or matters which have any adverse effect on the functioning of the company.

f) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of subsection (2) of Section 164 of the Companies Act, 2013.

g) There is no qualification, reservation or adverse remark relating to the maintenance of accounts and other matters connected therewith.

h) With regards to the adequacy and operating effectiveness of the internal financial controls over financial reporting system in place and their operating effectiveness, a report as Annexure II giving our responsibilities and opinion has been annexed herewith.

i) Such other matters as are prescribed by the Companies (Audit and Auditors) Rules, 2014,

i. The company has disclosed the impact, if any, of pending litigations on its financial position in its financial statements.

ii. The company has made provision, as required under any law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

iii. There has been no any delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company.

[Referred to in above the Auditor’s Report of even date for M/s Mideast Integrated Steels Limited on the Financial Statements for the year ended 31st March 2018]

1 a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b) As per the information and explanation given to us, fixed assets are physically verified by the management according to a phased programme designed to cover all the locations which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As informed to us, the management during the year had physically verified the fixed assets at certain locations.

c) According to the information and explanation given to us, the title deeds of immovable properties are held in the name of the company.

2. As per the information provided to us, Inventory has been physically verified by the management during the year, and no material discrepancies have been found.

3. According to information and explanation given to us, the Company has not granted any secured or unsecured loans to parties covered in the register maintained under Section 189 of the Act.

4. In our opinion and according to information and explanation given to us, the company has, in respect of loans, investments, guarantees, and security provisions, complied with section 185 and 186 of the Companies Act, 2013.

5. According to the information and explanation given to us, the company has not accepted any deposits, whether the directives issued by the Reserve Bank of India, and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013. Hence the provisions of clause 3(v) are not applicable to the company.

6. Pursuant to the rules made by the Central Government, the maintenance of Cost Records have been prescribed u/s. 148(1) of the Companies Act, 2013. We are of the view that prima facie the prescribed accounts and records have been maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. a) According to the books and records as produced and examined by us in accordance with generally accepted auditing practices in India and also management representations, undisputed statutory dues in respect of Provident fund, employees’ state insurance, Income Tax, Sales Tax, Service tax, Custom duty, Excise duty, Value added tax, Cess and other statutory dues, if any, applicable to it, has been regularly deposited with the appropriate authorities.

b) According to the records of the Company, the disputed dues in respect of Excise Duty, Service Tax, Sales Tax, Entry Tax and Customs duty as at March 31st, 2018 have not been deposited with appropriate authorities and no provision has been made for the same. Details are as follows:

Sr. No.	Dues pertaining to	Amount (In Crores) March 2018	Amount (In Crores) March 2017	Forum where dispute is pending
1	Excise Duty	28.77	81.26	Various Authorities
2	Service Tax	3.87	16.09	Various Authorities
3	Sales and Entry Tax	24.68	28.43	Various Authorities
	Total	57.32	125.78

8. In our opinion and according to the information and explanation given to us and the books of accounts verified by us, the company has not defaulted in repayment of dues to a financial institution, bank, Government or dues to debenture holders.

9. As per information given to us, no money was raised by way of initial public offer or further public offer (including debt instruments). As per the information and explanation given to us, the fresh term loans taken by the Company during the year have been applied for the purpose for which those were raised.

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

11. According to the information and explanation given to us and the books of accounts verified by us, the Managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

12. The Company is not a Nidhi Company, hence the provision of clause 3(xii) are not applicable to the company.

13. According to the information and explanation given to us and the record produced before us, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013, where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards.

14. According to information and explanation given to us, the Company during the year, has not made any preferential allotment of shares.

15. According to the information and explanation given to us and the books of accounts verified by us, the company has not entered into any non-cash transactions with directors or persons connected with him.

16. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

ANNEXURE II TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF M/S MIDEAST INTEGRATED STEELS LIMITED AS ON 31ST MARCH 2018

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

To the Members of M/s Mideast Integrated Steels Limited

We have audited the internal financial controls over financial reporting of M/s Mideast Integrated Steels Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. 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 the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if 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 over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 auditor’s judgment, including the assessment of the risks of material misstatement of the 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 internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of 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 (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion, the Company has, in all material respects, an internal financial controls system over financial reporting however they need to be strengthened and comprehensively documented, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For and on behalf of

Todarwal & Todarwal LLP

Chartered Accountants

ICAI Reg No : 111009W/W100231

Arun Todarwal

Partner

M. No. 32822

Place: Mumbai

Date: 8 JUNE, 2018

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Mar 31, 2012

1. We have iUdited the attached Balance Sheet of MIDEAST INTEGRATED STEELS LIMITED ("the Oempany") as at 31st March 2012, the Statement of Profit and Loss and the Cash FlbW Statement of the company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company''s management. Our responsibility is id express an opinion on these financial statements based on our audit.

2. We c6HdU§ted our audit in accordance with the auditing standards generally accepted in India, trrbse Standards require that we plan and perform the audit to obtain reasonable assurance abduf Whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors'' Report) Order, 2003 (CARO) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that;

i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii) in our opinion, proper boks of account as required by law have been kept by the Company so far as appears from our examination bf these books;

iii) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement With the books of account;

iv) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report brawly with the accounting standards referred to in sub-section (3C) of section 211 bf the Companies Act, 1956;

v) on the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors Is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956;

vi) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

(b) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Annexure to Auditor''s Report

Referred to in paragraph 3 of the Report of even date

(i) a. The Company has maintained proper records showing particulars, including quantitative details and situation of the fixed assets on the basis of available information.

b. Physical verification of fixed assets is carried out in a phased manner as determined by management, whereby assets held at the Company''s factories have been verified during the year. The programme of verification is reasonable considering the nature of assets and size of the Company and no material discrepancies were noticed on such verification.

c. No substantial part of the fixed assets of the Company has been disposed off during the year.

(ii) a. The inventories have been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable.

b. The procedures of physical verification of inventories followed by the management are

reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans, secured or unsecured to Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Consequently, clauses (iii) (a) to (iii)(g) of paragraph 4 of CARO are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services.

(v) a. According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that needed to be entered have been so entered; and

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, where each of such transaction is in excess of Rs. 5 lakhs, have been made at prices which are prima facie reasonable having regard to prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, we are of the opinion that the company has not accepted any deposits from the public. Therefore provisions of clause (vi) of paragraph 4 of CARO are not applicable.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(ix) a. According to the records of the company, the Company has generally been regular in depositing with appropriate authorities undisputed statutory dues, including Provident Fund, Investor Education and protection Fund, Employee''s State Insurance, Income- tax, Sales-tax, Wealth Tax, Service tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it.

b. According to the information and explanations given to us, no undisputed amounts in respect of Income-tax, Sales-tax, Wealth Tax, Service tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March, 2012 for a period more than six months from the date they became payable.

c. Details of dues of Sales tax, Excise Duty and Cess which have not been deposited on account of any dispute as on 31st March, 2012 on account of disputes are given below:



(x) The company does not have accumulated losses at the end of the financial year, however in immediately preceding year accumulated losses were Rs. 67.95 crores. The company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

(xi) As per information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

(xii) In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or nidhi/mutual benefit fund/society. Therefore, the provisions of paragraph (xiii) of are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, the Company has not during the year given any guarantee for loan taken by others from banks or financial institutions. In respect of a guarantee issued by the Company in an earlier year and remaining enforceable, the terms and conditions of the guarantee for a loan taken by a Company from a bank, are not prima facie prejudicial to the interests of the Company.

(xvi) According to the information and explanations given to us, term loans availed by the Company was applied for the purpose for which these loans were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term basis have been used for long term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

(xix) According to the information and explanation given to us the company had not issued debentures during the year.

(xx) The Company has not raised money by way of public issues during the year.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

FOR SANGRAM PAUL & CO.

CHARTERED ACCOUNTANTS

(Firm Regn No.: 308001E)

S.K. PAUL

PROPRIETOR

Place: New Delhi

Date : 31st August, 2012 MEMBERSHIP NO.: 13015