Auditor Report of MSTC Ltd.

Mar 31, 2025

We have audited the Standalone Ind AS financial
statements of MSTC Limited ("the Company"), which
comprise the balance sheet as at 31^st March 2025, and
the statement of Profit and Loss, including the statement
of Other Comprehensive Income, statement of cash
flows and statement of changes in equity for the year
then ended, and notes to the Ind AS financial statements,
including a summary of material accounting policies
and other explanatory information.

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 Act in the manner so
required and give a true and fair view in conformity with
the Ind AS and the accounting principles generally
accepted in India, of the state of affairs of the Company
as at 31^st March 2025, and profit, changes in equity and its
cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the
Standards on Auditing (SAs) specified under section
143(10) of the Companies Act, 2013. 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 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
thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements
and the Code of Ethics. We believe that the audit
evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.

Emphasis of Matter

We draw attention to the following:

• Management''s outlook on the current status of
borrowings from Standard Chartered Bank (Refer
Note no. 18B (b) to the standalone financial
statements).

• In respect of the Transfer of 100 % shareholding in Ferro
Scrap Nigam Limited (FSNL) to Konoike Transport
Company Limited on 21^st January, 2025. The Share
Purchase Agreement (SPA) was signed on 24^th

October, 2024. Accordingly, FSNL ceased to be a
subsidiary of MSTC Limited (Refer Note no. 27A to the
standalone financial statements).

• Exceptional items: income/(expenses) include net
proceeds from disposal of Investment in wholly
owned subsidiary Ferro Scrap Nigam Limited (FSNL)
amounting to ''30,169.19 lakhs and expenditure
towards payment and provision on account of very
old arbitration awards of 3,850.33 lakhs (USD 38.93
Lakhs and ''481.98 Lakhs) (Refer Note no. 27A to the
standalone financial statements).

• The Company carried out the annual impairment
testing under Ind AS 36; the recoverable amount of
investment in Mahindra MSTC Recycling Private
Limited (MMRPL) was determined based on the fair
value derived using the Discounted Cash Flow (DCF)
method at 2,494.00 Lakhs compared to the carrying
amount of ''3,500.00 Lakhs. Accordingly, an
impairment loss of ''1,006.00 Lakhs has been
recognised in the Statement of Profit and Loss (Refer
Note no. 26A to the standalone financial statements).

Our opinion is not modified on the above matter.

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. 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. For each matter below, our description of
how our audit addressed the matter is provided in that
context.

We have determined the matters described below to be
the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the
Auditor''s responsibilities for the audit of the Standalone
Ind AS financial statements section of our report,
including in relation to these matters. Accordingly, our
audit included the performance of procedures designed
to respond to our assessment of the risks of material
misstatement of the Standalone Ind AS financial
statements. The results of our audit procedures,
including the procedures performed to address the
matters below, provide the basis for our audit opinion on
the accompanying Standalone Ind AS financial
statements.

	Key audit matters	How our audit addressed the key audit matter
I.	Recoverability of Trade Receivables
	Trade Receivables-Gross is ''75,147.21 lakhs (Net ''30,954.39 lakhs) with ''44,192.82 lakhs being considered as credit impaired for which a provision for doubtful debts is held in the books. In the event of reference of each case of debt with impaired credit to NCLT and/or other forums for adjudication, the Company is exposed to potential risk of financial loss when the recoveries become subjected to long processes of litigations and eventually doubtful. The recoverable amounts are estimated by management based on their specific recoverability assessment on individual debtor as well as consideration and application of a provisioning policy. The disclosures related to Trade Receivables of the Company are provided in Note 8 (8.1 to 8.6) of the Standalone Financial Statements.	While examining details of Receivables and transactions during the year ended 31st March, 2025, we have observed the nature of the Trade Receivables including those Advance to Customers classified as such, the sustainability and the likelihood of recoverability of Receivables. In terms of and Accounting Policy all such debts considered doubtful of recovery have been provided for in the books as of 31st March, 2025. Since the Company''s obtaining of balance confirmation from Parties is an ongoing process (as referred to in Note-38) substantive audit procedures have been followed to ensure accuracy of balances. We have assessed the recoverability of the unsettled receivables on a sample basis through our evaluation of management''s assessment with reference to the credit profile of the customers and their historical payment pattern, wherever applicable, along with the latest correspondences with the customers, as available read with Company''s existing Risk Management Policy.
II.	IT Systems & Control
	Preparation and presentation of Standalone Ind AS Financial Statements are dependent on the Company''s supporting software and hardware controls involving risk management exercise for maximum elimination of erroneous data. Thus, quality of audit outcome and its authenticity are dependent on the extent of IT controls and systems.	We have planned, designed and carried out the desired audit procedures and sample checks, which in our opinion are adequate to provide reasonable assurance on the adequacy of IT controls in place.
III.	Assessment of allowance for Bad and Doubtful Advances and Contingent Liabilities
	Assessment of allowance for Bad and Doubtful Advances made during the year and Contingent liabilities requires assessment of probable outcomes and cash flows. The identification and quantification require estimation and judgement by the management. The disclosure related to allowance for Bad and Doubtful Advances during the year and Contingent liabilities are provided in Note no. 27 and 30 (a) to the accompanying Standalone Ind AS Financial Statements.	We have carried out the validation of information provided by the management by performing the following procedures: o Evaluating reasonableness of the underlying assumptions. o Understanding the status of the litigations. o Examining the relevant documents on available records. o Reviewing legal opinion/industry practices wherever necessary. o Verification of various disclosures made by the management. o Obtaining Management''s Representation as per guidelines of the ICAI. o Company''s Accounting Policy.

Other Matter

With reference to Note no. 38, confirmation of balances
was not available in many cases of Trade and other
Receivables, Trade and other Payables, Loans and
Advances, Deposits made and received and the impact
of consequent adjustments required, if any, is not
ascertained.

Our opinion is not modified in respect of the above
matters.

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

• The Company''s Board of Directors is responsible for
the other information. The other information
comprises the information included in the
management report but does not include the
Standalone Ind AS financial statements and our
auditor''s report thereon.

• 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.

• 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 in the audit or otherwise
appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a
material misstatement of this other information, we
are required to report that fact. We have nothing to
report in this regard.

Management''s Responsibility for the Standalone
Financial Statements

The Company''s Board of Directors is responsible for the
matters stated in section 134(5) of the Companies Act,
2013 ("the Act") with respect to the preparation of these
Standalone 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 Indian Accounting Standards (Ind
AS) prescribed under section 133 of the Act. 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 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 financial statement that give a true
and fair view and are free from material misstatement,
whether due to fraud or error.

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. Those Board of Directors
are also responsible for overseeing the Company''s
financial reporting process.

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

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.

As part of an audit in accordance with SAs, we exercise
professional judgement and maintain professional
skepticism 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 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 Standalone Ind AS
financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the
date of our 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 financial statements represent the
underlying transactions and events in a manner that
achieves fair presentation.

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

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

From the matters communicated with those charged
with governance, we determine those matters that were
of most significance in the audit of the 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

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-A" a
statement on the matters specified in paragraphs 3 and
4 of the Order, to the extent applicable.

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 Balance Sheet, the Statement of Profit and Loss
including Other Comprehensive Income, Statement
of Changes in Equity and the Cash Flow Statement
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 specified under Section 133 of the Act, read
with relevant rules of the Companies (Accounts)
Rules, 2014.

e) Notification no. G.S.R. 463 (e) dated 5^th June, 2015
issued by Ministry of Corporate Affairs, Section 164 (2)
of the Companies Act, 2013 regarding disqualification
of the Director is not applicable to the Company, since
it is a Government Company.

f) With respect to the adequacy of the internal financial
controls with reference to these standalone Ind AS
financial statements of the Company and the
operating effectiveness of such controls, refer to our
separate Report in "Annexure B".

g) The Company being a Government Company,
provisions of Section 197 (16) of the Companies Act,
2013 regarding managerial remuneration are not
applicable to the Company as per notification no.
G.S.R. 463 (E) dated 5^th June, 2015.

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) Rules, 2014, in our
opinion and to the best of our information and
according to the explanations given to us:

i) The Company has disclosed the impact of
pending litigations lying in the name of the
Company as on 31^st March, 2025 on its financial

position in its standalone Ind AS financial
statements-Refer Note 30(a) to the Standalone
Ind AS Financial Statements.

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

iii) There has been no delay in transferring the
amounts 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 have
been advanced or loaned or invested (either
from borrowed funds or share premium or any
other sources or kind of funds) by the
Company to or in any other person or entity,
including a foreign entity ("Intermediaries"),
with the understanding, whether recorded in
writing or otherwise, that the Intermediary
shall, whether directly or indirectly, lend or
invest in other persons or entities identified in
any manner whatsoever by or on behalf of the
Company ("Ultimate Beneficiaries") or provide
any guarantee, security or the like on behalf of
the Ultimate Beneficiaries;

(b) The Management has represented, that, to the
best of its knowledge and belief, no funds have
been received by the Company from any
person or entity, including a 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; and

(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 (i) and (ii)
of Rule 11(e) of the Companies (Audit and
Auditors) Rules, 2014, as amended, as provided
under and (b) above, contain any material
mis-statement.

(d) The final dividend paid by the Company during
the year in respect of the same declared for
the previous year is in accordance with section
123 of the Act to the extent it applies to
payment of dividends. The interim dividend
declared and paid by the Company during the
year and until the date of this audit report is in
accordance with section 123 of the Act.

i) Based on our examination which included test
checks, the company has used an accounting
software for maintaining its books of account which
has a feature of recording audit trail (edit log) facility
and the same has operated throughout the year for
all relevant 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. The audit trail has been preserved as
per the statutory requirements for record retention.

j) As required by Section 143 (5) of the Companies Act,
2013 the directions and sub-directions issued by the
Comptroller & Auditor General of India, we give our
comments on the Standalone Ind AS Financial
Statements in "Annexure-C" annexed herewith.

For S. Guha & Associates
Chartered Accountants
Firm''s Registration No.- 322493E

Sd/-

Sourabh Mitra
Partner

Membership No.- 308743
UDIN: 25308743BMIDJJ3775

Place: New Delhi

Date: May 29, 2025

---

Mar 31, 2024

To The Members MSTC Limited

Report on the Audit of the Standalone Financial

Statements

Opinion

We have audited the Standalone Ind AS financial statements of MSTC Limited ("the Company"), which comprise the balance sheet as at 31^st March 2024, and the statement of Profit and Loss, including the statement of Other Comprehensive Income, statement of cash flows and statement of changes in equity for the year then ended, and notes to the Ind AS financial statements, including a summary of material accounting policies and other explanatory information.

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 Act in the manner so required and give a true and fair view in conformity with the Ind AS and the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March 2024, and profit, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. 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 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 thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the Standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Standalone Ind AS financial statements.

Sl.	Key Audit Matters	How our Audit addressed the Key Audit Matter
I.	Recoverability of Trade Receivables Trade Receivables-Gross is '' 75,831.65 lakhs (Net '' 31,690.46 lakhs) with '' 44,141.19 lakhs being considered as credit impaired for which a provision for doubtful debts is held in the books. In the event of reference of each case of debt with impaired credit to NCLT and/or other forums for adjudication, the Company is exposed to potential risk of financial loss when the recoveries become subjected to long processes of litigations and eventually doubtful.	While examining details of Receivables and transactions during the year ended 31st March, 2024, we have observed the nature of the Trade Receivables including those Advance to Customers classified as such, the sustainability and the likelihood of recoverability of Receivables. In terms of and Accounting Policy all such debts considered doubtful of recovery have been provided for in the books as of 31st March, 2024. Since the Company''s obtaining of balance confirmation from Parties is an ongoing process (as referred to in Note-38) substantive audit procedures have been

Sl.	Key Audit Matters	How our Audit addressed the Key Audit Matter
	The recoverable amounts are estimated by management based on their specific recoverability assessment on individual debtor as well as consideration and application of a provisioning policy. The disclosures related to Trade Receivables of the Company are provided in Note 8 (8.1 to 8.6) of the Standalone Financial Statements.	followed to ensure accuracy of balances. We have assessed the recoverability of the unsettled receivables on a sample basis through our evaluation of management''s assessment with reference to the credit profile of the customers and their historical payment pattern, wherever applicable, along with the latest correspondences with the customers, as available read with Company''s existing Risk Management Policy.
II.	IT Systems & Control Preparation and presentation of Standalone Ind AS Financial Statements are dependent on the Company''s supporting software and hardware controls involving risk management exercise for maximum elimination of erroneous data. Thus, quality of audit outcome and its authenticity are dependent on the extent of IT controls and systems.	We have planned, designed and carried out the desired audit procedures and sample checks, which in our opinion are adequate to provide reasonable assurance on the adequacy of IT controls in place.
III.	Assessment of allowance for Bad and Doubtful Advances and Contingent Liabilities Assessment of allowance for Bad and Doubtful Advances made during the year and Contingent liabilities requires assessment of probable outcomes and cash flows. The identification and quantification require estimation and judgement by the management. The disclosure related to allowance for Bad and Doubtful Advances during the year and Contingent liabilities are provided in Note no. 27 and 30 (a) to the accompanying Standalone Ind AS Financial Statements.	We have carried out the validation of information provided by the management by performing the following procedures: -- Evaluating reasonableness of the underlying assumptions. -- Understanding the status of the litigations. -- Examining the relevant documents on available records. -- Reviewing legal opinion/industry practices wherever necessary. -- Verification of various disclosures made by the management. -- Obtaining Management''s Representation as per guidelines of the ICAI. -- Company''s Accounting Policy.

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

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the management report but does not include the Standalone Ind AS financial statements and our auditor''s report thereon.

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.

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 in the audit or otherwise appears to be materially misstated. If,

based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Standalone 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 Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act. 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 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 financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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. Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

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

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.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism 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 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 Standalone Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our 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 financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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.

Other Matter

With reference to Note no. 38, confirmation of balances was not available in many cases of Trade and other Receivables, Trade and other Payables, Loans and Advances, Deposits made and received and the impact of consequent adjustments required, if any, is not ascertained.

Our opinion is not modified in respect of the above matters. Report on Other Legal and Regulatory Requirements 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-A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Cash Flow Statement 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 specified under Section 133 of the Act, read with relevant rules of the Companies (Accounts) Rules, 2014.

e) Notification no. G.S.R. 463 (E) dated 5^th June, 2015 issued by Ministry of Corporate Affairs, Section 164 (2) of the Companies Act, 2013 regarding disqualification of the Director is not applicable to the Company, since it is a Government Company.

f) With respect to the adequacy of the internal financial controls with reference to these standalone Ind AS financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

g) The Company being a Government Company, provisions of Section 197 (16) of the Companies Act, 2013 regarding managerial remuneration are not applicable to the Company as per notification no. G.S.R. 463 (E) dated 5^th June, 2015.

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) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations lying in the name of the Company as on 31^st March, 2024 on its financial position in its standalone Ind AS financial statements-Refer Note 30(a) to the Standalone Ind AS Financial Statements.

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

iii. There has been no delay in transferring the amounts 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 have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including a foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity, including a 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; and

(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 (i) and (ii) of Rule 11(e) of the Companies (Audit and Auditors)

Rules, 2014, as amended, as provided under and (b) above, contain any material mis-statement.

(d) The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividends. The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with section 123 of the Act.

i) Based on our examination which included test checks, the company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant 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.

j) As required by Section 143 (5) of the Companies Act, 2013 the directions and sub-directions issued by the Comptroller & Auditor General of India, we give our comments on the Standalone Ind AS Financial Statements in "Annexure-C" annexed herewith.

For S. Guha & Associates Chartered Accountants Firm''s Registration No.- 322493E

Sourabh Mitra Partner

Place: New Delhi Membership No.- 308743

Date: May 27, 2024 UDIN: 24308743BKAUQT6198

---

Mar 31, 2023

MSTC Limited

Report on the Audit of The Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone Financial Statements of MSTC Limited (“the Company”), which comprise the Balance Sheet as at 31^st March 2023, and the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity, Statement of Cash Flows for the year then ended, and notes to the Financial Statements, including a summary of Significant Accounting Policies and other explanatory information.

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March, 2023, Profit and Other Comprehensive Income, changes in Equity and its Cash Flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143 (10) of the Companies Act, 2013. 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 ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, 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 provides basis for ouropinion.

Emphasis of Matter

2. Without qualifying our opinion, we draw attention to the following:

(a) With reference to Note No. 33 of the Standalone Financial Statements there is a non- Provision of Deferred Tax Asset of ? 4,237.60 lakhs on Provision for Doubtful Debts of ? 12,126.84 lakhs since 1^st April, 2018.

(b) The Title Deed of a freehold flat in Mumbai having Gross Block of ? 7.42 lakhs as at 31^st March, 2023 was not available for verification.

Key Audit Matters

3. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

SI.	Key Audit Matters	Auditor''s Response
1.	Recoverability of Trade Receivables: As at 31st March 2023, Trade Receivables- Gross is ? 88,033.95 lakhs (Net ? 33,353.06 lakhs), with ? 54,680.89 lakhs being considered as Credit Impaired for which a provision for bad and doubtful debts for similaramountisheld inthe Books.	While examiningdetails of Receivables and transactions during the year ended 31stMarch 2023, we have observed the nature of the Trade Receivables including those Advance to Customers classified as such, the sustainability and the likelihood of recoverability of Receivables. In terms of an Accounting Policy all such debts as considered doubtful of recovery have been provided for in the Books as at 31st March 2023.

SI.	Key Audit Matters	Auditor''s Response
	In the event of reference of each case of debt with impaired credit to NCLT and /or other forums for adjudication, the Company is exposed to potential risk of financial loss when the recoveries become subjected to long processes of litigations and eventually doubtful. The recoverable amounts are estimated by management based on their specific recoverability assessment on individual debtor as well as consideration and application of a provisioning policy. The disclosures related to Trade Receivables of the Company are provided in Note 8.1 to 8.6 to the accompanyingStandalone Financial Statements.	Since Company''s obtaining of balance confirmations from Parties is an ongoing process (as referred to in Note 41), substantive audit procedures have been followed to ensure accuracy of balances. We have assessed the recoverability of the unsettled receivables on a sample basis through our evaluation of management''s assessment with reference to the credit profile of the customers and their historical payment pattern, wherever applicable, along with the latest correspondences with the customers, as available read with the Company''s existing Risk Management Policy.
ii.	IT Systems & Control: Preparation and presentation of Financial Statements are dependent on Company''s supporting software and hardware controls involving risk management exercise for maximum elimination of erroneous data. Thus, quality of audit outcome and its authenticity are dependent on the extent of IT controls and systems.	We have planned, designed and carried out the desired audit procedures and sample checks, which in our opinion are adequate to provide reasonable assurance on the adequacy of IT controls in place.
III.	Assessment of allowance for Bad and Doubtful Advances and Contingent Liabilities: Assessment of allowance for Bad and Doubtful Advances made during the year and Contingent liabilities requiring assessment of probable outcomes and cash flows. The identification and quantification require estimation and judgment by the management. The disclosure related to allowance for Bad and Doubtful Advances during the year and Contingent liabilities are provided in Note No 28 & 32 (a) to the accompanying Standalone Financial Statements.	We have carried out the validation of the information provided by the management by performing thefollowing procedures:-Evaluating reasonableness of the underlyingassumptions. Understandingthe currentstatus of the litigations. Examiningthe relevant documentson available records. Reviewing legal opinion/ industry practices wherever necessary. Verification of various disclosures made by the management. Obtaining Management''s Representation as per guidelines of the ICAI. Company''s Accounting Policy.

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

4. The Company''s Board of Directors is responsible for the preparation of other information. The other information comprises the information included in the Management Discussions and Analysis, Board''s Report including Annexureto Board''s Report, Corporate Governance and Shareholder''s Information, but does not include the Standalone Financial Statements and our auditor''s report thereon.

Our opinion on the Standalone Financial Statements does not cover the other information and we do not

express any form of assurance and conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above 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. We have nothing to report in this regard.

Responsibility of Management and Those Charged with

Governance for Standalone Financial Statements

5. The Company''s Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act”) with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS''s specified under Section 133 of the Act. 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; makingjudgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, management is responsible for assessing the Company''s ability to continue as a Going Concern, disclosing, as applicable, matters related to GoingConcern and usingthe 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 Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone

Financial Statements

6. Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, orthe 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 control systems 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 ourauditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our 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 Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a mannerthatachievesfair presentation.

Materiality is the magnitude of misstatement in the

Standalone Financial Statement that, individually or in

aggregate, makes it probable that the economic decision of a

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

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 duringouraudit.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are, therefore, the key audit matters. We describe these matters in our 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.

Other Matter

7. The following other matters are mentioned.

(a) With reference to Note 41, confirmation of balances were not available in many cases of Trade and other Receivables, Trade and other Payables, Loans and Advances, Deposits made and received and the impact of consequent adjustments required, if any, is not ascertained.

(b) Since the pandemic situation out of COVID -19 has waned in India, we have made visits to certain Southern Region Branches, viz. Hyderabad, Vizag and Chennai to audit the transactions as well as having the assessment of activities in the said Branches. We have, however, followed alternative audit procedures as per the Standards on Auditing prescribed by the Institute of Chartered Accountants of India (ICAI) in respect of all the Branches. Full remote access of the data in respect of all the Branches were available on the Company''s ISTMS systems. We have been represented by the

management of the Company that the data provided on the system for our audit purposes is correct, complete, reliable and are generated by the accountingsystem of the Company.

Our audit opinion is not modified in respect of the above.

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order”), issued by Government of India in terms of Sub-section (11) of Section 143 of the Companies Act, 2013, we give in the" Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

9. As required bySectlon 143(3) of the Act, we reportthat:

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

(b) In our opinion, proper Books of Accounts 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), the statement of changes in Equity and the Cash Flow Statement dealt with bythis Reportare in agreement with the Books of Accounts.

(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with relevant Rules thereto.

(e) Notification no. G.S.R 463(E) dated 5^th June, 2015 issued by Ministry of Corporate Affairs, Section 164(2) of the Companies Act, 2013 regarding disqualification of the Director is not applicable to the Company, since it is a Government Company.

(f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls, refer to ourseparate Report in “Annexure B".

(g) The Company being a Government Company, provisions of Section 197 (16) of the Companies Act, 2013 regarding managerial remuneration is not applicable to the Company as per notification no. G.S.R. 463(E) dated 5^th June, 2015 issued by Min istry of Corporate Affairs.

(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) Rules, 2022, in

our opinion and to the best of our information and

according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements -Refer Note 32(a) to the Standalone Financial Statements.

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

(iii) The Company had transferred ? 11.06 lakhs to the Investor Education and Protection Fund duringtheyear under review.

(iv) The management of the Company has represented that, to the best of its knowledge and belief, other than as disclosed in the Notes to Accounts, no funds has 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 any other person(s) or entity (ies), including foreign entities ("Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(v) The management of the Company has represented that, to the best of its knowledge and belief, other than as disclosed in the Notes to Accounts, no funds has been received by the Company from any person(s) or entity (ies), 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.

Based on the audit procedures considered reasonable and appropriate in the circumstances, nothing has come to notice that may cause us to believe that the representations as noted in Sl.(h)(iv) & (v) above contain any material misstatement.

(vi) The Company has declared dividend or paid during the year in compliance with the Companies Act, 2013.

10. As required by Section 143(5) of the Act the directions and sub-directions issued by the Comptroller & Auditor General of India, we give our comments on the Standalone Financial Statements in “Annexure-C” annexed herewith.

For S. Ghose & Co LLP

Chartered Accountants FRN-302184E/E300007

CA Pradlp Kumar Mltra Partner

Place: Kolkata M.No.052183

Date: May 23, 2023 UDIN : 23052183BGZFZD3156

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Mar 31, 2021

To the Members of MSTC Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone Financial Statements of MSTC Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2021, and the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity, Statement of Cash Flows for the year then ended, and notes to the Financial Statements, including a summary of Significant Accounting Policies and other explanatory information.

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2021, Profit and Other Comprehensive Income, changes in Equity and its Cash Flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Companies Act, 2013. 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 ethical requirements that are relevant to our audit of the standalone Financial Statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, 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 opinion.

Emphasis of Matter

2. Without qualifying our opinion, we draw attention to the following:

(a) With reference to Note 8.4 for Trade Receivables-Credit Impaired representing pledged stocks held by the Company in the premises of the Customers on behalf of them under "Cash & Carry" model of business, now discontinued, the Company does not have appropriate internal control system in place for inventory due to which substantial amounts have had to be provided for /written off in the past as well as during the year.

Further, with reference to the said Note, last Volumetric Analysis was done during the year with quantity and Market Value of stocks in respect of few Customers while in rest of the cases, such

exercise was not undertaken for either the Stocks held are reported to be "Nil" or access was denied by the concerned Customer.

(b) With reference to Note No. 36 of the standalone Financial Statements there is a non-Provision of Deferred Tax Asset of '' 1,188.96 millions on Provision for Doubtful Debts of '' 3,402.48 millions since 1st April, 2018.

(c) The Title Deed of a freehold flat in Mumbai having Gross Block of '' 0.74 million as at 31st March, 2021 was not available for verification.

Key Audit Matters

3. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be

Sl. Key Audit Matters	Auditor''s Response
i. Recoverability of Trade
Receivables:
As at 31st March 2021,	While examining details of
Trade Receivables-Gross is	R e c e i v a b l e s a n d
'' 15,502.93 millions (Net	transactions during the
'' 7,237.64 millions), with	year ended 31st March
'' 8,265.29 millions being	2021 , if any, we have
considered as Credit	observed the nature of the
Impaired for which a	Trade Receivables, the
provision for bad and	sustainability and the
doubtful debts for similar	likelihood of recoverability
amount is held in the Books.	of Receivables. In terms of an Accounting Policy all such debts as considered doubtful of recovery have been provided for in the Books as at 31st March, 2021.
In the event of reference of each case of debt with impaired credit to NCLT and/or other forums for adjudication, the Company is exposed to potential risk of financial loss when the reco veri es b ecom e subjected to long processes of litigations and eventually doubtful. The recoverable amounts a r e e s t i m a t e d b y management based on their specific recoverability	Since Company''s obtaining of balance confirmations from Parties is an ongoing process (as referred to in Note 42), substantive audit procedures have been followed to ensure accuracy of balances. We h a ve a ss e ss e d th e recoverability of the unsettled receivables on a sample basis through our e v a l u a t i o n o f
	management''s assessment with reference to the credit profile of the customers

assessment on individual d e b t o r a s we l l a s co n s i d e ra ti o n a n d a p p l i c a t i o n o f a provisioning policy. The disclosures related to Trade Receivables of the Company are provided in Note 8.1 to the accompanying standalone		and their historical payment pattern, wherever applicable, along with the latest correspondences with the customers, as available read with the Company''s existing Risk Management Policy.
ii. IT Systems & Control:
Preparation	and	We have planned, designed
presentation of Financial		and carried out the desired
Statements are dependent		audit procedures and
on Company''s supporting		sample checks, which in our
software and hardware		opinion are adequate to
controls involving risk		provid e reasonable
management exercise for		assurance on the adequacy
maximum elimination of		of IT controls in place.
erroneous data.	Thus,
quality of audit outcome
and its authenticity are
dependent on the extent of
IT controls and systems.

iii. Assessment of allowance
for Bad and Doubtful Advances and Contingent Liabilities:
Assessment of allowance	We have carried out the
for Bad and Doubtful	v a l i d a t i o n o f t h e
Advances made during the	information provided by
year and Contingent	the management by
l i a b i l i ti e s re q u i re assessment of probable	performing the following procedures:- Evaluating reasonable-
outcomes and cash flows.	ness of the underlying
The identification and	assumptions.
quantification require	- Understanding the
estimation and judgment	current status of the
by the management. The	litigations.
disclosure related to	- Examining the relevant
allowance for Bad and	documents on available
Doubtful Advances during	records.
the year and Contingent	- Reviewing legal opinion/
liabilities are provided in	industry practices
Note No 30 & 35 (a) to the	wherever necessary.
accompanying Standalone	- Verification of various
Financial Statements.	disclosures made by the management.
	- Obtaining Management''s
	Representation as per guidelines of the ICAI.
	- Company''s Accounting
	Policy.

iv. Impact of continuing

As a result of continuing

COVID-2019 pandemic :

COVID-19 pandemic situation prevailing in the country, we had to encounter difficulties / delay in the process of collection of data and analysing the same in respect of Branches which could not be physically visited. Accordingly, the audit of the Branches was carried out based on remote access of the data in respect of the Branches as p r o v i d e d b y t h e management of the Company, to enable us to come to an audit conclusion without compromising the maintenance of quality of audit as desired by the regulatory authorities.

Information Other than the Standalone Financial

Statements and Auditor''s Report Thereon

4. The Company''s Board of Directors is responsible for the

preparation of other information. The other information comprises the information included in the Management Discussions and Analysis, Board''s Report including Annexure to Board''s Report, Corporate Governance and Shareholder''s Information, but does not include the standalone Financial Statements and our auditor''s report thereon.

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

In connection with our audit of the standalone Financial Statements, our responsibility is to read the other information identified above 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. We have nothing to report in this regard.

Responsibility of Management and Those Charged with Governance for Standalone Financial Statements

5. The Company''s Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Financial Statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with

the accounting principles generally accepted in India, including the Ind AS''s specified under Section 133 of the Act. 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 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 Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone Financial Statements, management is responsible for assessing the 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 Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone

Financial Statements

6. Our objectives are to obtain reasonable assurance about whether the standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of the standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section

143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the Company has adequate internal financial control systems 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 Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our 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 Financial Statements, including the disclosures, and whether the standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Financial Statements of the current period and are, therefore, the key audit matters. We describe these matters in our 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.

Other Matter

7. The following other matters are mentioned.

(a) With reference to Note 42, confirmation of balances were not available in many cases of Trade and other Receivables, Trade and other Payables, Loans and Advances, Deposits made and received and the impact of consequent adjustments required, if any, is not ascertained.

(b) The continued spreading of COVID -19 across India has resulted in restriction on physical visit to the Branches and the need for carrying out alternative audit procedures as per the Standards on Auditing prescribed by the Institute of Chartered Accountants of India (ICAI). As a result of the above, the audit was carried out based on remote access of the data in respect of the Branches as provided by the management of the Company. This has been carried out based on the advisory on "Specific Considerations while conducting Distance Audit/ Remote Audit/ Online Audit under current Covid-19 situation" issued by the Auditing and Assurance Standards Board of ICAI. We have been represented by the management of the Company that the data provided for our audit purposes is correct, complete, reliable and are generated by the accounting system of the Company.

Our audit opinion is not modified in respect of the above.

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by Government of India in terms of Sub-section (11) of Section 143 of the Companies Act, 2013, we give in the" Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

9. 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 Accounts 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), the statement of changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the Books of Accounts.

(d) In our opinion, the aforesaid standalone Financial Statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with relevant Rules thereto.

(e) Notification no. G.S.R 463(E) dated 5th June, 2015 issued by Ministry of Corporate Affairs, Section 164(2) of the Companies Act, 2013 regarding disqualification of the Director is not applicable to the Company, since it is a Government Company.

(f) 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".

(g) The Company being a Government Company, provisions of Section 197 (16) of the Companies Act, 2013 regarding managerial remuneration is not applicable to the Company as per notification no. G.S.R. 463(E) dated 5 th June, 2015 issued by Ministry of Corporate Affairs.

(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule11 of the Companies (Audit and Auditors) Rules,2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its standalone Financial Statements -Refer Note35(a) to the standalone Financial Statements.

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

10. As required by Section 143(5) of the Act the directions and sub-directions issued by the Comptroller & Auditor General of India, we give our comments on the standalone Financial Statements in "Annexure-C" annexed herewith.

For S. Ghose & Co LLP Chartered Accountants FRN- 302184E/E300007

CA Pradip Kumar MitraPlace: Kolkata Partner

Date: June 25, 2021 M.No.052183

UDIN : 21052183AAAAAC2933

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Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS Financial Statements of MSTC LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March 2018, 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 then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as ‘Standalone Ind AS financial statements’).

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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 Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the Standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements.

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 Ind AS financial statements. Basis for Qualified Opinion

i) Trade Receivables includes Rs. 19544.01 lakh due from M/s SPS Steel Rolling Mills Ltd for procurement and supply of materials to the party which is now more than five years old. Thus with the passage of time, quality of materials has deteriorated and as per the volumetric analysis the net realizable value of pledged raw materials comes to Rs. 6230 lakh. The party has defaulted in making the payment as per the terms of the Arbitration award. As per the volumetric analysis done on 01.12.2017, pledged stock worth Rs. 6543 lakh was unauthorisedly lifted by the party inspite of the same being under the jurisdiction of a Custodian. The creditors have filed an application in NCLT for initiation of Corporate Insolvency Resolution Process against the Company. The Company has security deposit of Rs. 10 lakh and has also recovered Rs. 641 lakh from the party during the financial year 2018-19. An amount of Rs. 1500 lakh have been provided for in the books of accounts. The Company should have provided a further amount of Rs. 17393.01 lakh against this debt during the year. Non-provision of the same has resulted in overstatement of profit and understatement of provision for the year 2017-18 by Rs. 17393.01 lakh - Refer Note no. 9.4 (a) of notes to the Standalone Ind AS financial statements.

ii) Trade Receivables includes Rs. 22124.13 lakh due from M/S Concast Steel & Power Ltd. for procurement and supply of materials. With the passage of time, quality of materials has deteriorated resulting in lower realisable value. As per the report of volumetric analysis conducted on 03.05.2018, part of pledged stock at Bankura unit was unauthorisedly lifted by the party inspite of the same being under the jurisdiction of a Custodian. Volumetric analysis at Jharsuguda unit of the party could not be performed by MSTC. Thus the book value of Rs. 108 lakh of the pledged stock in this unit is doubtful. Pursuant to admission of a case of insolvency filed by creditors in NCLT, MSTC has filed its claim before Insolvency Resolution Professional under NCLT. The Company has a security deposit of Rs. 40 lakh and during the year procured materials on behalf of the party for Rs. 9206 lakh against which they realized only Rs. 9088 lakh. As per the volumetric analysis of the materials, the net realizable value of the pledged stock is Rs. 2313.81 lakh. The Company has made a provision of Rs. 3000 lakh during the year. The Company therefore should have provided a further amount of Rs. 19084.13 lakh against this debt during the current year. This non-provision of the shortfall has resulted in overstatement of profit and understatement of provision for the year 2017-18 by Rs. 19084.13 lakh - Refer Note no. 9.4 (b) of notes to the Standalone Ind AS financial statements.

Qualified Opinion

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 paragraph (i) and (ii) of Basis for Qualified Opinion, the overall effect of which is overstatement of profit and understatement of provision by Rs. 36477.14 lakh, the aforesaid standalone Ind AS 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, of the state of affairs of the Company as at 31st March 2018, and its profit, other comprehensive income, its cash flows and changes in equity for the year ended on that date.

Emphasis of matters

We draw attention to the following matters:

i) Reference is invited to Note no. 9.4 (c) of notes to the Standalone Ind AS financial statements wherein it is stated that Trade Receivables include ‘11484.29 lakh due from M/s Jai Balaji Industries Ltd for procurement and supply of materials which are more than three years old. The party is making payment as per the Arbitration award and in the current year only Rs. 482 lakh have been adjusted against outstanding opening receivable of Rs. 11937 lakh. Since as per the Volumetric Analysis Report by an independent valuer, the net realizable value of the pledged stock is higher at Rs. 14185.21 lakh (Previous year: Rs. 6870 lakh), no provision has been considered necessary by the Management in the current year.

ii) Reference is invited to Note no. 9.4 (d) of notes to the Standalone Ind AS financial Statements wherein it is stated that Trade Receivables include Rs. 2831.52 lakh due from M/s Global Coke Ltd for procurement and supply of materials which are more than three years old. In view of the expected liquidation of dues by way of consumption of pledged materials and also net realizable value of the pledged stock is higher at Rs. 5311 lakh (Previous year : Rs. 1250 lakh) as per the Volumetric Analysis Report by an independent valuer, no provision has been considered necessary by the Management in the current year.

iii) Reference is invited to Note no. 42 of notes to the Standalone Ind AS financial Statements relating to pending confirmation/reconciliation of balances of Trade Receivables and Trade Payables and its consequential impact that may arise on reconciliation.

iv) The Company had appointed four Independent Directors, two on 06.09.2017 and the remaining two on 09.03.2018. Two Audit Committee meetings were held during the year. In absence of the Independent Directors, no Audit Committee meetings could be held before September 2017.

Our opinion is not modified in respect of these matters.

Other Matters

The comparative financial information of the Company for the year ended 31st March, 2017 included in the Standalone Ind AS financial statements are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor, M/s Ray & Co., whose report dated 07th August, 2017 for the year ended 31st March, 2017 expressed a modified opinion on those standalone financial statements.

Report on Other Legal and Regulatory Requirements

1. With respect to the other matters to be included in the Auditor’s Report in terms of the directions of the Comptroller and Auditor General of India (CAG) under Section 143(5) of the Act, and on the basis of our examination of the books and records of the Company carried out in accordance with the generally accepted principles in India and according to the information and explanations given to us, we give in the Annexure A, statement on the matters specified in the directions of CAG.

2. 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 Act, we give in the Annexure B, a statement on the matters specified in paragraphs 3 and 4 of the said order.

3. 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 Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and the Cash Flow Statement 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 specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended.

e. The matters described in the Basis for Qualified Opinion paragraph above, in our opinion, may not have an adverse effect on the functioning of the Company.

f. As per notification No. GSR 463(E) dated 5th June, 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 164(2) of the Act is not applicable to the Company.

g. With respect to the adequacy of the internal financial control over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure C.

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) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note no. 34 of notes to the Standalone Ind AS financial statements.

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

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

(Referred to in paragraph 2 under “Report on Other Legal and Regulatory Requirements” section of our report of even date)

i. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets;

(b) The Company has physically verified its fixed assets during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The title deeds of the following immovable properties are not held in the name of the Company:

Total No. of Cases 14

Whether leasehold/freehold Freehold

Gross Block (as at Balance Sheet date) Rs. 105 lakh

Net Block (as at Balance Sheet date) Rs. 97.07 lakh

ii. The Company does not hold any inventory as at the year end. Therefore, the provisions of Clause 3(ii) of the Order are not applicable to the Company.

iii. The Company has not granted any loan, secured or unsecured, to companies, Limited Liability Partnerships, firms or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii) [(a), (b) and (c)] of the Order are not applicable to the Company.

iv. The Company has not granted any loan, provided any guarantee/ security and hence Section 185 of the Act is not applicable. The investment made by the Company is in compliance of section 186 of the Act.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Therefore, the provision of clause 3(v) of the order is not applicable on the Company.

vi. The Central Government of India has not prescribed the maintenance of cost records under sub-section (1) of Section 148 of the Act. Therefore, the provision of clause 3(vi) of the order is not applicable on the Company.

vii.(a) The Company is generally regular in depositing the undisputed statutory dues including provident fund, employees’ state insurance, income tax, goods and service tax, cess and any other statutory dues as applicable, with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2018 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income-tax, sales-tax, value added tax, custom duty, service tax, etc as at 31st March 2018 which have not been deposited on account of a dispute, are as follows:

Sl. No.	Name of the Statute	Nature of Dues	Period to which the amount relates (F.Y)	Amount (Rs. in Lakh)	Forum where dispute is pending
1	UP VAT Act 2008	Claim by Sales Tax Authority	2001-02	1.93	High Court Allahabad
			2004-05	1.67	Commercial Tax Tribunal Bench, Ghaziabad.
2	J&K Sales Tax Act 1962	Claim by Sales Tax Authority	2009-10	1.50	Commercial taxes Circle, Jammu
			2010-11	0.66	Commercial taxes Circle, Jammu
3	WB VAT Act 2003	Claim by Sales Tax Authority	2009-10	332.75	Appellate Revision Board, Kolkata
			2012-13	314.42	Commissioner, Kolkata
4	AP VAT Act 2005	Claim by Sales Tax Authority	1998-99	22.53	Sales Tax Appellate Tribunal (STAT),
					Visakhapatnam
			1999-00	44.42	Assessing Authority i.e Commercial Tax Officer /
					Surya Bagh Circle, Visakhapatnam
			2004-05	9.08	Sales Tax Appellate Tribunal (STAT) ,
					Visakhapatnam
			2005-06	3.70	Sales Tax Appellate Tribunal (STAT),
					Visakhapatnam
			2006-07	0.76	Sales Tax Appellate Tribunal (STAT) ,
					Visakhapatnam
			2008-13	79.35	High Court of Judicature at Hyderabad
			2007-08	27.46	High Court. Andhra Pradesh
5	Central Sales Tax Act (CST)	Claim by Sales Tax Authority	2009-10	249.00	Sales Tax Appellate Tribunal (STAT) ,
					Visakhapatnam
			2011-12	82.32	Appellate Deputy Commissioner (Appeals),
					Vijayawada
			2015-16	14.28	Appellate Deputy Commissioner (Appeals),
					Vijayawada
6	Orissa Sales Tax Act	Claim by Sales Tax Authority	1986-87	269.00	High Court, Orissa
7	Gujarat VAT Act 2003	Claim by Sales Tax Authority	2002-03	52.25	Pre-Audit Dept. Ahmedabad
			2003-04	369.45	Pre-Audit Dept. Ahmedabad
			2004-05	217.99	Appeal filed in Tribunal against DC (Appeal Order)
	Total of Sales Tax Dues			2094.52
8	Customs Act 1962	Claim by Custom Department	1995-96	240.00	Commissioner Customs, Chennai
			2001-02	203.81	High Court, Calcutta
			2012-13	1542.49	CESTAT, Bangalore
			2013-14	83.55	CESTAT, Bangalore
	Total of Custom Dues		2069.85
9	Finance Act 1994 (Service Tax)	Service Tax Demand	2002-05	73.02	High Court, Delhi
			2005-07	1490.10	CESTAT, Kolkata
			2003-05	22.02	Commissioner Appeals, Kolkata
	Total of Service Tax Dues		1585.14
10	Income Tax Act 1961	Income Tax Demand	2002-03	51.56	High Court, Calcutta
			2004-05	1.06	CIT Appeals, Kolkata
			2006-07	11.64	CIT Appeals, Kolkata
			2008-09	67.62	Income tax Appellate Tribunal, Kolkata
			2011-12	21.34	Commissioner Appeals, Kolkata
			2012-13	275.73	Commissioner Appeals, Kolkata
			2013-14	100.05	Commissioner Appeals, Kolkata
			2014-15	176.75	Commissioner Appeals, Kolkata
	Total of Income Tax Dues			705.75
	TOTAL TAX DUES			6455.26

viii. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks except for the loans as mentioned in Note No. 20(a) and 20(b) of the notes to the Standalone Ind AS financial statements and detailed here under:

Name of Bank	Principal	Interest
Indian Overseas Bank	Rs. 138 lakh	-
Standard Chartered Bank	Rs. 14362 lakh	Rs. 7889 lakh

The Company did not have any loans or borrowings from financial institutions or government and has not issued any debentures.

ix. The Company has not raised any money by way of initial public offer/further public offer (including debt instruments)/term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we report that no fraud on the Company or no fraud by the officers and employees of the Company has been noticed or reported during the year, nor have we been informed of any such case by the management.

xi. The managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V of the Act.

xii. The Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

xiii. All the transactions with related parties are in compliance with section 177 and 188 of the Act and the details have been disclosed in the notes to the Standalone Ind AS financial statements as required by the applicable accounting standards.

xiv. No money was raised through preferential allotment/ private placements of shares or fully/partly convertible debentures during the year and hence, the provision of Clause 3(xiv) of the Order is not applicable to the Company.

xv. According to the information & explanation given to us and the records of the Company examined by us, the Company has not entered into any non-cash transactions with directors or persons connected with them as referred to in Section 192 of the Act. Accordingly, paragraph 3(xv) of the Order is not applicable

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

ANNEXURE C TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 3(g) under “Report on Other Legal and Regulatory Requirements” section of our report of even date)

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

We have audited the internal financial controls over financial reporting of MSTC LIMITED (“the Company”) as at 31st March, 2018 in conjunction with our audit of the standalone Ind AS 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 (the “Guidance Note”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to 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 Act.

Auditors’ 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 Standards on Auditing prescribed under section 143(10) of the Act and Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”), to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and Guidance Note require that we comply with the 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 aspects.

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 auditors’ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company’s internal financial controls 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 controls over financial reporting includes those policies and procedures that:

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

(b) 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

(c) 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 controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weakness have been identified as at 31st March 2018:-

(a) The Company did not have an appropriate internal control system for customer acceptance, credit evaluation and establishing credit limits for sales, which could potentially result in the Company recognizing revenue without establishing reasonable certainty of ultimate collection. The internal control over follow up with the customers for recovery of dues is inadequate.

(b) The Company did not have an appropriate internal control system with regard to pledged stock of raw materials procured by the Company on behalf of its customers and kept under the control of the Custodian appointed by the Company resulting in unauthorized liftment of the materials from the godowns.

A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, except for the possible effects of the material weaknesses described above on the achievements of the objectives of the control criteria, the Company has maintained, in all material aspects, adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018, based on the internal financial 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 D. K. Chhajer & Co.

Chartered Accountants

FRN 304138E

Niraj K. Jhunjhunwala

Place: Kolkata Partner

Date : 27.07.2018 Membership No. 057170