We have audited the financial statements of INDIA STEEL WORKS LIMITED (Hereinafter referred to as company), which comprise
the balance sheet as at 31st March 2026, and the statement of profit and loss (including other comprehensive income), statement of
changes in equity and 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 (hereinafter referred to as “the financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give
the information required by the Companies Act, 2013 (“Act”) in the manner so required and does not 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 2026, of its
profit and other comprehensive income, changes in equity and cash flows for the year then ended.
Going Concern
The Company’s current liabilities exceeded its current assets as at the previous balance sheet date and the operations of the
Company have substantially ceased. Further, the Company has incurred significant losses and, based on information made available
to us, the Company is facing severe financial constraints affecting its ability to discharge liabilities in normal course of business. These
events and conditions indicate existence of a material uncertainty that may cast significant doubt on the Company’s ability to continue
as a going concern. In absence of sufficient and appropriate audit evidence regarding management’s assessment of going concern
assumptions and future viability of operations, we are unable to comment upon the appropriateness of preparation of financial
statements on going concern basis.
Basis for Adverse Opinion
a. The primary accounting software (SAP) and underlying accounting records maintained therein were not accessible during the
course of audit. The Company has prepared books of account using alternative software based on opening balances derived
from previously audited financial statements and backup records made available to us by the management. In absence of
complete access to original accounting records, system-generated audit trails, and supporting electronic data maintained in the
primary accounting system, we were unable to obtain sufficient and appropriate audit evidence regarding the completeness,
accuracy, authenticity, and integrity of the books of account and related financial information. Consequently, we are unable to
determine the consequential impact, if any, of the aforesaid matter on the accompanying financial statements.
b. Inventories amounting to '13,696.20 Lakhs have not been valued at lower of cost and net realizable value, which is not in
compliance with the requirements of Ind AS 2 “Inventories” and the significant accounting policies followed by the Company.
Further, the Company has not carried out proper physical verification, identification of obsolete/non-moving inventories, or
assessment of realizable value of such inventories. Based on the information and records made available to us, work-in¬
progress amounting to '10,608.94 Lakhs and raw materials amounting to '1,867.67 Lakhs appear recoverable substantially at
scrap value. Further, in absence of quantitative records, valuation workings, aging analysis and supporting documents relating
to finished goods, stock-in-trade, stores and spares amounting to '1,219.60 Lakhs, we were unable to determine the
recoverable value and carrying value of such inventories. Consequently, we are unable to determine the extent of adjustments
required in respect of valuation of inventories, cost of materials consumed, losses, and consequential impact on the
accompanying financial statements. Pending determination of the same, we are unable to determine the consequential impact,
if any, on inventories, losses, net worth and other elements of the accompanying financial statements.
c. During the year, the Company has taken over work-in-progress (WIP) amounting to ?1.67 Crores from a Director of the
Company and has recognized the same under Current Assets in the financial statements. As informed to us and based on
records made available for our verification, the said WIP substantially comprises indirect expenditure and administrative costs
incurred over a period of time and does not represent any independently identifiable tangible asset as at the balance sheet date.
Further, payment/consideration has been made by the Company to the Director against such takeover of WIP. The valuation of
the said WIP is primarily supported by an architect’s certificate furnished by the management. However, in absence of
independently verifiable documentary evidence demonstrating the nature, recoverability, realizability, future economic benefits
and basis of capitalization of such expenditure, we were unable to obtain sufficient and appropriate audit evidence regarding the
appropriateness of recognition and valuation of the aforesaid WIP as an asset of the Company. Accordingly, we are unable to
determine whether any adjustment is required to the carrying value of such WIP and the consequential effect thereof on current
assets, profit/loss for the year, related party disclosures and other elements of the accompanying financial statements.
d. The Company has entered into various non-cash transactions with related parties during the year, including transactions
involving adjustment entries, transfers and settlement arrangements. Further, during the year, the Company has recorded
purchase transactions aggregating to ?1.83 Crores from a related party through issuance of credit notes in respect of goods
which, as informed to us, had originally been sold by the Company to the same related party in earlier years. Additionally,
payments have also been made to and/or received from such related parties against certain of the aforesaid non-cash
transactions. In absence of adequate supporting agreements, underlying documentary evidence and satisfactory explanation
regarding the commercial rationale and business substance of such transactions, we were unable to obtain sufficient and
appropriate audit evidence to establish the genuineness, nature, arm’s length basis and commercial substance of the aforesaid
related party transactions. The aforesaid circumstances indicate existence of significant risk relating to authenticity and
substance of related party transactions. Consequently, we are unable to determine whether any adjustments, reclassifications,
reversals, disclosures or other consequential effects are required in respect of the aforesaid transactions in the accompanying
financial statements.
e. The Company has shown insurance claim receivable amounting to '1,120.27 Lakhs under Non-Current Assets and '1,672.79
Lakhs under Current Assets. The said claims have remained outstanding for a considerable period and as informed to us, the
same have not yet been approved/adjudicated by the concerned authorities/insurance companies. In absence of sufficient
appropriate evidence supporting the certainty of realization and recoverability of such claims, we are unable to obtain sufficient
and appropriate audit evidence regarding the carrying value of the said receivables. Consequently, we are unable to determine
recoverability and consequential impact, if any, on the accompanying financial statements.
f. Balance confirmations in respect of trade receivables, trade payables, loans and advances, advances to suppliers and
advances from customers were not made available for our verification. In absence of sufficient alternate audit evidence
regarding the completeness, existence, accuracy and recoverability/payability of such balances, we were unable to determine
consequential adjustments, reconciliations or disclosures, if any, required in the accompanying financial statements.
g. Sufficient and appropriate documentary evidence in respect of various claims, litigations, disputed statutory liabilities,
contingent liabilities and other legal matters was not made available to us. Further, the Company has not carried out adequate
assessment of obligations arising from such matters in accordance with the requirements of Ind AS 37 “Provisions, Contingent
Liabilities and Contingent Assets”. Accordingly, we were unable to determine whether any provision, adjustment, impairment,
disclosure, or reclassification is required in respect of such matters and the consequential impact thereof on the accompanying
financial statements.
h. The Company has not carried out assessment of impairment in respect of its tangible assets, investments, financial assets and
other non-financial assets in accordance with the requirements of Ind AS 36 “Impairment of Assets”. Consequently, no
impairment provision or diminution adjustment, wherever applicable, has been recognized by the Company. In absence of such
assessment and sufficient supporting evidence regarding recoverable amount of the aforesaid assets, we are unable to
comment upon the realizable value of such assets and consequential impact, if any, on the accompanying financial statements.
i. In absence of financial information, valuation reports and other relevant information from the investee entities, we were unable to
determine the recoverable value of investments carried in the financial statements. Consequently, the investments have
continued to be carried at cost and no adjustment/provision for diminution in value, if any, has been recognized by the Company.
Accordingly, we are unable to determine the consequential impact of the aforesaid matter on the accompanying financial
statements.
j. The Company does not have an internal audit system commensurate with the size, nature and complexity of its operations.
Further, significant deficiencies and material weaknesses were observed in internal controls relating to maintenance of
accounting records, supporting documentation, inventory management, related party transactions and monitoring controls. The
aforesaid matters indicate existence of material weaknesses in the internal financial controls over financial reporting of the
Company, which could potentially result in material misstatement in the financial statements.
k. We draw attention to Note of the accompanying financial results regarding the Company’s classification of its freehold land
located at as “Assets Held for Sale” under Ind AS 105. The Company has not determined the fair value less costs to sell of the
said land as of the reporting date, as negotiations with prospective buyers are ongoing, and has therefore carried out the asset at
its existing book value. Ind AS 105 requires assets held for sale to be measured at the lower of carrying amount and fair value
less costs to sell. In the absence of fair value determination, we are unable to comment on the possible impact on the carrying
value of the asset, profit/loss), and net assets for the period.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not provide a separate opinion on these matters. During the year under consideration, we do
not have any key audit matters to report.
Other Information
The Company’s management and Board of Directors are responsible for the other information. The other information comprises the
information included in the Company’s annual report but does not include the financial statements and our auditors’ report thereon.
Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the 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 Responsibilities for the Financial Results
These Financial Results have been prepared on the basis of the annual financial statements. The Company's Board of Directors are
responsible for the preparation and presentation of these Financial Results that give a true and fair view of the net profit and other
comprehensive income and other financial information of the Company and the balance sheet and the statement of cash flows in
accordance with the recognition and measurement principles laid down in the Indian Accounting Standards prescribed under Section
133 of the Act read with relevant rules issued thereunder and other accounting principles generally accepted in India and in
compliance with Regulation 33 and Regulation 52 of the Listing Regulations. The Board of Directors of the Company are responsible
for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of
adequate internal financial controls, that were operating effectively for ensuring accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Financial Results by the
Directors of the Company, as aforesaid.
In preparing the Financial Results, the Board of Directors of the Company are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative
but to do so.
The Board of Directors of the Company are responsible for overseeing the financial reporting process of the Company.
Auditor's Responsibilities for the Audit of the Financial Results
Our objectives are to obtain reasonable assurance about whether the Financial Results as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Results.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the
audit. We also:
a. Identify and assess the risks of material misstatement of the Financial Results, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
b. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company
has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such
controls.
c. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the Board of Directors.
d. Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
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 Financial Results or, if such disclosures are Inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
e. Evaluate the overall presentation, structure and content of the Financial Results including the disclosures, and whether the
Financial Results represent the underlying transactions and events in a manner that achieves fair presentation.
f. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We
also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 (‘the Order’) issued by the Central Government of India in terms of
Section 143(11) of the Act, we give in the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
a) We have not been provided with all the information and explanations which to the best of our knowledge and belief were
necessary for the purpose of our audit.
b) In our opinion, proper books of accounts as required by law have not 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 change in
equity and the Cash Flow Statement dealt with by this Report are not in agreement with the relevant books of account.
d) With reference to matters stated in basis of disclaimer of opinion and going concern paragraph, in our opinion, the
aforesaid financial statements do not comply with I nd AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none
of the directors is disqualified as on March 31,2026, from being appointed as a director in terms of Section 164(2) of the
Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating
effectiveness of such controls, refer to our separate report in “Annexure B” to this report.
g) 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 (as amended), in our opinion and to the best of our information and according to the
explanations given to us:
i. Expect for the matters as described in basis of disclaimer of opinion, the Company has disclosed the impact of
pending litigations as of March 31,2026, on its financial position in its 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 were no amounts which were required to be transferred to the Investor Education and Protection Fund by the
Company.
iv. 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 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; 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 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; and Based on such audit
procedures that were 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 (a) and (b) contain any material
misstatement.
3. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Holding Company or any of its subsidiary
companies incorporated in India only with effect from 1 April 2026, reporting under Rule 11(g) of the Companies (Audit and
Auditors) Rules, 2014 is not applicable.
4. With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of
the Act: In our opinion and to the best of our information and according to the explanation given to us, the remuneration paid/
provided by the company to its directors during the year is in accordance with the provisions of Section 197 of the Act. The
remuneration paid to any directors is not in excess of the limit laid down U/s 197 of the IT Act. The Ministry of Corporate Affairs
has not prescribed other details U/s 197 (16) which requires to be commented by us.
5. Based on our examination which included test checks, the company has not used an accounting software for maintaining its
books of account which has a feature of recording audit trail (edit log) facility Accordingly, we are unable to comment on any
instance of audit trail feature being tampered.
For Laxmikant Kabra & Co LLP
Chartered Accountants
Firm Reg. No.: 117183W/ W100736
Place: Thane CA Laxmikant Kabra
Date: 15th May 2026 Partner
Membership No.: 101839
UDIN: 26101839EBDOUQ5206
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