Zenith Steel Pipes & Industries Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2025

Zenith Steel Pipes & Industries Limited

Report on the Audit of the Standalone Financial Statements Qualified Opinion

1. We have audited the accompanying standalone financial statements of Zenith Steel Pipes & Industries Limited (the ‘Company’), which comprise the Standalone Balance Sheet as at 31 March 2025, and the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year ended on that date, and notes to the Standalone Financial Statements, including a summary of material accounting policy information and other explanatory information (hereinafter referred to as the ‘Standalone Financial Statements’).

In our opinion and to the best of our information and according to the explanations given to us, subject to the effect of the matters described in the Basis for Qualified opinion paragraph below the aforesaid Standalone Financial Statements give the information required by the Companies Act,2013 (''the Act’) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (''Ind AS’) and other accounting principles generally accepted in India, of the State of Affairs of the Company as at 31 March 2025, and its Profit and Other Comprehensive Loss, Changes in Equity and its Cash Flows for the year ended on that date.

Basis for Qualified Opinion

1. With reference to Note No. 35 of the Standalone Financial Statement, the Company has not complied with the provisions of Section 74 and other applicable provisions of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 with respect to the, (a) Nonrepayment of public deposits and the interest thereon on the respective due dates, (b) Nonmaintenance of prescribed liquid assets to the extent required under the said Rules, and (c) Noncompliance with the orders passed by the Company Law Board (CLB) in connection with the above matters.

In our opinion, these constitute a material non-compliance with the provisions of the Act and may result in regulatory implications for the Company. Had the Company complied with the aforesaid provisions, the reported liabilities, interest obligations, and disclosures in the standalone financial statements would have been different.

2. With reference to Note No. 43 of the Standalone Financial Statement, balances relating to Trade Payables, Trade Receivables, Loans, Advances, Deposits, Intergroup balances, Current Liabilities, Borrowings from others, etc., are subject to reconciliation and confirmation. The management has not sent direct balance confirmations to the respective parties, citing pending reconciliations. In the absence of such confirmations and reconciliations, we are unable to obtain sufficient appropriate audit evidence to verify the accuracy, completeness, and recoverability/payability of these balances as at the reporting date. Consequently, we are unable to determine whether any adjustments are required in respect of the stated balances in the accompanying standalone financial statements.

3. With reference to Note No. 50 to the Standalone Financial Statement, the Company has made a provision of Rs. 41.07 lakhs in respect of certain current bank accounts which have been frozen

by regulatory authorities. In the absence of relevant bank statements and year-end balance confirmations for these accounts, we were unable to obtain sufficient appropriate audit evidence to verify the completeness and accuracy of the balances reported in respect of these accounts. Accordingly, we are unable to determine whether any adjustments may be required to the carrying amount of these balances and the related impact, if any, on the standalone financial statements for the year ended 31 March 2025.

4. We draw attention to Note No. 47 to the Standalone Financial Statement, which states that the Company has incurred significant accumulated losses exceeding its share capital and reserves, and its net worth has been fully eroded as at 31 March 2025. These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern. However, the Standalone Financial Statements have been prepared on a going concern basis based on the reasons stated by the management in the said note. In our opinion, the material uncertainty exists, and accordingly, the use of the going concern basis of accounting in the preparation of the Standalone Financial Statements is not adequately supported.

5. We draw attention to Note No. 49 to the Standalone Financial Statement, which states that the Company has valued its inventories at Rs. 779.36 lakhs as at 31 March 2025 using the weighted average cost method. However, we were not provided with adequate information and necessary supporting documentation to verify the basis of valuation, including evidence supporting the quantities, condition, and cost allocation of inventories. Accordingly, we are unable to determine whether any adjustments are necessary in respect of the carrying amount of inventories stated in the Standalone Financial Statements. The consequent impact, if any, on the profit/loss and financial position for the year ended 31 March 2025 is also not ascertainable.

We conducted our audit in accordance with the Standards on Auditing (SA’s) specified under Section 143(10) of the Act. 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 Act 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 qualified opinion on the Standalone Financial Statements.

Emphasis of Matter

2. We draw attention to the following matters forming part of the notes to the Standalone Financial Statements:

1. We draw attention to Note No. 45 to the Standalone Financial Statement, which describes that the Company has entered into a Memorandum of Understanding (MOU) with Tribus Real Estate Pvt. Ltd. (TREPL) for taking over the Company’s secured bank loans amounting to Rs. 16,884.92 lakhs as on 31 March 2025. As per the terms of the MOU, TREPL shall negotiate settlements with the lending banks/ARCs and upon completion, shall have absolute rights over the secured assets until repayment is made by the Company. The arrangement is pending completion and is subject to further negotiations and fulfillment of agreed conditions.

2. We draw attention to Note No. 48 of the Standalone Financial Statement, which describes that the Company was prohibited from accessing the securities market for a period of three years by an order issued by the Securities and Exchange Board of India (SEBI) dated 31.03.2021, for violations of certain provisions of the SEBI Act, 1992 and SEBI Regulations

relating to the issue of Global Depositary Receipts (GDR). Subsequently, the Company had filed an appeal against the said order, and vide order dated 21.02.2023, the appellate authority modified the original SEBI order by reducing the penalty and limiting the debarment period to the time already served. SEBI has further filed a civil appeal before the Hon’ble Supreme Court on 07.08.2023, which has been admitted as on 02.01.2025. As of the reporting date, no further communication has been received.

3. We draw attention to Note No. 46 of the Standalone Financial Statement, which describes

that the Consortium of Banks has initiated action under the Securitisation and

Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, for recovery of outstanding dues amounting to Rs. 19,319.00 lakhs as on 31.01.2014. The Banks have taken symbolic possession of certain immovable properties of the Company located at its Khopoli unit on 29.05.2014 and have filed an application for taking physical possession of the said assets. The loan has since been assigned to Invent Assets Securitization and Reconstruction Private Limited as on 31.03.2018. The matter is currently pending before the Debt Recovery Tribunal (DRT), Pune, and the next hearing has been adjourned to 11.06.2025.

4. We draw attention to Note No.52 of the Standalone Financial Statement, which discloses that the Company has written back certain provision for expenses/balances totalling to Rs. 781.91 lakhs during the FY 2024-25 and has recognized under Other Income as “Provision Written Back.”

Our opinion is not modified in respect of these matters.

Key Audit Matters

3. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current year. 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.

Key Audit Matter

Auditors'' Response

Evaluation of income tax provision The Company is required to estimate its income tax liabilities in accordance with the tax laws applicable in India. Further, there are matters of interpretation in terms of application of tax laws and related rules to determine current tax provision and deferred taxed. The Company has material tax positions and litigations on a range of tax matters. This requires management to make significant judgements to determine the possible outcome of uncertain tax provisions and litigations and their consequent impact on related accounting and disclosures in the standalone financial statements.

In view of significance of matter, we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence: • testing the design and operating effectiveness of the company’s key controls over identifying uncertain tax position and matters involving litigations/disputes. • obtaining details of tax positions and tax litigations for the year and as at 31st March 2025 and holding discussions with designated management personnel. • assessing and analysing select key correspondences with tax authorities and inspecting external legal opinions obtained by management for key uncertain tax positions and tax litigations.

Refer Note No. 34 to the Standalone Financial Statements.	• evaluating underlying evidence and documentation to determine whether the information provides a basis for amounts reserved / not reserved in the books of account. • Involving our tax specialists and evaluating managements underlying key assumptions in estimating the tax provisions and estimate the possible outcome of tax litigations; and in respect of tax positions and litigation, assessing the computation of provisions and consequent impact on related accounting and disclosures in the standalone financial statements.
Net realisable value fNRVl of Inventory
The total inventory of the Company	In view of the significance of the matter we
amounting to Rs. 779.36 lakhs (as on 31	applied the following audit procedures in this
March 2025) forms about 5.03% of the	area, among others, to obtain sufficient audit
total assets of the Company.	evidence: • Assessed the appropriateness of the
This includes materials such as HR Coil,	accounting policy for inventories as per
fuel, Iron ore etc, which are susceptible	relevant Indian accounting standards.
to handling loss, moisture loss/gain,	• Verified inventory ageing report by testing
spillage etc. and determination of the	samples, selected using statistical sampling
same requires estimation based on	method.
experience and technical expertise.	• Tested the moving weighted average rate computation of inventory samples, selected
Such judgment includes Company’s	using statistical sampling method.
expectations for future sale, inventory	• The company has procedure of physical
liquidation plans and future selling prices less cost to sell & modification cost. In view of the above, assessment of NRV and its consequential impact, if any on the carrying value of inventories has been identified as a key audit matter. Refer Note No. 49 to the Standalone Financial Statements.	verification of inventories at regular intervals.
Allowance for credit losses	Our audit procedures related to the allowance for
The Company determines the	credit losses for trade receivables included the
allowance for credit losses based on historical loss experience adjusted to	following, among others:
reflect current and estimated future	We tested the effectiveness of controls over the
economic conditions. The Company	• development of the methodology for the
considered current and anticipated	allowance for credit losses, including

future economic conditions relating to industries the Company deals with and the geographical location where it operates. In calculating expected credit loss, the Company has also considered credit reports and other related credit information for its customers to estimate the probability of default in future. We identified allowance for credit losses as a key audit matter because the Company exercises significant judgment in calculating the expected credit losses. Refer Note No. 58 to the Standalone financial statements.	consideration of the current and estimated future economic conditions • completeness and accuracy of information used in the estimation of probability of default and • Computation of the allowance for credit losses. For a sample of customers: We tested the input data such as credit reports and other credit related information used in estimating the probability of default by comparing them to external and internal sources of information. We tested the mathematical accuracy and computation of the allowances by using the same input data used by the Company.
Investment impairment assessment	Evaluation of impairment risk and assessing whether triggers exist for any investment based on
The Company has investments in	consideration of external and internal factors
subsidiaries. These investments are	affecting the value and performance of the
accounted for at cost less impairment. If an impairment exists, the recoverable	investment.
amounts of the above investment are	Our audit procedures included:
estimated in order to determine the extent	• Obtained management assessment of
of the impairment loss, if any.	recoverable amount for investments where impairment risk is identified.
Determination of triggers for impairment	• Evaluated the mathematical accuracy of the
in value of these investments and	cash flow projection and assessed the
recoverable amount involves significant	underlying key assumptions in management’s
estimates and judgements.	valuation models used to determine recoverable amount considering external data, including assumptions of projected EBITDA, revenue growth rate, terminal growth rates, discount rates, and assessed the sensitivity of the assumptions on the impairment assessment and assessed the forecasts against the historical performance. Assessed the appropriateness of the related disclosures in the standalone financial statements.

Other Information

4. 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 Standalone Financial Statements and our auditors’ report thereon. The Other Information is expected to be made available to us after the date of this auditor’s report.

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

5. In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Standalone 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.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements.

6. The Company’s Management and Board of Directors are responsible for the matters stated in Section 134(5) of 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, including other comprehensive income, changes in equity and cash flows of the Company in conformity with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other accounting principles generally accepted in India. 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 software for ensuring compliance with applicable laws and regulations including those related to retention of audit logs; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

7. In preparing the Standalone Financial Statements, the Management of the Company and the Board of Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company’s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone financial statements

8. 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 skepticism 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 Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to Standalone financial statements in place and the operating effectiveness of such controls.

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

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 year and are therefore the key audit matters. We describe these matters in our auditors’ 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.

Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements 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.

Report on Other Legal and Regulatory Requirements

9. 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 Act, we give in the ‘Annexure A’ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

10. 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 except for matters stated in paragraph 10(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended);

c. The Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive Income, the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act read with the relevant rules thereunder;

e. On the basis of the written representations received from the directors as on 31 March 2025 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2025 from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the adequacy of the internal financial controls with reference to

Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in ‘Annexure B’. Our report expresses a Qualified Opinion on the internal financial controls over Standalone Financial Statements of the Company for the year.

g. In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act.

h. With respect to the other matters to be included in the Auditors’ 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. The Company has disclosed the impact of pending litigations as at 31 March 2025 on its financial position in its Standalone Financial Statements. Refer Note No. 34 to the Standalone 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 amount required to be transferred as on 31 March 2025, to the Investor Education and Protection Fund by the Company;

iv.

a. The Management has represented that to the best of their 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(s) or

entity(ies), including foreign entity (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any 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 their knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entity ("Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

c. Based on such audit procedures that were considered reasonable and appropriate in the circumstances, performed by us, nothing has come to our notice that has caused us to believe that the representations under sub-clause 10(h)(iv)(a) and 10(h)(iv)(b) contain any material misstatement.

v. The company has not declared or paid any Dividend during the year.

vi. 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 except in respect of three units, where the accounting software did not have the audit trail feature. Further, for one unit, the audit trail facility has been operating only from 07 April 2024, and therefore, did not operate throughout the entire financial year for all relevant transactions recorded in the software. During the course of our audit, we did not come across any instance of audit trail feature being tampered with for the unit for which audit trail feature had been enabled.

Additionally, the audit trail has been preserved by the company as per the statutory requirements for record retention for the one unit for the period it was enabled.

For C K S P AND CO LLP

Chartered Accountants

FRN - 131228W / W100044

Dhananajay Jaiswal

Partner

M. No. 187686

UDIN: 25187686BMJGPW9412

Place: Mumbai

Dated: 29 May 2025

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Mar 31, 2024

Zenith Steel Pipes & Industries Limited

(Formerly known as Zenith Birla (India) Limited)

Report on the Audit of the Standalone Financial Statements Qualified Opinion

1) We have audited the accompanying standalone financial statements of Zenith Steel Pipes & Industries Limited (formerly known as Zenith Birla (India) Limited) (“the Company”), which comprise the Balance Sheet as at 31st March 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of the material accounting policies and other explanatory information (herein after referred to as “the standalone financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, subject to the effect of the matters described in the Basis for Qualified opinion paragraph below the aforesaid standalone financial statements give the information required by the Companies Act,2013 (“the Act”) in the manner so required and give true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2024, the loss and the total comprehensive loss, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

1. The Company has not complied with the provision of section 74 or any other relevant provision of the Act, and the Companies (Acceptance of Deposits) Rules, 2014 with regard to non-repayment of deposits and interest, on due date, maintenance of liquid assets to the extent required as well as not fully complying with the orders passed by the Company Law Board.

2. With reference to Note No 43 regarding the balance of Trade Payables, Trade Receivables, Loans, Advances, Deposits, intergroup, current liabilities, borrowing from others etc. being not confirmed by the parties due to pending reconciliation the management has not sent direct confirmations to parties and hence our inability to state whether these balances are recoverable /payable to the extent stated.

3. The Company has made a provision of Rs. 41.07 lakhs in respect of certain current bank accounts maintained with various banks, which have been frozen by regulatory authorities. In the absence of bank statements and year-end balance confirmations, we are unable to comment on its impact, if any, on the books of account. (Refer note 50).

4. The Company has accumulated losses exceeding the share capital and reserves and its net worth has been fully eroded. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the company''s ability to continue as a going concern. However, the standalone financial statements have been prepared on a going concern basis considering management''s assessment of the current situation and future prospects. (Refer note 47)

5. The Company has considered inventory value of Rs. 1,986.47 Lakhs as on 31st March, 2024 in the standalone financial statements by adopting weighted average cost method as informed to us. Since adequate information and necessary supporting evidences for the valuation were not made

available to us, as a result the impact of shortage/ excess of inventory, if any, could not be ascertained and adjusted in the books. (Refer Note no 49)

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SA''s) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Financial Statements'' section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (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 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 on the Standalone Financial Statements.

Emphasis of Matter

2) We draw attention to the following matters forming part of the notes to the standalone financial statements:

1. Note no. 45 regarding MOU entered into by the Company with T ribus Real Estate Pvt. Ltd (TREPL) for taking over the Company''s secured bank loan, which is pending completion.

2. Note no. 48 regarding to the order issued by SEBI for violations of provisions of SEBI Act 1992 and SEBI regulations regarding issue of GDR.

3. Note no. 46 regarding Securitization & Reconstruction of Financial Assets initiated by Consortium Banks for repayment of dues Rs. 19,319.00 Lakhs as on 31st January, 2014 and have taken symbolic possession of immovable assets and filed case for physical possession. The case is pending in DRT Pune.

4. Note no. 53 regarding the show cause notice u/s 148A(b) of Income Tax Act, 1961 received by Company on 01st March, 2024 for AY 2020-21.

5. Note no. 54 regarding reversal of provisions for expenses and disclosed in the Financial Statements.

Our opinion is not modified in respect of these matters.

Key Audit Matters

3) Key Audit Matters (“KAM”) are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion Section, we have determined the matters described below to be the Key Audit Matters (“KAM”) to be communicated in our report.

Key Audit Matter	Auditors'' Response
Evaluation of income tax provision The Company is required to estimate its income tax liabilities in accordance with the tax laws applicable in India. Further, there are matters of interpretation in	In view of significance of matter, we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence:

terms of application of tax laws and related rules to determine current tax provision and deferred taxed. The Company has material tax positions and litigations on a range of tax matters. This requires management to make significant judgements to determine the possible outcome of uncertain tax provisions and litigations and their consequent impact on related accounting and disclosures in the standalone financial statements. Refer Note 34 to the Standalone Financial Statements.	• testing the design and operating effectiveness of the company''s key controls over identifying uncertain tax position and matters involving litigations/disputes. • obtaining details of tax positions and tax litigations for the year and as at 31st March 2024 and holding discussions with designated management personnel. • assessing and analyzing select key correspondences with tax authorities and inspecting external legal opinions obtained by management for key uncertain tax positions and tax litigations. • evaluating underlying evidence and documentation to determine whether the information provides a basis for amounts reserved / not reserved in the books of account. • Involving our tax specialists and evaluating managements underlying key assumptions in estimating the tax provisions and estimate the possible outcome of tax litigations; and in respect of tax positions and litigation, assessing the computation of provisions and consequent impact on related accounting and disclosures in the standalone financial statements. We verified that the income tax provisions recognized till date in the books of account and assessed that the related disclosures are given in the financial statements.
Allowance for credit losses	Our audit procedures related to the allowance
The Company determines the	for credit losses for trade receivables included
allowance for credit losses based on	the following, among others:
historical loss experience adjusted to
reflect current and estimated future	We tested the effectiveness of controls over
economic conditions. The Company	the
considered current and anticipated	• development of the methodology for
future economic conditions relating to	the allowance for credit losses,
industries the Company deals with and	including consideration of the current
the geographical location where it	and estimated future economic
operates.	conditions
	• completeness and accuracy of
In calculating expected credit loss, the	information used in the estimation of
Company has also considered credit	probability of default and
reports and other related credit	• Computation of the allowance for
information for its customers to	credit losses.
estimate the probability of default in

future. We identified allowance for credit losses as a key audit matter because the Company exercises significant judgment in calculating the expected credit losses. Refer Note 57 to the Standalone financial statements.	For a sample of customers: We tested the input data such as credit reports and other credit related information used in estimating the probability of default by comparing them to external and internal sources of information. We tested the mathematical accuracy and computation of the allowances by using the same input data used by the Company.
Investment impairment assessment	Evaluation of impairment risk and assessing whether triggers exist for any investment
The Company has investments in	based on consideration of external and
subsidiaries. These investments are	internal factors affecting the value and
accounted for at cost less impairment. If an impairment exists, the recoverable	performance of the investment.
amounts of the above investment are	Our audit procedures included:
estimated in order to determine the	• Obtained management assessment of
extent of the impairment loss, if any.	recoverable amount for investments where impairment risk is identified.
Determination of triggers for	• Evaluated the mathematical accuracy of the
impairment in value of these	cash flow projection and assessed the
investments and recoverable amount	underlying key assumptions in
involves significant estimates and	management''s valuation models used to
judgements.	determine recoverable amount considering external data, including assumptions of projected EBITDA, revenue growth rate, terminal growth rates, discount rates, and assessed the sensitivity of the assumptions on the impairment assessment and assessed the forecasts against the historical performance. We assessed the appropriateness of the related disclosures in the standalone financial statements.

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

4) The Company''s management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Director''s Report including annexures to Director''s Report, Corporate Governance Report and Shareholder''s Information, but does not include the Standalone Financial Statements and our Auditors'' Report thereon. The above-referred information is expected to be made available to us after the date of this Auditor''s report.

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

5) In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above when it becomes available 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 on the other information obtained prior to date of this audit report, 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.

When we read the other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate actions, if required.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements.

6) The Company''s management and Board of Directors are responsible for the matters stated in Section 134 (5) of 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 (including other comprehensive income), changes in equity and cash flows of the Company in accordance with, the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act and the accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and 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.

7) In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone financial statements

8) 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 skepticism 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 Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to Standalone financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures 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 misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements 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 auditors'' 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

9) 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 Act and on the basis of the examination of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we give in the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

10) 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 except for the matters stated in paragraph 10(h) (vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended);

c. The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account;

d. In our opinion and to the best of our information and explanation given to us, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended;

e. On the basis of the written representations received from the directors as on 31st March 2024 taken on record by the Board of Directors, none of the directors are disqualified as on 31st March 2024 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”. Our report expresses a Qualified Opinion on the internal financial controls over financial statements of the Company for the year.

g. In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h. With respect to the other matters to be included in the Auditors'' Report in accordance with Rule11 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 as at 31st March 2024 on its financial position in its standalone financial statements. Refer Note 34 to the standalone 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 amount required to be transferred as on 31st March 2024, 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 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.

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 foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

c. Based on 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.

v. The company has not declared or paid any Dividend during the year.

vi. Based on our examination, which included test checks, the Company has used accounting software''s for maintaining its books of account for the financial year ended 31st March, 2024 which does not have a feature of recording audit trail (edit log) facility for all relevant transactions recorded in the software. Further, in absence of audit trail feature in the system we are unable to comment on whether the audit trail feature is being tampered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from 1st April, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended 31st March, 2024.

For C K S P AND CO LLP

Chartered Accountants

FRN - 131228W / W100044

Dhananajay Jaiswal

Partner

M. No. 187686

UDIN: 24187686BKBXMW2292

Place: Mumbai

Dated: 28th May, 2024

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Mar 31, 2023

1) We have audited the accompanying standalone financial statements of Zenith Steel Pipes & Industries Limited (formerly known as Zenith Birla (India) Limited) ("the Company”), which comprise the Balance Sheet as at 31st March 2023, 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 notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (herein after referred to as "the standalone financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, subject to the effect of the matters described in the Basis for Qualified opinion paragraph below the aforesaid standalone financial statements give the information required by the Companies Act,2013 ("the Act”) in the manner so required and give true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2023, the profit and the total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

1. The Company has not complied with the provision of section 74 or any other relevant provision of the Act, and the Companies (Acceptance of Deposits) Rules, 2014 with regard to non-repayment of deposits and interest, on due date, maintenance of liquid assets to the extent required as well as not fully complying with the orders passed by the Company Law Board.

2. With reference to Note No 43 regarding the balance of Trade Payables, Trade Receivables, Loans, Advances, Deposits, intergroup, current liabilities, borrowing from others etc. being not confirmed by the parties due to pending reconciliation the management has not sent direct confirmations to parties and hence our inability to state whether these balances are recoverable /payable to the extent stated.

3. The Company has made a provision of Rs. 48.08 lakhs in respect of certain current bank accounts maintained with various banks, which have been frozen by regulatory authorities. In the absence of bank statements and year-end balance confirmations, we are unable to comment on impact, if any, on the books of accounts. (Refer note 54).

4. The Company has accumulated losses exceeding the share capital and reserves and its net worth has been fully eroded. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the company''s ability to continue as a going concern. However, the standalone financial statements have been prepared on a going concern basis considering management assessment of the current situation and future prospects. (Refer note 47).

5. The Company has considered inventory value of Rs.2094.49 Lakhs as on 31.03.2023 in the standalone financial statements by adopting weighted average cost method as informed to us. Since adequate information and necessary supporting evidences for the valuation were not made available to us, as a result the impact of shortage/ excess of inventory, if any, could not be ascertained and adjusted in the books. (Refer Note no 50).

6. We draw attention to Note No. 51 which states that the company has provided for provision for quality claim amounting to Rs.76.20 Lakhs as on 31/03/2023 in standalone financial statements in relations to quality defect and late delivery of goods to one of its customer, In the absence of supporting evidence, we are unable to comment on its impact, if any, on the books of account.

7. We draw attention to Note No. 52 which states that the company has provided for provisions for ocean freight of Rs.494.18 Lakhs in the current financial year, In the absence of supporting evidence, we are unable to comment on its impact, if any, on the books of account.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act (SAs). Our responsibilities under those SAs are further described in the ''Auditor''s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the 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

2) We draw attention to the following matters forming part of the notes to the financial statements:

1. Note no. 45 regarding MOU entered into by the Company with Tribus Real Estate Pvt. Ltd (TREPL) for taking over the Company''s secured bank loan, which is pending completion.

2. Note no. 48 regarding to the order issued by SEBI for violations of provisions of SEBI Act 1992 and SEBI regulations regarding issue of GDR.

3. Note no. 46 regarding Securitization & Reconstruction of Financial Assets initiated by Consortium Banks for repayment of dues Rs. 19,319.00 Lakhs as on 31.01.2014 and have taken symbolic possession of immovable assets and filed case for physical possession. The case is pending in DRT Pune.

Our opinion is not modified in respect of these matters.

Key Audit Matters

3) Key Audit Matters ("KAM”) are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the 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 ("KAM”) to be communicated in our report.

Key Audit Matter	Auditors'' Response
Evaluation of income tax provision	In view of significance of matter, we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence: • testing the design and operating effectiveness of the company''s key controls over identifying uncertain tax position and matters involving litigations/disputes. • obtaining details of tax positions and tax litigations for
The Company is required to estimate its income tax liabilities in accordance with the tax laws applicable in India. Further, there are matters of interpretation in terms of application of tax laws and related rules to determine current tax provision and deferred taxed.

The Company has material tax positions and litigations on a range of tax matters. This requires management to make significant judgements to determine the possible outcome of uncertain tax provisions and litigations and their consequent impact on related accounting and disclosures in the standalone financial statements. Refer Note 33 to the Standalone Financial Statements.	the year and as at 31st March 2023 and holding discussions with designated management personnel. • assessing and analysing select key correspondences with tax authorities and inspecting external legal opinions obtained by management for key uncertain tax positions and tax litigations. • evaluating underlying evidence and documentation to determine whether the information provides a basis for amounts reserved / not reserved in the books of account. • Involving our tax specialists and evaluating managements underlying key assumptions in estimating the tax provisions and estimate the possible outcome of tax litigations; and in respect of tax positions and litigation, assessing the computation of provisions and consequent impact on related accounting and disclosures in the standalone financial statements.
Net realisable value (NRV) of Inventory The total inventory of the Company amounting to Rs. 2,094.49 lakhs (as on March 31, 2023) forms about 12.65 % of the total assets of the Company. This includes materials such as HR Coil, fuel, iron ore etc, which are susceptible to handling loss, moisture loss/gain, spillage etc. and determination of the same requires estimation based on experience and technical expertise. Such judgment includes Company''s expectations for future sale, inventory liquidation plans and future selling prices less cost to sell & modification cost. In view of the above, assessment of NRV and its consequential impact, if any on the carrying value of inventories has been identified as a key audit matter. Refer Note 8 to the Standalone Financial Statements.	In view of the significance of the matter we applied the following audit procedures in this area, among others, to obtain sufficient audit evidence: • Assessed the appropriateness of the accounting policy for inventories as per relevant Indian accounting standards. • Verified inventory ageing report by testing samples, selected using statistical sampling method. • Tested the moving weighted average rate computation of inventory samples, selected using statistical sampling method. • The company has procedure of physical verification of inventories at regular intervals.
Allowance for credit losses The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to industries the Company deals with and the geographical location where it operates. In calculating expected credit loss, the Company has also considered credit reports and other related credit	Our audit procedures related to the allowance for credit losses for trade receivables included the following, among others: We tested the effectiveness of controls over the • development of the methodology for the allowance for credit losses, including consideration of the current and estimated future economic conditions • completeness and accuracy of information used in the estimation of probability of default and • Computation of the allowance for credit losses.

information for its customers to estimate the probability of default in future. We identified allowance for credit losses as a key audit matter because the Company exercises significant judgment in calculating the expected credit losses.	For a sample of customers: We tested the input data such as credit reports and other credit related information used in estimating the probability of default by comparing them to external and internal sources of information.
Refer Note 56 to the Standalone financial statements.	We tested the mathematical accuracy and computation of the allowances by using the same input data used by the Company.
Investment impairment assessment The Company has investments in subsidiaries. These investments are accounted for at cost less impairment. If an impairment exists, the recoverable amounts of the above investment are estimated in order to determine the extent of the impairment loss, if any. Determination of triggers for impairment in value of these investments and recoverable amount involves significant estimates and judgements.	Evaluation of impairment risk and assessing whether triggers exist for any investment based on consideration of external and internal factors affecting the value and performance of the investment. Our audit procedures included: • Obtained management assessment of recoverable amount for investments where impairment risk is identified. • Evaluated the mathematical accuracy of the cash flow projection and assessed the underlying key assumptions in management''s valuation models used to determine recoverable amount considering external data, including assumptions of projected EBITDA, revenue growth rate, terminal growth rates, discount rates, and assessed the sensitivity of the assumptions on the impairment assessment and assessed the forecasts against the historical performance.
	Assessed the appropriateness of the related disclosures in the standalone financial statements.

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

4) The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Director''s Report including annexures to Director''s Report, Corporate Governance Report and Shareholder''s Information, but does not include the Standalone Financial Statements and our Auditors'' Report thereon, which we obtained prior to the date of this Auditor''s Report, and the Annual Report, which is expected to be made available to us after that date.

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

(5) In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information obtained prior to date of this audit report, 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.

When we read the Annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Management''s Responsibilities for the Standalone Financial Statements.

6) The Company''s management and Board of Directors are responsible for the matters stated in Section 134 (5) of 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, 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 (Ind AS) 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 judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

7) In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone financial statements

8) 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 skepticism 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 Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to Standalone financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures 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 misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements 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 auditors'' 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

9) 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 Act, we give in the "Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable

10) 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), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Actread with the Companies (Indian Accounting Standards) Rules, 2015 as amended;

e. On the basis of the written representations received from the directors as on 31st March 2023 taken on record by the Board of Directors, none of the directors are disqualified as on 31st March 2023 from being appointed as a director in terms of Section164(2) of the Act.

f. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in ''Annexure B''. Our report expresses an unmodified opinion on the existence of internal financial control with reference to financial statements and its operating effectiveness on the company.

g. In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h. With respect to the other matters to be included in the Auditors'' Report in accordance with Rulell 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 as at 31^st March 2023 on its financial position in its standalone financial statements. (Refer Note 33 to the standalone 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 are no 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 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 foreign entity ("Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

c. Based on 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.

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

vi. No Dividend has been declared or paid during the year by the company.

For C K S P AND CO LLP Chartered Accountants FRN - 131228W / W100044

Debmalya Maitra

Partner

M. No. 053897

UDIN: 23053897BGVHAF1572

Place: Mumbai Dated: 29/05/2023

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Mar 31, 2015

1. We have audited the accompanying financial statements of ZENITH BIRLA (INDIA) LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014. 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; 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 statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these 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 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 financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements, that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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 financial statements.

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

6. Emphasis of Matter:

We draw attention to the following matter in Notes to the financial statements:

Note no. 49 in the financial statements which indicates that the company has accumulated losses and its net worth has been fully eroded. The company has incurred a net loss/net cash loss during the current and previous years and the Company's current liabilities exceeded its current assets as at the Balance Sheet date. These conditions, along with other matters, indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. However, the financial statements of the company have been prepared on a going concern basis for the reasons stated in the said Note.

Our opinion is not modified in respect of this matter.

7. Basis for Qualified Opinion

1. With reference to Note no. 44 regarding the non provision by the company of the interest amounting to Rs. 32.70 crores on its working capital facilities from banks during the year. Had this amount been provided for, the loss would have been higher by Rs. 32.70 crores and Secured loans would have been higher by an amount of Rs. 32.70 crores.

2. The Company has not complied with the provisions of sections 74 or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules 2014 with regard to non-repayment of deposits and interest on due date, maintenance of liquid assets to the extent required as well as not fully complying with the orders passed by The Company Law Board.

3. With reference to Note no. 42 regarding the company not having the balance confirmations for its party balances and hence our inability to state whether these balances are recoverable / payable to the extent stated.

8. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, subject to the effects of the matters described in the basis for Qualified Opinion paragraph the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2015.

b) In the case of the statement of Profit and Loss ,of the loss for the year ended on that date; and

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

9. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("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 a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. 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 purpose of our audit;

b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c. the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014

e. on the basis of written representations received from the directors as on 31st March, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015, from being appointed as a director in terms of Section 164(2) of the Act

f. With respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) As per the best estimates made by the management on the basis of opinion taken, the Company is of the view that the ongoing litigations as at the reporting date would not have a material impact on its financial position;

ii) Based upon the assessment made by the company, there are no material foreseeable losses on its long term contracts that may require any provisioning.

iii) In view of there being no amount(s) required to be transferred to the Investor Education and Protection Fund for the year under audit the reporting under this clause is not applicable.

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 7 under the heading of "report on other legal and regulatory requirement" 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 as at 31st March 2014. These details are however yet to be updated for the year. The Company has started the process of updating these.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and nature of its assets. However during the year the Company has not adhered to the programme of physical verification in its Khopoli and Murbad Units.

ii. (a) The Inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of inventory records, in our opinion the Company is maintaining proper records of inventory. As informed to us no material discrepancies were noticed on physical verification.

(a) The Company has granted unsecured loans to three companies covered in the register maintained under section 189 of the Act. The maximum amount involved during the year was Rs. 10664.69 lacs and year-ended balance was Rs. 10556.42 lacs

(b) As explained to us no amounts of principal and interest has become due during the year.

(c) In view of our comments in (b) above, para iii(b) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanation given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

(v) In our opinion, and according to the information and explanations given to us, in respect of compliance by the company with the directives issued by the Reserve Bank of India, the provisions of Section 74 or any other relevant provisions of the Act and the rules framed there under, with regard to the deposits accepted from the public, we have to state that these have not been complied with in respect to non repayment of deposits and interest on due date and maintenance of liquid assets to the extent required as per Rule 13 of the Companies (Acceptance of Deposit) Rules,2014. The Company has also not fully complied with the orders passed by Company Law Board.

(vi) We have broadly reviewed the books of accounts maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India the maintenance of cost records has been prescribed under subsection (1) of section 148 of the Companies Act,2013, and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion except for dues in respect of Dividend Distribution Tax, Tax Deducted at source, Professional Tax, Tax Collected at Source, Service Tax, and Provident Fund, the Company is generally regular in depositing the undisputed statutory dues including Wealth Tax, Excise Duty Custom Duty,Cess and other material statutory dues, as applicable, with the appropriate authorities. The following balances remain in arrears as at the last day of financial year for a period exceeding six months from the date they become payable.

Nature of Dues Amount Outstanding

(in Rs.)

Tax Deducted at Source 1846145

Profession Tax 20550

Tax collected at Source 40763

Service Tax 158043

Provident Fund 579895

Dividend Distribution Tax 35908091

Interest on Dividend Distribution Tax 16158641

(b) According to the information and explanation given to us and the records of the company examined by us, there were no disputed dues in respect of Income Tax, Wealth Tax, Service Tax, and Cess. The particulars of dues of Custom Duty , Excise Duty and Sales Tax as at March 31,2015, which have not been deposited on account of disputes, are as follows:

Name of Statute Amount Period to which (Rs. in Lacs) relates amount Forum where dispute is pending

Customs Act, 1962 82.00 1998-1999 Tribunal 3.45 1985-1986 High Court

Central Excise Act, 1959 129.78 1995-1996 Commissioner appeal

Central Sales Tax Act and 78.88 1995-1996 Tribunal Local Sales Tax

(c) There was a delay of 21 days in transferring the amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Act.

(viii) The Company's accumulated loss as at March 31 2015, exceeded its net worth. The Company has incurred cash losses in the current financial year as well as in the immediately preceding financial year.

(ix) According to the records of the Company examined by us and the information and explanations given to us, there has been default in payments to the banks since August, 2012 and the Company's outstanding as at 31st March 2015, as per the notice received from the banks, is Rs. 21583.43 lacs plus interest of Rs. 5821.25 lacs for the period upto March 2015.

(x) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

(xi) The Company has not raised new term loan during the year. The term loans outstanding at the beginning of the year have been applied for the purpose for which they were raised.

(xii) 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 explanation given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

For Thakur, Vaidyanath Aiyar & Co. Chartered Accountants Firm Reg. No. 000038N

Place: Mumbai C V Parameswar Date: 30.05.2015 Partner Mem. No. 11541

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Mar 31, 2014

We have audited the accompanying financial statements of ZENITH BIRLA (INDIA) LIMITED ("the Company), which comprise the Balance Sheet as at March 31,2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

1. With reference to Note No. 45 regarding the non provision by the Company of the interest amounting to Rs. 2,551.72 lacs on its working capital facilities from Banks during the year Had this amount been provided for, the loss would have been higher by Rs. 2,551.72 lacs and Secured Loans would have been higher by an amount of Rs. 2,551.72 lacs.

2. The Company has not complied with the provisions of sections 58A, 58AA or other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to non-repayment of deposits and interest on due date, maintenance of liquid assets to the extent required as well as not intimating the appropriate authorities of such defaults.

3. With reference to Note No. 42-regarding the Company not having the balance confirmations for its party balances and hence our inability to state whether these balances are recoverable/payable to the extent stated.

Qualified Opinion

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

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2014;

b) In the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

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

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

c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.;

d) In our opinion, the Balance Sheet, Statement of Profit and loss and Cash Flow Statement comply with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

e) On the basis of written representations received from the directors as on March 31,2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 1 under the heading of "report on other legal and regulatory requirements "of our report of even date.

1. (a) The Company has maintained records showing full particulars,including quantitative details and situation of fixed

assets as at 31st March, 2013. These details are however yet to be updated for the year. The Company has however started the process of updating these.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. However during the year the Company has not adhered to the programme of physical verification

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of inventory records, in our opinion, the Company is maintaining proper records of inventory. As informed to us no material discrepancies were noticed on physical verification.

3. (a) The Company has granted unsecured loans to two companies covered in the register maintained under Section 301

of the Act. The maximum amount involved during the year was Rs. 679.53 lacs and year-end balance was Rs. 679.53 lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

(c) As explained to us no amount of principal and interest has become due during the year.

(d) In view of our comment in (c) above, para 4(iii)(d) of the Order is not applicable to the Company.

(e) The Company has taken unsecured interest free loan from one company covered in the register maintained under Section 301 of the Act. The maximum amount outstanding anytime during the year was Rs. 45 lacs and the year-end balance was Rs,45 lacs.

(f) In our opinion and according to the information and explanation given to us the terms and conditions of such loan are not primafacie prejudicial to the interest of the Company

(g) In respect of the aforesaid loan, as explained to us no amount of principle has become due during the year.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) According to the information and explanations given to us, there were no contracts or arrangements referred to in Section 301 of the Act that required to be entered in the register maintained under the section.

(b) Since there were no contracts or arrangements with any parties referred to in Section 301 of the Act, the provisions of this clause are not applicable.

6. In our opinion and according to the information and explanations given to us, in respect of compliance by the Company with the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975, with regard to the deposits accepted from the public, we have to state that these have not been complied with in respect to non repayment of deposits and interest on due date, maintenance of liquid assets to the extent required as per Rule 3A of the Companies (Acceptance of Deposit) Rules,1975, accepting fresh deposits after the default, as well as not intimating the appropriate authorities of such defaults.

7. The Company has appointed a firm of Chartered Accountants for carrying out the internal audit functions. The internal audit coverage has been done only at Tarapur unit and not at any of the other locations. In our opinion, the scope and coverage of the audit require enhancement to make it commensurate with the size of the Company and nature of its business.

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

9. (a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion except for dues in respect of Dividend Distribution Tax, Tax Deducted at Source, Profe -ssion Tax, Tax Collected at Source, Service Tax, and Provident Fund, the Company is generally regular in depositing the undisputed statutory dues including Wealth Tax, Excise Duty, Custom Duty, Cess and other material statutory dues, as applicable, with the appropriate authorities. The following balances remain in arrears as at the last day of the financial year for a period exceeding six months from the date they became payable:

Nature of Dues Amount Outstanding (in)

Tax Deducted at Source 3,36,740

Profession Tax 22,775

Tax Collected at Source 10,140

Service Tax 192

Provident Fund 2,27,930

Dividend Distribution Tax 3,59,08,091

Interest on Dividend Distribution Tax 1,18,49,670

(b) According to the information and explanation given to us and the records of the Company examined by us, there were no disputed dues in respect of Income Tax, Wealth Tax, Service Tax and Cess. The particulars of dues of customs duty, excise duty and sales tax as at March 31,2014, which have not been deposited on account of disputes, are as follows:

Name of Statute Amount Period to which Forum where dispute is (in lacs) amount relates pending

Customs Act,1962 82.00 1998-1999 Tribunal

3.45 1985-1986 High Court

Central Excise 129.78 1995-1996 Commissioner Appeals Act,1959

Central Sales 78.88 1995-1996 Tribunal Tax Act and Local Sales Tax

10. The Company''s accumulated loss as at March 31,2014 exceeded fifty percent of its net worth. The Company has incurred cash losses in the current financial year as well as in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, there has been default in payments to the banks since August, 2012 and the Company''s outstanding as at 31st March, 2014, as per the notice received from the banks, is Rs. 21,583.43 lacs plus interest of Rs. 523.15 lacs for the period February and March, 2014.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore clause 4(xiii) of the Companies (Auditor''s report) Order, 2003 is not applicable to the Company.

14. In respect of shares, securities, debentures and other investments dealt or traded by the Company, proper records have been maintained in respect of the transactions and contracts and timely entries have been made therein. All the investments are held by the Company in its own name.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

16. The Company has raised new term loan during the year. The term loans outstanding at the beginning of the year and those raised during the year have been applied for the purposes for which they were raised.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on short term basis which have been used for long-term investment during the year.

18. The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under Section 301 of the Act, during the year.

19. The Company has not issued any debentures during the year, and does not have any debentures outstanding at the year end.

20. The Company has not raised any money by way of public issue during the year.

21. 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 have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

For THAKUR, VAIDYANATH AIYAR & CO. Chartered Accountants Firm Reg. No. 000038N

C V Parameswar Partner Place: Mumbai Mem. No. 11541 Date: 14th August, 2014

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Zenith Birla (India) Limited as at 31st March, 2012, and the statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of 'The Companies Act, I956' of India (the 'Act') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order to the extent applicable to the company.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

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

(c) The Balance Sheet, statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 2II of the Act;

(e) On the basis of written representations received from the directors, as on 31st March, 20I2 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 20I2 from being appointed as a director in terms of clause (g) of sub-section (I) of Section 274 of the Act.

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

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

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

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

Referred to in paragraph 3 of the Auditors' Report of even date to the members of Zenith Birla (India) Limited on the financial statements for the year ended 31st March, 2012.

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory has been noticed,

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. Inventories lying with outside parties have been confirmed by them at the close of the year.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has granted unsecured loans to 2 companies covered in the register maintained under Section 30I of the Act. The maximum amount outstanding at any time during the year was Rs 829.92 lacs and the yearend balance is Rs 829.92 lacs.

(c) As per the information and explanations given to us the rate of interest and the terms and conditions of the said loans are primafacie not prejudicial to the interest of the Company.

(d) As explained to us no amount of principal and interest has become due during the year.

(e) In view of our comment in (d) above Para 4(iii)(d) of the Order is not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. There is no sale of services during the year. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) According to the information and explanations given to us the transactions that need to be entered in the register maintained under section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanation given to us, these transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act,1956 and exceeding the value of Rs Five lacs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, in respect of compliance by the Company with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975, with regard to the deposits accepted from the public, we have to state that there has been a small delay in issue of Fixed Deposit Receipts to the extent of Rs. 78.16 lacs during January and February 2012 consequent to the change in the Registrar of the Company. According to the information and explanations given to us, no Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (I) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. However, Dividend Distribution Tax amounting to Rs. 359.08 lacs plus interest amounting to Rs. 6463456.38 remained in arrears as at the last day of the financial year, for a period exceeding six months from the date it became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there were no disputed dues in respect of income tax, wealth tax, service tax and cess. The particulars of dues of custom duty, excise duty and sales-tax, as at 31st March, 2012 which have not been deposited on account of disputes are as follows:

Name of the Statute Amount Period to which the Forum where the dispute (Rs. in lacs) amount relates is pending

Customs Act, 1962 82.00 1998-1999 Tribunal

3.45 1985-1986 High Court

Central Excise Act, 1944 129.78 1995-1996 Commissioner Appeals

Central Sales Tax Act and Local Sales Tax 78.88 1995-1996 Tribunal

10. The Company has no accumulated losses as at 31st March, 2012 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any bank. There were no dues to any financial institution or debenture holder as at the Balance Sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In respect of shares, securities, debentures and other investments dealt or traded by the Company, proper records have been maintained in respect of the transactions and contracts and timely entries have been made therein. All the investments are held by the Company in its own name.

14. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

15. The Company has not obtained any term loan during the year.

16. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long- term investment.

17. The Company has not made a preferential allotment of shares to parties and companies covered in the register maintained under Section 30I of the Act during the year.

18. The Company has not issued any debentures during the year, and does not have any debentures outstanding as at the year end.

19. The Company has not raised any monies by way of public issues during the year.

20. 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 have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

21. The other clauses, (iii)(f), (iii)(g), and (xiii) of paragraph 4 of the Order, are not applicable in the case of the Company for the current year, since in our opinion there is no matter which arises to be reported in the aforesaid Order.

For Thakur, Vaidyanath Aiyar & Co.

Chartered Accountants

Firm Registration Number: 000038N

C. V. Parameswar

Place: Mumbai Partner

Date : 25-05-2012 M.No.: 11541

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Zenith Birla (India) Limited as at 31st March, 2011, and the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor’s Report) Order, 2003, as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 (together the “Order”), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of ‘The Companies Act, 1956’ of India (the Act’) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order to the extent applicable to the company.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

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

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on 31st March, 2011 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

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

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

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

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

ANNEXURE TO AUDITORS' REPORT

Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Zenith Birla (India) Limited on the financial statements for the year ended 31st March, 2011.

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

assets. However, in respect of the Company’s Divisions at Tarapur and Murbad, the fixed asset records are in the process of being updated.

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory has been noticed, except in the case of the Company’s Divisions at Tarapur and Murbad, where the comparisons will be made once the records are completed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year so as affect its going concern.

2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of

verification is reasonable. Inventories lying with outside parties have been confirmed by them at the close of the year.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the maintained under Section 301 of the Act.

(b) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. There is no sale of services during the year. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of the Act during the year, to be entered in the register required to be maintained under that Section. Accordingly, the question of commenting on transactions made in pursuance of such contracts or arrangements does not arise.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975, with regard to the deposits accepted from the public. According to the information and explanations given to us, no Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. However, Dividend Distribution Tax amounting to Rs 359.08 lacs remained in arrears as at the last day of the financial year, for a period exceeding six months from the date it became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there were no disputed dues in respect of income tax, wealth tax, service tax and cess. The particulars of dues of custom duty, excise duty and sales-tax, as at 31st March, 2011 which have not been deposited on account of disputes are as follows:

Nature of dues Amount Period to Forum Where the which the dispute is amount Pending

(Rs. in lacs) relates pending Custom Duty 82.00 1998-1999 Tribunal 3.45 1985-1986 High Court

Excise Duty 129.78 1995-1996 Commissioner Appeals

Sales Tax 78.88 1995-1996 Tribunal

10. The Company has no accumulated losses as at 31st March 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any bank. There were no dues to any financial institution or debenture holder during the year.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In respect of shares, securities, debentures and other investments dealt or traded by the Company, proper records have been maintained in respect of the transactions and contracts and timely entries have been made therein. All the investments are held by the Company in its own name.

14. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

15. The Company has not obtained any term loan during the year.

16. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long- term investment.

17. The Company has made a preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year and the price at which the shares have been issued is not prejudicial to the interest of the Company.

18. The Company has not issued any debentures during the year.

19. The management has disclosed the end use of money raised by issue of Global Depositary Receipts and we have verified the same.

20. 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 have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

21. The other clauses, (iii)(b), (iii)(c), (iii)(d), (iii)(f), (iii)(g), and (xiii) of paragraph 4 of the Order, are not applicable in the case of the Company for the current year, since in our opinion there is no matter which arises to be reported in the aforesaid Order.

For Thakur, Vaidyanath Aiyar & Co. Chartered Accountants Firm Registration Number: 000038N

C.V.Parameswar Partner M.No.: 11541 Place: Mumbai Date : 30-05-2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Zenith Birla (India) Limited as at 31st March, 2010, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the.basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

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

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on 31st March, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (I) of Section 274 of the Act.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

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

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

ANNEXURE TO AUDITORS REPORT Referred to in paragraph 3 of the Auditors Report of even date to the members of Zenith Birla (India) Limited on the financial statements for the year ended 31st March, 2010.

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

assets. However, in respect of the Companys Tungabhddra Divisions at Tarapore and Murbad, the fixed asset records are in the process of being updated.

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory has been noticed, except in the case of the Companys Tungabhadra Divisions at Tarapore and Murbad, where the comparisons will be made once the records are completed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year so as affect its going concern.

2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. Inventories lying with outside parties have been confirmed by them at the close of the year.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. There is no sale of services during the year. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of the Act during the year, to be entered in the register required to be maintained under that Section. Accordingly, the question of commenting on transactions made in pursuance of such contracts or arrangements does not arise.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975, with regard to the deposits accepted from the public. According to the information and explanations given to us, no Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (I) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. However, Advance Tax amounting to Rs 533.70 lacs remained in arrears as at the last day of the financial year, of which, Rs 350.22 lacs remained outstanding for a period exceeding six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there were no disputed dues in respect of income tax, wealth tax, service tax and cess. The particulars of dues of custom duty, excise duty and sales-tax, as at 31 st March, 2010 which have not been deposited on account of disputes are as follows:

Nature of dues Amount Period to which the Forum where the

(Rs. in lacs) amount relates dispute is pending

Custom Duty 82.00 1998-1999 Tribunal

3.45 1985-1986 High Court

Excise Duty 129.78 1995-1996 Commissioner Appeals

Sales Tax 78.88 1995-1996 Tribunal

10. The Company has no accumulated losses as at 31st March 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any bank. There were no dues to any financial institution or debenture holder during the year.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In respect of shares, securities, debentures and other investments dealt or traded by the Company, proper records have been maintained in respect of the transactions and contracts and timely entries have been made therein. All the investments are held by the Company in its own name.

14. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

15. The Company has not obtained any term loan during the year.

16. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long- term investment.

17. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

18. The Company has not issued any debentures during the year.

19. The Company has not raised any money by public issues during the year.

20. 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 have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

21. The other clauses, (iii)(b), (iii)(c), (iii)(d), (iii)(f), (iii)(g). and (xiii) of paragraph 4 of the Order, are not applicable in the case of the Company for the current year, since in our opinion there is no matter which arises to be reported in the aforesaid Order.

For Dalai & Shah

Firm Registration Number: 102021W

Chartered Accountants

S. Venkatesh

Partner

Membership Number: 037942