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Uttam Galva Steels Ltd.

BSE: 513216 Sector: Metals & Mining
NSE: UTTAMSTL ISIN Code: INE699A01011
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OPEN 6.70
PREVIOUS CLOSE 6.86
VOLUME 2027
52-Week high 9.76
52-Week low 3.56
P/E
Mkt Cap.(Rs cr) 98
Buy Price 6.91
Buy Qty 980.00
Sell Price 7.10
Sell Qty 599.00
OPEN 6.70
CLOSE 6.86
VOLUME 2027
52-Week high 9.76
52-Week low 3.56
P/E
Mkt Cap.(Rs cr) 98
Buy Price 6.91
Buy Qty 980.00
Sell Price 7.10
Sell Qty 599.00

Uttam Galva Steels Ltd. (UTTAMSTL) - Auditors Report

Company auditors report

To

The Members

M/s Uttam Galva Steels Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying Standalone Ind AS Financial Statementsof M/S Uttam Galva Steels Limited ("the Company") which comprises of theBalance Sheet as at 31st March 2020 the Statement of Profit and Loss and(including Other Comprehensive Income) the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended and Notes to the Standalone FinancialStatements including a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as "the Standalone Financial Statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020and loss (including other comprehensive income) its changes in equity and its cash flowsfor the year then ended.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statement section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements

and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matters

ArcelorMittal Luxembourg and ArcelorMittal India Pvt. Ltd. have madepayments of US$ 169.04 Mios and Rs 4922.30 crores to secured financial lenders to clearthe foreign currency loans over-due Rupee Term Loan and Working Capital Loan togetherwith interest acting as a lender providing financial support to the Company due tofinancial difficulty. No interest has been charged on the said financial support duringthe year. ArcelorMittal Luxembourg assigned US$ 169.04 Mios to AMNS Holding Luxembourg SAduring the financial year under audit. In addition ArcelorMittal India Pvt. Ltd. has alsoprovided Inter Corporate Deposit amounting to Rs 362.63 crores as longterm funding onwhich no interest has been charged. Ind AS 109 specifically deals with cases with respectto accounting of Financial Instruments on off-market terms. The company has elected not tofollow the principles of IND AS 109 with respect to the accounting of interest-freefinancial support. Had the company followed the accounting treatment of IND AS 109 thecompany would be required to measure the financial liabilities at its fair value. Howeverthe overall impact on the Profit and Loss Statement and Balance Sheet over the tenure ofthe amount extended at current estimates would be NIL.

Our opinion remains unmodified in respect of the matters above.

(Refer Note 13 & 33 of the Standalone Financial Statements.)

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements of thecurrent period. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

We have determined the matters described below to be the key auditmatters to be communicated in our report.

Key Audit Matters How our audit addressed the key audit matter
1) Evaluation of Contingent Liabilities
(Refer Note 30 of the Standalone Financial Statements) Our audit procedures include the following:
Claims against the company not acknowledged as debts is disclosed Standalone Financial Statements. The existence of the payments against these claims requires management judgment to ensure disclosure of most appropriate values of contingent liabilities • Assessing the appropriateness of the management's judgment in estimating the value of claims against the company not acknowledged as debts.
• We have obtained details of completed tax assessments and demands/claims raised up to 31st March 2020 from management.
• We assessed the completeness of details of these claims through discussion with senior management personnel.
• We have also reviewed the outcome of the disputed cases at various forums.
• We have also assessed the appropriateness of presentation of the contingent liabilities in the Standalone Financial Statements.
2) Recoverability of Subsidy under Package Scheme of Incentive
(Refer Note 10 21 and 32 the of Standalone Financial Statements) Our audit procedures include the following:
As at 31st March 2020 Non-Current Assets include Receivables under IPS Subsidy/ Mega Incentive Scheme relating to VAT and GST recoverable amounting to Rs. 70.57 crores subject to receipt of Government approval from relevant authority. • We obtained applications made claim under Industrial Packaging scheme.
• We assessed the completeness of details of these claims through discussion with senior management personnel.
• We have involved our internal experts to review the nature of the amounts recoverable the sustainability and the likelihood of recoverability.
3) Evaluation of Exceptional Items
(Refer Note 29 of the Standalone Financial Statements) Our audit procedures include the following:
During the year the company has recognized to the Statement of Profit and Loss provision on advances to vendors amounting to Rs. 760.01 crores since after several attempts of recovery the company considers that these amounts are no longer recoverable. Further the Company has also recognized amount aggregating to Rs. 3.87 Crores as amounts disallowed upon completed Sales Tax Assessments and Rs. 1.56 Crores for the balances held with PMC Bank due to inability to exercise full control over these balances until the resolution plan for PMC Bank is provided by the RBI. • Assessing the appropriateness of the management's judgement in estimating the amounts recognized in Profit and Loss.
• We have also assessed the appropriateness of presentation of these exceptional items in the Standalone Financial Statements in accordance with requirements of Ind AS.
4) Provision of Finance cost of Borrowing from banks and FI's and receipt of loan recall notice from secured lenders
(Refer Note 27 of the Standalone Financial Statements) Our audit procedures include the following:
The Company has recognized the interest expenses on borrowings from the secured lenders amounts to Rs. 93.08 Crores based on the interest rates provided in the agreements between the secured lenders and the Company. • Updating our understanding of Company's procedure and financial control about recognition of finance costs.
• Verifying on test check basis the computation of interest with reference to principal amount rate of interest additional or penal interest as per the agreements as applicable.
The company has defaulted in repayment of dues to financial institutions and banks as per Annexure II' attached. The secured lenders have classified the Company's accounts as Non-performing
Asset (NPA) for non-payment of installments and stopped recognizing the interest income in their books of account hence accordingly not confirmed the amount of interest due from the Company. • Verifying the monthly bank statements on test check basis.
• Direct balance confirmations of principal amount due from the selected lenders as at 31st March 2020 could not be obtained due to COVID-19 lockdown and therefore the existing arrangements have been relied upon to the extent possible.
(Refer Note 17(iii) of the Standalone Financial Statements) The Company has received the loan recall notice from few secured lenders amounting to Rs. 108.91 crores.
We considered this matter as key audit matter due to significant amount of finance costs incurred which comprises major part of the total expenditure of the Company. • Ensuring the completeness of disclosure and presentation of borrowings and borrowing costs as per applicable Ind AS.
• We state that the amount of interest on loans not charged by the Banks and Financial Institutions due to the default by the Company on repayment has led to under reporting of financial costs and in the absence of complete information the proper amount could not be ascertained.
5) Unhedged Foreign Currency Exposure due to ECBs and FCL
(Refer Note 17 (iii) of the Standalone Financial Statements) As on 31st March 2020 the company has exposure to foreign exchange risk as a result of borrowings from Banks and FI's of $ 248.73 Million. Our audit procedures for assessing the risk of the unhedged foreign currency exposures included but were not limited to the following:
• Assessing the appropriateness of the amounts as recognized in Profit and Loss
(Refer Note 27 of the Standalone Financial Statement)
The existence of such exposure has resulted in significant exchange loss Rs. 100.34 crores on Translation of Foreign Currency on Reporting date due to the volatility of USD-INR exchange rates. • We have also assessed the appropriateness of presentation of these exceptional items in the Standalone Financial Statements in accordance with requirements of Ind AS.
• We consider this matter as a key audit matter due to significant amount of foreign exchange loss incurred by the company on Foreign Currency Loan and the global impact of COVID-19 pandemic on the Currency Exchange Rates.
6) Revaluation of Land
The carrying value of Land as per Note 1 ("Property plant and equipment") of Consolidated Financial Statements as on 31st March 2020 stands at Rs.1067.12 crores. Our audit procedures include the following:
• We obtained an understanding from the management assessed and tested the design and operating effectiveness of the Group's key controls over the assessment and fair valuation of material Property plant and equipment.
As per Note 1.01(b) of the Significant notes to accounts - The financial statements are prepared under the historical cost convention except for certain financial instruments and Land which are measured at fair values at the end of reporting period.
• We evaluated the Company's process regarding assessment and fair valuation by involving auditor's valuation experts to assist in assessing the appropriateness of the valuation model.
The company follows Revaluation Model for Land.
As per Ind AS 16 pursuant to recognition as an asset an item of property plant and equipment whose fair value can be measured
reliably shall be carried at a revalued amount being its fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations shall be made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period. • We are unable to obtain a recent report on the valuation of land by an expert due to lockdown caused by COVID-19 pandemic and hence the Group has retained the carrying value.
7) Delay in Adoption of Ind AS 116 Leases
The application and transition to this accounting standard is complex and is an area of focus in our audit since the Company has leases with different contractual terms. Our audit procedures on adoption of Ind AS 116 include:
• Assessed the Company's evaluation on the identification of leases based on the contractual agreements and our knowledge of the business;
Ind AS 116 introduces a new lease accounting model wherein lessees are required to recognise a right-of-use (ROU) asset and a lease liability arising from a lease on the balance sheet. The lease liabilities are initially measured by discounting future lease payments during the lease term as per the contract/ arrangement. Adoption of the standard involves significant judgements and estimates including determination of the discount rates and the lease term. Additionally the standard mandates detailed disclosures in respect of transition.
• Requested for Lease Agreements to check the applicability of Ind AS 116 based on the tenure of the lease and renewal clause provided in the Agreements however due to the lockdown on account of COVID-19 pandemic only the basic details of the Lease could be identified and hence application of Ind AS 116 could not be done since the Computation of the Discounting rate recognition of the ROU etc. was not possible due to unavailability of generic information on the leases and monthly invoices.
• The Company has proposed to apply the Ind AS upon access to proper data and Agreements after relaxation of the COVID-19 Lockdown.
• We agree with the Managements evaluation since the overall impact during the term of lease on the Profit and Loss and the Assets and Liability balances created at the time of initial recognition will be Nil.

Information Other than the Financial Statements and Auditor'sReport Thereon

The Company's Management and Board of Directors are responsible forpreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report including Annexures toBoard's Report Directors Responsibility Statement Corporate Governance and Shareholder'sInformation but does not include the Standalone Financial Statements and our auditor'sreport thereon.

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

In connection with our audit of the Standalone Financial Statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Financial Statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Management's Responsibility for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for thematters stated in Section 134(5) of the Act with respect to the preparation of theseStandalone Financial Statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgements and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

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

The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibility for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

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

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3) (I) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to StandaloneFinancial Statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the Management.

• Conclude on the appropriateness of the management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the Standalone Financial Statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theStandalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation. Materiality is the magnitude of misstatements in theStandalone Financial Statements that individually or in aggregate makes it probable thatthe economic decisions of a reasonably knowledgeable user of the financial statements maybe 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 financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the StandaloneFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication. Other Matters

The Consolidated Annual Financial Statements include the auditedfinancial results of 7 subsidiaries whose financial statements/financial informationreflect total assets (before consolidation adjustments) of Rs. 193.93 Crores as at 31stMarch 2020 total revenue (before consolidation adjustments) of Rs. 30.47 Crores andtotal net loss after tax (before consolidation adjustments) of Rs. 11.61 Crores for yearended 31st March 2020 and net cash inflows of Rs. 0.12 crores for the yearended on that date as considered in the consolidated annual financial results which havebeen audited by their respective independent auditors. This financial statements /financial information has been audited by other auditors whose reports have been furnishedto us by the Management and our opinion on the consolidated annual financial results inso far as it relates to the amounts and disclosures included in respect of thesesubsidiaries and associates is based solely on the audit reports of the other auditors.

The accompanying consolidated financial results include the Group'sshare of Net Loss after tax of Rs. 1.71 Crores for the year ended on that date in respectof two Joint Ventures

which have been audited by other auditors whose financial statementsother financial information and auditor's reports have been furnished to us by themanagement. Our opinion on the consolidated financial statements in so far as it relatesto the amounts and disclosures included in respect of these jointly controlled entitiesand associates is based solely on the reports of such other auditors and the proceduresperformed by us are as stated in paragraph above.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Companies Act 2013 we give in the 'Annexure A' a statement onthe matters specified in paragraphs 3 and 4 of the Order.

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

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

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

c) The Company has no branch office and hence the company is notrequired to conduct audit under section 143 (8) of the Act;

d) The Balance Sheet the Statement of Profit and Loss (including OtherComprehensive Income) the Cash flow statement and the Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

e) In our opinion the aforesaid standalone Ind AS financial statementscomply with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of theAct read with the Companies (Accounts) Rules 2014 except for matters specified inEmphasis of Matter.

f) On the basis of the written representations received from thedirectors as on 31st March 2020 taken on record by the Board of Directors noneof the directors is disqualified as on 31st March 2020 from being appointed asa director in terms of Section 164 (2) of the Act;

g) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure B"; and

h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending

litigations on its financial position as per the Note 30 of theStandalone Financial Statement.

ii. The Company has made provision as required under the applicablelaw or Indian Accounting Standards (Ind AS) for material foreseeable losses and asrequired on long-term contracts including derivative contracts as per Notes to theStandalone Ind AS Financial Statement.

iii) During the year ' 120000 pertaining to unclaimed redemption ofdebentures were required to be transferred to the Investor Education and Protection

Fund by the Company. We have been informed that the Company was notable to transfer the funds due to lack of availability of data.

For Todarwal & Todarwal LLP
Chartered Accountants
ICAI Reg. No. : W100231
Sunil Todarwal
Partner
Membership No.: 032512
Dated: 8th May2020.
Place: Mumbai

Annexure - A to Independent Auditor's Report

The 'Annexure A' referred to in Independent Auditor's Report

to the Members of the Company on the Standalone Financial

Statements for the year ended 31st March 2020 we report that:

i) (a) According to the information and explanation given to

us and based on the records produced before us we are of the opinionthat the Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) According to the information and explanation given to us fixedassets were physically verified by the management according to a designed to cover all thelocations which in our opinion is reasonable having regard to the size of the company andthe nature of its assets.

(c) According to the information and explanation given to us and basedon the records produced before us the title deeds of immovable properties are held in thename of the company.

ii) According to the information and explanation given to us Inventoryhas been physically verified by the management during the year. No material discrepancieswere noticed that would have an impact over the Financial Statements.

iii) According to the information and explanation given to us theCompany has not granted any secured & unsecured loan to Companies Firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Act whose repayment is overdue for more than ninety days during the year. Hencethis clause is not applicable to the Company.

iv) According to the information and explanation given to us we are ofthe opinion that in respect of loans investments guarantees and security provisions ofsection 185 and 186 of the Companies Act 2013 have been complied with.

v) According to the information and explanation given to us thecompany has not accepted any deposits within the meaning of Section 73 to 76 of the Actand the rules framed

there under.

vi) According to the information and explanation given to us theCompany has maintained cost records as specified by the Central Government undersub-section (1) of section 148 of the Act.

vii) (a) According to the information and explanations given to

us and on the basis of our examination of the records of the Companyamounts deducted/ accrued in the books of account in respect of undisputed statutory duesincluding Provident fund Employees' State Insurance Income-tax Goods and Servicestax duty of Customs Cess and other material statutory dues have generally been regularlydeposited during the year by the Company with the appropriate authorities. According tothe information and explanations given to us no undisputed amounts payable in respect ofProvident fund Employees' State Insurance Income- tax Goods and Services tax dutyof Customs Cess and other material statutory dues were in arrears as at 31st March2020for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us and therecord produced before us the disputed amount payable in case of Income Tax Goods &Service Tax Sales Tax Wealth Tax Service Tax Custom Duty Excise Duty Value Added Taxor Cess is as per 'Annexure I' attached.

viii) According to the information and explanation given to us andbased on the records provided before us the company has defaulted in repayment of dues tofinancial institutions and banks as per 'Annexure II' attached.

ix) According to the information and explanation given to us and therecord produced before us the company has not raised any money by way of initial publicoffer or further public offer. The company has raised money by way of term loan during theyear and the proceeds were applied for the purpose for which it was raised.

x) During the course of our examination of the books of account carriedin accordance with the generally accepted auditing standards in India we have neithercome across any instance of fraud on or by the Company by its officers or employeeseither noticed or reported during the year nor have we been informed of such case by theManagement.

xi) According to the information and explanation given to us and therecord produced before us managerial remuneration paid by the Company is in accordancewith requisite approvals mandated by the provisions of section 197 read with Schedule V ofthe Companies Act 2013.

(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi Company as prescribed under section 406 of theCompanies Act 2013. Hence the provision of this clause is not applicable to the company.

(xiii) According to the information and explanation given to us and therecord produced before us all transactions with the related parties are in compliancewith sections 177 and 188 of Companies Act 2013 where applicable and the details havebeen disclosed in the Standalone Financial Statements as required by the applicableIndian Accounting Standards.

(xiv) According to the information and explanation given to us and therecord produced before us the company has not

made any preferential allotment or private placement of shares or fullyor partly convertible debentures during the year under review. Hence the provision of thisclause is not applicable to the company.

(xv) According to the information and explanation given to us and therecord produced before us the company has not entered into any non-cash transactions withdirectors or persons connected with him. Hence the provision of this clause is notapplicable to the company.

(xvi) According to the information and explanations given to us thecompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For Todarwal & Todarwal LLP
Chartered Accountants
ICAI Reg No: W100231
Sunil Todarwal
Partner
Dated: 8th May 2020. Membership No.: 032512
Place: Mumbai

Annexure - B to the Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

Opinion

We have audited the internal financial controls with reference toStandalone Financial Statements of Uttam Galva Steels Limited ("the Company") asof 31st March 2020 in conjunction with our audit of the Standalone FinancialStatements of the Company for the year ended on that date.

In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls were operating effectively as at 31st March 2020based on the internal financial controls with reference to Standalone Financial Statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (the "GuidanceNote").

Management's Responsibility for Internal Financial Controls

The Company's Management and Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to Standalone Financial Statements criteria established by

theCompany considering the essential components of internal controlstated in the Guidance Note. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013(hereinafter referred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to the Standalone Financial Statements based onour audit. We conducted our audit in accordance with the Guidance Note and the Standardson Auditing prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls with reference to StandaloneFinancial Statements. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to Standalone FinancialStatements were established and maintained and whether such controls operated effectivelyin all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls

with reference to Standalone Financial Statements and their operatingeffectiveness. Our audit of internal financial controls with reference to StandaloneFinancial Statements included obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols with reference to Standalone Financial Statements.

Meaning of Internal Financial with reference to Standalone FinancialStatements

A company's internal financial control with reference toStandalone Financial Statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of StandaloneFinancial Statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control with reference toStandalone Financial Statements includes those policies and procedures that (1) pertain tothe maintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneFinancial Statements in accordance with generally accepted

accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorizations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference toStandalone Financial Statements

Because of the inherent limitations of internal financial controls withreference to Standalone Financial Statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to Standalone Financial Statements to future periods are subjectto the risk that the internal financial controls with reference to Standalone FinancialStatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For Todarwal & Todarwal LLP
Chartered Accountants
ICAI Reg No: W100231
Sunil Todarwal
Partner
Dated: 8th May 2020. Membership No.: 032512
Place: Mumbai

ANNEXUREI

Details of disputed statutory dues as on 31st March 2020.

Sr. No. Nature of duty Period Amount (in Rs.) Form where dispute is pending
1 Service Tax Oct-06 to Nov-09 1315490 Deputy Commissioner of Central Excise
2 Excise Duty Mar-12 to 28th May-12 1777180 Central Excise & Service Tax Appellate Tribunal
3 Excise Duty Dec-07 to Jun-08 3082563 Central Excise & Service Tax Appellate Tribunal
4 Service Tax Mar-11 Jun-11 Aug-11 & Sep-11 2502879 Central Excise & Service Tax Appellate Tribunal
5 Service Tax Jan-11 Feb-11 Apr-11 May- 11 Jul-11 Oct-11 to Dec-11. 2415279 Central Excise & Service Tax Appellate Tribunal
6 Service Tax Jan-12 860833 Central Excise & Service Tax Appellate Tribunal
7 Excise Duty May-07 to Sep-09 27612314 Additional Commissioner of Central Excise
8 Custom Duty Financial Year 2008-09 116780968 Central Excise & Service Tax Appellate Tribunal
9 Interest on Income-tax Financial Year 2008-09 136640 Centralized Processing Centre (CPC) Bangalore
10 Income-tax Financial Year 2012-13 6910 Commissioner of Income-tax (Appeal)
11 Income-tax Financial Year 2014-15 8460 Commissioner of Income-tax (Appeal)
12 Sales Tax Financial Year 2009-10 935190267 Sales Tax Tribunal (STT) Bench IV Mumbai
13 Sales Tax Financial Year 2010-11 1250264797 Sales Tax Tribunal (STT) Bench IV Mumbai
14 Sales Tax Financial Year 2015-16 584197380 Joint Commissioner (JC) of Sales Tax (Appeals) Konkan Bhavan CBD Belapur Navi Mumbai.
Total 2926151960

ANNEXIJRE II

Details of Term Loan Principal and Interest overdue as on 31stMarch2020.

Name of Lender

Default in

Default from

Principal Repayment Interest Principal Repayment Interest
Punjab National Bank 22.99 2.73 June-2019 June-2019
Bank of Baroda 8.75 1.20 June-2019 June-2019
Vijaya Bank 32.50 6.72 June-2019 June-2019
Syndicate Bank 34.69 4.10 June-2019 June-2019
Oriental Bank of Commerce 74.22 7.60 June-2019 June-2019
Indian Overseas Bank 2.50 4.03 June-2019 June-2019
State Bank of India 52.44 5.98 June-2019 June-2019
Phoenix ARC 15.00 6.79 June-2019 June-2019
State Bank of India-FCL - 2.52 - June-2019
Bank of India ECB US$ 30 Mios 56.51 6.30 July-2019 January-2019
Bank of Baroda-ECB US$ 15 Mios 28.25 3.04 July-2019 January-2019
Punjab National Bank - ECB US$ 25 Mios 47.09 4.83 July-2019 January-2019
Union Bank of India ECB US$ 25 Mios 47.09 4.91 July-2019 January-2019
Indian Bank ECB US$ 20 Mios 37.67 4.20 July-2019 January-2019
Canara Bank ECB US$ 30 Mios 56.51 5.92 July-2019 January-2019
Indian Overseas Bank-ECB US$ 25 Mios 47.09 5.07 July-2019 January-2019
ICICI Bank Limited ECB US$ 28 Mios 52.74 5.68 July-2019 January-2019
Total 616.05 81.63

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