1. We have jointly audited the accompanying standalone
financial statements of Titagarh Rail Systems Limited
(formerly known as Titagarh Wagons Limited) ("the
Company"), which comprise the Standalone Balance
Sheet as at March 31,2025, 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 then ended, and notes to the standalone financial
statements, including material accounting policy
information and other explanatory information.

2. In our opinion and to the best of our information and
according to the explanations given to us, except for the
indeterminate effect as laid out in the Basis for Qualified
Opinion section of our Report 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 accounting principles generally
accepted in India, of the state of affairs of the Company
as at March 31, 2025, and total comprehensive income
(comprising of profit and other comprehensive income),
changes in equity and its cash flows for the year then
ended.

Basis for Qualified Opinion

3. We draw attention to Note 49 to the standalone financial
statements in respect of investments (directly and
indirectly through Shivaliks Mercantile Limited, a joint
venture company) in Titagarh Firema SpA ("Firema"), an
associate company based in Italy, having a carrying value
of Rs. 112.73 crores (March 31, 2024: Rs. 112.73 crores) as
at balance sheet date. Firema has encountered significant
operational and financial difficulties due to an ongoing
dispute with one of its largest customers which has
severely impacted its liquidity position. Firema has filed
for protection under Italian Crisis Code - Composizione

Negoziata della Crisi (CNC) along with a restructuring
plan on May 14, 2025 with Chamber of Commerce,
which was also admitted by the Court of Naples on May
27, 2025. Pending the outcome of the CNC process and
approval by the Court, the possible impairment loss in
the carrying value of investments in Firema as stated
above and its consequential impact on the profit for the
year and the net worth of the Company as at March 31,
2025 is currently not determinable.

4. We conducted our joint audit in accordance with the
Standards on Auditing (SAs) 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
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.

Key Audit Matter

5. Key audit matters are those matters that, in our
professional judgement, were of most significance in
our audit of the standalone financial statements of
the current period. These matters were addressed in
the context of our audit of the standalone financial
statements as a whole and in forming our qualified
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 matter described below to be the
key audit matter to be communicated in our report.

Other Information

6. The Company's Board of Directors is responsible for the
other information. The other information comprises the
information included in the Annual Report, but does
not include the standalone financial statements and our
auditor's report thereon. The Annual Report is expected
to be made available to us after the date of this auditor's
report.

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

In connection with our audit of the standalone financial
statements, our responsibility is to read the other
information 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.

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

7. The Company's Board of Directors is 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, changes in equity
and cash flows of the Company in accordance with
the accounting principles generally accepted in India,
including the Indian Accounting Standards specified
under Section 133 of the Act. 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.

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

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

Auditor's responsibilities for the audit of the
standalone financial statements

10. 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.

11. As part of an audit in accordance with SAs, we exercise
professional judgement and maintain professional
scepticism throughout the audit. We also:

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

• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that

are appropriate in the circumstances. Under Section
143(3)(i) of the 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.

12. 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.

13. 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.

14. From the matters communicated with those charged
with governance, we determine those matters that
were of most significance in the audit of the standalone
financial statements of the current period and are

therefore the key audit matters. We describe these
matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that
a matter should not be communicated in our report
because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest
benefits of such communication.

Report on other legal and regulatory requirements

15. 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 B a statement on the
matters specified in paragraphs 3 and 4 of the Order, to
the extent applicable.

16. As required by Section 143(3) of the Act, we report that:

(a) We have sought and except for the matter described
in the paragraph 3 of the Basis for Qualified Opinion
section of our report 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, except as described in the Basis
for Qualified Opinion section of our Report above,
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 16(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 Indian Accounting
Standards specified under Section 133 of the Act.

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

(f) With respect to the maintenance of accounts and
other matters connected therewith, reference is
made to our remarks in paragraph 16(b) above on
reporting under Section 143(3)(b) and paragraph
16(h)(vi) below on reporting under Rule 11(g) of
the Companies (Audit and Auditors) Rules, 2014 (as
amended).

(g) 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 A".

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

i. The Company has disclosed the impact of
pending litigations on its financial position
in its standalone financial statements - Refer
Note 18 and Note 38 to the standalone financial
statements

ii. The Company has made provision, as required
under the applicable law or Indian Accounting
Standards, for material foreseeable losses, if any,
on long-term contracts including derivative
contracts - Refer Note 18 and Note 22 to the
standalone financial statements;

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

iv. (a) The management has represented that,

to the best of its knowledge and belief,
as disclosed in Note 48.2(vi)(A) to the
standalone financial statements, no funds
have been advanced or loaned or invested
(either from borrowed funds or share
premium or any other sources or kind
of funds) by the Company to or in any
other person(s) or entity(ies), including
foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing
or otherwise, that the Intermediary shall,
whether directly or indirectly, lend or invest
in other persons or entities identified in

any manner whatsoever by or on behalf of
the Company ("Ultimate Beneficiaries") or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries;

(b) The management has represented that,
to the best of its knowledge and belief,
as disclosed in the Note 48.2(vi)(B) to the
standalone financial statements, no funds
have been received by the Company from
any person(s) or entity(ies), including
foreign entities ("Funding Parties"), with the
understanding, whether recorded in writing
or otherwise, that the Company shall,
whether directly or indirectly, lend or invest
in other persons or entities identified in any
manner whatsoever by or on behalf of the
Funding Party ("Ultimate Beneficiaries") or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries; and

(c) Based on such audit procedures that we
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 dividend declared and paid by the Company
during the year and until the date of this audit
report is in compliance with Section 123 of the
Act.

vi. Based on our examination, which included
test checks, the Company has used accounting
software for maintaining its books of account,

which has a feature of recording audit trail (edit
log) facility and that has operated throughout
the year for all relevant transactions recorded
in the software, except that the audit trail
feature was not enabled for the period April
1, 2024 to May 2, 2024 at the application level
for modification, if any, by certain users with
specific access and for the period April 1, 2024
to May 13, 2024 for direct database changes and
the audit log of modification does not contain
the pre-modified values at the database level.
During the course of performing our procedures,
other than the aforesaid instances of audit trail
not maintained / enabled where the question
of our commenting does not arise, we did not
notice any instance of audit trail feature being
tampered with. Further, the audit trail, to the
extent maintained in the prior year, has been
preserved by the Company as per the statutory
requirements for record retention. In respect of
another accounting software, which is operated
by a third party service provider for maintaining
its books of account in respect of which the
audit trail was not maintained in the prior year
and hence to this extent, the question of our
commenting on whether the audit trail was
preserved by the Company as per the statutory
requirements for record retention does not
arise.

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