IMPEX FERRO TECH LIMITED

(A Company under Corporate Insolvency Resolution Process vide NCLT order) Report on the Audit of the Financial Statements Qualified Opinion

We have audited the accompanying financial statements of Impex Ferro Tech Limited (“the Company”), which comprise the Balance Sheet as at 31st March ,2025, and the Statement of Profit and Loss, the Statement of Changes in Equity and Statement of Cash Flows for the year ended together with notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

The Hon'ble National Company Law Tribunal (“NCLT”), Kolkata Bench, admitted the Corporate Insolvency Resolution Process (“CIRP”) application filed by a Financial Creditor of Impex Ferro Tech Limited (the Company) and appointed Mr. Rajiv Kumar Agarwala as Interim Resolution Professional (RP), in terms of the Insolvency and Bankruptcy Code, 2016 (The code) vide order dated 2nd May, 2024. Subsequently Mr. Ashok Kumar Sarawagi was appointed as Resolution Professional (RP) by the Committee of Creditors (CoC) its 2nd CoC meeting held on 14th June,2024 as approved by virtue of e- voting by the CoC members and further vide order dated 12 July, 2024 by the Hon’ble court of NCLT, Kolkata. In view of pendency of CIRP, the management of the affairs of the company and power of the Board of Directors are now vested with RP. These financial results have been prepared by the management of the company and approved by RP.

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effect of the matter described in the basis for qualified opinion section of our report, the aforesaid 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, the loss and total comprehensive loss, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

i. We draw your attention to Note 37 of the accompanying Financial Results regarding non provision of Cumulative interest expense of Rs. 63,020.22 on the borrowings of the company which is not in accordance with the requirements of \ \ Ind As 109: Financial Instruments. Had the aforesaid Cumulative interest ! 7) expense been recognized, Other Equity as on 31.03.25 would have been Rs. C⁷ (103334.21 Lakhs) instead of reported amount of Rs. (40313.99 lakhs) and

current financial liability as on 31st March,2025 would have been Rs. 63076.15 lakhs instead of reported amount of Rs. 55.93 lakhs.

The aforesaid Cumulative interest amount had been admitted by RP in the submitted list of claims dated 08.04.2025, for the CIRP initiated on 02.05.2024, however no bifurcation is available for 30.04.2024, hence finance cost taken as nil, and recorded amount in books is 0.79 lakhs.

ii. With reference to Note 43 Other Expenses includes provisioning of expected credit loss (ECL) of Rs. 313.60 lakhs on Trade Receivable & Rs. 393.53 lakhs on Advance to parties as considered prudent by the management, in view of nonrealisation for long time, to change the ECL policy of the company which has resulted in excess provision. In the absence of other corroborative evidence, we are unable to comment on carrying amount of such receivable on which ECL has been provided for the FY 23-24.

iii. As referred in Note 45 of the Financial Statements, "Trade Receivables", "Trade payables", Advances from Customer", Advances Recoverable in Cash or Kind and " Advance to Suppliers and Other Parties" etc includes balances remaining outstanding for a substantial period. The balances are subject to confirmation/reconciliation. In the absence of above and other corroborative evidence, we unable to comment on the extent to which such balances are recoverable. The reported Financials might have consequential impact which remains unascertained.

Refer Note 37, for list of claims for liabilities (including statutory dues) which were admitted by RP (dated 08.04.2025).

iv. As referred in Note 38 of the Financial Statements, as a part of CIRP, creditors were called upon to submit their claims. In aggregate the claim submitted by the financial creditors as well as operational creditors exceeded the amount as appearing in the books of account/financials.

List of creditors (published on 08.04.2025), Includes admitted claims and also claims under verification and reconciliation by RP with amount as appealing in books. No accounting impact in the books of account has been made in respect of excess, shortage, non-receipt of claims from operational and financial creditors. Hence, consequential impact if any on the reported Financial Statements is currently not considered.

However, the CIRP is going on and the Resolution Plan has already been submitted and one of the Resolution Applicants has been declared as II1 bidder.

v. We have been informed that certain infonnation including minutes of CoC meeting and the outcome of certain procedures carried out as part of CIRP

v process are confidential in nature and could not be shared with anyone other than \ \ Committee of Creditors and NCLT. Accordingly, we are unable to comment on

y-';-7 the possible financial impact, presentation and disclosures, if any on aforesaid ^ ’ ^JL' - / information not provided to us.

We conducted our audit of the Financial Statements in accordance with the Standards

on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the 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 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Material Uncertainty Relating to Going Concern

We draw attention to the Note 35 to the financial statements regarding preparation of the financial statements on going concern basis which states that the company has incurred cash losses, its liabilities exceeded its total assets and its net worth has been fully eroded as on 31.03.2025. Since, the CIRP is currently under process as per the IBC Code, it is required that the company be managed as going concern during the CIRP. The financial statements is continued to be prepared on going concern basis. However there exists material uncertainly about the company's ability to continue as a going concern since the same is dependent upon the resolution plan to be formulated and approved by NCLT. The appropriateness of preparation of the financial statements on going concern basis is critically dependent upon CIRP as specified in the IBC Code.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of most significance in our audit of the financial statement of the current period. These matters were addressed in the context of our audit of financial statements as a whole, and informing 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.

Emphasis of Matter

We draw attention to Note 52 of the accompanying financial statements, which describes the following matters relating to the Company's bank balances and fixed deposits:

i) A Fixed Deposit of ?10 lakhs, the status and detailed documentation of which are under verification, and the amount has been temporarily classified under advances from others.

ii) Two fixed deposits provided as bank guarantees in favour of the West Bengal Pollution Control Board, with the guarantee validity having expired on 19.6.24.

We draw attention to Note 53 of the accompanying financial statements, which describes the following matters relating to the Company’s Axis Bank account marked under lien:

An amount of ?50 lakhs in the Company's Axis Bank account marked under lien, following a NCRP complaint lodged with the Law-and-Order Police Station, Telangana, which remains frozen and is not available for use.

We draw attention to Note 36 of the accompanying financial statements, which describes the following matters relating to the attachment of the Property by Enforcement Directorate:

The assets of the corporate debtors had been attached by Enforcement Directorate vide Provisional Attachment order no 07/2021 dated 31/03/2021 under sub-section 1 of Section 5 of the Prevention of Money Laundering Act, 2002 to the extent to the value of Rs.660.45 lakhs.

The said Provisional Attachment order got confirmed by Ld. Adjudicating Authority vide order dated 09.11.2021. An appeal was filed by the corporate debtor against the said order before Appellate Tribunal of PMLAon 23.12.2021 vide FPA-PMLA-4373/KOL/2021. The said appeal was dismissed on 03/10/23 for non-appearance.

We draw attention to Note 51 of the accompanying financial statements, which describes that surplus inventory, not previously recorded in the books of accounts, was identified and sold during the current financial year.

As informed to us, the identification of this inventory was carried out during the year, and the related sale proceeds have been accounted for accordingly.

As stated in Note 29 of the accompanying financial statements, no actuarial valuation for gratuity has been carried out during the financial year ended 31st March 2025. Consequently, the gratuity-related disclosures and the amounts reported in the financial statements are based on the figures from the previous year.

In the absence of an updated actuarial valuation, we are unable to determine the potential impact, if any, on the Company's employee benefit obligations, expenses, and related disclosures for the current year. Accordingly, the current year's financial statements are impacted to that extent.

We draw attention to Note No. 40 of the financial statements, which describes the ongoing proceedings initiated by the Directorate of Enforcement (ED) under the Prevention of Money Laundering Act, 2002 (PMLA), involving provisional attachment of immovable properties of the Company valued at ?6.60 Crores. The proceedings pertain to allegations of the property being value equivalent proceeds of crime, arising from transactions with SPS Steel Rolling Mills Ltd. The management has contested the attachment and the matter is currently sub judice before the competent authorities.

We draw attention to Note 54 of the accompanying financial statements, which describes the outcome of the Transaction Audit conducted pursuant to the ongoing Corporate Insolvency Resolution Process (CIRP) initiated against the Company under the Insolvency and Bankruptcy Code, 2016.

The Transaction Audit covered the period from 1st April 2022 to 2nd May 2024, and while no transactions were classified as Preferential, Undervalued, Extortionate, or Fraudulent under Sections 43, 45, 50, and 66 of the IBC, certain irregularities were noted outside the scope of the IBC provisions. These include:

Unpaid capital and repair expenditure with concerns over vendors’ credentials. Subcontracting arrangements and service income involving entities with suspended GST registrations.

Income Tax proceedings related to unexplained credits and alleged dealings with shell entities amounting to ?485 crores, contested by the Company.

Our opinion is not modified in respect of this matter.

Information other than the financial statements and Auditors' report thereon

The Company's management and Board of Directors/RP are responsible for the other information. The other information comprises the information included in the Management's/ Directors' report, Management Discussion & Analysis etc., but does not include the financial statements and our auditors’ report thereon. Such other Information are expected to be made available to us after the date of this auditor's report. Our opinion on the 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 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 financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

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

Responsibility of the Management & Resolution Professional for the Financial Statements

Tile Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 with respect to the preparation of these financial statements that give a true and fair view of the financial position and financial performance and cash flow of the Company in accordance with the accounting principles generally accepted in India, including the 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 implementation and maintenance of 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 financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or 11 as no realistic alternative but to do so.

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

As the Corporate Insolvency Resolution Process has been initiated in respect of the company under by the Resolution Professional appointed by the NCLT by the said order under the provisions the provision of the Insolvency and Bankruptcy Code, 2016 (The Code) by the National Company Law Tribunal (NCLT) Kolkata Bench, vide its order dated 2nd May, 2024, the powers of the Board of Directors stand suspended as per section 17 of the Code and such power is being exercise of the Code

This statement which is the responsibility of the company’s management and has been signed by and taken on record by the Resolution Professional.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 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 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 detecting a material misstatement resulting from fraud is higher than one resulting from error, fraud may involve collusion, forgery, Intentional omissions, misrepresentation, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the 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 financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the 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 effects 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 financial statement of the current period and therefore the key audit matters. We describe these matters in our auditor report unless law or regulation precludes public disclosure about the matters on when, in extremely rare circumstances, we detennine that a matter should not be communicated in our report because the adverse consequence of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

I. As required by the Companies (Auditor's Report) Order, 2020 (" the Order") 1 issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Companies Act, 2013, we give in the Annexure A, a Statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) Except for the possible effect of the matter described in the basis for qualified opinion section of our report, 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) Except for the possible effect of the matter described in the basis for qualified opinion section of our report, 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 losses, the cash flow statement and the statement of changes in equity dealt with by this Report are in agreement with the books of accounts.

d) Except for the possible effect of the matter described in the basis for qualified opinion section of our report, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of die Act, read with Rule 7 of the Companies (Accounts) Rules, 2014,

e) The matter described in the basis for qualified opinion section of our report, may have adverse effect on the functioning of the company.

f) Based on the written representations received from the directors as on 31st March, 2025 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2025 from being appointed as a director, However the power of board has been formally suspended due to commencement of the CIRP and all authority to manage the affairs of the company solely vested with RP.

g) 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".

h) With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of section 197(16) of the Act, as amended:

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

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

a) The Company has disclosed the impact of pending litigations on the financial position in the Financial Statements.

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

c) The company is not required to transfer any amount to Investor Education and Protection Fund pertaining to unpaid dividend.

d) i. The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, 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.

ii. The management has represented, that, to the best of its knowledge and belief, as disclosed in the notes to the accounts, no funds have been received by the company from any person or entity, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Fundillg Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

iii. 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 (i) and (ii) contain any material misstatement.

e) The company has neither declared nor paid dividend during the year. Hence, compliance of provision of section 123 of the Companies Act 2013 does not arise. . _;

f) Based on our examination which included test checks, the company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has not been operated throughout the year for all relevant transactions recorded in the software.

Accordingly, audit trail has not been preserved by the company as per the statutory requirements for record retention for the financial year ended March 31,2025.

For V.K. TULSYAN & Co. LLP.

Chartered Accountants F.R. No.- 326740E/E300015