Castex Technologies Ltd Auditor Reports

Disclaimer of Opinion

We have audited the accompanying standalone IND AS financial statements of CASTEX TECHNOLOGIES LIMITED (the Company⁷), which comprise the balance sheet as at 31^st March 2021, the statement of profit and loss [including other comprehensive income], the statement of cash flows and the statement of changes in equity for the year ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone IND AS financial statements")

In our opinion and to the best of our information and according to the explanations given to us & based on the substantive nature and significance of the matters described in paragraph lto 3 and its possible effects of the matters described therein in the "Basis for Disclaimer "Paragraph below we are unable to comment whether the accompanying IND AS financial statements give a true and fair view in conformity with the accounting principles generally accepted in India

Basis for Disclaimer of Opinion

1. As per "Indian Accounting Standard 36" which talks about impairment of asset, if the carrying amount of the asset as disclosed in the financial statements, is more than recoverable amount then asset need to be appropriately adjusted for the impairment. However, the management has not recognised impairment of Property, Plant & Equipment including Capital Work In Progress and Investments for the reasons explained in note no. 3.30 (b) of the standalone IND AS financial statements.

2. As per "Indian Accounting Standard 109" on financial instruments which contains provisions of impairment of financials assets through expected credit loss method basis, value of assets as disclosed In the financial statements need to be appropriately adjusted for the impairment. However, the management has not determined value in use and thus expected credit loss on advances given and has not been accounted for.

3. Considering the current operating levels of the Company, the company has not made any Impairment in the value of Tools and Dies, and also it is subject to physical verification.

We are unable to obtain the sufficient appropriate audit evidence regarding the extent of impairment loss to be recognized on these Property, Plant & Equipment including Capital Work In Progress and Investments and expected credit loss through expected credit loss method to be recognized on Advances given, effect of impairment in the value of Tools and Dies and its consequential impact on the standalone financial statements as at 31st March, 2021. Accordingly forms a basis for the Disclaimer of Opinion.

Emphasis of Matter

We draw attention to the following:

a) Regarding Corporate Insolvency Resolution Process (CIRP) initiated under Insolvency and Bankruptcy Code, 2016 (the Code) and the Honble NCLT heard the argument for approval of the Resolution Plan for the company and pronounced its order of approval on 15^th December 2020.

Post the NCLT approval, the company is continuing to operate as a going concern in terms of the approved resolution plan. Implementation & Monitoring Committee (IMC) has been formed for the management of going concern and supervision of Implementation of the approved resolution plan;

b) The Management has not given the evidences that give the probability that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilized. Also, adjustments to deferred tax (net) & MAT credit available have not been given effect to, during the period.

c) For the reasons mentioned in note 3.30 (b) of IND AS standalone financial statements, the Resolution plan approved by the National Company Law Tribunal (NCLT) is yet to be accounted for;

d) Trade receivables are subject to confirmation and reconciliations.

Management and Those Charged with Governances Responsibility for the Standalone IND AS financial statements

The Management and board of directors of the company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (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 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 Companies (Indian Accounting Standards) Rules, 2015.

A corporate insolvency resolution process ("CIRP") has been initiated against Castex Technologies Limited (the Company) vide an order of Chandigarh bench of the National Company Law Tribunal (NCLT) dated December 20, 2017 under the provisions of the insolvency and bankruptcy code 2016 (Code). Pursuant to the order, the power of the Board of directors stands suspended and are exercisable by Mr Dinkar T. Venkatasubramanian, who was appointed as interim resolution professional (IRP) by the NCLT vide order dated December 22, 2017 and was consequently confirmed as Resolution Professional (RP) by the Committee of Creditors (CoC) in its meeting held on January 12, 2018. Honble National Company Law Tribunal ""Chandigarh Bench"" vide their order No, CP (IB) No.ll6/Chd/Hry/2017 dated 13th June 2018, approved the extension of CIRP period by 90 days (i.e. from 180 days to 270 days).

Further, the Committee of Creditors of CTL had approved the resolution plan submitted by Liberty House Group Pte Ltd (LHG) through e-voting process op August 30, 2018. The resolution plan, as

approved by the Committee of Creditors of CTL, had also been subsequently submitted to Honble National Company Law Tribunal "Chandigarh Bench for consideration and approval as per the provision of the Code.

However, in view of the failure by LHG to comply with CoC approved Resolution Plan, the Adjudicating Authority vide its Order dated March 15, 2019 directed CoC to proceed with inviting fresh expression of interest from prospective investors, wherein Deccan Value Investors L.P. (DVI) was selected as the successful Resolution Applicant. The Resolution Plan submitted by the Successful Resolution Applicant was approved by Honble NCLT vide Order dated 15th December 2020 and subsequently, an Implementation & Monitoring Committee ("IMC") has been formed as per the terms of the Resolution Plan for overseeing its implementation. In terms of the Code, the Resolution Professional, with IMC in place, would subsequently continue as Insolvency Professional.

On 25th January 2021 an Appeal has been filed by DVI before the Honble National Company Law Appellate Tribunal (NCLAT) against the NCLT Order dated December 15, 2020. The matter is pending with NCLAT.

As the powers of the Board of Directors have been suspended, the above result has not been adopted by the Board of Directors. However, the same have been signed by Mr. Sanjay Arora, Director of the Company, confirming, accuracy & completeness of the results and taken on record but not signed by Mr. DinkarT. Venkatasubramanian (Resolution Professional).

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 standalone financial statements 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 Companys 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 has no realistic alternative but to do so.

Auditors Responsibility

Our responsibility is to conduct an audit of the entitys financial statements in accordance with Standards on Auditing issued by ICAI and to issue an auditors report. However, because of the matters described in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements. We are independent of the entity in accordance with the ethical requirements in accordance with the requirements of the Code of Ethics issued by ICAI and the ethical requirements as prescribed under the laws and regulations applicable to the entity.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016 ("the Order") issued by the Central Government of India in exercise of powers conferred by sub section (11) of section 143 of the act, we give in "annexure A", a statement on the matters specified in paragraph 3 & 4 of the Order, to the extent applicable.

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

(a) We have sought all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. However as described in the Basis for Disclaimer of Opinion paragraph we are unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the audit;

(b) Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether 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) Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the balance sheet, the statement of profit and loss [including other comprehensive income], the cash flow statement and the statement of changes in equity dealt with by this report are in agreement with the relevant books of account;

(d) Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether aforesaid standalone IND AS financial statements comply with the Indian Accounting Standards specified under section 133 of the Act, read with the relevant rules there under;

(e) Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the aforesaid financial statements comply with the Accounting Standards under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014;

(f) Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether they have an adverse effect on the functioning of the Company.

(g) On the basis of the written representations received from the directors as on 31^stMarch 2021 and taken on record by the board of directors, none of the directors is disqualified as on March 31, 2021, from being appointed as a director in terms of Section 164 (2) of the Act; but the power of board of directors stands suspended as the company is in NCLT.

(h) The reservation relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Disclaimer of Opinion paragraph above.

(i) With respect to the adequacy of the internal financial controls over financial reporting with reference to these standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B";

(j) 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 on its financial position in its standalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as on March 31, 2021;

iii. There has been a delay in transferring Rs. 1,00,158, which was required to be transferred to the Investor Education and Protection Fund by the company.

ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT

The Annexure referred to in Independent Auditors Report to the members of the Company on the standalone IND AS financial statements for the year ended 31st March, 2021.On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

I. In respect of fixed assets:

a) According to the information and explanation given to us and on the basis of examination of books and records, the Company has maintained the records, however the same was not showing full particulars including quantitative details and situation of fixed assets and as informed the company is in the process of updating the same.

b) According to the information and explanation given to us the company has a regular program of physical verification of fixed assets on selective basis.

c) According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of immovable properties are held in the name of the company. However, none is made available to us as they are pledged with the financial institutions.

!!. In respect of Inventories: -We have been informed by the management that the inventories are physically verified by external agency except Nalagarh and Palwal plant during the period appointed by the RP (Resolution Professional) at each quarter end and no major discrepancies have been pointed out by them. However, physical verification of stock of Dies & Fixtures has not been conducted neither by management nor by third agency. The valuation of inventory has been certified by the management. Inventory is valued at cost or net realizable value which is based upon the managements estimation of realizable value of each inventory items.

III. The company, during the year, has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (the Act). Accordingly, paragraph 3(iii) of the Order is not applicable to the company.

IV. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans, investments, guarantees and security during the year.

V. In our opinion and according to the information and explanations given to us, the company has not accepted any deposit from the public covered under Section 73 to 76 of the Companies Act, 2013. Therefore, the provisions of the clause 3 (v) of the Order are not applicable to the Company.

VI. We have not reviewed the records maintained by the company pursuant to the rules prescribed by the central government for maintenance of cost records under sub-section (I) of section 148 of the act as we have not been provided with the same. Moreover, as informed by the company, cost audit is under process.

VII. According to the information and explanations given to us and based on the records of the company examined by us, the company has not been regular ^depositing the undisputed statutory dues,

including Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Service Tax, Custom Duty, Excise Duty, Value added tax, Goods and service tax and other material statutory dues, as applicable, with the appropriate authorities in India during the year ended 31^st March, 2021. According to the information and explanation given to us, arrears of undisputed statutory dues outstanding for a period of more than 6 months as on 31^st March, 2021 were Rs. 2095.63 Lakhs and outstanding for less than six months as on 31^st March, 2021 were Rs 376.95 lakhs.

According to the information and explanation given to us and based on the records of the company examined by us, the company has not paid/deposited following statutory dues on account of any disputes.

S.No. Name of Statute	Period to which it pertains	Forum where dispute is pending	Amount In lacs
1 Excise/Service	2008 to 2021	Commissioner Central Excise	1772.44
Tax/Sales Tax		Appeals/Assistant
		Commissioner/Jt.
		Commissioner/superintendent
		CGST/Tribunal
2 Income Tax	2006 to 2021	Income Tax Appellate Tribunals	1161.36
Total			2933.80

VIII. Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to information and explanations given by the management, a corporate insolvency resolution process ("CIRP") has been initiated against the company vide an order of Chandigarh bench of the National Company Law Tribunal (NCLT) dated December20, 2017 under the provisions of the insolvency and bankruptcy code 2016 (Code). Pursuant to the order, the power of the Board of directors stands suspended and are exercisable by Mr. Dinkar T. Venkatasubramanian, who was appointed as interim resolution professional (IRP) by the NCLT vide order dated December 22, 2017 and was consequently confirmed as Resolution Professional (RP) by the Committee of Creditors (CoC) in its meeting held on January 12, 2018.

IX. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.

X. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or no material fraud on the Company by its officers or employees has been noticed or reported during the year.

XI. In our opinion and according to the information and explanations given to us, the Company has paid /provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

XII. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

XIII. In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

XIV. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures and hence reporting under clause 3 (xiv) of the Order is not applicable to the Company.

XV. In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its Directors or persons connected to its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

XVI. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Annexure - B to Independent Auditors* Report (Referred to in our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") of CASTEX TECHNOLOGIES Limited.

We have audited the internal financial controls over financial reporting of CASTEX TECHNOLOGIES LTD ("the Company") as of 31st March, 2021 in conjunction with our audit of the standalone IND AS financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI).

These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India.

Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone IND AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controjs system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone IND AS financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with Authorizations of management and directors of the company; and (3) provide reasonable Assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the standalone IND AS financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected.

Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Disclaimer of Opinion

(a) As described in the Basis of Disclaimer in our main audit report, the system of internal financial controls with reference to financial statements with regard to the Company were not made available to us to enable us to determine if the Company has established adequate internal financial controls with reference to financial statements and whether such internal financial controls with reference to financial statements were operating effectively as at 31st March, 2021.

(b) We have considered the disclaimer reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company as at and for the year ended 31st March 2021, and the disclaimer has affected our opinion on the standalone financial statements of the Company and we have issued a disclaimer of opinion on the standalone financial statements.