imp powers ltd share price Auditors report

To the Members of IMP Powers Limited,

Report on the audit of Standalone Financial Results Qualified

Opinion

We have audited the standalone financial statements of IMP Powers Limited ("the Company"), which comprise the balance sheet as at 31st March 2023, and the statement of Profit and Loss, (statement of changes in equity) and statement of cash flows for the year ended, and notes to the financial statements as per IND AS, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the basis for Qualified Opinion paragraph, the aforesaid standalone IND AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, Profit and Loss, (changes in equity) and its cash flows for the year ended on that date.

Basis of Qualified Opinion

Finance Cost

We draw attention to note no. 47 of the standalone financial statement of the Company, that it has not provided finance cost related with interest expenses for the year ended on March 31, 2023 as the account of the Company has been reclassified as Non-Performing Assets (NPA) by all lenders on financial facilities availed from them. Due to non-provision of the interest expenses, Loss for the year ended on March 31, 2023 is understated. Amount is not determinable.

Material Uncertainty related to Going Concern

The company has accumulated losses and its net worth has been eroded. The company has incurred net loss during the current year and in the earlier year(s), the companys current liabilities exceed its current assets and the company has a high debt-equity ratio as at 31st March, 2023, earnings per share is negative.

In our opinion, based on the above, the company does not appear to be a going concern. The status of the Company being going concern and impact arising therefrom as such cannot be commented upon by us.

However, the standalone financials statements are prepared on the going concern assumption.

Tax related balances

The Company is in the process of reconciling direct/indirect tax related balances as per books of account and as per tax records.

Other current assets

It mainly includes advances to vendors, balances with government authorities and other recoverable. In the absence of confirmations from such parties, we are unable to comment on it including its recoverable value etc. Bank Guarantees amounting Rs.39.15 Crores issued to the customers are invoked by them during the year ended on March 31, 2023. The entire amount is retained as receivable based on the RP/management assessment of these amount.

Cash and Cash Equivalents

To confirm the balances of the Company, held as on March 31, 2023 from the records of the Banks we had only 2 bank statements of balances held as on that date, no other banks statements were provided. As there was no transaction during the year in those remaining banks of which bank statements not provided, we have to rely on the audited opening balances carried forward from previous year for the reconciliation with of books of account of the Company.

Borrowings:

The Company has been categorised as Non-Performing Asset by the lender banks and majority of the Lender Banks stopped debiting interest on their outstanding debts. Accordingly, the Company had not recognised interest expense on the borrowings. Lender Banks. As per the IBC, the RP has received, collated, verified the claims submitted by the creditors of the Company till May 01, 2023. The RP received claims amounting to Rs. 440.91 crores from Financial Creditors (including Rs. 42.21 crores from unsecured financial creditors) and after verification admitted a sum of Rs. 408.24 crores (including Rs. 37.10 crores from unsecured financial creditors). Further, RP has received claims from the various classes of operational/ other creditors totalling to Rs.173.61 crores out of which Rs. 86.80 crores been admitted against the company as per the provisions of IBC 2016. Pending reconciliation of the claims admitted with the books of accounts, the impact of such claims, if any, that may arise has not been considered in the preparation of the aforesaid financial results as on March 31, 2023.

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

Emphasis of Matter

We draw attention to Note 41 of the standalone Ind AS financial statements, which states that Powers of the Board of directors have been suspended on account of ongoing corporate insolvency resolution process. These financial statements are signed by the suspended directors and thereafter taken on record by the Resolution Professional (RP) CIRP has commenced from March 29, 2022

We draw attention to Note 42 of the standalone Ind AS financial statements, that one of the Operational Trade creditors filed an application under Section 9 of the Insolvency and Bankruptcy Code ("IBC"), 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 before the Honble Adjudicating Authority, i.e. National Company Law Tribunal, at Ahmedabad (Honble NCLT Ahmedabad) for initiation of Corporate Insolvency Resolution Process (CIRP) for the Corporate Debtor under the provisions of the Insolvency and Bankruptcy Code 2016. The said Application has been admitted by the Honble NCLT Ahmedabad vide its order dated 29 March 2022 ("Order") and the CIRP has commenced from the date of the order. The Honble NCLT Ahmedabad vide its order dated 29 March 2022 (CIRP Commencement Order) inter alia appointed, Interim Resolution Professional ("IRP") of the Corporate Debtor to conduct the CIRP and to exercise all powers and subject and carry out all duties as envisaged under the pro-visions of the IBC.

Balances of Trade Receivables, Trade Payables and Loans and advances are subject to confirmations and reconciliations.

We draw attention to Note no. 57 that:

i) During the quarter ended March 2022, the Company has written down the customised cost of Raw Material inventories Rs.12.16 Crores in work in progress on account of cancellation of orders by the customers, at net realisable value (NRV) and which has been subsequently utilised at NRV in the manufacturing of other finished goods.

ii) The Company had certain outstanding contracts for manufacture of transformers which were at different stages of manufacturing as on 31.03.2022. Due to inherent nature of contracts, there was difficulty in properly estimating cost of completion of said contracts. After completion of contacts, it has been observed that had work in progress goods as on

31.03.2022 been valued on net realizable value basis, as required under IND AS 2, inventory would have lower to the extent of Rs 4.27 crore as on 31.03.2022. Further, there was unaccounted impairment loss in inventory to the extent of Rs 17.94 crore caused due to cancellation of orders before

31.03.2022 and other such unavoidable reasons. Pursuant to IND AS 8, this being a material error, therefore, impairment loss in inventory of Rs 22.21 crore has been recognized, retrospectively by restating the financial statements of 2021-22. Accordingly, the financial statements of the previous period have been restated. This impact has been given in the quarter ended on 30th June,2022.

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined below to be the key audit matter to be communicated in our report

Description of Key Audit matter	How we addressed the matter in our audit
Valuation and existence of Trade Receivables	Our Audit procedures included:
We have identified valuation and existence of trade receivables as a significant audit matter on account of the significant RP/management judgment involved with respect to the recoverability and existence of trade receivables and the provisions for impairment of receivables and the importance of cash collection with reference to the working capital management of the business.	We have understood and tested the design and operating effectiveness of controls as established by the RP/ Management over trade receivable.
	I We have checked supporting of underline documents like Invoices, E- way Bills and other related documents on test basis
	Discussing with the supporting staff of the company and obtaining a list of accounts receivables and their assessment on the recoverability of accounts receivables.
	Obtaining understanding on how the Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivable.
	I We have checked the ageing analysis, on a sample basis and subsequent receipt of the trade receivables, to the source documents, including bank statements.
Litigations, provisions and Contingent Liabilities	Our Audit procedures included
The Company has several litigations for direct taxes matters i.e., Income Tax under dispute which involves significant judgment and estimates on the possible outcome of the litigations and consequent provisioning thereof or disclosure as contingent liabilities Refer Note No. 34.1 of INDAs Standalone financial statement.	As part of the audit process, we obtained from the supporting staff of the company details of matters under disputes including ongoing and completed tax assessments, demands and other litigations.
	Our Audit approach for the above consists of the following audit procedures. -
	I Evaluation and testing of the design of internal controls followed by the Company relating to litigations and open tax positions for the direct tax matters i.e., Income Tax and processed followed to decide provisioning or disclosure as contingent liabilities;
	Discussed with Companys legal team and taxation team for sufficient understanding of ongoing and potential litigation matters impacting the Company

The Companys erstwhile Management and suspend Directors are responsible for the other information. The other information comprises the information related with Annual Report is not yet compiled.

Our opinion on the financial statements does not cover the other information and we do 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 and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or other-wise 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.

RPs/ Managements responsibilities for the standalone financial statement

The Statement has been prepared on the basis of the standalone annual financial statements. The RP/ Management of the Company are responsible for the matters stated in section 134(5) of the Act with respect to these standalone Ind AS financial Statements that gives a true and fair view of the financial position , financial performance including other comprehensive income, cash flows and changes in equity of the Company and other financial information in accordance with the applicable accounting standards prescribed under Section 133 of the Act, read with relevant rules issued thereunder and other accounting principles generally accepted in India.. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application. of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 Statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, RP/ 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 RP/management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. RP/ management are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Results

Our objectives are to obtain reasonable assurance about whether the Statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditors 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. Mis

statements 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 the Statement.

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 Statement, 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 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 the RP/ Management.

Conclude on the appropriateness of the RPs"/ 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 Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial results 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 auditors 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 Statement, including the disclosures, and whether the Statement represents the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of subsection (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.

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

We have sought and except for effects (to the extent ascertained) of the matters described in the basis of qualified opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

Except for the effects (to the extent ascertained) of the matter described in the Basis for Qualified Opinion paragraph, 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 and proper returns adequate for the purposes of our audit.

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

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

Pursuant to the NCLT Order dated March 29, 2022, the erstwhile Directors of the Company are deemed to have Suspended/ resigned/vacated the office. Hence, none of the erstwhile Directors continue as Members of the Board.

The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph;

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".

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, in our opinion and to the best of our information and according to the explanations given to us:

The Company has disclosed the impact of pending litigations on its financial position in its financial statements- Refer Note No.34.1 in its financial position in its standalone Ind AS financial statements

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

An amount of Rs. 1,02,236.50 which was required to be transferred to the Investor Education and Protection Fund by the Company which has not been transferred

For SHYAM GUPTA & ASSOCIATES.,

Chartered Accountants

Firm Registration Number: 0007309C

CA Nirav Saiya

Partner

Membership No. 179919

Date: 30-05-2023

Place: Mumbai

UDIN: 23179919BGYU LH7270

Annexure A referred to in paragraph 1 under the heading ‘Report on Other Legal and Regulatory Requirements of our report of even date

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

i. (a) (A) The Company is maintaining proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

(B) The Company is maintaining proper records showing full particulars of intangible assets.

(b) During the year, the RP/management of the Company has physically verified the Property, Plant and Equipment and no material discrepancy were noticed on such verification.

(c) The title deeds of all immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) disclosed in the financial statements are held in the name of the Company.

(d) The Company has not revalued its Property, Plant and Equipment (including Right of use assets) or intangible assets during the year ended March 31, 2023

(e) There are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of benami Property Transaction Act, 1988 and rules made thereunder.

ii. (a) The RP/management has conducted physical verification of inventory at reasonable intervals during the year. In our opinion the coverage and the procedure of such verification by the RP/management is appropriate. No discrepancies of 10% or more in aggregate for each class of inventory were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at March 31, 2023 and discrepancies of 10% or more in aggregate for each class of inventory were not noticed in respect of such confirmations.

(b) As disclosed in note 20 to the financial statements, the Company has been sanctioned working capital limits in excess of Rupees five crores in aggregate from banks and/or financial institutions during the year on the basis of security of current assets of the Company. The quarterly returns/statements filed by the Company with such banks and financial institutions are in agreement with the books of account of the Company. The Company has not filed the quarterly returns / statements for the period 1^st April 2022 to 31^st March 2023 as company is undergoing CIRP.

iii. (a) During the year, the Company has not provided loans, advances in the nature of loans, stood guarantee or provided security to companies, firms, Limited Liability Partnerships or any other parties. Accordingly, the requirement to report on clause 3(iii)(a) of the Order is not applicable to the Company.

(b) During the year, the Company has not made investments and Company has not provided guarantees, security and granted loans and advances in the nature of loans to companies, firms, Limited Liability Partnerships

or any other parties. Accordingly, the requirement to report on clause 3(iii)(b) of the Order is not applicable to the Company.

(c) The Company has not granted loans and advances in the nature of loans to companies, firms, Limited Liability Partnerships or any other parties. Accordingly, the requirement to report on clause 3(iii)(c) of the Order is not applicable to the Company.

(d) The Company has not granted loans or advances in the nature of loans to companies, firms, Limited Liability Partnerships or any other parties. Accordingly, the requirements to report on clause 3(iii)(d) of the Order is not applicable.

(e) There were no loans or advance in the nature of loan granted to Companies, firms, Limited Liability Partnerships or any other parties. Accordingly, the requirements to report on clause 3(iii)(e) of the Order is not applicable.

(f) The Company has not granted loans or advances in the nature of loans to companies, firms, Limited Liability Partnerships or any other parties. Accordingly, the requirement to report on clause 3(iii)(e) 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 not provided any loans, guarantees, security and has not made any investments in respect of which provisions of sections 185 and 186 of the Act are applicable.

v. The Company has not accepted any deposits or amounts which are deemed to be deposits, Hence the directives issued by the Reserve Bank of India and the provisions of the Sections 73 to 76 or any other relevant provisions of the Act and rules framed thereunder, are not applicable. Accordingly reporting under clause 3(v) of the Order is not applicable.

vi. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of the cost records under section 148(1) of the Companies Act, 2013, related to the manufacture electrical transformers and are of the opinion that prima facie, the specified accounts and records have been made and maintained.

vii. (a) The Company is not regular in depositing with appropriate authorities undisputed statutory dues including goods and service tax, provident fund, employees state insurance, income tax, duty of custom, cess and other statutory dues applicable to it. According to the information and explanations given to us and based on audit procedures performed by us, undisputed amounts payable in respect of these statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

Name of Statute	Nature of Dues	Outstanding for more than 6 months (Rs.)	Period
Employee State Insurance, 1948	ESIC	2,44,044	Upto December 2022
Employees Provident Fund & Miscellaneous Provisions Act, 1952	Provident Fund	3,33,848	Upto December 2022
Profession Tax Act 1987	Profession Tax	6,94727	Upto December 2022
The Income Tax Act, 1961	Tax Deducted at Source	1,46,53,1 89	Upto December 2022
The Income Tax Act, 1961	Tax Collected at Source	54,350	Upto December 2022

(b) Dues in respect of Income tax, sales tax, duty of customs, service tax, Goods and Service Tax, entry tax value added tax, on account of disputes not deposited are as follows:

Name of the statue	Na ture of dues	Amo unt (Rs. In lakhs )	Period for whic h the amou nt relates	Fo rum whe re dis pute is pen ding	De po sit ed	Net
The In-	Tax/	200.0	2000-	Com	Nil	625
come Tax	Inter-	4	01 to	miss
Act, 1961	est		2018-	ione
	Pen-		19	rate
	alty

This amount is derived from the latest intimation order received from the income tax department for the F.Y. 2021-22 and subject to reconciliation.

viii. The Company has not surrendered or disclosed any transaction, previously unrecorded in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year. Accordingly, the requirement to report on clause 3(viii) of the Order is not applicable to the Company.

ix. (a) The Company has defaulted in repayment of loans and borrowings to the banks and financial institutions and during the year. Pursuant to the continuing defaults of the Company, a corporate insolvency resolution process ("CIRP") under The Insolvency and Bankruptcy Code, 2016 („IBC") was initiated against the Company vide an order of the "NCLT" dated 29

March 2022 accordingly, the details of outstanding amounts as on 31^st March 2023 is as follows:

There are no Loans or borrowings payable to Gov

Nature of the Lender	Name of lender	Amount due as on March 31,2023
Banks
Cash Credit	Karnataka Bank Limited	2539.48
Cash Credit	Bank of India	4772.58
Cash Credit	State Bank of India	9652.94
Cash Credit	Indian Bank	3570.85
Cash Credit	IDBI Bank Limited	2488.72
Cash Credit	Axis Bank Limited	1607.65
Term Loan	State Bank of India	378.09
Term Loan	Axis Bank Limited	14.37
Term Loan	Bank of India	161.79
Term Loan	IDBI Bank	115.28
Term Loan	Karnataka Bank Limited	84.24
Term Loan	ICICI Bank Limited	16.48
Covid- 19 Term Loan	Indian Bank	150.00
Covid- 19 Term Loan	Bank of India	212.25
Covid- 19 Term Loan	State Bank of India	312.00
Financial Institution
Term loan	STCI finance Limited	2338.66
Loan	Ambit Finvest Private Limited	59.67
	Adisun investment Private Limited	85
CIRP loan
Loan	Axis Bank	14.02
Loan	Bank of India	43.00
Loan	Canbank Factors Ltd	13.73
Loan	IDBI Bank	23.97
Loan	Indian Bank	1.12
Loan	Karnataka Bank Ltd	28.74
Loan	State Bank of India	103.30
Loan	STCI Finance Ltd	11.41

ernment.

(b) The Company has not been declared as wilful defaulter by any bank or financial institution or Government or any government authority.

(c) In our opinion and according to the information and explanations given by the RP/management, during the year the Company has not borrowed any term loans, Accordingly clause (ix)(c) of the Order not applicable.

(d) On an overall examination of the financial statements of the Company, funds raised on short-term basis have been used for long-term purposes by the Company

(e) On an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures

(f) The Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies. Accordingly, the requirement to report on clause (ix)(f) of the Order is not applicable to the Company.

x. (a) The Company has not raised any money during the year by way of initial public offer / further public offer (including debt instruments) hence, the requirement to report on clause 3(x)(a) of the Order is not applicable to the Company.

(b) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit and hence, reporting requirements under clause 3(x)(b) of the order are not applicable to the Company.

xi. (a) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the RP/management, we report that no fraud by the Company or no fraud on the Company has been noticed or reported during the year.

(b) During the year, no report under sub-section (12) of section 143 of the Companies Act, 2013 has been filed by us in Form ADT - 4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules,2014 with the Central Government.

(c) We have taken into consideration the whistle blower complaints received by the Company during the year while deter-mining the nature, timing and extent of audit procedures

xii. In our opinion Company is not a Nidhi Company. Accordingly, clause 3(xii)(a), (b) and (c) is not applicable.

xiii. According to the information and explanations given by the RP/management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013, where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable

India accounting standards

xiv. (a) The Company has an internal audit system which is not in commensurate with the size and nature of its Business and which needs to be strengthen.

(b) The internal audit reports of the Company for the period 1^st April 2022 to 31^st March 2023 have been considered by us.

xv. According to the information and explanations given by the RP/management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Act.

xvi. (a) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company

(b) The Company has not conducted any Non- Banking Financial or Housing Finance activities

(c) The Company is not a Core Investment Company as defined in the regulations made by Reserve Bank of India. Accordingly, the requirement to report on clause 3(xvi)(c) and (d) of the Order is not applicable to the Company

xvii. The Company has incurred cash losses in the current financial year and in the immediately preceding financial year

xviii. There has been no resignation of the statutory auditors during the year. Accordingly, requirement to report on Clause 3(xviii) of the Order is not applicable to the Company

xix. On the basis of the financial ratios disclosed in note 34(b) to the financial statements, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, Based on our examination of the evidence supporting the assumptions, we are drawing our attention which causes us to believe that material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx. Due to Losses the provisions related with section 135 of the Act are not applicable. Accordingly, reporting under clause 3(xx) (a) and (b) of the order is not applicable

Annexure - B to the Auditors Report

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

We have audited the internal financial controls over financial reporting of Imp Powers Limited (the Company) as of 31 March 2023 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

RPs/Managements Responsibility for Internal Financial Controls

The Companys management/RP 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 safe-guarding 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, as-

ing 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 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 controls 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 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 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 RP/ 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 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 RP/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.

Opinion

In our opinion and to the best of our information & according to the explanations give to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting

and such internal financial controls over financial reporting were operating effectively as at 31 March 2023, 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.

For and on behalf of

Shyam S. Gupta & Associates

Chartered Accountants

FRN 007309C

CA Nirav Saiya

Partner

MN. 179919

Date: 30-05-2023

Place: Mumbai

UDIN: 23179919BGYULH7270