Wc have audited the accompanying Standalone Financial Statements of Richa Industries Limited ( the
Company"), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss, and
Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and
other explanatory information (here in refer to as "Standalone Financial Statement").

In our opinion and to the best of our information and according to the explanations given to us, except for the
effects of the matters described in para 3(a) to 3(m) in the basis for qualified opinion, 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, 2024, its profit (or Loss) and cash
flows for the year ended on that date.

3. Basis for Qualified Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing
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 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 (ICAI) together with the independence requirements that are
relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules
made there under, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the ICAI’s Code of Ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
qualified audit opinion on the standalone financial statements. We refer to the following notes to standalone
financial statements:

a. During the year, the Company has incurred a Net Loss of Rs. 16.76 Crore resulting into accumulated losses
of Rs. 334.73 Crore and erosion of its Net worth as at March 31, 2024. The Company has obligations
towards fund-based borrowings and operational creditors and statutory dues, subject to
reconciliation/verification that have been dcmanded/recalled by the financial/operating creditors
pursuant to ongoing Corporate Insolvency Resolution Process (CIRP). These conditions indicate the
existence of a material uncertainty that may cast significant doubt on the Company’s ability to continue as
going concern and therefore the Company may be unable to realize Its assets and discharge its liabilities in
the normal course of business. The ultimate outcome of these matters is at present not ascertainable.
Accordingly, we are unable to comment on the consequential impact, if any, on the accompanying
standalone financial statements.

b. The Company has been unable to conclude with the Resolution Plan and also the liquidation process
request has been submitted before Hon'ble NCLI which is pending as on the date of audit. This situation
indicates that a material uncertainty exists that may cast significant doubt on the Company's ability to
continue as a going concern. The financial statements do not adequately disclose this matter.

c In view of the significant losses which have been incurred by the company during the previous financial
years, the carrying value of certain fixed assets needs to be tested for impairment. The management has
not done the impairment testing and in absence of any Information, we are unable to comment as to
whether any provision for impairment is required or not

d. In connection with the existence of material uncertainties over the realizability of trade receivables and
Security Deposit amount aggregating to Rs. 50.55 Crore included in financial and other assets which are
past due subject to confirmation and reconciliation. The management is yet to assess the change in risk of
default and resultant expected credit loss allowance on such assets.

e. The Inventory valuing Rs. 4.19 Crore comprises of raw material, stock of work in progress, semi-finished
goods including recovery stock and material at shop floor and Net Fixed Assets valuing Rs. 85.83 Crore was
neither Physical verification nor valued by us. The quantity and valuation as provided by Management /
Resolution Professional has been accepted without any further verification / valuation. Any deviation in
the same may affect the Financial Position and / or Financial Performance of the Company, to the extent.

f. In respect of various claims, submitted by the financial creditors (including claims towards fund based and
non-fund based exposure and claims on behalf of subsidiary companies and other parties) , operational
creditors, workmen or employee and authorized representative of workmen and employees of the
Company to Resolution Professional pursuant to the Insolvency and Bankruptcy Board of India (Insolvency
Resolution Process for Corporate Persons) Regulation 2016, that are currently under
consideration/reconciliation. Pending reconciliation/admission of such claims by the RP, we are unable to
comment on the consequential impact, if any, on the accompanying statement.

g. The company has not made any provision for gratuity and leave encashment for the current financial year

and no actuarial valuation report has been taken, the Impact on loss for the year on account of such

previous provision is not ascertainable and relevant disclosures have not been given. This is not in
compliance with AS-15 Employee Benefits.

h. The GST returns i.e. GSTR-1, GS1R-3B, G5TR-2A are subject to reconciliation with books of accounts.

I. The accompanying statements are in compliance to Indian Accounting Standards ('IND AS') specified under
Section 133 of the Companies Act, 2013, read with relevant rules issued there under. The same have been
adopted from 01-04-2021.

j. The company has not appointed Internal Auditor as required by section 138 of the Companies Act, 2013.

k. The company has not deposited statutory liabilities on time with concerned Government authorities under

various Acts before commencement of CIRP during the FY 2023-24. It has also not provided for
Interest/penaity for such default.

l. In connection with the existence of material uncertainties over the balances of trade payables and other
current liabilities amount aggregating to Rs. 77.56 Crore included in financial statements are subject to
reconciliation.

m. TD5 amounting to Rs 22.65 lacs has been shown as payable as on 31 Mar-2024. However, TDS of only Rs
10.38 lacs is paid up to the date of this report and balance TDS of Rs 12.27 lacs Is still outstanding.

4. Key Audit Matters

Key audit matters are those matters that, in our professional judgment, 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, and in forming 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.

5. Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the other information. The other
information comprises the information induded in the Management Discussion and Analysis, Board's Report
including Annexure to Board's Report, Business Responsibility Report, Corporate Governance and Shareholder's
Information, but does not include the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone 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 standalone financial statements, our responsibility Is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
standalone financial statements, or our knowledge obtained during the course of our 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.

The Company's financial statements have been prepared using the going concern basis of accounting.
Management is responsible for assessing the Company's ability to continue as a going concern, including
whether the use of the going concern basis of accounting is appropriate. The use of the going concern basis of
accounting is appropriate unless management either intends to liquidate the Company or to cease operations
or has no realistic alternative but to do so. Management is also responsible for disclosing (in the financial
statements] a material uncertainty of which management becomes aware related to events or conditions that
may cast significant doubt on the Company's ability to continue as a going concern.

As part of our audit, we conclude regarding the appropriateness of management's use of the going concern
basis of accounting in the preparation of the financial statements in the context of the applicable financial
reporting framework. We also conclude, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the entity's ability to continue as a
going concern If we conclude that a material uncertainty exists, we are required to draw attention in the

auditor's report to the disclosures in the financial statements about the material uncertainty or, if such
disclosures are inadequate, to modify the opinion on the financial statements. Our conclusions are based on
information available to us at the date of the auditor's report. However, future events or conditions may cause
an entity to cease to continue as a going concern.

6. Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies
Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial
statements that give a true and fair view of the financial position, 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, read with relevant Rules issued thereunder.

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; 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 statements 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, 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 has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reporting process. However,
Pursuant to ongoing Corporate Insolvency Resolution Process (CIRP) powers of the Board of Directors have
been suspended and these Powers are now vested with Resolution Professional (RP).

7. Auditors' Responsibility

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.

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 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 financial controls 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
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.

Ý 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.

Materiality is the magnitude of misstatements In the standalone 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 effect
of any identified misstatements in the 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.

i&f \n\

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 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.

I. Emphasis of matters Attention is invited to:

a. In respect of Income tax notices received by the company from the Income Tax department and these
cases are still under dispute.

b. In respect of Notices received by the company from Various Labor acts.

c. As per the insolvency and bankruptcy code. 2016 ("insolvency code"), the RP receives, collect, and
admit all the claim submitted by the creditor (Operational, Financial & Other), employee & workmen
of the company, and Govt. Authorities. Such claim can be submitted to the RP during the CIRP, till the
approval of a resolution plan by COC. The impact of such admitted or rejected claims, if any, has not
been considered in the preparation of the Financial Statements.

d. Information is not available regarding classification of creditors into Micro, Small and Medium
enterprises as required under the Micro, Small and Medium enterprises Development Act 2006. The
Financial Impact of this Non-Compliance, if any could not be determined

. Report on Other Legal and Regulatory Requirements

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

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

a) We have sought and except for the effects/possible effects of the matters described under

Basis for qualified opinion paragraph, have obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) Except for the effects/possible effects of matters 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.

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

d) In our opinion, except for the effects/ possible effects of the matters described in the "Basis
for qualified opinion' paragraph, 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.

e) The matters described under "Basis for Qualified Opinion" and "Emphasis of Matters"
paragraph, in our opinion, may have an adverse effect on the functioning of the Company.

f) The qualification relating to the maintenance of accounts and other matters connected
there with are as stated in the basis for Qualified Opinion paragraph;

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 . Our report expresses a qualified opinion on the adequacy and operating
effectiveness of the Company s Internal financial control over financial reporting.

h) 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 operated throughout the year for all relevant
transactions recorded in the software. Further, during the course of our audit we did not
come across any instance of audit trail feature being tampered with.

i) As the proviso to Rule 3(1) of the Companies (Accounts) Rules 2014 is applicable from 1st
April 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules 2014 on
preservation of audit trail as per statutory requirements for record retention is not
applicable for the financial year ending 31st March 2024.

j) 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 information and explanations given to us:

I. The Company has disclosed the impact of pending litigations on its financial
position to the extent ascertained, in its standalone financial statements;

"* ^{Except for the} effects/possibfe effects of matters described under basis of qualified
opinion paragraph, the Company has made provision, as required under the
applicable law or accounting standards, for material foreseeable losses, if any, on
long-term contracts. The Company did not have any derivative contracts;

III. There has been no delay in transferring the amounts that were due to be
transferred to the Investor Education and Protection Fund by the Company during
the year ended March 31, 2024;

For Sri Prakash & Co
Chartered Accountants
FRN:002058C

CA Punit Kumar _rfv,\0,\

M. No.522295 i 0020SBC j ’J Date: 28-Aug-2024

UDIN : 24522295BKAVRQ9211 V ^P‘^{3Ce: Baddi}