madhucon projects ltd Auditors report

To the Members of M/s. Madhucon Projects Limited

Report on the Standalone Financial Statements

Qualified Opinion

We have audited the financial statements of M/s. Madhucon Projects Limited ("the company"), which comprise the standalone balance sheet as at 31st March 2023, and the standalonestatement of Profit and Loss (including other comprehensive income), the standalone statement of changes in equityand the standalonestatement of cash flows for the year then ended, and notes to the financial statements, 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, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("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, itsloss and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

1. We refer to the carrying value of investments of Rs 1,34,212.99 lakhs held in subsidiaries/other companies and unsecured loans and advances of Rs 5624.18 lakhs given by the company to its subsidiaries/other companies, Some of these have been incurring losses and in case of some of the subsidiaries, net worth was fully or substantially eroded / Going Concern is affected. We are unable to comment upon the carrying value of investments and loans & advances, whether any provision for impairment in the value of investments and loans & advances is required; the effect of same upon the profitability could not be ascertained in the absence of fair valuation.

2. "The Company "has written back Trade Payables amounting to Nil and Rs 10,001.95 lakhs for the quarter ended 31^st March, 2023and for the Year ended 31^st March, 2023 respectively.

3. "The Company "has written back Other Payables amounting to Rs 873.94 lakhs and Rs 1,211.82 lakhs for the quarter ended 31^st March, 2023and for the Year ended 31^st March, 2023 respectively.

4. "The Company "has written off loans , advances and other Investments from Related Parties amounting to Rs 4,306.13 Lakhs and Rs 18,530.32 Lakhsfor the

quarter ended 31^st March, 2023and for the Year ended 31^st March, 2023 respectively.

5. "The Company "has written off advances from Other Parties amounting to Rs 2,298.31 Lakhs and Rs 3,446.54 Lakhs for the quarter ended 31^st March, 2023and for the Year ended 31^st March, 2023 respectively.

6. The company is yet to transfer unpaid dividend of an amount aggregating to Rs. 4.46 Lakhs relating to Financial Years 2009-10 to 2010-11 from unpaid dividend account to Investor Education and Protection Fund (IEPF).

7. "The company" has defaulted in repayment of dues to Banks and financial institutions amounting to Rs 48,839.25 lakhs and Rs 4,508.69 lakhs respectively as per books of account and the same were classified as NPA by the lenders . Interest on these loans have not been provided for the FY 2018-19 to FY 2022-23. However Dues in case of some banks were settled through "One time settlement", but entries in respect of OTS have not been passed in the books of account and the effect of same has not been quantified and as such the impact of the same on profitability could not be ascertained.

Balance Confirmation in respect of the loans from banks have not been obtained.

8. As per note in financial statement, One Financial Creditor Appeal and Company Appeal against NCLT order is pending with NCLAT.

9. Undisputed Statutory dues in case of following are outstanding carried from previous Year:

S.No.	Name of the Status	Nature of Due	Period	Rs. in Lakhs
1	rhe Income Tax Act, 1961	Dividend Distribution Tax & Interest on it	2011-12 to 2015-16	139.93
2	The Employees Provident funds and Miscellaneous provision act 1952	Provident fund	2013-14 to 2020-21	93.65
3	Value Added Tax	VAT payable	2013-14 to 2017-18	9.77
4	Works Contract Tax	Works Contract Tax	2014-15 to 2017-18	611.42

10. In view of losses incurred by "the company" andln the absence of prior approval from the lender banks and financial Institutions, managerial remuneration of Rs. 104.51 Lakhs paid by the company during the year is in excess of the limits specified under section 197 read with schedule V of Companies Act,2013.

11. The turnover and input credits as per the books of account are subject to reconciliation with the GST returns filed.

12. Internal Audit has not been conducted for the period 01st April 2022 to 31^st March 2023. Internal auditor has not been appointed for the period from October 2022.

13. The Company has not produced Title Deeds in respect of certain immovable properties (lands) held.

14. The Company" has given a Bank Guarantee for Rs 1,224.33 Lakhs on behalf of its step-down subsidiary "Vijayawada-Machilipatnam Expressways Limited" in favor of NHAI and the same was invoked in FY 2014-15 by NHAI. The Company has accounted the invoked amount as receivable from "Vijayawada-Machilipatnam Expressways Limited" and subsequently "The Company" has written off the same by charging it to "Statement of Profit and Loss" in FY 2015-16.

Consequent to receipt of claims on arbitration by "Vijayawada-Machilipatnam Expressways Limited", an amount of Rs 1,955.00 lakhs was paid by "Vijayawada- Machilipatnam Expressways Limited" to "The Company", against the invocation of Bank Guarantee, which is offered as income during the quarter ending 30-06-2022.

15. In case of "Ranchi Expressways Ltd (REL)", a step-down subsidiary of the company, CBI has filed FIR against REL, its Promoters and Directors on 12-03-2019 under Prevention of Corruption Act and Indian Penal Code. Subsequently, the Enforcement Directorate has raided the premises of "the company" on 11-06-2021 and the investigation is under progress.

16. As per the press release dated02-07-2022 and 17-10-2022TheDirectorate of Enforcement has provisionally attached 105immovable propertiesand 28 other assets worth Rs 96.21 Crore and Rs80.65 Crore respectively belonging to Madhucon Group of companies, its directors and promoters in a case against M/s Ranchi Expressway Ltd, under the provisions of PMLA, 2002. Further investigation is going on.

17. In the absence of confirmations of Trade payables, Trade Receivables and various advances/loans, we are unable to comment on the extent to which such balances are payable/recoverable.

18. Balance confirmation of current accounts, which have become Dormant, are not obtained in case of Bank Branches at various project sites.

Matters Relating to Going Concern

We draw attention to Note 2.45 to Standalone financial statements-"The Companys" current liabilities exceeded current assets and "The Company" has defaulted in payment of dues to banks, all these indicate a material uncertainty existing that may cast a significant doubt on "The Companys" ability to continue as a going concern. However, the management believes the use of going concern assumption on the preparation of the financial statements of "the company" is still appropriate in view of implementation of OTS agreements already entered into in case of some banks, and its continuing discussions with its lenders to obtain approval for and an appropriate debt resolution plan and also, that "The company" will continue to be in operation in the foreseeable future.

Emphasis of Matter

• "The Company" has offered Rs. 259.60 Lakhs as Revenue during the year which was an Advance received against work bills from a step-down subsidiary.

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 as a whole, 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

1) The carrying value of investments held in and unsecured loans and advances given by the company to its subsidiaries, which have been incurring losses and in case of some of these companies, net worth was fully or substantially eroded.

How the matter was addressed in our audit:

We have examined the key controls in place for making investments in subsidiaries. We assessed the networth of subsidiaries on the basis of latest available financial statements. In the absence of fair valuation of investments, taken into account the management representations made for the internal assessments and initiatives to be implemented to improve the working of the

subsidiaries basing on which they are of the view that the carrying value of the investments and loans and advances are realizable at the value stated in the books and no impairment is considered.

2) "The Company" has defaulted in repayment of dues to Banks and financial institutions All the loans outstanding were classified as NPA by the Banks and Financial Institutions. Interest on these loans have not been provided for the financial years 2018-19 to2022-23.Dues in case of some banks were settled through "One time settlement", but entries in respect of OTS have not been passed in the books of account.

How the matter was addressed in our audit:

Dues in case of some of the banks were settled through "One time settlement" butentries in respect of OTS have not been effected in the books of accounts due to Procedural Formalitiesas explained by the management. However the same has been qualified in our Audit Report(Clause 7 of Basis for Qualified Opinion).

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 Auditors 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 there under, 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.

In connection with our audit of the Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included inthe Management Discussion and Analysis, Boards Report including Annexure to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include the standalone financial statements and our auditors 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.

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.

Managements Responsibility for the Financial Statements

The Companys 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 of these 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement, whether due to fraud orerror.

In preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters relatedto 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 doso.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

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 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. 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 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 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 disclosuresmade by management.

• Conclude on the appropriateness of managements 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 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 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 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.

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 the standalone financial statements of the current period and are there fore the key audit matters. We describe these matters in our auditors report unless lawor regulation precludes public disclosure about them after or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued

by the Central Government of India in terms of sub-section (11) of section 143 of

the Act, we give in the Annexure 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 further report that:

a) we have sought and 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 possible effects of the matter described in the Basis for Qualified Opinion 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) Except for the possible effects of the matter described in the Basis for Qt/a//77ecfOpinion the Balance Sheet, Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account; as perCompanies (Audit and Auditors) Rules, 2014 as amended.

d) Except for the possible effects of the matter described in the Basis for Qualified Opinion, the aforesaid Financial Statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with relevant rules issued there under.

e) On the basis of written representations received from the directors as on March 31, 2023, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023, from being appointed as a director in terms of Section 164(2) of the Act.

f) 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.

g) In view of losses incurred by "the company" and in the absence of prior approval from the lender banks and financial Institutions, managerial remuneration of Rs. 104.51 Lakhs paid by the company during the year is in excess of the limits specified under section 197 read with schedule V of Companies Act,2013.

h) With respect to 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 pending litigations which would impact its financial position in its notes to financial statements.

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

iii. The company is yet to transfer unpaid dividend of an amount aggregating to Rs. 4.46 Lakhs relating to Financial Years 2009-10 to 2010-11 from unpaid dividend account to Investor Education and Protection Fund (IEPF).

iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) 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 or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been 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) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. The Company has neither declared nor paid any dividend during the year.

For P.Murali&Co.,

Chartered Accountants Firm Registration No: 007257S

A. Krishna Rao Partner

Membership No. 020085 UDIN: 23020085BGQFZ8683

Place: Hyderabad Date: 16-05-2023

Annexure A to the Auditors Report

Annexure referred to in Independent Auditors Report to the Members of M/s.

Madhucon Projects Limited on the Financial Statements for the year ended 31^st

March 2023, we report that:

i. In respect of the Companys Property, Plant and Equipment and Intangible Assets:

a)

• The Company has maintained proper records showing full particulars, including quantitativedetails and situation of Property, Plant and Equipment.

• The Company doesnt have any intangible assets.

b) As explained to us, Property, Plant and Equipment have been physically verified by the management at regular intervals; as informed to us no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable.

c) The Company has not produced Title Deeds in respect of certain immovable properties (lands)held, as such we are unable to provide the details as required.

d) According to the information and explanations given to usby the management the Company has not revalued any of its Property, Plant and Equipment (including right-of-use assets) during the year.

e) There are no proceedings initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

ii.

a) In our opinion and according to the information and explanations given to usthe Inventory has been physically verified during the year by the Management and in our opinion, the frequency of verification is reasonable. As per our observations the coverage and procedure of such verification was appropriate, and there are no major discrepancies found on and above 10% aggregately of such classes of inventory.

b) The Company has not been sanctioned working capital limits in excess of Rs 5 crore, in aggregate, at any points of timeduring the year, from banks or financial institutions on the basis of security of current assets .

iii.

(a) The Company has not provided loans or provided advances in the nature ofloans, or stood guarantee, or provided security to other entity during the year.

(b) In our opinion, the loans provided and the terms and conditions of the grant of loans, during the year are, prima facie,not prejudicial to the Companys interest.

(c) In respect of loans granted by the Company, the schedule of repayment of principal and payment of interest has beenstipulated and the repayments of principal amounts and receipts of interest are generally been regular as per stipulation.

(d) In respect of loans granted by the Company, there is no overdue amount remaining outstanding as atthe balance sheet date.

(e) No loan granted by the Company which has fallen due during the year, has been renewed or extended or fresh loansgranted to settle the overdues of existing loans given to the same parties.

(f) The Company has granted loans or advances in the nature of loans either repayable on demand or withoutspecifying any terms or period of repayment during the year.Aggregate amount of loans granted during the year Rs 4,946.54/-lakhs and outstanding balance as on 31st March, 2023 is Rs 18,432.44/- lakhs.

iv. In our opinion and according to the information and explanations given to us, the

Company has complied with the provision of sections 185 and 186 of the Act to the

extent applicable, in respect of loans, investments guarantees and security.

v. During the year The Company has not accepted any deposits from the public covered

under Section 73 to 76 of the Companies Act, 2013 and rules framed there under.

vi. Pursuant to the rules made by the Central Government of India, the Company is

required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. According to the information and explanations given to us and based on the records of the company examined by us, in respect of the Statutory dues:

a) There are some delays in depositing undisputed statutory dues for the current year in case of Provident Fund, ESI .Goods andService Tax.TDS.

Undisputed amounts payable in respect of Statutory dues which were outstanding for more than six months from the date they became payable are as follows:

S.No.	Name of the Status	Nature of Due	Period	Rs. in Lakhs
1	The Income Tax Act, 1961	Dividend Distribution Tax & Interest on it	2011-12 to 2015-16	139.93
2	The Employees Provident funds and Miscellaneous provision act 1952	Provident fund	2013-14 to 2020-21	93.65
3	Value Added Tax	VAT payable	2013-14 to 2017-18	9.77
4	Works Contract Tax	Works Contract Tax	2014-15 to 2017-18	611.42

b) Details of dues of Sales tax, Entry tax, Service tax which have not been deposited as on March 31, 2023 on account of disputes are given below:

Name of the Statute	Forum where dispute is pending	Period to which the amount relates	Amount involved (Rs.in lakhs)
Sales Tax	HonbleHigh Court	2001 to 2005 & 2009-10	637.42
Entry Tax	Honble High Court	2015-16 & 2016- 17	8.85
Service Tax	Settlement Commission	2010-12	1,655.75

viii. There were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

ix.

a) Based on the examination of books of account and related records and according to the information and explanations given by the management, the company has defaulted in repayment of dues to financial institutions and banks during the year [Refer Clause7 of Basis for Qualified Opinion], as follows:

Delay in Principal and Interest payments:

Amount in Rs.Lakhs

Nature	Name of the Lender	Amount not paid on due date		Principal or Interest		No. of days delay or unpaid	Remarks, if any
Cash credit	Bank of India	2661.70		Principal		181 and above days	The loan has become NPA
Cash credit	Canara Bank	5758.56		Principal		181 and above days	The loan has become NPA
Cash credit	Axis Bank	338.37		Principal		181 and above days	The loan has become NPA
Cash credit	ICICI Bank	18625.35		Principal		181 and above days	The loan has become NPA
Cash credit	State Bank of India	4045.82		Principal		181 and above days	The loan has become NPA
Cash credit	Punjab National Bank (Formerly Oriental Bank of Commerce)	4991.80		Principal		181 and above days	The loan has become NPA
Cash credit	Kotak Mahindra Bank	2036.26		Principal		181 and above days	The loan has become NPA
Cash credit	IDBI	5279.70		Principal		181 and above days	The loan has become NPA
Term loan	NBFC		4000.00		Principal	181 and above days	The loan has become NPA
Interest on loans	Axis Bank		35.25		Interest	181 and above days	The loan has become NPA
Interest on loans	ICICI Bank		4107.30		Interest	181 and above days	The loan has become NPA
Interest on loans	IDBI Bank		348.19		Interest	181 and above days	The loan has become NPA
Interest on loans	Canara Bank		193.00		Interest	181 and above days	The loan has become NPA
Interest on loans	Punjab National Bank(Formerly Oriental Bank of Commerce)		249.40		Interest	181 and above days	The loan has become NPA
Interest on loans	State Bank of India		168.56		Interest	181 and above days	The loan has become NPA
Interest on loans	NBFC		508.69		Interest	181 and above days	The loan has become NPA

b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been declared a wilful defaulter by any bank or other lenders.

c) According to the information and explanations given to us and in our opinion, the Company has not raised any term loans during the year.

d) On an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term purposes.

e) On an overall examination of the financial statements of the Company, the Company has not taken any funds from anyentity or person on account of or to meet the obligations of its subsidiaries.

f) The company has not raised loans during the year on the pledge of securities held in itssubsidiaries, joint ventures or associate companies.

x.

a) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments)during the year.

b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares orconvertible debentures(fully or partially or optionally convertible) during the year.

xi.

a) No fraud by the Company and on the Company has been noticed or reported during the year.

b) No report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed underrule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and up to the date of this report.

c) We have taken into consideration the whistle blower complaints received by the Company during the year and up tothe date of this report.

xii. The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

xiii. In our opinion, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 with respect to applicabletransactions 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. Internal Audit has not been conducted for the period 01st April 2022 to 31st March 2023. Internal auditor has not been appointed for the period from October 2022.

xv. In our opinion during the year the Company has not entered into any non-cash transactions with its Directors or personsconnected with its directors. As per the provisions of section 192 of the Companies Act, 2013

xvi.

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

b) The company has not conducted any Non-Banking Financial or Housing Finance activities .

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

d) There is no core investment company within the Group (as defined in the Core Investment Companies(Reserve Bank) Directions, 2016)

xvii. The Company has not incurred cash losses during the financial year and incurred cash loss of Rs (2,884) lakhs in the immediately preceding financial year 2021-22. Further we state that the effect of anllnquantified Qualification (Refer Clause 7 of Basis For Qualified Opinion) on the figure of cash losses, has not been taken into consideration for the purpose of making comments in respect of this clause.

xviii. There has been no resignation of the statutory auditors of the Company during the year.

xix. According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of evidence supporting the assumptions, we conclude based on the information obtained from the management and audit procedures performed that material uncertainty exists as on the date of the audit report indicate that the 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, which depend on the outcome of the management planson the discussions with its lenders to obtain approval for and implementation of appropriate debt resolution plan (Refer note on Going Concern 2.45).

xx. In view of the losses incurred by the company, it is not covered under the provisions of section 135 of the companies act 2013.

xxi. The qualifications or adverseremarks by the respective auditors in the Companies (Auditors Report) Order (CARO) reports of the companies included in the consolidated financial statements, the details of the companies and the clauses of the CARO report containing the qualifications or adverse remarks -

s No	Name	CIN	Holding Company/subsidiary /Step down subsidiary Associate/Joint Venture		Clause number of the CARO report which is qualified or adverse
1	TN(DK) EXPRESSWAYS LIMITED	U45200T G2006PLC048941	Step subsidiary	down	(vii).(ix), (xiii),(xiv)
2	TRICHY- THANJAVUR EXPRESSWAYS LIMITED	U45200TG2006PLC049815	Step subsidiary	down	(vii),(ix), (xiii),(xiv),(xix)
3	CHHAPRA- HAJIPUR EXPRESSWAYS LIMITED	U45209TG2010PLC068742	Step subsidiary	down	(ix), (xiii).(xiv)
4	BARASAT- KRISHNAGAR EXPRESSWAYS LIMITED	U45203TG2011PLC073469	Step subsidiary	down	(ix),(xiii), (xix)
5	VIJAYAWADA- MACHILIPATNAM EXPRESSWAYS LIMITED	U45209AP2011PLC077676	Step subsidiary	down	(xvii), (xix)
6	RAJAULI- BAKHTIYARPUR EXPRESSWAYS LIMITED	U45203TG2012PLC080775	Step subsidiary	down	(xix)
7	MADURAI- TUTICORIN EXPRESSWAYS LIMITED	U45203TG2006PLC050114	Subsidiary		(vii),(ix), (xiii),(xiv),(xix)

 

8	NAMA HOTELS PRIVATE LIMITED	U55101TG2007PTC056818	Subsidiary	(vii), (xiv)
9	MADHUCON HEIGHTS PRIVATE LIMITED	U45209TG2007PTC056733	Subsidiary	(vii).(xiv), (xix)
10	MADHUCON MEGA MALL PRIVATE LIMITED	U45400TG2007PTC056734	Subsidiary	(vii), (xiv)
11	MADHUCON TOLL HIGHWAYS LIMITED	U93000TG2008PLC060479	Subsidiary	(vii).(xvii)
12	MADHUCON INFF LIMITED	*A U45200TG2006PLC0492:	35 Subsidiary	(vii),(ix), (xiv) (xix)
13	RANCHI EXPRESSWAYS LIMITED	U45209TG2011 PLC0735(	38 Step dowr subsidiary	l (vii),(ix),(xiv), (xix)

For P. Murali& Co, Chartered Accountants, FRN No: 007257S

A Krishna Rao Partner

Membership No:020085 UDIN: 23020085BGQFZ8683

Place: Hyderabad Date: 16-05-2023

Annexure B to the Independent Auditors Report

Report on the Internal Financial Controls over Financial Reporting under clause (i) of the Sub-section 3 of the Section 143 of the Companies Act, 2013 (‘The Act)

We have audited the internal financial controls over financial reporting of M/s. Madhucon Projects Limited (‘the company) as of 31^st March 2023 in conjunction with our audit of 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 Act.

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 deemed to be prescribed under section 143(10) of the Act 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 ICAI. These standards and guidance note require that we comply with ethical requirements and plan and performed 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 risk 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 and the companys internal financial control 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 these policies and procedures that (1) pertain to the maintenance of records that, in reasonable detailed, 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 principles, and that receipts and expenditures are being made only in accordance with authorization 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 Financial Statements.

Inherent Limitation of Internal Financial Controls over Financial Reporting

Because of the inherent limitation 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.

Qualified Opinion

In our opinion, except for the possible effects of the matter described in the basis for qualified opinion, the company has in all material respectsreasonable internal financial controls system over financial reporting but not adequate and such internal financial controls over financial reporting were operating effectively as at March 31^st2023 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 ICAI.

For P. Murali& Co.,

Chartered Accountants Firm Registration No: 007257S

A Krishna Rao Partner

Membership No: 020085 UDIN: 23020085BGQFZ8683

Place: Hyderabad Date: 16-05-2023

Madhucon Projects Limited