pratibha industries ltd Auditors report

To,

The Members of

PRATIBHA INDUSTRIES LIMITED

Report on the audit of the standalone financial statements

Disclaimer of Opinion

We were engaged to audit the accompanying standalone financial statements of PRATIBHA INDUSTRIES LIMITED, ("the Company"), which comprises the Balance Sheet as at March 31, 2020, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity, the Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

We do not express an opinion on the accompanying standalone financial statements of the Company. Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these standalone financial statements.

Basis for Disclaimer of Opinion

1. Inventory of Work in Progress (WIP) includes certain contractual claim amounting to Rs.310.60 Crores. These amounts have been ascertained by the management based on their estimates. Out of these contractual claims, claims amounting to Rs. 259.33 Crores are either formally submitted but not yet approved by respective clients or no formal submissions have been made to respective clients. The amounts of these claims are subject to change post approval from respective clients. To the extent of Rs. 259.33 Crores, Inventories are overstated and accumulated losses are understated in the standalone financial Statements.

2. The management has not provided detailed working of Construction Work in Progress (WIP), Cost to Completion and consequent profits or losses in the projects which are pending for execution. In absence of these details, it is not possible for us to ascertain whether the Construction WIP of Rs. 5.63 Crores has been valued and stated correctly or not. The consequential impact, if any, on the standalone financial Statements is therefore not ascertainable.

3. Balance confirmation of trade Receivables, Loans and Advances, deposits and trade payables are not received from third parties. These balances are subject to confirmations and consequent adjustments, if required. In absence of balance confirmations, financial impact on standalone financial Statements is not ascertainable.

4. As per the bank loan statements made available to us by the management, the banks had charged Rs. 25.55 Crores on account of interest and other charges for the period from February 01, 2019 to March 31, 2019. However, the company had not made provision for such interest and charges, due to commencement of CIRP period under IBC. To that extent, loan liabilities and accumulated losses are understated.

5. Certain loan accounts of company having aggregate balance of Rs. 461.72 Crores in the books of accounts are not reconciled with their respective bank statements which are showing aggregate balance of Rs. 370.42 Crores. Thus, loan balances are overstated in books of accounts by Rs. 91.30 Crores.

6. Certain current accounts of the company having aggregate balance of Rs. 0.04 Crores in the books of accounts are not reconciled with their respective bank statements which are showing aggregate balance of NIL. Thus, current bank balances are overstated in books of accounts by Rs. 0.04 Crores.

7. Many loan accounts of the Company having aggregate balance of Rs. 4445.37 Crores, and current accounts of the Company having aggregate balance of Rs. 16.85 Crores are not confirmed due to non-availability of statement / confirmation from respective Banks. In absence of sufficient appropriate audit evidence, we are unable to determine any possible impact thereof on Standalone financial Statements.

8. In the reconciliation statement of various bank accounts of the Company, there are many entries relating to Receipts and Payments, having aggregated value of Rs. 9.75 Crores and Rs. 9.43 Crores, respectively, which are pending to be cleared since long. To the extent of Rs. 0.32 Crores, the bank balance is overstated. In absence of complete details such receipts and payments, we cannot ascertain the overall impact on Standalone financial Statements.

9. The Company has an unconfirmed balance of Fixed Deposits amounting to Rs. 13.81 Crores as at March 31, 2020. In absence of balance confirmation from the banks, financial impact on Standalone financial Statements is not ascertainable.

10. The Company has given loans and advances to various related parties amounting to Rs. 979.25

Crores. As per the information given by the Companys management and as reported in the audit reports of these parties for the FY 2019-20, all these related parties have made substantial losses and their net worth have been fully eroded. However, the Company has not made any provision for possible loss on such loans and advances.

11. The company has not provided audited financial statements of its wholly owned subsidiary M/s.

Pratibha Holdings (Singapore) Pte. Ltd. In absence of these Financial Statements, we cannot comment on any requirement for provision for diminution in value of investment.

12. The Company has not made provision for impairment against Investment of Rs. 0.01 Crore in its subsidiary M/s. Bhopal Sanchi Tollways Private Limited. As informed to us, its Concession Agreement has been terminated by NHAI and the subsidiary company has lodged claim and the matter is under arbitration.

13. There are many statutory dues amounting to Rs. 153.59 Crores which are pending to be deposited with appropriate government authorities by the Company. The company has not made provision for interest on these dues on account of delay in depositing them. Since the management of Company has not estimated overall liability on account of interest, financial impact on Standalone financial Statements is not ascertainable.

14. The RP/Liquidator has received various claims of disputed statutory dues pertaining to VAT/CST,

Income Tax and Central Excise aggregating to Rs. 351.16 crores. However, since the outcome of the cases are not known to the RP/Liquidator, no provisions have been made in the Books of accounts. In absence of complete details of litigations, we cannot ascertain impact on standalone financial statements.

15. The company has not provided sufficient appropriate information to evaluate the accuracy of recognition, measurement and presentation of revenues and other related balances in view of the applicability of Ind AS 115 "Revenue from Contracts with Customers". The company has not evaluated impact of variable consideration on its revenue as required under IND AS 115.

16. During the year, the Company has unilaterally written back certain liabilities amounting to Rs. 1.33

Crores. The management of the Company is of the opinion that based on their analysis of balances and due to various reasons, these balances were not payable and hence written back. To that extent, the liabilities, current quarters loss and accumulated losses are understated.

17. The company has not made Provision for Employee Benefits in accordance with Ind AS 19. The management is in opinion that since the matter is under CIRP and also majority of the employees have already left the company, there will be no additional liability on account of employee benefits. In absence of valuation report, we cannot comment on the impact on standalone financial Statements.

18. Foreign currency balance of certain foreign vendors, having aggregate balance of Rs. 4.50 Crores as per Books of accounts as at March 31, 2020, could not be ascertained due to improper accounting. In the absence of these details, their balances could not be translated as required under IND AS 21 and consequential impact on standalone financial Statements could not be ascertained.

19. The balance with statutory authorities includes credits for Service Tax and Excise Duty amounting to Rs. 24.44 Crores. The company has not filed Service Tax and Excise Returns since 2016-17, to claim credits against Service Tax and Excise Duty liabilities. In absence of submission of returns, the credits cannot be utilized. To this extent, the current assets are overstated and accumulated losses are understated.

20. The Company has not maintained detailed Party wise outstanding of Public Deposits and the provision for penal interest has not been made since February 2019 due to the commencement of CIRP period under IBC. In the absence of these details consequential impact on standalone financial Statements could not be ascertained.

21. As required under the provisions of Section 148 of the Companies Act, 2013, read with Rule 4 of the Companies (Cost Records and Audit) Rules, 2014, the cost audit has not been conducted of companys records.

22. As required under the provisions of Section 138 of the Companies Act, 2013, read with Rule 13 of the Companies (Accounts) Rules, 2014, the Internal Audit of the functions and activities of the company has not been conducted for the year ended March 31, 2020.

Material Uncertainty Related to Going Concern

The company has accumulated losses of Rs. 4972.26 Crores and its net worth is fully eroded. It has incurred net loss during the year ended March 31, 2020 amounting to Rs. 63.50 Crores as well as in previous years. It is unable to repay its debts, statutory obligations and pay salaries apart from other obligations/commitments. The application of Financial Creditors under section 9 of the Insolvency and Bankruptcy Code (IBC) had been admitted by Honble National Company Law Tribunal ("NCLT"), Mumbai Bench and Resolution Professional ("RP") was appointed vide order dated March 14, 2019. Since no resolution plan had been approved, application for liquidation of the Company had been filed with the NCLT. NCLT vide its order dated February 8, 2021 has approved liquidation of the company.

All these indicate a material uncertainty about the Companys ability to continue as a Going Concern. However, the standalone financial statements are prepared on a going concern basis.

Responsibilities of Management and those charged with Governance for the Standalone Financial Statements

The application of Financial Creditors under section 9 of the Insolvency and Bankruptcy Code (IBC) had been admitted by Honble National Company Law Tribunal, Mumbai Bench and Resolution Professional ("RP") was appointed vide order dated March 14, 2019. Since no resolution plan had been approved, application for liquidation of the Company had been filed with the NCLT. NCLT vide its order dated February 8, 2021 has approved liquidation of the company. Resolution Professional Mr. Anil Mehta has been appointed as Liquidator by the NCLT. The management & operations of the Company are being managed by Liquidator on a Going Concern Basis.

The Companys management is responsible for the matters 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(including other comprehensive income), statement of changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India,including the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

The management is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our responsibility is to conduct an audit of the standalone financial statements in accordance with Standards on Auditing and to issue an auditors report. However, because of the matter described in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these standalone financial statements.

We are independent of the entity in accordance with the ethical requirements in accordance with the requirements of the Code of Ethics issued by ICAI and the ethical requirements as prescribed under the laws and regulations applicable to the entity.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure "A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

As required by section 143(3) of the Act, we report that: a. As described in the Basis for Disclaimer of Opinion paragraph, we sought but were unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the Balance Sheet, Statement of Profit and Loss (including Other Comprehensive Income), the statement of Changes in Equity, and Statement of Cash Flows dealt with by this Report are in agreement with the books of account;

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

e. the matters described under the Basis for Disclaimer of Opinion paragraph and the Material

Uncertainty Related to Going Concern paragraph ,in our opinion, may have an adverse effect on the functioning of the Company.

f. on the basis of information available on the MCA website, all the directors are disqualified as on

31 March, 2020, from being appointed as a director in terms of Section 164(2) of the Act.

g. the qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Disclaimer of Opinion paragraph above.

h. with respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, we give our separate Report in "Annexure B".

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

a. Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note No. 36 to the Standalone Financial Statements;

b. Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

c. Following are the instances of delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company:

Amount	Due Date	Date of Payment
97,791	30th September, 2018	2010-11
1,13,493	30th September, 2019	2011-12
1,15,700	30th September,2020	2012-13

For Ramanand & Associates

Chartered Accountants

ICAI Firm Registration Number: 117776W

Ramanand Gupta

Managing Partner

Membership No.: 103975

UDIN: 21103975AAAAIR5489

Date: 26th March,2021.

Place: Mumbai

Annexure "A" to the Independent Auditors Report

The Annexure referred to in our report to the members of PRATIBHA INDUSTRIES LIMITED (‘The Company) on the standalone financial statements for the year ended 31st March, 2020. We report that:

i. In respect of its fixed assets:

a. The Company has maintained records showing particulars including quantitative details and situation of fixed assets. However, locations of the assets are not updated in records.

b. During the year, physical verification of Fixed Assets was not conducted and no impairment testing was done for any assets. We are informed by the management that physical verification could not be conducted on account of no access to various site due to termination of contracts. In absence of complete physical verification of the assets, we cant comment on material discrepancies on such physical verification.

c. According to the information and explanations given to us, the title deeds of immovable properties recorded as fixed assets in the books of account are held in the name of the company. ii. In respect of inventories, according to the information and explanation given to us, the physical verification of inventory was not conducted at the end of the year.In the absence of physical verification of inventories, we cant comment on material discrepancies on such and its consequential impact on the financial statement. As regards inventory in the nature of Work in Progress, reference is invited to para 1&2of Basis for Disclaimer of Opinion of our report.

iii. According to information and explanations given to us, during the year, the Company has not granted unsecured loans to parties covered in the register maintained under Section 189 of the Companies Act, 2013.

iv. In our opinion and according to the information and explanations given to us, in respect of loans, investments, guarantees, and security, provisions of section 185 has been complied with. However, during the year, it has granted loan to its three Joint Venture companies which is non-compliance of section 186(2) as the companys net worth is fully eroded. Also, these loans are interest free unsecured loans to which is in non-compliance of provisions of section 186(7).

v. The Company has accepted deposits from the public. As per our verification of records and information & explanations given to us, except the provisions of section 73(3) and 74(3),the company has complied with the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there-under, where applicable. As per information & explanations given to us, as per the requirements of section 73(3),the company has failed to repay the amount of deposits & interest thereon on maturity. Further the order has been passed by Company Law Board under section 74 (2) of the Companies Act 2013. As per the requirement of the order and section 74 (3) of the Act, the company has failed to repay deposits amounting to Rs. 1,848.20 Lakhs and interest thereon amounting to Rs. 1,209.68 Lakhs. As regards Public Deposits and interest thereon, reference is invited to Para 20 of Basis for Disclaimer of Opinion of our report. Further, directives issued by the Reserve Bank of India are not applicable to the company.

vi. We are not provided with the books of accounts required to be maintained by the Company pursuant to the rules prescribed by the Central Government under Section 148(1) of the Companies Act, 2013. We, therefore, can not comment on their accuracy or completeness.

vii. In respect of statutory dues:

a. According to information and explanations given to us and on the basis of our examination, undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, duty of Customs, Duty of Excise, Value Added Tax, Goods & Service Tax, Cess and other material statutory dues have not been regularly deposited with the appropriate authorities and there have been significant delays in payment of statutory dues.

According to the information and explanations given to us, undisputed amounts payable in respect thereof, which were outstanding as at March 31, 2020 for a period of more than six months from the date of becoming payable are as follows:

Nature of Dues	Amount (Rs. in Lakhs)	Period to which amount relates	Due Date
Provident Fund	669.86	Upto August 2019	Various due dates
Employee State Insurance	127.61	Upto August 2019	Various due dates
Profession Tax	72.16	Upto August 2019	Various due dates
Maharashtra Labour Welfare Fund	2.18	Upto August 2019	Various due dates
Service Tax	3,573.73	Upto June 2017	Various due dates
Excise Duty	12.60	Upto June 2017	Various due dates
Customs Duty	572.58	2016-17	31-03-2017
Tax Deducted At Source	2,246.04	Upto August 2019	Various due dates
Tax Collected At Source	0.64	Upto August 2019	Various due dates
Value Added Tax	812.28	Upto June 2017	Various due dates
Goods and Service Tax	277.15	Upto August 2019	Various due dates

During CIRP period, the RP has received following claims from statutory authorities against which no litigations were pending:

Name of Statutory Authority	Amount Claimed	Claims Verified
	(Rs. In Lakhs)	(Rs. In Lakhs)
GST Department - Maharashtra (VAT, CST) - FY 2015-16 and FY 2016-17	4,376.28	4,376.28
Assistant Commissioner of Customs, EPCG
(Monitoring Cell), Export, New Customs	139.63	139.63
House, Ballard Estate, Mumbai
Commissioner of Customs (NS-II), JNCH, Nhava Sheva, Mumbai	2,815.74	-
Office of the Director General of GST Intelligence, Mumbai Zonal Unit	3,483.02	19.18
Assistant Commissioner of Income Tax (TDS) - (2)(1), Mumbai	3,317.47	3,317.47
Recovery Officer, Employee Provident Fund Organization, Delhi (East)	2,139.81	-
Deputy Excise and Taxation Commissioner (ST), Gurugram, South	774.37	774.37
Regional Provident Fund Commissioner - I, Employee Provident Fund Organization, Regional Office Delhi (East)	39.34	-
Total	17,085.67	8,626.94

*These amounts are not reconciled with balances appearing in Books of accounts. b. According to the information and explanations given to us, dues that have not been deposited by the Company on account of disputes are as follows:

Nature of the dues	Amount (Rs. in Lakhs)	Period to which the amount relates	Forum where dispute is pending
Income Tax	1,699.46	AY 2000-01 to AY 2008-09	Mumbai High Court
Income Tax	12,438.13	AY 2006-07 to AY 2013-14	ITAT, Mumbai
Income Tax	17,600.56	AY 2011-12 to AY 2015-16	Commissioner (Appeals) – 51, Mumbai

During CIRP during CIRP period, the RP has received following claims from statutory authorities against which litigations were pending:

Name of Statutory Authority	Amount Claimed	Claims Verified
	(Rs. In Lakhs)	(Rs. In Lakhs)
Deputy Commissioner of Commercial
Taxes, Bangalore, Karnataka VAT - FY 2010-11 and FY 2011-12	2,451.86	2,451.86
GST Department - Maharashtra (VAT, CST) - FY 2008-09 to FY 2012-13	3,780.67	3,780.67
GST Department - Maharashtra (VAT, CST) - FY 2012-13 and FY 2014-15	5,941.03	5,941.03
Deputy Commissioner of Income Tax - Central Circle 3(1), Mumbai	17,600.56	17,600.56
Assistant Commissioner of CGST & CENTRAL EXCISE, Mumbai East	3,431.52	3,431.52
GST Department - Maharashtra (VAT, CST)
- Interest Order - FY 2008-09 to FY 2012- 13	1,910.44	1,910.44
Total	35,116.08	35,116.08

# The outcome of the above cases are not known to the Resolution Professional.

## No provisions have been made in the Books of accounts in absence of complete details and records.

viii. In our opinion and according to the information and explanations given to us the Company has defaulted in repayment of following dues to the financial institutions and banks during the year, which were not paid as at the Balance Sheet date:

Name of Bank/ FI	No. of Installment	Total Amount of Defaults (Rs. in Lakhs)	Range of Delay
Allahabad Bank	16	5,472.00	91 – 1461
Bank of Baroda	6	3,000.00	700 – 1154
Bank Of Maharashtra	8	10,000.00	790-1431
Central Bank Of India	12	3,813.75	30-1034
Export Import Bank Of India	5	12,100.00	1095-1460
BMW Financial Services	2	2.48	396-424
Daimler Financial Services	17	34.00	29-729

Further, company has not issued debentures.

ix. According to the information and explanation given to us, during the year, the company has neither raise money by way of initial public offer or further public offer nor has received any Term loan.

x. According to the information and explanation given to us, no fraud by the company or on the

Company by its officers or employees has been noticed or reported during the year. xi. According to the information and explanation given to us and on the basis of an overall examination of books of accounts of the Company, no managerial remuneration has been paid or provided during the year.

xii. According to the information and explanation given to us, the company is not a Nidhi Company.

Therefore, provisions of clause 3(xii) of the order are not applicable to the company.

xiii. During the FY 2019-20, the company was under CIRP period under the provisions of IBC. The powers of Board of Directors are suspended and RP was responsible to manage the operations of the Company. Thus, the related party transactions disclosed in standalone Financial Statements are not in compliance with sections 177 and 188 of Companies Act, 2013 as there was not Audit Committee and Board of Directors in place.

xiv. The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

xv. According to the information and explanation given to us, the company has not entered into any non-cash transactions with directors or persons connected with him during the year.

xvi. According to the information and explanation given to us, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For Ramanand & Associates

Chartered Accountants

ICAI Firm Registration Number: 117776W

Ramanand Gupta

Managing Partner

Membership No.: 103975

UDIN: 21103975AAAAIR5489

Place: Mumbai

Date: 26th March,2021.

Annexure "B" to the Independent Auditors Report

[Referred to under ‘Report on Other Legal and Regulatory Requirements in the Independent Auditors Report of even date to the members of PRATIBHA INDUSTRIES LIMITED on the standalone financial statements for the year ended March 31, 2020]

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

1. We were engaged to audit the internal financial controls with reference to standalone financial statements of Pratibha Industries Limited ("the Company") as of March 31, 2020in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

2. Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

3. Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on 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 specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, 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 with reference to standalone financial statements was established and maintained and if such controls operated effectively in all material respects.

Because of the matter described in the Disclaimer of Opinion paragraph below, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on internal financial controls system with reference to the standalone financial statements of the Company.

4. Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control with reference to financial statements 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 with reference to financial statements 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 expenditure of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

5. Basis for Disclaimer of Opinion

We are unable to obtain sufficient appropriate audit evidence on which to base our opinion on the effectiveness of Companys internal financial controls with reference to standalone financial statements, because of the significance of the following matters: a) The Company did not have an appropriate internal control system for preparing debtors ageing and making provision for doubtful debts. This could potentially result in non-booking of provision for doubtful debts.

b) The Company did not have an appropriate internal control system for obtaining external balance confirmation on periodic basis. This could potentially result in inaccurate assets & liabilities disclosed in the books of accounts.

c) The company did not have an appropriate internal control system for reviewing computation of Construction Work in Progress (WIP), Cost to Completion and estimated profitability of all projects regularly. This could potentially result in inaccurate disclosure of WIP and consequent profitability.

d) The company did not have an appropriate internal control system to collect bank statements / balance confirmations in respect of its various current and loan accounts. This could lead to long outstanding entries in the bank reconciliation statements and unreconciled balances of various bank accounts on Balance Sheet date.

e) The company did not have an appropriate internal control system of maintaining updated bank fixed deposit register, tracking maturity of FDs and accounting for interest on timely basis. This could potentially result in inaccurate reporting of the balance of fixed deposit, accrued interest and interest income.

f) The company did not have an appropriate internal control system with respect to the details of the Public Deposit holders. This could lead to inability to track the balance of amount outstanding to individual deposit holders, and inaccurate accounting of the penal interest, in absence of such individual balances.

g) The company did not have an appropriate internal control system for physical verification and safeguarding of its Property, Plant & Equipment. This could potentially result in misrepresentation of the existence and valuation of the assets.

h) The company did not have an appropriate internal control system for reconciling balances of foreign vendors in INR and applicable foreign currency. This could potentially result in inaccurate translation of foreign currency balance in INR balance on Balance sheet date.

i) The company did not have an appropriate internal control system over updation of accounts on timely basis. Booking of many entries are delayed on account of delayed receipt of records. There is lack of coordination between different divisions of the company. These all could potentially result in misstatement of financial statements.

j) The company did not have an appropriate internal control system of checking the interest levied by Lenders. This could potentially lead to overcharging by Lenders and increase in Finance Cost of the company.

k) The company did not have an appropriate internal control system of calling Quotations from more than one Vendor while placing order. This could potentially lead to inefficient procurement and increased cost.

l) The company did not have mechanism to track booking of expenses against advances paid. This could potentially lead to unauthorised payment and non-adjustment of advance against corresponding liability.

6. Disclaimer of Opinion

As described in the Basis for Disclaimer paragraph above, because of the significance of the matters, we are unable to obtain sufficient appropriate audit evidence to provide a basis for our opinion on whether the Company had adequate internal financial controls with reference to standalone financial statements and whether such internal financial controls were operating effectively for the year ended March 31, 2020 based on the internal control with reference to standalone financial statements 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.

We have considered the disclaimer reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company for the year ended March 31, 2020, and the disclaimer has affected our opinion on the financial statements of the standalone Company and we have issued a disclaimer of opinion on the financial statements for the year ended on that date.

For Ramanand & Associates

Chartered Accountants

ICAI Firm Registration Number: 117776W

Ramanand Gupta

Managing Partner

Membership No.: 103975

UDIN: 21103975AAAAIR5489

Place: Mumbai

Date: 26th March,2021.