bgr energy systems ltd share price Auditors report

INDEPENDENT AUDITORS REPORT To

The Members of BGR Energy Systems Limited Report on Audit of the Standalone Financial Statements

OPINION

We have audited the accompanying Standalone Financial Statements of BGR Energy Systems Limited (referred to as the "Company") which comprises the Balance Sheet as at March 31,2023, the Statement of Profit and Loss (including other comprehensive income), Statement of Cash Flows and Statement of changes in Equity for the year then ended, and notes to the standalone 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, in the manner so required, and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Companies Act 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the company as at March 31,2023, the Loss including other comprehensive income, changes in equity and its cash flows for the year ended on that date.

BASIS FOR 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 on the financial statements.

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 for the year ended March

31,2023. These matters were addressed in the context of our audit of the standalone 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. Revenue Recognition in case of Construction Contracts:

The Company recognises revenue in case of Revenue from Construction Contracts on the basis of stage of completion based on the proportion of contract costs incurred, relating to the total costs of the contract at completion. Thus, the recognition of revenue is based on estimates in relation to total estimated costs of each contract and cost incurred. There are significant accounting judgments which include estimates of cost of completion of the Contract, the stages of completion and timing of revenue recognition.

Estimates also takes into account various contingencies in the contracts & uncertain risks, disputed claims against the company relating to different contract which are reviewed by the management on a regular basis over the contract life and adjusted appropriately.

The revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognised when the recovery of such consideration is probable.

As revenue recognition involves aforesaid significant judgement and estimation, we therefore determined this to be a key audit matter.

Our principal audit procedures included but were not limited to:

? We assessed the appropriateness of the Companys revenue recognition policies, including those related to variable considerations by comparing with applicable accounting standards;

? We tested the effectiveness of controls relating to the evaluation of performance obligations and identification of those that are distinct; estimation of costs to complete each of the performance obligations including the contingencies in respect thereof, as work progresses and the impact thereon as a consequence of change orders; the impact of change orders on the transaction price of the related contracts; and evaluation of the impact of variable consideration on the transaction price.

? We selected a sample of contracts with customers and performed the following procedures:

o Obtained and read contract documents for each selection, change orders and other documents that were part of the agreement/arrangement.

o Identified significant terms and deliverables in the contract to assess managements conclusions regarding the (i) identification of distinct performance obligations; (ii) changes to costs to complete as work progresses and as a consequence of change orders; (iii) the impact of change orders on the transaction price; and (iv) the evaluation of the adjustment to the transaction price on account of variable consideration.

o Compared costs incurred with Companys estimates of costs incurred to date to identify significant variations and evaluated whether those variations have been considered appropriately in estimating the remaining costs to complete the contract.

o Tested the estimate for consistency with the status of delivery of milestones and customer acceptance to identify possible delays in achieving milestones, which require changes in estimated costs or efforts to complete the remaining performance obligation

? Performed analytical audit procedures for reasonableness of revenues disclosed by type and nature of service.

? Assessed appropriateness of the relevant disclosures made by the company in accordance with Ind AS 115.

We concluded that based on the procedures performed above, we did not find any material exceptions with regards to adoption of Ind AS 115 and timing of revenue recognition.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITORS REPORT THEREON:

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Directors Report and Management Discussion and Analysis, but does not include the consolidated financial statements, 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.

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 performed, we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance. We have nothing to report in this regard.

RESPONSIBILITY OF MANAGEMENT FOR THE STANDALONE 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 standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity 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. 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 implementation and maintenance of 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 misstatements, 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.

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

AUDITORS RESPONSIBILITY FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS:

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatements, whether due tofraud 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 judgement and maintain professional scepticism throughout the audit. We also:

a. Identify and assess the risks of material misstatements 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;

b. 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether company has adequate internal financial controls system in place and the operating effectiveness of such controls;

c. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

d. 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;

e. 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 standalone 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 standalone 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.

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 auditors 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.

OTHER MATTERS:

1. The comparative financial information of the company for the year ended 31^st March,2022 included in these Standalone financial statements, are audited by the predecessor auditors of the company and their report dated 20^th May,2022, wherein an unmodified opinion is expressed by them.

Our opinion is not modified in respect of these matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order") as amended, 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 statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable our report thereon is enclosed as "Annexure A".

2. As required by Section 143(3) of the Act, we 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 purposes of our audit;

b. In our opinion, proper books of account as required by law have been kept by the company so far as it appears from our examination of those books and proper adequate returns have been received from all the regional offices of the company;

c. The Companys Balance Sheet, the Statement of Profit and Loss (incl. 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 accounts;

d. In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with The Companies (Indian Accounting Standards) Rules, 2015, as amended thereon.

e. On the basis of the written representations received from the directors as on March 31, 2023 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". Our report expresses unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting;

g. With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

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

i. The company has disclosed the impact of pending litigations on its financial position in its standalone financial statements; (Refer Note No. 36 to the Standalone Financial Statements)

ii. The company has made provision, as required under applicable law or accounting standards, for material foreseeable losses, if any on long term contracts including derivative contracts;

iii. There were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company;

iv. a. The management has represented that,

to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds 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(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall,

? 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, other than as disclosed in the notes to the accounts, no funds have been received by the company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall,

? 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; and

c. Based on such audit procedures as considered reasonable and appropriate in these circumstances, nothing has come to our notice that has caused them to believe that the representations under sub clause (i) and (ii) contain any material misstatement.

v. In lieu of carried over previous years and current year losses, the company has not declared and/or paid any dividend during the year in accordance with Sec. 123 of the Companies Act, 2013;

For Anand and Ponnappan Chartered Accountants FRN000111S

R. Ponnappan Partner

Place: Chennai Membership No : 021695

Date: 30.05.2023 UDIN: 23021695BGUOPT2498

ANNEXURE - A TO THE AUDITORS REPORT

Referred to in Paragraph 1 under "Report on Other Legal and Regulatory Requirements section of our report to the Members of the Company of even dated

Based on the audit procedures performed and information and explanations given to us, we report that:

i. In respect of the Companys Property, Plant and

Equipment,

a. The company has maintained proper records showing full particulars with respect to

A. Property, Plant and Equipment including quantitative details and situation thereon and relevant details of right-of-use assets;

B. Intangible Assets;

b. The company has a practice of conducting physical verification of property, plant and equipments mainly every year based on a program designed by the management, which in our opinion are reasonable, having regard to the size and the magnitude of the company.

During the year, the internal committee of the company has conducted physical verification of entire Property, Plant and Equipment and given a report confirming the categories of assets verified with no major adverse comments. Based on our examination of working papers with which the process of verifications is carried out, we have not come across any significant deficiencies in this regard;

c. The company has clear title deeds of immovable properties held in its name, measuring 19.58 Acres in aggregate; However, with regard to premises measuring about 96,300 Sq. ft at Chennai used for the Companys Corporate Office, the lease term has been expired. The Company is yet to enter into a new lease agreement or renew the existing lease.

d. During the year, the company has not revalued its Property, Plant and Equipment (Inc. Right to Use assets) or Intangible Assets or both. Accordingly reporting under this clause does not arise.

e. The Company does not hold any benami property. Accordingly, reporting under this clause does not arise.

ii. In respect of the Inventories:

a. The company has regular program in physical verification of inventories, which is carried out annually. During the year, the management has formed a technical committee for carrying out the physical verification.

Based on documents and reports made available to us and considering the size and nature of industry, the physical verification conducted by the management and policies adopted thereon are reasonable. However, we have not come across any significant deficiencies (ie., more than 10%) in this regard;

b. The Company is sanctioned a working capital limit (i.e, both fund and non-fund-based facilities) in excess of Rs.5.00 Crores by the Banks on the basis of the security of current assets and book debts.

In our opinion, the quarterly returns or statements filed by the company with bank are in agreement with books of the accounts.

iii. During the year, the company has not made any investments in, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms and limited liability partnerships or other parties covered under the register maintained under section 189 of the Companies Act, 2013.

Hence, the reporting under the provisions of clause (iii) (a), (b),(c),(d),(e) and (f) of the order are not applicable.

iv. The company has complied with the provisions of section 185 and 186 of the Companies Act 2013 in respect of loans granted, investments made and guarantees and securities provided, as applicable.

v. The company has not accepted any deposits from the public, hence the directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 of the Companies Act, 2013 and the rules framed there under, are not applicable.

vi. The company is maintaining the cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act.

We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under subsection (1) of Section 148 of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed cost records have been made and maintained.

We have, however not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii. In respect of statutory dues:

a. The company has generally been regular in depositing undisputed applicable statutory dues including provident fund, employees state insurance, income-tax, sales tax, and service tax, duty of customs, duty of excise, GST, cess and any other statutory dues applicable to it with the appropriate authorities;

There were no outstanding of aforesaid statutory dues as on March 31,2023 for a period of more than six months from the date they became payable.

b. There were no dues of GST, Income Tax, value added tax, duty of customs, duty of excise and cess which have not been deposited on account of any dispute except in the cases provided as Annexure-C;

viii. We have not come across any transactions that are not recorded in the books of account have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961. Hence, the recording of unrecorded income in the books of accounts does not arise.

ix. a. Subject to Note No. 41 to the Standalone Financial

Statements, the company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender (ie., banks, financial institutions, Government and other lenders).

b. To the best of our knowledge, the company has not been declared willful defaulter by any bank or financial institution or government or any government authorities.

c. The company has not availed any term loans from Bank/Financial Institutions during the year. Accordingly, reporting for this clause does not arise.

d. On overall examination of the financial statements of the company, we report that no funds raised on short term basis have been used for long term purposes by the company.

e. The Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries or joint ventures.

Further, the company does not have any associates.

f. The Company has not raised loans during the year on the pledge of securities held in its subsidiaries or joint ventures.

Further, the company does not have any associates.

x. a. The Company has not raised money by way of initial public offer or further public offer (including debt instrument) during the year. Accordingly, reporting under this clause does not arise.

b. During the year, company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures. Therefore, reporting under this clause is not applicable to the company.

xi. To the best of our knowledge,

a. No fraud by the company or on the company has been noticed or reported during the year.

b. No report has been filed by us or the predecessor auditors of the company or cost auditors secretarial auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government in accordance with section 143(12) of the Companies Act,2013 during the year and upto the date of issuance of this report.

c. As represented to us by the management, there are no whistle blower complaints received by the company during the year.

xii. The company is not a Nidhi company. Hence, the reporting under the provisions of clause (xii) (a), (b) and (c) of the order are not applicable.

xiii. In our opinion, all the related party transactions during the financial year are in compliance with Section 177 and 188 of Companies Act, 2013 and the details of the said transactions have been disclosed appropriately in the standalone financial statements in accordance with applicable Ind AS.

xiv. a. In our opinion and based on our examination, the company has an adequate internal audit system commensurate with the size and nature of its business.

b. We have obtained the internal audit reports for the period under audit on a timely manner and duly considered by us, in determining the nature, timing and extent of our audit procedures.

xv. According to the information and explanations given to us ,in our opinion during the year the company has not entered into any non-cash transactions with directors or persons connected with its directors and hence provisions of Section 192 of the Companies Act, 2013 are not applicable to the company.

xvi. The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1935.

Accordingly, the reporting under the provisions of clause (xvi) (b) and (c) of the order does not arise.

Further, in our opinion, there is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under this clause is not applicable to the company.

xvii. The company has incurred any cash losses of Rs. 51,096.98 lakhs in the financial year and Rs.21,133 lakhs in the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors during the year and accordingly reporting under this clause does not arise.

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 of the company, our knowledge of the Board of Directors and management plans and based on our examination of the evidences supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of

the audit report that company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date,

We, however, state that this is not an assurance as to the future viability of the company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the company as and when they fall due.

xx. Even though the company is under the obligation to spend amount in accordance with Sec.135 of the Companies Act,2013, the last three immediately preceding financial years, the company has net losses, hence there is no amount that has been prescribed by the CSR Committee, which needs to be spent during the year.

Further, in our opinion,

a. there are no unspent amount in respect of other than ongoing projects, to a Fund specified in Schedule VII to the Companies Act, 2013 till the date of our report.

b. there are no amount remaining unspent in respect of ongoing projects.

xxi. The reporting under this clause is not applicable in respect of audit of standalone financial statements. Accordingly, no comment in respect of this clause has been included in this report.

For Anand and Ponnappan Chartered Accountants FRN000111S

R. Ponnappan Partner

Place: Chennai Membership No : 021695

Date: 30.05.2023 UDIN: 23021695BGUOPT2498

ANNEXURE - B TO THE AUDITORS REPORT

Referred to in Paragraph 2(f) under "Report on Other Legal and Regulatory Requirements section of our report to the Members of the Company of even dated.

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

We have audited the Internal Financials Controls over Financial Reporting of BGR Energy Systems Limited (referred to as the "Company") for the year ended March 31,2023, in conjunction with our audit of the Standalone Financial Statements of the company.

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

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on the companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the ICAI and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide us for our audit opinion on the companys internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles.

A companys internal financial control over financial reporting includes those policies and procedures that:

a. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

b. provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

c. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the standalone financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion, the company has in all material respects, maintains adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31,2023, based on the internal control over financial

reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Anand and Ponnappan Chartered Accountants FRN000111S

R. Ponnappan Partner

Place: Chennai Membership No : 021695

Date: 30.05.2023 UDIN: 23021695BGUOPT2498

ANNEXURE - C TO THE AUDITORS REPORT- CARO 2020

Referred to in Clause vii (b) of Annexure-A to the Auditors Report of our report to the Members of the Company of even dated

Name of the Statute	Nature of Dues		Amount (In Lakhs)		Period to which the amount relates	Forum where dispute is pending
			Disputed	Deposited
The Finance Act,1994	Classification of Erection, Commissioning and Installation Service as works contract service	Service Tax	36,278.75	1,196.29	June 2007 to June 2017	CESTAT, Chennai
		Interest	42,289.09	-
		Penalty	12,670.03
	Levy on Bank Charges	Service Tax	384.18	38.41	April 2007 to March 2017
		Interest	276.53	-
		Penalty	123.89	-
		Service Tax	2.50	0.19	April 2017 to June 2017	Commissioner of Central Excise (Appeals),Chennai
		Interest
		Penalty	0.25	-
The Employee Provident Fund & Miscellaneous Provisions Act, 1952	Contribution under Sec.7A of the Act	Provident Fund	521.15	100.00	June 2006 to May 2010	The Honourable High Court, Hyderabad
Rajasthan Value Added Tax Act,2003	Treatment of Contracts entered with RRVUNL as a composite and indivisible contract which tantamount to a works contract.	Tax	9,866.26	2,222.42	2009-10	The Honourable High Court of Rajasthan, Jaipur
		Interest	3,847.29
		Penalty	19,732.51
		Tax	9,541.31	3,381.48	2010-11
		Interest	2,316.14
		Penalty	19,082.63
		Tax	4,333.66	3,610.59	2011-12
		Interest	180.77
		Penalty	8,667.32
The Central Sales Tax Act,1956 Andhra Pradesh	Classification and Levy of higher rate of tax	Tax	39.20	-	1997-98	The Honourable High Court, Andhra pradesh
		Tax	0.12	-	1998-99	The Commercial Tax Officer, Andhra pradesh
		Tax	1.45	0.62	2004-05	Sales Tax Appellate Tribunal, Visakhapatnam, Andhra pradesh
		Penalty	4.13
		Tax	2.07	1.04	March-2007
		Penalty	0.52
		Tax	5.94	2.97	April-2007
		Penalty	1.49
		Tax	109.83	13.74	2016-17	Appellate Deputy Commissioner (CT), Tirupathi,Andhra Pradesh
AP Value Added Tax Act,2005	Determination of Taxable Turnover	Tax	408.97	51.12	AY 2011-12	Appellate Deputy Commissioner (CT), Tirupathi,Andhra Pradesh
Gujarat Goods and Service Tax Act,2017	Difference in Tax Liability and ITC Comparison	Tax	37.57	-	2019-20	The Joint Commissioner GST,Vyara Tapi
		Interest	11.27	-
		Penalty	37.57	-
Kerala Value Added Tax Act,2003	Detention of Goods Transported	Tax	1.44	1.76	2006-07	Sales Tax Appellate Tribunal, Kerala
		Interest	1.21
		Penalty	0.96
The Maharashtra Value Added Tax Act, 2002	Disallowance of Claim of Sale & Purchases	Tax	43.57	43.57	2013-14	The Joint Commissioner of Sales Tax, Appeal V, Mumbai
		Interest	10.29	10.29
		Tax	16.90	-	2014-15
The Orissa Value Added Tax Act, 2004	Determination of Taxable Turnover	Tax	20.39	-	Oct 2015 to June 2017	The Joint Commissioner Commercial Tax Bhubaneswar Range
		Penalty	20.39	-
Tamil Nadu General Sales Tax Act, 1959	Determination of Taxable Turnover	Tax	0.11	-	1999-00	Commercial Tax Officer, Tamilnadu
Tamil Nadu Value Added Tax Act, 2006	Disallowance of Input Tax Credit	Tax	31.80	8.00	2011-12	The Honourable Madras High Court, Chennai
		Penalty	15.90
		Tax	14.36	3.59	2012-13
		Penalty	7.18
Tamil Nadu Goods and Service Tax Act 2017	Mismatch in Turnover, Input Tax Credit & TDS	Tax	9,077.84	-	2018-19	Appellate Deputy Commissioner (ST), GST Appeal-I, Chennai-6
		Interest	6,411.56	-
		Penalty	965.79	-
The Central Sales Tax Act,1956 (Uttar Pradesh)	Determination of Taxable Turnover	Tax	14.80	12.00	2017-18	The Additional Commissioner (Appeal) Commercial Tax, Prayagraj.
The Income Tax Act,1961	Disallowance of Depreciation/ Expenditures Claimed	Income Tax	137.65	-	AY 2007-08	The Honourable High Court, Andhra Pradesh
		Income Tax	141.55	-	AY 2008-09
		Income Tax	192.15	-	AY 2009-10
		Income Tax	101.17	-	AY 2010-11	The Honourable Madras High Court, Chennai
		Income Tax	112.79	-	AY 2011-12
		Income Tax	83.20	-	AY 2012-13
		Income Tax	76.35	-	AY 2013-14
		Income Tax	1,468.05	-	AY 2008-09 to AY 2014-15
		Income Tax	575.71	575.71	AY 2015-16	Income Tax Appellate Tribunal,Chennai
		Income Tax #	377.34	377.45	AY 2016-17	The Honourable Madras High Court, Chennai
		Income Tax #	135.33	-	AY 2017-18
		Income Tax	67.65	67.65	AY 2018-19	Income Tax Appellate Tribunal,Chennai
		Income Tax	125.12	125.12	AY 2020-21	Commissioner of Income Tax (Appeals),Chennai

* Interest on Service Tax and Goods and Service Tax (GST) Cases are computed on approximate basis. #The Company is in the process of filling Appeal before Honble Madras High Court.

	For Anand and Ponnappan Chartered Accountants FRN000111S
Place: Chennai Date: 30.05.2023	R. Ponnappan Partner Membership No : 021695 UDIN: 23021695BGUOPT2498