BGR Energy Systems Ltd Directors Report.

TO THE MEMBERS OF BGR ENERGY SYSTEMS LIMITED

REPORT ON THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS

OPINION

We have audited the accompanying standalone Ind AS financial statements of BGR ENERGY SYSTEMS LIMITED ("the Company”), which comprise the Balance Sheet as at March 31, 2020, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in equity and the Statement of cash flows for the year then ended, and notes to the standalone Ind AS 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 Ind AS Financial statements give the information required by the Companies Act, 2013 (the "Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of their state of affairs of the Company as at March 31, 2020, the Profit and total 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 Standalone Ind AS 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 standalone Ind AS financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the standalone Ind AS 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.

S. No Key Audit Matters Response to Key Audit Matters
1 Appropriateness of estimation/revision of budgeted cost and contract value including non-cash consideration: Principal Audit procedures:
We have performed the following audit procedures:
a) We have reviewed the cost estimates including subsequent revisions, if any, as approved by the management for all the contracts in progress.
The Company recognizes revenue from contracts with customers on percentage completion method as specified under Indian Accounting Standards (Ind AS) 115 - Revenue from contracts with customers.
b) We have reviewed the controls placed over the preparation of all relevant information for the purpose of revenue recognition.
Recognition of Revenue under IND AS 115 involves key judgements relating to c) Verified the required documents, provisions made etc., for the actual costs incurred up to the year-end date.
a. identification of performance obligations, b. determination and allocation of transaction price including non-cash consideration to performance obligation, c. recognition of revenue over the period of contract and d. presentation and disclosures of all relevant items in the financial statements. d) Discussed the status of the projects with the companys project management team and evaluated the reasonableness of estimates made by the management on cost to be incurred for completion of the respective projects.
e) We have reviewed the workings provided by the management with reference to revision in the contract value or budgeted cost of all projects along with approvals.
Determination of revenue requires estimation of total contract costs which involves exercise of significant judgment by the management, making forecasts and assumptions. f) We further verified the billings made to customers which are in line with the revised contract values.
S. No Key Audit Matters Response to Key Audit Matters
2 Adoption of IND AS 116 - Leases Principal Audit Procedures:
The Company has adopted IND AS 116 from the current year. The Application and transition to this accounting standard is complex and is an area of focus in our audit. We have performed the following audit procedures:
a) We have reviewed the method of transition adopted and related adjustments in the financial statements.
b) Reviewed various judgements and controls applied by the management in classifying the leases based on contractual agreements.
As per IND AS 116, a right of use asset and lease liability were recognized in the balance sheet. Lease liability is initially recognized at the present value of future lease payment during the lease term. This standard requires usage of significant judgements and estimation in recognizing the leases.
c) We have verified the reconciliation prepared between short term or low value leases and leases where IND AS 116 was applied.
d) Verified the recognition of right of use assets and lease liability including the estimates such as discount rates and lease term.
During the first year of transition, the standard mandates detailed note on impact of transfer.
e) Assessed and verified the presentation and disclosures of leases as per IND AS 116 including the disclosure requirements of transition period.
Refer note 33 to the financial statements
3 Provision for Receivables: Principal Audit procedures:
The Company has trade receivables (net) of Rs.332697 lakhs and contract assets (net) of Rs.88560 lakhs as at March 31, 2020. The Company follows the practice of creating lifetime expected credit loss (ECL) allowance on the overall trade receivables and contract assets. We have assessed the Companys review mechanism, guidelines and policies relating to trade receivables and contract assets.
We have reviewed the ageing of trade receivables and contract assets.
We have analyzed the past trend of the trade receivables written off by the company and verified the adequacy of the provisions for loss of trade receivables and contract assets.

EMPHASIS OF MATTER

Without qualifying our report, we draw attention to note 39 to the standalone financial statements, where the extent of COVID 19 pandemics impact on companys financial performance depends on future developments, which are highly uncertain and as such, we are unable to quantify the financial impact.

Our opinion is not modified in respect of the above matter.

INFORMATION OTHER THAN THE STANDALONE IND AS 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 Boards Report including Annexures thereto but does not include the standalone Ind AS financial statements and our auditors report thereon.

Our opinion on the standalone Ind AS 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 Ind AS 5 financial statements, our responsibility is to read the other information identified above and, in doing so, s consider whether the other information is materially ; inconsistent with the standalone Ind AS financial

statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we performed, we conclude that there is a 5 material misstatement of this other information, we are required to report the fact. We have nothing to report in j this regard.

 

r MANAGEMENTS RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS

5 The Companys Board of Directors is responsible for the 5 matters stated in section 134(5) of the Companies Act, 3 2013 with respect to the preparation of these Standalone

 

5 Ind AS Financial statements that give a true and fair t view of the financial position, financial performance, Changes in equity and cash flows of the Company in l accordance with the accounting principles generally accepted in India, including the accounting standards t 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 standalone Ind AS 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 Ind AS financial statements, management is responsible for assessing the ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS 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 Ind AS 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 Ind AS 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

• 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 Ind AS 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 Ind AS financial statements, including the disclosures, and whether the standalone Ind AS 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 Ind AS 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.

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 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) 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) I n our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

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

(e) On the basis of the written representations received from the directors as on March 31, 2020 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2020 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) 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 managerial remuneration paid by the Company during the year is in excess of the limits prescribed under section 1 97 of the Companies act, 201 3. The company proposes to place the relevant agenda in the ensuing general meeting to obtain the requisite approval from shareholders.

(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 Ind AS financial statements - Refer Note nos. 3.c.(i), 3.c.(ii) and 35 to the standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts. - Refer Note 38 to the standalone Ind AS financial statements; The Company did not enter into any derivative contracts; and

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

For N R Doraiswami & Co
Chartered Accountants
Firm Registration No: 000771S
Suguna Ravichandran
Partner
Place : Coimbatore Membership No: 207893
Date : June 30, 2020 UDIN : 20207893AAAAJB3984

ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS

The Annexure referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements” of our Independent Auditors Report to the members of

M/s BGR ENERGY SYSTEMS LIMITED for the year ended March 31, 2020, we report that:

(i) (a) The Company is maintaining proper records

showing full particulars, including quantitative details and situation of fixed assets;

(b) The Company has a regular program of physical verification of its fixed assets by which fixed assets are verified in a phased manner on a rotational basis. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets; and

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

(ii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, we are of the opinion that the management has conducted the physical verification of inventory at reasonable intervals during the year. There are no material discrepancies noticed between book stock and physical stock on physical verification conducted by the management.

(iii) The Company has not granted any loans to parties covered in the register maintained under section 189 of the Act during the year. Accordingly, paragraph 3(iii)(a), (b) and (c) of the Order is not applicable.

(iv) 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 granted loans and guarantees to any parties covered under Section 185 of the Act. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 186 of the Act.

(v) The Company has not accepted any deposits from the public within the meaning of sections 73 to 76 of the Act and the rules framed there under to the extent notified. Therefore, the provisions of clause (v) of the Companies (Auditors Report) Order, 2016, are not applicable to the Company.

(vi) We have broadly reviewed the cost records maintained by the Company as specified by the Central Government under Section 148(1) of the Act and are of the opinion that prima facie the prescribed cost records have been 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) (a) In our opinion and according to the information

and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Professional Tax, Income-tax, Customs Duty, Goods and Service tax, Cess and other statutory dues have generally been regularly deposited during the year by the company with the appropriate authorities. According to the information and explanations given to us and on the basis of our examination of the records of the Company, no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Professional Tax, Income-tax, Customs Duty, Goods and Service tax, Cess were in arrears as at March 31, 2020, for a period of more than six months from the date they became payable; and

(b) As per the information and explanations given to us, the following are the details of statutory dues which have not been deposited by the Company on account of disputes:

Name of the Statute Nature of Due Disputed Tax Amount (INR Lakhs) Financial Year Forum in which dispute is lying
Central Sales Tax Act, 1956 Central Sales Tax 4.20 1997-98 The Honourable High Court, Andhra Pradesh
Central Sales Tax Act, 1956 Central Sales Tax 35.03 1997-98 The Honourable High Court, Andhra Pradesh
Andhra Pradesh Value Added Tax Act, 2005 Andhra Pradesh Sales Tax 0.12 1998-99 Commercial Tax Officer, Andhra Pradesh
Tamil Nadu General Sales Tax Act, 1959 Tamil Nadu Sales Tax 0.11 1999-00 Commercial Tax Officer, Tamil Nadu
Tamil Nadu General Sales Tax Act, 1959 Tamil Nadu Sales Tax 2.21(3) 2001-02 Sales Tax Appellate Tribunal, Chennai, Tamilnadu.
Central Sales Tax Act, 1956 Central Sales Tax 5.58(3) 2004-05 Sales Tax Appellate Tribunal, Vishakhapatnam, Andhra Pradesh.
Andhra Pradesh Value Added Tax Act, 2005 Andhra Pradesh Sales Tax (Penalty) 2.59(3) 2006-07 Sales Tax Appellate Tribunal, Vishakhapatnam, Andhra Pradesh.
Kerala Value Added Tax Act, 2003 Kerala Sales Tax 2.65(3) 2006-07 The Deputy Commissioner (Appeals), Ernakulum, Kerala
Andhra Pradesh Value Added Tax Act, 2005 Andhra Pradesh Sales Tax ( Penalty) 7.43(3) 2007-08 Sales Tax Appellate Tribunal, Vishakhapatnam, Andhra Pradesh.
The Rajasthan Value Added Tax, 2003 Rajasthan Sales Tax 9865.96(3) 2009-10 Rajasthan Tax Board, Ajmer
The Rajasthan Value Added Tax, 2003 Rajasthan Sales Tax 9541.31(3) 2010-11 Rajasthan Tax Board, Ajmer
The Rajasthan Value Added Tax, 2003 Rajasthan Sales Tax 4333.66(3) 2011-12 Rajasthan Tax Board, Ajmer
Central Sales Tax Act, 1956 Central Sales Tax 261.76(3) 2014-15 The Appellate Deputy Commissioner (CT) North, Chennai
Central Sales Tax Act, 1956 Central Sales Tax 95.88 2013-14 The Tamilnadu Sales Tax Appellate Tribunal, Chennai -104
Central Sales Tax Act, 1956 Maharashtra Value Added Tax 53.85 2013-14 The Joint Commissioner of Sales Tax, Appeal VII, Mumbai
Chapter V of Finance Act, 1994 Service Tax 24482.00(1) 2007-08 to 2014-15 CESTAT, Chennai, Tamilnadu.
Chapter V of Finance Act, 1994 Service Tax 11798.95(1) 2014-15 to 2017-18 CESTAT, Chennai, Tamilnadu.
Name of the Statute Nature of Due Disputed Tax Amount (INR Lakhs) Financial Year Forum in which dispute is lying
Chapter V of Finance Act, 1994 Service Tax 306.45(1) 2007-08 to 2014-15 High Court of Judicature at Madras
Chapter V of Finance Act, 1994 Service Tax 77.72(1) 2015-16 to 2017-18 High Court of Judicature at Madras
Tamil Nadu Value Added Tax Act, 2006 Value Added Tax 119.23 2013-14 The Appellate Deputy Commissioner (CT) North, Chennai.
Tamil Nadu Value Added Tax Act, 2006 Value Added Tax 136.44 2014-15 The Appellate Deputy Commissioner (CT) North, Chennai.
Tamil Nadu Value Added Tax Act, 2006 Value Added Tax 28.27 2015-16 The Appellate Deputy Commissioner (CT) North, Chennai.
Uttar Pradesh Value Added Tax Act Value Added Tax 16.46 2014-15 The Additional Commissioner (Appeal) Commercial Tax, Prayagraj.
Uttar Pradesh Value Added Tax Act Entry Tax 0.41 2014-15 The Additional Commissioner (Appeal) Commercial Tax, Prayagraj.
Central Sales Tax Act, 1956 Maharashtra Value Added Tax 58.33 2014-15 The Joint Commissioner of Sales Tax, Appeal VII, Mumbai
Odisha Value added Tax Act Value Added Tax 40.77 2015-16 to 2017 -18 The Joint Commissioner Commercial Tax, Bhubaneswar Range
Central Sales Tax Act, 1956 Central Sales Tax 0.23 2015-16 to 2017 -18 The Joint Commissioner Commercial Tax, Bhubaneswar Range
The Employee Provident Fund & Miscellaneous Provisions Act, 1952 Provident Fund 521.15(3) 2006-2010 The Honourable High Court, Hyderabad
Income-tax Act, 1961 Income Tax 137.65(2) 2006-07 The Honourable High Court, Andhra Pradesh
Income-tax Act, 1961 Income Tax 141.55(2) 2007-08 The Honourable High Court, Andhra Pradesh
Income-tax Act, 1961 Income Tax 192.15(2) 2008-09 The Honourable High Court, Andhra Pradesh
Income-tax Act, 1961 Income Tax 101.16(2) 2009-10 The Honourable High Court, Madras.
Income-tax Act, 1961 Income Tax 112.79,2,,3) 2010-11 Income Tax Appellate Tribunal
Income-tax Act, 1961 Income Tax 83.20(2) 2011-12 Income Tax Appellate Tribunal
Income-tax Act, 1961 Income Tax 76.35(2) 2012-13 Income Tax Appellate Tribunal
Income-tax Act, 1961 Income Tax 100.07(2) 2013-14 Income Tax Appellate Tribunal
Income-tax Act, 1961 Income Tax 38.11(2) 2013-14 Commissioner of Income Tax (Appeals - 19), Chennai
Name of the Statute Nature of Due Disputed Tax Amount (INR Lakhs) Financial Year Forum in which dispute is lying
Income-tax Act, 1961 Income Tax 1184.19(2) 2014-15 Commissioner of Income Tax (Appeals - 19), Chennai
Income-tax Act, 1961 Income Tax 1468.05(2) 2007-08 to 2013-14 Income Tax Appellate Tribunal
Income-tax Act, 1961 Income Tax 72.35(2) 2015-16 Commissioner of Income Tax (Appeals - 19), Chennai
Income-tax Act, 1961 Income Tax 84.95(2) 2016-17 Commissioner of Income Tax (Appeals - 19), Chennai

(1) Excludes Interest and penalty.

(2) Excludes Interest and penalty which are not

ascertainable.

(3) Represents gross tax liability. Out of this, a sum of INR 1598.39 lakhs was paid as deposit.

(viii) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not defaulted in repayment of loans or borrowings to any financial institutions or banks.

(ix) During the year the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loan. Accordingly paragraph 3(ix) of the order is not applicable.

(x) To the best of our knowledge and according to the information and explanations given to us, we report that no material 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 explanations given to us and based on our examination of the records of the Company, the Company has paid managerial remuneration in excess of the limits prescribed under section 197 of the Companies Act, 2013. The company proposes to get requisite approval in the ensuing general meeting in compliance with Section 197 of the Companies Act, 2013.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the

related parties are in compliance with sections 177 and 188 of the Act where ever applicable.

The details of transactions with related parties have been disclosed in the standalone Ind AS financial Statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us and based on our examinations of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) I n our opinion and according to the information and explanations given to us, the company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable.

For N R Doraiswami & Co
Chartered Accountants
Firm Registration No: 000771S
Suguna Ravichandran
Partner
Place : Coimbatore Membership No: 207893
Date : June 30, 2020 UDIN : 20207893AAAAJB3984

ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION (3) OF SECTION 143 OF THE COMPANIES ACT, 2013 (“THE ACT”)

We have audited the internal financial controls over financial reporting of BGR Energy Systems Limited (“the Company”), as of March 31, 2020, in conjunction with our audit of the standalone Ind AS 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, issued by ICAI and 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 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 Ind AS financial statements, whether due to fraud or error.

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

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone Ind AS 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:

(i) pertain to the maintenance of records that, in reasonable details, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone Ind AS 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

(iii) 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 Ind AS 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, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2020, 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 N R Doraiswami & Co
Chartered Accountants
Firm Registration No: 000771S
Suguna Ravichandran
Partner
Place : Coimbatore Membership No: 207893
Date : June 30, 2020 UDIN : 20207893AAAAJB3984