Entegra Ltd Auditor Reports

To the members Entegra Limited

Report on the Audit of the Standalone Financial Statements

Disclaimer of Opinion

We were engaged to audit the Ind AS Standalone Financial Statements of Entegra Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2019, 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 ended on that date, and notes to the Ind AS Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "Standalone Financial Statements").

We do not express an opinion on the accompanying Standalone Financial Statements of the entity. Because of the significance of the matters described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence particularly to ascertain the impact on the financial statements of the Company of the final outcome of the matters described in the Basis for Disclaimer of Opinion section mentioned herewith to provide a basis for an audit opinion on these Standalone Financial Statements.

Basis for Disclaimer of Opinion

1) Refer Note No. 36 to the financial statement which states that we were unable to Comment on the investment The Company has an investment in its subsidiary company viz. Shree Maheshwar Hydel Power Corporation Limited (SMHPCL). The shares of the said step down subsidiary Company were pledged with Power Finance Corporation (PFC) against the loan availed by SMHPCL. PFC illegally invoked these pledged shares on 2nd December, 2016. Against this illegal invocation Entegra approached Ministry of Corporate Affairs for justice under section 206 of the Companies Act. Apprehending the adverse report PFC moved National Company Law Tribunal (NCLT) making false allegations against the promoters. NCLT on 15th June, 2017 ruled in favor of the Company and further declared among others that the invocation of the pledged shares was illegal. Against this judgment PFC appealed to National Company Law Appellate Tribunal (NCALT) and lost there too. NCLAT in their judgment dated 12th March 2018 upheld the NCLT order and made further observations. Against this NCLAT judgment PFC preferred an appeal to the Supreme Court, where it was dismissed in the very first hearing on 18th May 2018. In view of the above the Company continues to show the said assets in its books at Cost Rs 61,529.90 as the same are Long term Strategic Investment. In respect of Other Subsidiary amounting to Rs 101.00 the Companys is of the Opinion that there is no Diminution in value of investment and hence continues to carry at cost. Neither valuation of shares was carried out nor shares of SMHPCL are share still transferred in the name of the Company. In view of the above we were unable to determine whether any adjustments might have been found necessary in respect of investment in the Balance Sheet, and the corresponding elements making up the Statement of Profit and Loss and Cash Flow Statement.

2) As stated in Note No 37 of the financial statement regarding non-provision of interest liability amounting to Rs. 13,702.59 Lakhs for the current financial year and non receipt of Confirmation of M/s. Edelweiss Asset Reconstruction Company Ltd. (EARCL) , who have been absolutely assigned all rights and interests in the financial assistance of the Company, vide Assignment Agreement dated 28.03.2014 in respect of the Loan which was taken in the earlier years by the Company from Central Bank of India, based on management estimates the liability that exists in the books of accounts would be sufficient to meet the proposed One Time Settlement (OTS) which will be negotiated with EARCL. The Company has not booked total interest on the said loan till 31st March 2019 amounting to Rs. 53,677.66 Lakhs. On account of the aforesaid non-provision towards interest, loss for the year and borrowing have been has been understated by Rs. 13,702.59 Lakhs.

3) As stated in note No 34 of the financial statement regarding non-provision in respect of Deposit given to one of the party which is shown under the head Long term loans and advances amounting to Rs 20,00,00,000. The said deposit is given for occupying rent free area in the proposed newly constructed building. However the said project is still on hold by the developer but the management is hopeful of its performance in near future. On account of the aforesaid non-provision, loss for the year has been understated and deposit shown under the head other financial asset have been has been overstated by Rs20,00,00,000.

4) Note no. 38 regarding balances under the heads heads borrowings, Other Financial Liabilities, Trade Payable, Loans, Other Financial Asset, Trade receivable, Other Financial Assets and Fixed Deposit and three Bank Account being dormant are subject to confirmation and reconciliation, if any, from the respective parties and consequential reconciliation - Amount presently unascertainable.

5) Note No. 39 of the financial statement regarding non-provision Loans, Non-current Other Financial Asset comprising of receivable from holding company and Trade Receivables amounting to Rs 80.98 Lakhs, Rs 6,779.55 Lakhs and Rs 423.78 Lakhs respectively against which no recovery has been done. Consequently, Loans, Non-current Other Financial Asset comprising of receivable from holding company and Trade Receivables have been overstated and loss for the year has been understated by Rs. 7284.31 Lakhs.

6) Note No. 40 of the financial statement regarding the fact that the Company has been incurring constant losses further the Company is a Holding Company of Shree Maheshwar Hydel Power Corporation Limited, the said has limited development due to various reasons further there are legal cases going on by and against the Company, further the Company has also been discontinued its business operation it has also been facing cash-flow mismatches, if the said project is not revived than the going concern assumption might get impacted.

7) Refer Note No. 33 to the financial statement the Company which states that the Company during the year under review has identified and written back Trade Payable and other Payables which are pending for more than 3 years amounting to Rs 198.09 Lakhs as the Company is of the opinion that the said balance are no longer payable. However there are no documentation or confirmation from the said party for waiver of their amount thereby overstating loss of the Company and understating Trade payable and Other Financial Liability to the above extent.

Emphasis of Matter

1) Refer Note No. 3 to the financial statement the Company has filed an application with MPSIDC for agreeing the terms of closure of an outstanding loan against which the Company made payments aggregating Rs. 22,09,76,000 till 11 July 2006. The application is under evaluation and the Company expects that on finalization of the terms, it would not be required to repay amount exceeding the amount of liability of Rs.52,27,53,000 already recognized in the books. As on the date of the approval of these financial statements, a formal decision in respect of the Companys above proposal is yet to be taken by the MPSIDC. On 25 April 2011, the Company has also made a payment of Rs.300 Lakh as part settlement of this loan liability.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current year. 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 following matters, to be the Key audit matters to be communicated in our Report apart from two matters stated above under the heading "Basis for Disclaimer of Opinion".

Key Audit Matter	Auditors Response
1) The Company was not in the position to pay listing fees hence the exchange has suspended its share trading. Further the Company has also received notices from both the exchanges for non-compliance with the listing terms and for non-payment of listing fees. The Company approached SAT against the delisting order of NSE and presented all the factual positions pertaining to the matter. SAT upheld the Appeal and directed NSE to reconsider their delisting order.	We have verified all the documents in the said regards.
2) The Company which states that the company does not have Company Secretary as well as CFO, which is not in line with Section 203 of the Act.	The said is still pending compliance.
3) The Company which states that the Company has not carried out Internal Audit as well as Secretarial Audit as required under the Audit further the Company has also not strictly not complied with Provisions of Companies Act.	The said is still pending compliance
The Company has not carried out Internal The said is still pending compliance Audit as well as Secretarial Audit as required under the Audit further the Company has also not strictly not complied with Provisions of Companies Act.	The said is still pending compliance

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of 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, total Comprehensive Income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial 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 Board of Directors are 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 entitys Standalone Financial Statements in accordance with Standards on Auditing and to issue an auditors report. However, because of the matters 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 of the Code of Ethics issued by ICAI and as prescribed under the laws and regulations applicable to the entity. We have fulfilled our other ethical responsibilities in accordance with these requirements.

Report on Other Legal and Regulatory Requirements

1. 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.

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

(a) As described in the Basis for Disclaimer of Opinion paragraph, we have sought but we are unable to obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) As 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, 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) 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 the Cash Flow Statement dealt with by this report comply with the Indian Accounting Standards (Ind AS) referred to in Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) The matter described in the Basis for Disclaimer of Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(f) With Respect to the adequacy of the internal financial control over financial reporting of the Company and the operating effectiveness of such controls, we report that the Company is exempt from such reporting vide MCA circular No. GSR 583(E) dated 13.06.2017 read with General Circular No. 08/2017 dated 25.07.2017;

(g) On the basis of the written representations received from the Directors as on 31st March, 2019 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2019 from being appointed as a director in terms of Section 164 (2) of the Act.

(h) The reservation relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Disclaimer of Opinion paragraph above;

(i) In our opinion and to the best of our information and according to the explanations given to us, no remuneration is paid by the Company to its directors during the year and hence the provisions of section 197 (16) of the Act are not applicable.

(j) 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. 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 II. 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 contract III. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

For S K H D& Associates

Chartered Accountants

Firm Registration No. 105929W

Krunal Furia

Partner

Membership No. 151805

Mumbai, dated 30th May 2019

Annexure A to Auditors Report In terms of the information and explanations given to us and the books and records examined by us and on the basis of such checks as we considered appropriate, we further report as under:

1. Fixed Assets

(a) The Company has maintained 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 all fixed assets are verified in a phased manner over a period of three years. No material discrepancies were noticed on such verification.

(c) According to the information and explanation given to us and on the basis of our examination of the records of the Company, the Company does not have any immovable properties.

2. Inventory

The Company does not have any inventory during the year under review.

3. Loans to parties of Directors interest

During the year under review, Company has not granted any loans/ advances to a body corporate representing a party covered in the register maintained under section 189 of the Act. However, the Company in its earlier years have given advance to a body corporate being parties covered under register maintained under section 189 of the Act. As there is no written documentation made available for the same we cannot comment whether the terms and conditions of the said loans are prima facie prejudicial to the Companys interests. The maximum and closing balances of the said loan are given as under:

Nature and number of the Parties	Maximum balance during the year (Rs. In Lacs)	Closing balance (Rs in Lacs.)
Body Corporate - 1	80,97,720	80,97,720

4. Loans/Guarantees/Investmentsin/ProvisionofSecuritytocertainparties

As per the records verified by us and based on the explanations given to us, the Company has not given guarantee for loans taken by others from bank.

5. Acceptance of Deposits

The Company has not accepted deposits as per the directives issued by Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under.

6. Maintenance of Cost Records

As explained to us, the Central Government has prescribed during the year under review for the maintenance of cost records under of section 148(1) of the Act. However; the Company has got the same verified by a Cost Accountant, as required.

7. Undisputed & Disputed Statutory Dues

As per the records verified by us, the Company is not regular in depositing the undisputed statutory dues involving Provident Fund, Customs Duty, Value Added Tax, Income Tax Investors Education and Protection Fund, Wealth Tax, Excise Duty and Service Tax with the appropriate authorities and there are amount remaining outstanding for more than six months as at the Balance Sheet date in respect of TDS amounting to Rs 15.03 Lacs, Service Tax amounting to Rs. 81.54 Lacs, Profession Tax amounting to Rs. 0.08Lacs and Income Tax amounting to Rs.22.26 Lacs, the liability in respect of Income tax has not been provided in books.

As per the records verified by us and based on the explanations given to us, there was disputed Income Tax liability amounting to Rs.198.98 Lacs pertaining to A.Y. 2000-2001 with Commissioner of Income Tax(Appeals) with the Company which is lying at any time during the year under review.

8. Loans from Banks/Financial Institutions/ Government/Debentures

As stated in basis of qualified opinion of our audit report, we are unable to comment on the extent of default in respect of period and amount payable to M/s. Edelweiss Asset Reconstruction Company Ltd. (EARCL) in respect of the principal dues aggregating Rs. 275,00,00,000 read together with VI.1 of Independent Auditors report for a period exceeding 1 year.

Further, as explained in Note 3 (c) to the financial statements, the Company has filed an application with MPSIDC for agreeing the terms of closure against an outstanding loan, which is currently under evaluation and the Company expects that it would not be required to repay an amount exceeding the liability of Rs. 52,27,53,000, which is already provided in the books of account.

9. Proceeds of Public issue (including debt instruments) /Term Loans

The Company has not raised any money during the year through initial / further public offer. The Company has not raised any new terms loans during the year.

10. Frauds on or by the Company

During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company or its officers/employees, noticed or reported during the year, nor have we been informed of such case by the management.

11. Managerial Remuneration

According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid / provided for managerial remuneration the same is within the limits prescribed under section 197 read with Schedule V to theAct.

12. Nidhi Companies

The Company is not a Nidhi company during the year under review and hence, the criteria as stipulated under Nidhi Rules 2014 are not applicable to the Company.

13. Related Party Transactions

As per the information and explanations given during the course of our verification, in our opinion, all transactions with the related parties made by the Company were for the reason sated in paragraph VI.1 of the Independent Auditors report are pending compliances with Section 188 and Section 177 of the Act, to the extent applicable to the Company during the year. However, the relevant details in respect of the same have been appropriately disclosed as per the requirements of the Accounting Standard- 18. 14. Preferential Issue

During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures and hence the requirements of Section 42 of theAct are not applicable. 15. Non-cash Transactions with Directors, etc.

As per the information and explanations provided to us, during the year, the Company has not entered into any non-cash transactions with directors or persons connected with the directors within the purview of Section 192 of the Act.

16. Provisions of 45-IAof the Reserve Bank of India Act,1934

As per the information and explanations provided to us and based on the overall operations of the Company, during the year, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

	For S K H D& Associates
	Chartered Accountants
	Firm Registration No. 105929W
	Krunal Furia
	Partner
Mumbai, dated 30th May 2019
	Membership No. 151805