era infra engineering ltd Auditors report

To The Members of ERA Infra Engineering Limited Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of ERA Infra Engineering Limited (the Company) which comprises the balance sheet as at 31^st March, 2017, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as "standalone Ind AS financial statements").

Managements Responsibility for the Standalone Ind AS 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 Ind AS 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 (Ind AS) prescribed under section 133 of the Act read with relevant rules issued thereunder.

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 misstatements, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these standaloneInd AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of the material misstatement of the standalone Ind AS financial statements, whether due to error or fraud. In making those risk assessments, the auditor considers internal control relevant to the Companys preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of the accounting estimates made by the Companys Directors as well as evaluating the overall presentation of the standaloneInd AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on standaloneInd AS financial statements.

Basis for Qualified opinion

We believe that our audit provided a reasonable basis for in continuations of our qualified opinion which was reported in the year ended 31^st March, 2016 & earlier quarter of 2016-17 which has been elaborated below. Besides our audit report for the year ended 31^st March, 2017 our qualified opinion is also based on the auditors report on the audited annual financial statements for the year ended 31^st March, 2015 by the preceding auditors of the company.

1. Based on Indian Accounting Standards (Ind AS-1) and Standards of Auditing (SA) 570, Going Concern issued by the Institute of Chartered Accountants read with section 143 of the Companies Act, 2013, non-disclosure of material uncertainties related to event and condition may cast significant doubt upon the entity s ability to continue as a going concern. The major indicators of material uncertainties are as mentioned therein and listed here are as;

2. as per note 45 of the standalone Ind AS financial statements regarding the Company has been incurring losses over past several quarters/years due to which the entire net worth of the Company had been eroded as reported in March, 2016. The accumulated losses of Rs. 284089.05 Lakhs are more than the entire net-worth as on 31.03.2017;

3. as per note 33of the standalone Ind AS financial statements regarding the Company is contesting material litigations against it including winding up petitions and matters under section 138 of the Negotiable Instruments Act, 1881 as amended thereto;

4. as per note 42(a) of the standalone Ind AS financial statements regarding trade receivables out of the total trade receivables of Rs.310961.38 Lakhs as on 31.03.2017,Rs. 143145.61 Lakhs are outstanding from the period prior to 01.04.2014;

a. These are slow moving as partly received or non-moving as no movement due to delay in obtaining confirmation and subsequent reconciliation. In some cases invoices raised by the Company are to be recognised by these customers which includes joint ventures, associates and other related parties, considering the non-recoverability since long, these needs to be impaired.

b. The management is of the opinion that as the Company has

(i) identified many cases during the year& have already started process of invoking the arbitration and shortly expect to file in all the identified cases.

(ii) undertaken confirmation and reconciliation process along with of its dues/claims in other than arbitration cases.

(iii) been continuously updating the documentation, it is not appropriate to make any provision at this point of time which may dilute the recovery of these receivables. Provisions in the books of accounts will be made at the time of finalization of matters;

5. as per note 42(b)of the standalone Ind AS financial statements out of the total Other short term loans & advances of Rs. 112281.18Lakhs as on 31.03.2017 (excluding claims for invocation of Bank Guarantee), and in most of the cases the balances are outstanding from the period prior to 01.04.2014. Based on updated document regarding the terms & conditions and written confirmation, it cannot be ascertained whether the amounts will be recovered or goods & services will be received in future, considering the non-recoverability or material against these advances since long.

Since, these are quite old advances the management is of the view that ongoing confirmation and reconciliation process is under progress and management is reviewing and will impair on getting finality and shall make further provision only on completion of the process including as provided under the applicable laws.Considering the non-recoverability or material against these advances since long, these should be impaired.

6. as per note 46 of the standaloneInd AS financial statements and as mentioned above in paragraph 5, a claim of Rs. 26496.63 lakhs pertains to invocation of Performance and other Bank Guarantees are receivable due to noncompliance of terms & conditions of the contract. The management has initiated the legal process for recovery of the said claim;

7. as per note 42(c) of the standalone Ind AS financial statements a sum of Rs.16895.72 Lakhs as on 31^st March, 2017under Capital advances is outstanding since long. The management has initiated the process of recovery of the amount of loans & advances or receipt of goods & services there - against. Due to non - recovery and non-receipt of material against these, needs to be impaired;

8. as per note 52of the standaloneInd AS financial statements regarding the company is developing a program for physical verification of work -in progress, of Rs. 60593.13Lakhs recognised in books as on 31.03.2017. On completion of physical verification & post reconciliation with the records, discrepancies will be adjusted. For raw material & other inventory management has completed the physical verification, is under process of reconciling as explained and based on reconciliation the difference and discrepancies have been adjusted;

9. as per note 51of the standaloneInd AS financial statements regarding the Company has made investments in securities, non - current & current, of / through its subsidiaries, associates, Joint ventures & group companies. In case of two associates Gwalior bypass projects limited & Hyderabad Ring Road Projects Private Limited, considering the accumulated losses in these and in others, the management is of view since these investee entities business is toll / annuity based which has a long gestation period, & also arbitration claims will be filed, the impairment, if any, is considered to be temporary in nature. Further considering the qualified opinion in financials statements of four subsidiaries (Bareilly Highways Projects Limited, Deharadun Highways Projects Limited,Haridhwar Highways Projects Limited, West Haryana Highways Projects Private Limited) the impact on diminution in value as per Indian Accounting Standard (Ind-AS) is not ascertainable ;

10. asper note 47 of the standalone Ind AS financial statements There is delay in deductions & deposit of statutory dues including VAT, service - tax, excise & customs duty, income tax, royalty, labour cess, entry tax, provident fund etc. & other similar dues, returns and forms. Provisions of interest on delay of these have not been recognised & exact quantum is not determinable, as delay on overall basis and reconciliations are under progress;

11. as per note 49(b) of the standaloneInd AS financial statements regarding based on inadequate security cover, prior approval of CDR EG before sale of assets etc., and other non-compliances of CDR terms & conditions still continues as already reported in earlier periods/years;

12. as per note 49(a) of the standalone Ind AS financial statements regarding loans provided by lenders under consortium have been reclassified as Non-Performing Assets (NPA) by all the Lenders;

13. For earlier non-compliances the Company is in the process of complying with the relevant provisions of the Companies Act 2013 & the SEBI Act, 1992, as amended, with respect to, quorums, meetings of Board of Directors, various committees, submission & publication of quarterly results, filing of various forms & declarations, compliance with listing regulations etc. The rectification for excess managerial remuneration paid earlier is still awaited;

14. Compliance & records relating to the related parties are being updated. MGT - 14 relating approval of Board of Directors for issue of debentures is still pending and there is absence of women director and chief financial officer in the company and common director to material subsidiary. As per the management the process of appointment in under progress;

15. as per note 48 of the standalone Ind AS financial statements regarding the stock exchanges have levied a penalty of Rs. 33.22 Lakhs for non-publishing & filing of results of quarter ended 30^th June & 30^th September, 2015 on time. Management expects it to be waived off;

16. as per note 18 of the standaloneInd AS financial statements regarding non ascertainment of interest and dues to micro, small and medium enterprises under MSMED Act, 2006.

As a consequence of above qualification, explicit unreserved statements for compliance of all Ind AS is not in compliance with requirement of Ind AS.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except the possible effects of the matters described in the aforesaid paragraphs 1 to 16 for our basis of qualified opinion, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the standalone Ind AS, of the financial position of the Company as at 31^st March, 2017 and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Other Matters

The comparative financial information of the company for the transition date opening balance sheet as at 01^st April, 2015 included in these standalone Ind AS financial statements, is based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31^st March, 2015 dated 30^th May, 2015 expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the company on transition to the Ind AS, which has been audited by us.

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, 2016 ("the Order") issued by the Central Government of India in terms of section 143(11) of the Act, we give in "Annexure - A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

a. we have sought and, except for the matters described in the basis for qualified opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. except for the possible effects of the matters described in the basis for qualified opinion paragraph, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss, Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d. in our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act read with relevant rules issued thereunderexcept for the non-compliance of explicit unreserved statement of compliance;

e. on the basis of written representations received from the directors as on 31 March 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017, 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 "; and

g. 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 litigation on its financial position in its standalone Ind AS financial statements- Refer note 33 to the standalone Ind AS financial statements;

ii) except for the possible effects of the matter described in the basis for qualified opinion paragraph, based on available records and information and explanation and considering the possible impact due to litigation and delay in projects we have been explained that there are no material foreseeable losses, on long term contracts, therefore the Company has not made any provision, required under the applicable law or Indian accounting standards;

iii) based on the records there is delay in transfer of amount to the Investor Education and Protection Fund by the Company; and

iv) the company has provided requisite disclosure in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8^th November, 2016 to 30^th December, 2016. And on the basis of information & explanation provided these are in accordance with the books of accounts maintained by the company. Refer note 54 to the standalone Ind AS financial statements.

For S. S. KOTHARI MEHTA & CO.

Chartered Accountants

Firm Registration No. 000756N

Neeraj Bansal

Partner

Membership No. 095960

Place : Noida

Date : 29.05.2017

ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE IND AS FINANCIAL STATEMENTS OF ERA INFRA ENGINEERING LIMITED

Referred to in paragraph 1 of report on other legal and regulatory requirements paragraph of our report on the financial statement

of even date.

i) In respect of 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 programme of verification of fixed assets to cover all the items in phased manner over a period of three years which in our opinion is reasonable having regards to the size of the Company and the nature of its assets. Pursuant to the programme, the company has carried out physical verification of its assets during the year as per the programme, the difference between book balance and physical balances being non material has not been adjusted. Documentations on physical verifications needs to be updated.

(c) The title of immovable properties is based on available records and management certified true copy, as the originals are being pledged with bankers as security for borrowings.

ii) In respect of Inventory

(a) The company is developing a program for physical verification of work -in progress, of Rs. 60593.13 Lakhs recognised in books as on 31.03.2017. On completion of physical verification & post reconciliation with the records, discrepancies will be adjusted. For raw material & other inventory management has completed the physical verification, is under process of reconciling as explained and based on reconciliation the difference and discrepancies have been adjusted; (refer note 52of the Ind AS financial statements and in qualified opinion in our main report).

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories, subject to above mentioned observations, followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) I n our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventories, however these needs to be updated. As explained to us, due to reconciliation process is under progress, so difference and discrepancies will be adjusted on completion of such reconciliation.

iii) In respect of Loan granted

(a) As informed to us and books and records, the Company has granted unsecured interest free loans to three Companies covered in the register maintained under section 189 and the total outstanding is Rs 1529.16 lakhs.

(b) As explained to us, the terms and condition of loans are not prejudicial to the interest of the Company as the document for loans are under process in absence any updated document for terms and condition we cannot comment on reliability of principle and interest.

iv) Based on information and explanations and available records the loans, investments, guarantees and pledge of securities given to/ for subsidiaries/ associates/ joint ventures are in compliance of section 185 and 186 of the Companies Act, 2013 as these are covered under exceptions as provided in section 185 and 186 of the Companies Act, 2013 and are within the prescribed limits and as necessary approvals.

v) The Company has not accepted any deposits from the public within the meaning of directives issued by the Reserve Bank of India and provisions of sections 73 to 76 or any other relevant provisions of the act and the rules framed thereunder.

vi) We have broadly reviewed the cost audit records maintained by the Company pursuant to the Companies (Cost records and audit) Rules, 2014 under section 148 of the act 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) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is not regular in depositing undisputed statutory dues in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues as applicable with the appropriate authorities.

the Company has not deposited statutory dues and amount outstanding for more than six months as on the date of balance sheet from the date they become payable are as mentioned below.

(Refer note 47of the Ind AS financial statements and qualified in our main report) ( in lakhs)

S.No.	Name of the Statute	Amount	Outstanding as on 31.03.2017
1	Income Tax Act, 1961	2645.95	3757.21
2	Royalty under various State Royalty Acts	32.36	62.28
3	Employee State Insurance Act	4.64	4.64
4	Employees Provident Fund Act	834.65	1079.18
5	Finance Act, 1994 (Service Tax)	1271.12	1683.35
6	VAT/WCT under various state Acts	171.23	1113.85
	Total	4959.95	7582.53

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of Income Tax, Sales Tax, Custom Duty, Wealth Tax, Excise Duty, Service Tax, Value Added Tax and Cess, which have not been deposited on account of any dispute, are as follows: -

Name of the Dues / Name Of The Statue	Disputed Amount ( in Lacs)	Period to which amount relates	Forum where dispute is pending
Sales Tax / Value Added Tax
Delhi VAT	1697.96	2009-10, 2010-11, 2012- 13& 2013-14	DVAT Tribunal - Commercial Tax Officer Delhi
Delhi VAT	3990.77	2011-12	Special Commissioner-1, Taxes, New Delhi
Jharkhand VAT	815.82	2010-11, 2011-12 & 201213	JT. Commissioner (Appeal), Jharkhand
Karnataka VAT	31.41	2009-10	JT. Commissioner (Appeal)
Tamilnadu VAT	958.89	2010-11 & 2013-14	Commercial Tax Officer, Tamilnadu
Bihar VAT	28.34	2013-14	JT. Commissioner Commercial Tax (Appeal), Gaya
Chhatisgarh VAT	124.26	2007-08	Commercial Tax Officer , Chhattisgarh
Madhya Pradesh VAT	398.07	2011-12, 2012-13& 201314	Assistant Commissioner of Commercial Tax Department, Indore (M.P.)
Gujarat VAT	1261.74	2009-10, 2010-11 & 201112	Commercial Tax Officer, Gujarat
Uttar Pradesh VAT	494.11	2013-14	JT. Commissioner Commercial Tax (Appeal), Ghaziabad
West Bengal VAT	90.94	2004-05 & 2007-08	Commercial Tax Officer, West Bengal
Punjab VAT	2.47	2006-07	Assistant Excises & Taxation Commissioner, Shambhu Import, Punjab
Customs / Excise Duty
Custom Act, 1962	29.50	2007-08	Tribunal Appellate Authority - Kolkata
Custom Act, 1962	567.48	2012-13	Tribunal Appellate Authority - Mumbai
Central Excise Act, 1944	11.39	2011-12 & 2012-13	Tribunal Appellate Authority - Allahabad
Central Excise Act, 1944	13.88	2012-13 & 2013-14	Tribunal Appellate Authority - Allahabad
Name of the Dues / Name Of The Statue	Disputed Amount ( in Lacs)	Period to which amount relates	Forum where dispute is pending
Central Excise Act, 1944	2.93	2011-12 & 2012-13	Commissionerate , Meerut - I
Central Excise Act, 1944	0.34	2013-14	Commissionerate , Meerut - I
Central Excise Act, 1944	3.70	2013-14	Commissionerate , Meerut - I
Central Excise Act, 1944	3.58	2012-13	Commissionerate , Meerut - I
Central Excise Act, 1944	1.45	2013-14	Commissionerate , Meerut - I
Central Excise Act, 1944	7.31	2012-13	Commissionerate , Meerut - I
Central Excise Act, 1944	6.27	2011-12 & 2012-13	Commissionerate , Meerut - I
Central Excise Act, 1944	1.22	2013-14	Commissionerate , Meerut - I
Central Excise Act, 1944	2.58	2013-14 & 2014-15	Commissionerate , Meerut - I
Central Excise Act, 1944	2.50	2011-12 & 2012-13	Commissionerate , Delhi
Central Excise Act, 1944	2.87	2014-15 & 2015-16	Dehradun Commissionerate
Central Excise Act, 1944	3.50	2014-15 & 2015-16	Commissioner Appeal, Meerut
Central Excise Act, 1944	15.27	2015-16	Commissioner Appeal, Meerut
Central Excise Act, 1944	4.18	2015-16	Commissioner Appeal, Meerut
Service Tax
Finance Act, 1994	3554.64	2007-08	The Additional Commissioner of (Adjudication), Central Excise, Delhi - 1
Finance Act, 1994	310.34	2008-09	The Additional Commissioner of (Adjudication), Central Excise, Delhi - 1
Finance Act, 1994	450.37	2008-09	The Additional Commissioner of (Adjudication), Central Excise, Delhi - 1
Finance Act, 1994	116.53	2009-10 & 2010-11	The Additional Commissioner of (Adjudication), Central Excise, Delhi - 1
Finance Act, 1994	34.16	2010-11 & 2011-12	The Additional Commissioner of (Adjudication), Central Excise, Delhi - 1
Finance Act, 1994	150.00	2006-07	Tribunal Authority, R. K. Puram
Finance Act, 1994	2090.37	2010-11 & 2011-12	Tribunal Authority, R. K. Puram
Finance Act, 1994	918.65	2012-13 & 2013-14	The Additional Commissioner of (Adjudication), Central Excise, Delhi- 1
Income Tax
Income Tax Act,1961	2,554.02	2009-10	ITAT, Delhi
Income Tax Act,1961	5,187.75	2008-09	ITAT, Delhi
Royalty
Madhya Pradesh Royalty Demand	100.00	2006-07	Revenue Board , Gwalior
Madhya Pradesh Royalty Demand	20.40	2006-07	Revenue Board , Gwalior
Madhya Pradesh Royalty Demand	28.04	2004-05	Commissioner , Ujjain
Name of the Dues / Name Of The Statue	Disputed Amount ( in Lacs)	Period to which amount relates	Forum where dispute is pending
Labour Cess
The Building & Other construction Workers (Regulation Of Employment & Condition Of Service) Act , 1996	85.61	2006-07	Honable Supreme Court

viii) According to the records of the Company examined by us and the information and explanations given to us, the Company has defaulted in payment of principle and interest to banks and financial institution the details are hereunder (refer note 49(a) of the Ind AS financial statements).

Name of Lender	Principal Amount (Amount in Lacs)	Interest Amount (Amount in Lacs)	Period of default (Days in Range)
Allahabad bank	296.25	316.04	1 to above 365 Days
Andhra bank	3228.74	-	Above 425Days
Axis bank	5.08	-	Above 425 Days
Bank of baroda	623.37	897.96	1 to above 1005 days
Bank of india	18667.84	13723.34	1 to above 365 days
Bank of maharashtra	5439.53	9200.41	1 to above 424 days
Canara bank	7161.81	9800.38	1 to above 365 days
Central bank of india	531.3	1365.69	1 to above 365 days
Corporation bank	5494.39	8729.57	1 to above 365 days
Dhanlaxmi bank ltd	145.19	-	Above 425 Days
First leasing co. of India ltd.	122.06	-	Above 425 Days
General insurance company limited	450.00	1298.86	1 to Above 1004 Days
Hdfc bank ltd	37.25	-	Above 425 Days
Idbi bank ltd	10049.13	4535.73	1 to above 396 Days
Indian overseas bank	8679.59	13399.7	1 to above 365 Days
Karnataka bank	3750.00	1977.34	Above 1004 Days
Lic of india	600.00	2552.31	1 to Above 1004 Days
Magma fincorp ltd	140.50	-	Above 425 Days
Oriental bank of commerce	3529.63	2800.35	1 to above 365 Days
Punjab &sind bank	3,000.00	1501.08	Above 973 Days
Punjab national bank	2955.97	5599.48	Above 455 Days
Religarefinvest ltd	7.52	-	Above 425 Days
Sicom limited	4,999.56	2692.42	Above 973 Days
State bank of hyderabad	1412.21	1761.22	1 to above 365 Days
State bank of india	5873.81	8646.46	1 to above 365 Days
Syndicate bank	1645.23	2042.64	1 to above 365 Days
Tata capital financial services ltd	32.42	-	Above 425 Days
Uco bank	11761.55	14378.01	1 to above 365 Days
Union bank of India	10087.73	17536.09	1 to above 365 Days
United bank of India	338.47	375.88	1 to above 365 days
Vijaya bank	2433.72	3195.21	1 to above 365 Days

In case where range is not given are due from the date of declaration of NPA.

ix) As per the information and explanation given to us and on the basis of our examination of the records, the company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and terms loan during the year.

x) 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, we have neither came across any instance of fraud on or by the Company noticed or reported during the year, nor had been informed of such case by the management.

xi) As per the information and explanation given to us and on the basis of our examination of the records, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

xii) The company is not Nidhi Company, therefore this clause is not applicable to the company.

xiii) Based on records and as per the information and explanation given to us and on the basis of our examination of the records, the company has transacted with the related parties which are in compliance with sections 177 and 188 of Companies Act, 2013 and the details have been disclosed in the financial statements. The entries required to be updated in register needs to be strengthen. (Refer note 41 of the Ind AS financial statements)

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

xv) As per the information and explanations given to us and on the basis of our examination of the records, the company has not entered into any non-cash transactions with directors or persons connected with him.

xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Therefore this clause is not applicable to the company.

For S. S. KOTHARI MEHTA & CO.

Chartered Accountants Firm Registration No. 000756N

Neeraj Bansal

Partner

Membership No. 095960

Place : Noida

Date : 29.05.2017

"ANNEXURE - B" TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE IND AS FINANCIAL STATEMENTS OF ERA INFRA ENGINEERING LIMITED

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 Era Infra Engineering Limited ("the Company") as of March 31, 2017 in conjunction with our audit of the 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". 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") 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 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 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 qualified 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 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 (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the 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.

Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 31, 2017:

The review process of short term loans & advances and periodic review of those recovery & advances is and are not operating effectively which may impact the reasonable certainty of ultimate adjustment or collection and the procedure for physical verification of work in progress is not operating effectively which may result in ultimate impairment of inventory.

A material weakness is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the companys annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, the Company has in all material respects, maintained adequate internal financial control in our financial reporting as of 31^st March, 2017, based on the internal control over financial reporting criteria, system & procedures 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 and except for the effects / possible effects of the material weaknesses described above on the achievements of the objectives of the control criteria, the companys internal financial controls over financial reporting were operating effectively as of 31^st March, 2017.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2017 financial statements of the Company, and these material weaknesses do not affect our opinion on the standalone financial statements of the Company.

For S. S. KOTHARI MEHTA & CO.

Chartered Accountants

Firm Registration No. 000756N

Neeraj Bansal

Partner

Membership No. 095960

Place : Noida

Date : 29.05.2017