Gammon India Ltd Auditor Reports

INDEPENDENT AUDITORS REPORT

Report on the Audit of the Standalone Financial Statements

We have audited the accompanying Standalone Financial Statements of Gammon India Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, 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 financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in Basis of Qualified Opinion paragraph, the aforesaid Standalone 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 Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its loss (including other comprehensive income), the changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

1. We invite attention to note no. 7(a) of the financial statement, detailing the recognition of claims during the earlier years in respect of on-going, completed and/or terminated contracts. The aggregate amount of claims outstanding as at March 31, 2023 is Rs. 151.39 crores. These claims were recognised only on the basis of opinion of an expert in the field of claims and arbitration. There are no further current updates from the expert, on the recovery of the claims, In view of the above-mentioned circumstances and facts we are unable to comment upon the amounts recognised, its realisation and the consequent effect on the financial statements for the year ended March 31, 2023.
2. We invite attention to note no. 7(b) of the financial statement relating to the claim of CMRL project wherein the Company has accounted the award at an amount of Rs 532.00 Crores. This amount includes an amount of Rs 123.08 Crores which is subject matter of appeal arising from the award. The company has given an unfunded exposure of Rs. 51.25 Crores in form of Bank Guarantee. The Company has accounted for the entire award to its account although the award is in the name of joint venture as detailed in the note. In view of the final fructification of the award amount and the settlement of the JV proceeds as detailed in the aforesaid note we are unable to opine whether the entire amount will be to the account of the Company.
3. We invite attention to note no. 4(a)(iii) of the financial statement relating to Trade receivables, inventories and loans and advances which includes an amount of Rs. 182.37 crores in respect of disputes in five projects of the Company and/or its SPVs. The Company is pursuing legal recourse/ negotiations for addressing the disputes in favour of the Company. Pending the conclusion of the matters we are unable to state whether any provisions would be required against the Companys exposure.
4. We invite attention to note no 27 of the financial statement relating to penal interest and charges of Rs 91.11 crores during the year charged by the lenders on its facilities. Total amount of penal interest amount to Rs. 415.76 Crores up to March 31, 2023. The same has not been debited to profit and loss account as management is disputing the same and is in discussion with the lenders for reversal of the said penal interest and charges. In the absence of conclusion of the aforesaid discussion, we are unable to state whether any provision is required to be made against such penal interest and charges.

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 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 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 qualified opinion on the Standalone Financial Statements.

Material Uncertainty relating to Going Concern.

We invite attention to note no. 37 of the financials statement relating to the present financial situation of the Company detailing the Material Uncertainties Relating to Going Concern and the Going Concern assumptions. The lenders had in the previous years recalled all the loans and facilities and also the Companys Current Liabilities exceeds Current Assets by Rs 9,496.94 Crore as at March 31, 2023. The Company is finding it difficult to meet its financial obligations and the resolution plan is under consideration by lenders. The liquidity crunch is affecting the Companys operation with increasing severity. The trading in equity shares of the Company is presently suspended. Some of the creditors have filed for winding up petitions against the Company. The company has severe manpower issues and is defaulting on its statutory and regulatory obligations. The Companys resolution plan is under consideration by the lenders as detailed in the aforesaid note but the final approval of all lenders and the execution of the plan and its success involves material uncertainties that may cast significant doubt about the Going Concern Assumption. Our report is not qualified on this account.

Emphasis of Matter

Without qualifying our conclusion, we draw attention to the following matters;

1. We draw attention to Note no 4(a)(i) & (ii) of the Statement relating to recoverability of an amount of Rs.291.42 crores as at March 31, 2023 under trade receivables in respect of contract revenue where the Company has received arbitration awards in its favour in respect of which the client has preferred an appeal for setting aside the said arbitration awards, recognition of claims while evaluating the jobs of Rs.7.56 crores where the Company is confident of recovery. The recoverability is dependent upon the final outcome of the appeals & negotiations getting resolved in favour of the company.
2. We draw attention to Note no 4 (iv) of the Statement relating to the projects of real estate sector where the exposure is Rs.

23.33 crores. The management is confident of ultimate recovery of the amounts, and we have relied on the management

assertions of recoverability.

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 period. These matters were addressed in the context of our audit of the Standalone financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

Apart from what is mentioned in our paragraph titled Basis of Qualified Opinion and paragraph titled Material Uncertainty related

to Going Concern there are no other matters described to be the key audit matters to be communicated in our report.

Information Other than the Standalone Financial Statements and Auditors Report thereon

The Companys Board of Directors is responsible for the Other Information. The other information comprises the information included in the Companys Annual Report but does not include the Standalone and Consolidated Financial Statements and our Independent Auditors Report thereon. We have read the Directors Report and Management Discussion and Analysis forming part of the Annual Report and found the same to be in order. However, the other contents of the Annual Report are expected to be made available to us after the date of this report.

Our opinion on the Standalone Financial Statements does not cover the Other Information and we do not and will not express any

form of assurance or conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the Other Information identified above and, in doing so, consider whether the Other Information is materially inconsistent with the Standalone Financial Statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

The Other Information has not been made available to us till the date of this report. We will read the Other Information as and when it is made available to us and if conclude that there is a material misstatement, we are required to communicate the matter with those charged with governance and take necessary steps as may be required thereafter.

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 (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting Standards specified under section 133 of the Act and relevant provisions 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 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 is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout

the audit. We also:

1. Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. 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 Act we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system with reference to Standalone Financial Statements in place and the operating effectiveness of such controls.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
4. Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, make it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statement.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit

and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current year and are therefore the Key Audit Matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

The comparative financial information of the company for the year ended March 31, 2023 included in these Ind AS financial statements have been audited by the predecessor auditor M/s. Nayan Parikh & Co. Chartered Accountants who had audited the financial statements for the relevant periods. The report of the predecessor auditor on the comparative financial information dated June 21, 2022 expressed a modified opinion.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, 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
1. 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.

2. In our opinion, except for the possible effects of the matter described in the Basis of Qualified Opinion paragraph, 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.
3. The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes

in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

4. In our opinion, except for the possible effects of the matter described in Basis of Qualified Opinion paragraph the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
5. The matters described in paragraphs under the Basis for Qualified Opinion and the Material Uncertainty related to Going Concern paragraph, in our opinion, may have an adverse effect on the functioning of the Company.
6. On the basis of the written representations received from the directors as on March 31, 2023, taken on record by the Board of Directors, all the directors are disqualified as on March 31, 2023, from being appointed as a director in terms of Section 164 (2) of the Act.
7. With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an modified opinion on the adequacy and operating effectiveness of the Companys internal financial controls with reference to Standalone Financial Statements.
8. With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by

the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.

9. 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, as amended, in our opinion and to the best of our information and according to the explanations given to us:
1. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements – Refer Note 33 to the standalone financial statements,
2. The Company did not have any long-term contracts including derivative contracts for which there were material foreseeable losses,
3. The Company has to transfer amount of Rs 0.58 Crores to the Investor Education and Protection Fund.
4. (a) The management has represented that, to the best of their knowledge and belief other than as disclosed in the notes to the financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities ("intermediaries") with the understanding whether recorded in writing or otherwise, that the intermediary shall, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security, or the like on behalf of the Ultimate Beneficiaries.

1. The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the company from any person(s) or entity(ies) including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
2. Based on such audit procedures considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (iv(a.)) and (iv(b.)) above contain any material misstatement.

1. The Company has neither declared nor paid dividend during the year.
2. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

For Natvarlal Vepari & Co.

Chartered Accountants

Firm Registration No- 106971W

Nuzhat Khan Partner

M. No. 124960

Mumbai, Dated: October 28, 2023 UDIN: 23124960BGVGGJ2575

Annexure A to the Independent Auditors Report

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of Gammon India Limited of even date)

To the best of our information and according to the explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, and to the best of our knowledge and belief, we state that:

i) a. (A) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its

1. The company does not have any intangible asset therefore clause 3(i)(a)(B) is not applicable.
1. Property, Plant and Equipment have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification except assets at some of their terminated sites where the access to the assets are presently restrained and the matter is under dispute. The total value of assets at such sites is Rs. 1.50 crores (Net WDV).
2. We are informed by the management that all the title deeds of immovable properties are in custody of IDBI trusteeship Services Limited as part of Corporate Debt Restructuring norms with the lenders. We have therefore not verified the physical documents of immovable property and relied on the management representation for the same.
3. The company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year.
4. There are no proceedings initiated during the year or are pending against the Company as at March 31, 2023 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

1. (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except for inventories at terminated sites valued at Rs. 6.58 crores. In our opinion, the frequency of such verification is reasonable. On the basis of examination of records, we are of the opinion that the coverage and procedure of such verification is appropriate and discrepancy noted were in excess of 10% in aggregate for each class of inventory and have been properly dealt with in the books of accounts of the Company.

(b) The Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks or financial institutions on the basis of security of current assets. However, the company has not filed quarterly returns or statements of current assets with banks or financial institutions as the entire facilities from the lenders have become Non Performing Assets in the month June17 and the Lenders have recalled all the loans and during the year no new working capital limit was sanctioned.

2. (a) During the year, the Company has not made any investment in companies, firms, Limited Liability Partnerships. The Company has not provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties during the year, hence Clause 3(iii)
1. and 3(iii)(b) of the Companies (Auditors Report) Order, 2020 are not applicable to the Company.

1. In respect of the loans and advances in the nature of loans, the schedule of repayment of principal and payment of interest have not been stipulated, hence we are unable to comment on the repayment of principal and interest outstanding.
2. Since there are no stipulated repayments schedule for loans and advances, we are unable to opinion that no amount is overdue for more than ninety days.
3. No loan or advance in the nature of loan granted which has fallen due during the year, has been renewed or extended or fresh loans granted to settle the overdues of existing loans given to the same parties.
3. The company has not granted any loans or advances in the nature of loans either repayable on demand or without

specifying any terms or period of repayment, except as under:

(RS. In Crores)

1. The company has complied with the provisions of section 185 and 186 of the Act with respect of loans granted, investments

made, guarantees and security given to the extent applicable.

2. The Company has not accepted deposits from the public or amounts that are deemed to be deposits pursuant to sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed thereunder. Accordingly, para 3(v) of the Order is not applicable. We are informed by the management, that no order that has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other tribunal in respect of the said sections.
3. The maintenance of the cost records under the sub-section (1) of section 148 of the Act has been prescribed and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, carried out a detailed examination of the records to ascertain whether they are accurate or complete.
4. (a) The Company has several instances of delay in depositing undisputed statutory dues including Goods and Services Act, Provident fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, duty of Customs, duty of Excise, Value Added Tax, Cess and other statutory dues to the appropriate authorities during the year.

On the basis of the audit procedures followed, test checks of the transaction and the representation from the Management there are no undisputed amount which were outstanding as at March 31, 2023 for a period of more than six months from the date they became payable except as given below, which is unpaid till date.

Name of the statute	Nature of dues	Amount (Rs in Crores)	Period to which the amount relates	Due date
Excise duty	Custom Duty	2.07	Prior to Apr 22	Prior to Apr 22
Sales Tax	Sales Tax	0.05	Prior to Apr 22	Prior to Apr 22
Sales Tax	Works Contract Tax	0.67	Prior to Apr 22	Prior to Apr 22
Employee provident fund	Labour welfare fund	0.00*	Prior to Apr 22	Prior to Apr 22
Employee provident fund act 1952	Provident Fund	0.20	Prior to Apr 22	Prior to Apr 22
Employee provident fund act 1952	Provident Fund	0.26	Apr 22 to Aug 22	15th of each subsequent month
Professional Tax act	Professional Tax	0.15	Prior to Apr 22	Prior to Apr 22
Professional Tax act	Professional Tax	0.00	Apr 22 to Aug 22	10th of each subsequent month
Others	Salary Saving Scheme	0.00*	Prior to Apr 22	Prior to Apr 22
Income Tax Act	TDS	0.01	Prior to Apr 22	Prior to Apr 22
Income Tax Act	TDS	0.57	Apr 22 to Aug 22	7th of each subsequent month
GST Act	Tamilnadu GST	0.00	June22	20/07/2022
GST Act	West Bengal GST	0.00	Apr22	20/05/2022
Total		3.98

Note: * Balances with values below the rounding off norm adopted by the Company have been reflected as "0.00".

(b) There are no statutory dues referred to in sub-clause (a) which have not been deposited on account of any dispute

except as given below:

Name of Statute	Nature of dues	Amount (In Crores)	Period to which Amount relates	Forum where dispute is pending
Sales Tax Act - Andhra Pradesh	Reassessment matter	0.04	2001-02	High Court
Sales Tax Act - Andhra Pradesh	Tax levied. Rule 6(3)(i)	2.10	2002-03	High Court
Sales Tax Act - Andhra Pradesh	Tax levied. Rule 6(3)(i)	1.64	2003-04	High Court
Sales Tax Act - Andhra Pradesh	Disallowance of Interstate purchase	0.24	2005-07	High Court
Sales Tax Act - Andhra Pradesh	Levy of Penalty	1.89	2005-07	High Court
Sales Tax Act - Uttar Pradesh	Taxes levied and denial of benefit of sec 3G and 3F2 b (1)	1.83	2003-04	Honble High Court of Allahabad
Sales Tax Act - Uttar Pradesh	Taxes Levied and denial of Benefit of sec 3G and 3F2 b (1)	1.89	2004-05	Honble High Court of Allahabad
Sales Tax Act - Uttar Pradesh	Taxes Levied and denial of Benefit of sec 3G and 3F2 b (1)	0.29	2007-08	A C Appeal
Sales Tax Act - Maharashtra	Denial of deduction on Pre cost component	0.06	1993-94 to 1994- 95	Tribunal
Sales Tax Act - Maharashtra	Rate Difference – WCT	0.03	2000-01	Tribunal
Sales Tax Act - Maharashtra	Disallowance of WCT & BST	5.81	2000 to 2002	Jt. Appeal
Sales Tax Act - Maharashtra	Sales-In-Transit (I.E. 6(2) Sales disallowed)	4.72	2013-14	Jt. Appeal I
Sales Tax Act - Orissa	Lab. and Service Charges disallowed	0.11	1992-93 to 1999- 00	A C Appeal
Sales Tax Act - Orissa	Various disallowance	0.11	2001-02	A C Appeal
Sales Tax Act - West Bengal	Tax demand	6.24	1997-98, 2010-11, 2009-10 and 2011- 12	Sr. JCT (Appellate)
Sales Tax Act - West Bengal	Tax demand	0.38	2008-09	Revision Board
Sales Tax Act - West Bengal	Tax demand	2.39	2007-08	Tribunal
Sales Tax Act - West Bengal	Tax Demand	0.63	2007-08 (CST)	Tribunal
Sales Tax Act - Rajasthan	Increase in EC Fees	0.05	2007-08	Tax Law Board – Ajmer
Sales Tax Act - Assam	Tax demand.	0.60	2004-05	Revisional Board
	Total	31.04
The Finance Act 1994	Service Tax	1.73	August, 2012 to January, 2016	CESTAT Mumbai
The Finance Act 1994	Service Tax	0.51	April 2010 to March 2015	CESTAT Mumbai
	Total	2.24
Goods & Service Tax Act - Maharashtra	Tax demand	0.27	2017-18	Appeal Filed
Goods & Service Tax Act - Maharashtra	Tax Demand	0.12	2019-20	Not yet Filled
Goods & Service Tax Act - West Bengal	Increase in EC Fees	1.47	2017-18	Asst Commnn of GST
Goods & Service Tax Act - Jharkhand	Tax demand.	0.00**	2018-19	Not yet Filled
	Total	1.86

Name of Statute	Nature of dues	Amount (In Crores)	Period to which Amount relates	Forum where dispute is pending
The Income Tax Act 1961	Income Tax Assessment Order u/s 271(1)(c)	44.26	A.Y. 2007-08 to A.Y. 2011-12	CIT Appeal
The Income Tax Act 1961	Income Tax Assessment Order U/s 143(3)	63.32	A.Y. 2007-08 to A.Y. 2011-12	ITAT Appeal
The Income Tax Act 1961	Income Tax Assessment Order U/s 143(3)	15.00	AY 2012-13	CIT Appeal
The Income Tax Act 1961	Income Tax Assessment Order U/s 143(3)	1.14	AY 2017-18	CIT Appeal
The Income Tax Act 1961	Income Tax Assessment Order U/s 271AAA	10.85	AY 2010-11	CIT Appeal
The Income Tax Act 1961	Income Tax Assessment Order U/s 143(1)	1.09	AY 2019-20	CIT Appeal
The Income Tax Act 1961	Income Tax Assessment Order U/s 143(3) - JV	2.13	AY 2013-14	CIT Appeal
The Income Tax Act 1961	Income Tax Assessment Order U/s 156	53.69	AY 2018-19	Not yet Filled
The Income Tax Act 1961	TDS Intimation U/s 200A	8.98	A.Y. 2008-09 to A.Y. 2022-23	Not yet Filled
The Income Tax Act 1961	TDS Intimation U/s 200A (JV)	0.06	A.Y. 2008-09 to A.Y. 2022-23	Not yet Filled
	Total	200.51
Provident Fund	Provident fund demand of Rs 2.56 crores (pertaining to job of the Company) for the earlier years , for which amount paid under protest is Rs 3.73 crores) by the Company.

** Balances with values below the rounding off norm adopted by the Company have been reflected as "0.00"

1. There are no transactions relating to previously unrecorded income that were not recorded in the books of account, and which has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).
2. (a) The company has defaulted in servicing interest and principal repayment due to debenture holders, financial institutions and banks. The borrowings have become Non-Performing Assets (NPA) and lenders have recalled all the loans. The total amount of recalled debts are disclosed as current liabilities aggregating to Rs. 3859.87 Crores. Details are disclosed in statement 1. The amounts of delays in interest servicing in respect of Rupee Term Loan, FITL, Priority Loan, Working Capital Term Loan, Short term Loan, NCD, NCD FITL, CC and OD are shown in statement 2.

1. The company has not been declared wilful defaulter by any bank or financial institution or government or any government

authority.

2. During the company has not borrowed term loan during the year and therefore clause 3(ix)(c) of the Companies (Auditors Report) Order, 2020 is not applicable to the Company.
3. On an overall examination of the Standalone Financial Statements of the Company, we report that no fresh funds were raised on short-term basis during the year and therefore reporting under clause 3(ix)(d) of the Companies (Auditors Report) Order 2020 is not applicable to the Company.
4. The company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries,

associates or joint ventures.

5. The company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies. Accordingly, paragraph 3(ix)(f) of the Companies (Auditors Report) Order, 2020 is not applicable to the Company.

1. (a) The Company has not raised monies by way of Initial Public Offer or Further Public Offer (including debt instruments) during the year. Hence, paragraph 3(x)(a) of the Companies (Auditors Report) Order, 2020 is not applicable to the Company.

(b) The Company has not made any preferential allotment or private placement of shares or convertible debentures fully or partly or optionally during the year under audit. Hence, paragraph 3(x)(b) of the Companies (Auditors Report) Order, 2020 is not applicable to the Company.

2. (a) No fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

1. No report under sub-section (12) of section 143 of the Companies Act has been filed by us in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government during the year and upto the date of this report and hence clause 3(xi)(b) of the Companies (Auditors Report) Order 2020 is not applicable to the company.
2. No whistle-blower complaints have been received during the year by the company.

1. The Company is not a Nidhi Company and hence clauses 3(xii)(a), 3(xii) (b) and 3(xii)(c) of the Companies (Auditors Report) Order 2020 is not applicable to the Company.
2. All transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 in so far as our examination of the proceedings of the meetings of the Audit Committee and Board of Directors are concerned. The details of related party transactions have been disclosed in the Financial Statements as required by the applicable Accounting Standards.

(xiv) (a) The companys internal audit system is not commensurate with the size and nature of its business.

(b) We have considered the internal audit reports for the year under audit, issued to the company by the in-house internal audit department during the year and till the date of the report, in determining the nature, timing and extent of our audit procedures.

1. The company has not entered into any non-cash transactions with its directors or persons connected with its directors and hence clause 3(xv) of the Companies (Auditors Report) Order, 2020 is not applicable to the Company.
2. a) The nature of business and the activities of the Company are such that the Company is not required to obtain registration under section 45-IA of the Reserve Bank of India Act 1934 and hence sub-clause 3(xvi)(a), 3(xvi)(b) and 3(xvi)(c) of the Companies (Auditors Report) Order, 2020 is not applicable to the company.

b) The Group does not have any CICs as part of the Group.

3. The Company has incurred cash losses of Rs. 839.12 Crores in current financial year and Rs. 945.42 Crores in the immediate previous financial year.
4. There has been no resignation of the statutory auditors during the year and accordingly clause (3)(xviii) Companies (Auditors Report) Order 2020 is not applicable to the Company.
5. On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions and also our paragraph on material uncertainty relating to going concern casting significant doubts, we are of the opinion that there exists material uncertainties in the management assumptions relating to the companys capability of meeting the financial liabilities existing as at the Balance sheet date as and when they fall due within next 12 months which casts significant doubts on the management ability to meet the liabilities as and when they fall due.
15. The Company not required to spend towards Corporate Social Responsibility (CSR) for the year under audit and hence sub- clauses (3)(xx)(a) and 3(xx)(b) of The Companies (Auditors Report) Order 2020 is not applicable to the Company.

For Natvarlal Vepari & Co.

Chartered Accountants

Firm Registration No- 106971W

Nuzhat Khan Partner

M. No. 124960

Mumbai, Dated: October 28, 2023 UDIN: 23124960BGVGGJ2575

Annexure - B to the Auditors Report

(Referred to in paragraph 2(f) under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of Gammon India Limited of even date)

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

We have audited the internal financial controls with reference to Standalone Financial Statements of Gammon India Limited ("the Company") as of March 31, 2023, in conjunction with our audit of the Standalone Financial Statement 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 with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to Standalone Financial Statements based on our audit. 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 with reference to Financial Statements 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 with reference to Financial Statements and their operating effectiveness. Our audit of internal financial controls with reference to Standalone Financial Statements included obtaining an understanding of internal financial controls with reference to Financial Statements, 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 audit opinion on the Companys internal financial controls system with reference to Standalone Financial Statements.

Meaning of Internal Financial Controls with reference to Standalone Financial Statements

A companys internal financial control with reference to Standalone Financial Statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control with reference to Financial Statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with 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 standalone financial statements.

Inherent Limitations of Internal Financial Controls with reference to Financial Statements.

Because of the inherent limitations of Internal Financial controls with reference to Standalone Financial Statements, 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 with reference to Financial Statements to future periods are subject to the risk that the internal financial controls with reference to Standalone Financial Statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

In view of what is stated in our basis of Qualified Opinion we cannot state that the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2023, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Basis of Qualified Opinion

1. The Company has laid down internal financial controls with reference to financial statements, however, its implementation and effectiveness in certain areas are affected due to severe manpower issues affecting timely preparation of financial statements.
2. Our test of transactions revealed instances of control weaknesses which have inter-alia resulted from manpower and liquidity

issues.

3. Internal Audit carried out by the Company was not adequate considering the size and operations of the Company and was required to be more extensive with timely follow up and actions to correct the issues promptly. The internal audit has also revealed weaknesses in the systems and processes.

For Natvarlal Vepari & Co.

Chartered Accountants

Firm Registration No- 106971W

Nuzhat Khan Partner

M. No. 124960

Mumbai, Dated: October 28, 2023 UDIN: 23124960BGVGGJ2575

Statement -1

Principal Default as at March 31, 2023, referred to In Para (ix) of The Annexure to Auditors Report.

Statement -2

Interest Default as at March 31, 2023, referred to In Para (ix) of The Annexure to Auditors Report

• Apart from above term loan default there if default in payment of interest to lenders for short term facility (cash credit , WCDL,

Short term loan amounting to Rs 393.80 crores.