Garden Reach Shipbuilders & Engineers Ltd Auditor Reports

To the Members of Garden Reach Shipbuilders & Engineers Limited

To the Members of

Garden Reach Shipbuilders & Engineers Limited Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of Garden Reach Shipbuilders & Engineers Limited ("the Company"), which comprise the balance sheet as at March 31, 2024, and the statement of profit and loss (including other comprehensive income), statement of changes in equity and 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 "financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, profit including other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matters that we have identified in the current year are as follows:

Key Audit Matter	How the matter was addressed in our audit
1. Recognition of revenue from ship building contracts
Companys revenue is mainly derived from ship building. Revenue on such contracts is recognised over time as performance obligations are fulfilled over time. The Company recognizes revenue from a performance obligation in accordance of Ind AS 115 only when it can reasonably measure its progress towards complete satisfaction of the obligation. Progress with respect to ship construction is recognized using input method i.e.by comparing the actual costs anticipated for the entire contract. As disclosed in Note 20 to the financial statements, during the year, the Company has earned 3,06,918.46 Lakh ( 2,30,196.88 Lakh) from ship building out of total revenue from operations of 3,59,264.23 Lakh ( 2,56,114.51 Lakh) during the year.	We obtained an understanding of the Companys controls over the revenue and cost recognition process to assess the design of the key controls in place. Our substantive audit procedures included
This area was important to our audit due to the fact that significant estimates are involved in determination of stage of completion and measurement of progress towards satisfaction of performance obligations and estimating costs to complete of each contract.	• Review of the contracts and service orders to evaluate managements assessment of performance obligations in accordance with Ind AS 115;
	• Obtaining cost estimation schedules approved by project teams and verifying the costs to complete by agreeing to evidence of committed expenditure, budgeted rates and actual costs incurred to date;
	• Review of correspondences to corroborate managements assessment of liquidated damages payable that may arise as per terms of contract due to probable delivery time overrun.
2. Inventories	Our audit procedures of inventory included but were not limited to the following:
As at the year end the Company carries inventory valued 3,98,444.14 Lakh ( 291,850.49 Lakh) refer Note 9 to financial statements. The above includes raw materials and equipment valued at 3,86,725.80 Lakh ( 278,271.69 Lakh) which are mostly project specific. The Company maintains detailed item wise record of these inventories and the same are classified project wise for management and control of inventories. The Company carries out regular physical verification of inventories, including technical evaluation of the condition and usability of the such items and makes necessary provision in the books for unusable/ obsolete items identified if any. The basis of valuation of inventories is set out in Note 1.2(h) to the financial statements.	• Understanding the basis followed for recognition of purchase and issue of materials and ensuring that the same are in accordance with normally followed accounting principles.
We have considered inventory management as a key audit matter since inventory constitutes a significant part of the assets of the Company. Moreover, timely recognition of procurement, issue, consumption, accounting of inventory, identification of unusable, obsolete items by way of technical evaluation and physical verifications have major impact on the profitability of the Company.	• Review of item wise/ contract wise record of inventories.
	• Review of reports on physical verification/ technical evaluation of inventories carried out by the management and ensuring adequacy of year end provision for slow-moving / non-moving / obsolete items identified based on the same.
	We critically assessed the Companys inventory provisioning policy, with specific consideration given to aged inventory and their movement status;
	We have verified the value of few sample of inventory items to confirm whether they are held at the lower of cost and net realisable value in same accordance to Ind AS 2.

Other Information

The Companys Board of Directors is responsible for the other information. The other information comprises the information contained in Directors Report including Annual Report on CSR Activities, Management Discussion & Analysis Report, Report on Corporate Governance, Business Responsibility & Sustainability Report and other information contained in the Annual Report, but does not include the financial statements and our report thereon. These reports are expected to be made available to us after the date of this auditors report. Our opinion on the financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of audit, or otherwise appears to be materially misstated. When we read the other information, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance.

Managements Responsibility for the 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 and presentation of these financial statements that give a true and fair view of the financial position, financial performance (changes in equity) and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the 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 Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

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" to this report a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. In compliance to directions of the Comptroller and Auditor General of India u/s.143(5) of the Act, we give in Annexure "B" to this report a statement on the matters specified therein.

3. As required by Section 143(3) of the Act, we report that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. (b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. (c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, and the Statement of Changes in Equity and Cash Flow Statement dealt with by this Report are in agreement with the books of account. (d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) Section 164(2) of the Act regarding disqualification of directors is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of Corporate Affairs, Government of India. (f) The provisions of Section 197(16) of the Act regarding payment of managerial remuneration to Companys directors are not applicable in view of Notification No. GSR 463(E) dated 5th June, 2015 issued by the Ministry of Corporate Affairs, Government of India.

(g) 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 given in Annexure "C" to this report. (h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has pending litigations, the liabilities in respect of which are either provided for or disclosed as contingent liabilities – Refer Note 29 to the financial statements. The impact of these pending litigations on the financial position of the Company is subject to their judicial outcome; ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses except Guarantee Repair and Onerous Contract in respect of which the Company holds adequate provision – Refer Note 19 to the financial statements. iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv.(a) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. (b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. (c) Based on such audit procedures as we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that representations made by the management in this regard contain any material misstatement. v. The dividend declared and paid during the year by the

Company is in compliance of with section 123 of the Companies Act, 2013. vi. Based on our examination which included test checks, the Company has in place an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with. Additionally, the audit trail is preserved by the Company as per the statutory requirements for record retention.

For Guha Nandi & Co.

Chartered Accountants

FRN: 302039E

Sd/-

(CA Dr. B. S. Kundu)

Partner

Membership No. 051221

UDIN: 24051221BKJSKS1004

Place: Kolkata

Date: 22 May, 2024

ANNEXURE – A

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31^ST MARCH 2024 OF GARDEN REACH SHIP BUILDERS & ENGINEERS LIMITED

(Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our Report of even date) i. In respect of the Companys Property, Plant and Equipment: a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment; (B) The Company has maintained proper records showing full particulars of intangible assets. b) The Company has a program of physical verification of Property, Plant and Equipment and right-of-use assets so to cover all the assets once every three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Accordingly, Property, Plant and Equipment of some division/ unit of the Company were verified internally by management during the year. Discrepancies noticed on such verification, which are not material, have been properly dealt with in the accounts. In our opinion, the periodicity of such physical verification is reasonable having regard to the size of the Company and nature of its assets; c) The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee), disclosed in the financial statements included under Property, Plant and Equipment are held in the name of the Company as at the balance sheet date; d) The Company has not revalued any of its Property, Plant and Equipment (including right-of-use assets) and intangible assets during the year; e) No proceedings have been initiated during the year or are pending against the Company as at March 31, 2024 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder. ii. a) The inventories (other than those lying with third parties), have been physically verified during the year by the management. The procedure followed for such verification, in our opinion, is appropriate. The discrepancies between physical stock and book records arising out of physical verification, have been properly dealt with in the books of account. However, there were no discrepancies of 10% or more in the aggregate for each class of inventory; b) During the year, the Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets. The Company has the sanction of 21,000 Lakh for fund-based facilities and 8,30,800 Lakh for non-fund based facilities. The quarterly returns of stocks and book debts filed by the Company with the banks are in agreement with the books of account of the Company. However, the Company is yet to submit the book debt statements with the banks in respect of the last quarter of the year. iii. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any investments in companies, firms, Limited Liability Partnerships or any other parties other than the investment in equity shares and mutual funds as disclosed in Note 6(a) & 10(a) to the financial statements. The Company has not provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, or stood guarantee, or provide security to companies, firms, Limited Liability Partnerships or any other parties. The Investments made by the Company in mutual funds, and equity shares are not prejudicial to the interest of the Company. Other matters of the clause are not applicable to the Company. iv. The Company has not given any loan, guarantee or provided any securities where provisions of section 185 and 186 of the Companies Act, 2013 are applicable. Further, in terms of Notification No. G.S.R. 463(E) dated June 5, 2015, the provisions of section 185 are not applicable to a Government company if the loans or advance in the loan are pre-approved by the Government; and section 186 of the Companies Act, 2013 are not applicable to the Government companies engaged in defence production. v. According to the information and explanations given to us the Company has not accepted any deposits or accepted any amount which are deemed to be deposits during the year to which directives of Reserve Bank of India or provisions of section 73 to 76 or any other relevant provision of the Companies Act, 2013 and the rules made thereunder are applicable. vi. According to the information and explanations given to us, maintenance of cost records by the Company has been specified by the Central Government under section 148(1) of the Companies Act, 2013 in respect of construction of ships, manufacturing of engineering goods and diesel engines. We have broadly reviewed such cost records and are of the opinion that, prima facie, prescribed accounts and records have been made and maintained. vii. (a) According to information and explanations given to us, and on the basis of our examination of books and accounts, the Company has been generally regular in depositing undisputed statutory dues including provident fund, ESI, income tax, goods and services tax, duty of customs, duty of excise, cess and any other statutory dues with the appropriate authorities. There is no undisputed amount payable in respect of aforesaid dues as on March 31, 2024 for a period of more than six months from the date they become payable. (b) According to the records of the Company and information and explanations given to us, the following are the details of disputed statutory dues not deposited on March 31, 2024:

Sl. No. Name of the Statute	Nature of dues	Year to which pertains	Amount ( in Lakh)	Forum where the dispute is pending
1 West Bengal Value Added Tax Act, 2003	Value Added Tax	2007-08	506.83	West Bengal Taxation Tribunal
2 Income Tax Act, 1961	Income Tax	2008-09	1624.58	Commissioner of Income Tax (Appeals)
3 Income Tax Act, 1961	Income Tax	2016-17	8.61	Commissioner of Income Tax (Appeals)
4 Goods & Services Tax	Interest Liability	2017-18	266.52	Addl. Commissioner, LTU, Corporate Division
TOTAL			2406.54

The amounts mentioned above are exclusive of interest and penalties that may be payable on final settlement of pending cases.

viii. There were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961). ix. (a) The Company has working capital limits sanctioned by banks (Both Funded & Non-Funded facilities). The Company has availed short term borrowings from the bank. The Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon; (b) The Company has not been declared willful defaulter by any bank or financial institution or other lender; (c) The Company has not taken any term loan during the year and there are no outstanding term loans at the beginning of the year and hence application of term-loan other than the purpose for which the loans were obtained does not arise; (d) On an overall examination of the financial statements of the Company, funds raised on short-term basis, prima facie, have not been utilized for long-term purposes by the Company during the year; (e) The Company does not have any subsidiary, joint venture or associate companies and hence taking any funds from any or person on account of them or meet their obligations or raising any loan on the pledge of securities held by them does not arise. As such, clauses 3(ix)(e) & (f) of the Order are not applicable to the Company. x. (a) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year and hence clause 3(x)(a) of the Order is not applicable to the Company. (b) The Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year and hence clause 3(x)(b) of the Order is not applicable to the Company. xi. To the best of our knowledge and according to the information and explanations given to us- (a) No fraud by the Company or on the Company has been noticed or reported during the year; (b) No report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year;

(c) No whistle blower complaints have been received by the Company during the year. xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company and hence clauses 3(xii)(a), (b) & (c) of the Order are not applicable to the Company. xiii. According to the information and explanations given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 where applicable and the details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards. xiv. (a) The Company has an internal audit system commensurate with the size and the nature of its business; (b) We have duly considered the internal audit reports for the year under audit received by the Company during the year in determining the nature and extent of our audit. xv. According to the information and explanations given to us and based on our examination of records, the Company has not entered into non-cash transactions with directors or persons connected with them and as such clause 3(xv) of the Order is not applicable to the Company. xvi. (a) In our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934; (b) The Company has not conducted any Non-Banking Financial or Housing Finance activities as per Reserve Bank of India Act, 1934 during the year; (c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India; (d) The Company does not belong to any Group having more than one CIC as part of the Group. xvii. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year. xviii. There has been no resignation of the statutory auditors of the

Company during the year. xix. 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 and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our report is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date will be discharged by the Company as and when they fall due. xx. (a) In respect of other than ongoing projects, the Company has no unspent funds towards Corporate Social Responsibility (CSR) required to be transferred to a Fund specified in Schedule VII to the Companies Act in compliance with second proviso to sub-section (5) of Section 135 of the said Act;

(b) The Company does not have any ongoing projects on CSR and hence there is no amount remaining unspent under sub-section (5) of section 135 of the Companies Act, pursuant to any ongoing project required to be transferred to special account in compliance with the provision of subsection (6) of section 135 of the said Act.

For Guha Nandi & Co.

Chartered Accountants

FRN: 302039E

Sd/-

(CA Dr. B. S. Kundu)

Partner

Membership No. 051221

UDIN: 24051221BKJSKS1004

Place: Kolkata

Date: 22 May, 2024

ANNEXURE "B"

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31^ST MARCH 2024 OF GARDEN REACH SHIP BUILDERS & ENGINEERS LIMITED

(Referred to in paragraph 2 under the heading of "Report on Other Legal and Regulatory Requirements" of our Report of even date)

Report on the directions under section 143(5) of the Companies Act, 2013 by the Comptroller & Auditor General of India

According to the information and explanations given to us by the management and on the basis of our examination of books and records of the Company, we report that:

Sl. No. Query	Reply
1. Whether the company has system in place to process all the accounting transaction through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated.	The Company has SAP system in place to process all the accounting transactions through IT system. As there is no processing of accounting transactions outside IT system, comment on the integrity of the accounts and financial implications of accounting transactions processed outside IT system does not arise.
2. Whether there is any restructuring of an existing loan or cases of waiver / write off of debts / loans / interest etc. made by a lender to the Company due to the Companys inability to repay the loan? If yes, the financial impact may be stated. Whether such cases are properly accounted for? (in case, lender is a Government company, then this direction is also applicable for statutory auditor of lender company)	There is no instance of restructuring of an existing loan and cases of waiver/written off of debts / loans/ Interest etc. made by any lender to the Company due to the Companys inability to repay the loan. Therefore, the financial impact due to above reasons does not arise.
3. Whether funds (grants / subsidy etc.) received / receivable for specific schemes from Central / State Governments and its agencies were properly accounted for/ utilized as per its term and conditions? List the cases of deviation.	During the year no fund has been received by the Company from the Central or any State Government or any Government agencies for any scheme and hence accounting of receipt of fund and utilization thereof as per terms and conditions does not arise.

 

For Guha Nandi & Co.

Chartered Accountants

FRN: 302039E

Sd/-

(CA Dr. B. S. Kundu)

Partner

Membership No. 051221

UDIN: 24051221BKJSKS1004

Place: Kolkata

Date: 22 May, 2024

ANNEXURE "C"

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31^ST MARCH 2024 OF GARDEN REACH SHIP BUILDERS & ENGINEERS LIMITED

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

We have audited the internal financial controls over financial reporting of GARDEN REACH SHIP BUILDERS & ENGINEERS LIMITED ("the Company") as of March 31, 2024 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the 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, both issued by ICAI, to the extent applicable to an audit of internal financial controls. 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 financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the 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 authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2024, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Guha Nandi & Co.

Chartered Accountants

FRN: 302039E

Sd/-

(CA Dr. B. S. Kundu)

Partner

Membership No. 051221

UDIN: 24051221BKJSKS1004

Place: Kolkata

Date: 22 May, 2024