hg infra engineering ltd share price Auditors report

To the Members of Rs..G. Infra Engineering Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone Financial statements of Rs..G. Infra Engineering Limited ("the Company"), which includes three jointly controlled operations consolidated on a proportionate basis (Refer note 51 to Standalone Financial Statements), which comprises the Standalone Balance Sheet as at March 31, 2023, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone 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, 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 ("Ind AS") prescribed under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, its total comprehensive income (comprising of profit and other comprehensive income), its changes in equity and its cash Flow s 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 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 (ICAI) together with the ethical requirements that are relevant to our audit of the standalone 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 obtained by us, and the audit evidence obtained by the other auditors in terms of their reports referred to in "Other Matters" paragraph below, is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Financial statements for the year ended March 31, 2023. These matters were addressed in the context of our audit of the standalone Financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter	Our audit procedures in respect of this area included the following:
1. Estimation of contract cost and revenue recognition. (Refer to note 1 (F) (i), 2 (d), 29 and 52) of the Standalone Financial Statements)	i. Evaluated the accounting policy for revenue recognition and assessed compliance of the policy with the principles enunciated under Ind AS 115 - ‘Revenue from Contracts with Customer.
Revenue from construction contracts is recognised over a period of time in accordance with the requirements of Ind AS 115, ‘Revenue from Contracts with Customers. The contract revenue amounts to RS.43,071.01 million for engineering, procurement and construction contracts, which usually extends over a period of 2-3 years, and the contract prices are Fixed and, in few cases, subject to clauses with price variances and variable consideration.	ii. Understood and evaluated the design and tested the operating effectiveness of key internal Financial controls, including those related to review and approval of estimated costs and review of provision for foreseeable losses, if any, by the authorised representatives.
In accordance with Input method prescribed under Ind AS 115, the contract revenue is measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total costs. This method requires the Company to perform an initial assessment of total estimated cost and reassess the total construction cost at the end of each reporting period to determine the appropriate percentage of completion.	iii. We obtained the revenue workings (percentage of completion calculations) from the Companys management, for all contracts, containing actual costs incurred, estimated costs (comprising of actual costs and remaining costs to completion), estimated contract revenue and actual revenues recognised during the year based on proportion of actual costs to estimated costs. For sample of contracts, we agreed contract revenue with key contractual terms, agreed current years actual costs with system generated reports and agreed estimated costs with costs sheets for individual contracts approved by the authorised representatives. Reperformed the calculation of revenues during the year using proportion of actual costs to estimated costs and compared the results with workings provided by the Company.
The estimation of total cost to complete the contract involves significant judgement and estimation throughout the period of contract, as it is subject to revision as the contract progresses - based on latest available information including physical work done on the ground, changes in cost estimates and need to accrue provision for onerous contracts, if any. Besides recognition of revenues based on actual costs and estimated costs to complete the work, at the period end, the measurement and recognition of contract assets (unbilled revenue) and contract liabilities (unearned revenue) related to each of the contracts is also dependent on cost estimates.	iv. For actual costs incurred during FY 2022-23, we tested the samples to appropriate supporting documents.
In view of above, we have considered the estimation of construction contract costs as a key audit matter.	v. To validate the remaining costs to completion, for sample contracts, we obtained the approved costs sheets (for each of such sample contracts) containing the breakdown of such costs. Evaluated the reasonableness of managements judgements and assumptions through comparison of actual margins during the year with base margins estimated at the beginning, comparison between Financial progress (proportion of actual costs to estimated costs) and physical progress certified by the Independent Engineer, past trends of recovery of price escalation with incremental costs incurred and comparison of actual costs within similar contracts.
Revenue from construction contracts is recognised over a period of time in accordance with the requirements of Ind AS 115, ‘Revenue from Contracts with Customers. The contract revenue amounts to RS.43,071.01 million for engineering, procurement and construction contracts, which usually extends over a period of 2-3 years, and the contract prices are Fixed and, in few cases, subject to clauses with price variances and variable consideration.	vi. Assessed the adequacy and appropriateness of the disclosures made in standalone Financial statements in compliance with the requirements of Ind AS 115.

 

2. Valuation of accounts receivable and contract assets in view of risk of credit losses. (Refer note 1 (K), 39(i), 7 and	i. Understood and evaluated the design and tested the operating effectiveness of key internal Financial controls in relation to determination of expected credit loss.
11 – Trade Receivables and Note 16(a) for contract asset to Standalone Financial Statements)
Accounts receivable and Contract assets are significant items in the Companys standalone Financial statements aggregating to RS.4,637.81 million as of March 31, 2023 and provision for impairment of receivables and contract assets amounted to RS.17.64 millions as at March 31, 2023. The Company has a concentration of credit exposure on certain customers, which include government and private organisations, where there are delays in collections due to various reasons.	i. Obtained confirmation from parties, for sample balances, with respect to outstanding balances. Wherever confirmations are not received for the samples, performed alternate procedures through verification of Companys invoices approved by the respective customers which represents acknowledgement of work delivered.
	iii. Performed inquiry procedures with senior management of the Company regarding status of collectability of the receivable and contract assets.
The management periodically assess the adequacy of provisions recognised, as applicable, on receivables and contract assets, based on factors such as credit risk of the customer, status of the project, discussions with the customers and underlying contractual terms and conditions. This involves significant judgement.	iv. In respect of material contract balances, corroborated our inquiry procedures with the correspondence between the Company and the customers, contracts and other documents.
Given the relative significance of these receivables and contract assets to the standalone Financial statements and the nature and extent of audit procedures involved to assess the recoverability of receivables and contract assets, we determined this to be a key audit matter.	v. Assessed the inputs used by the Management to determine the amount of allowances by considering factors such as credit risk of the customer, cash collections, past history and status of the project, and correspondence with customers.
	vi. Presented the results of our work done to the audit committee. vii. Assessed the adequacy and appropriateness of the disclosures made in the standalone Financial statements in this regard.

Information Other than the Standalone Financial Statements

The Companys Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Directors Report, Corporate Governance Report and Other Information included in the Annual Report but does not include the standalone Financial statements and our auditors report thereon.

Our opinion on the standalone Financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Financial statements, our responsibility is to read the other information 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. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of Management and Board of Directors for the Standalone Financial Statements

The Companys Management and Board of Directors are 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 and other comprehensive income, changes in equity and cash Flow s of the Company in accordance with the accounting principles generally accepted in India, including the Indian 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 standalone Financial statement 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 and Board of Directors are 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Financial statements.

We give in "Annexure A" a detailed description of Auditors responsibilities for Audit of the Standalone Financial Statements.

Other Matters

1. We did not audit the Financial statements of three jointly controlled operations included in the standalone Financial statements of the Company, whose Financial statements reflect total assets of RS.0.26 millions as at March 31, 2023, and total revenues of RS.3.45 millions, total net profit after tax of RS..11 million and total comprehensive income of RS..11 million for the year ended March 31, 2023, and cash inFlow s (net) of RS..23 million for the year then ended. The

Financial statements of these jointly controlled operations have been audited by other auditors whose reports have been furnished to us by the Management, and our opinion on the standalone Financial statements (including other information) in so far relates to the amounts and disclosures included in respect of these Jointly controlled operations, is based solely on the report of other auditors.

Our opinion is not modified in respect of the above matter with respect to our reliance on the work done and the reports of the other auditors.

2. The standalone Financial statements of the Company for the year ended March 31, 2022, were audited by another firm of Chartered Accountants along with the joint auditors i.e. M/s Shridhar & Associates, Chartered Accountants, whose report dated May 23, 2022 expressed an unmodified opinion on those standalone Financial statements.

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

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

2. As required by Section 143(3) of the Act, we report that: (a) 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flow dealt with by this Report are in agreement with the books of account; (d) In our opinion, the aforesaid standalone Financial statements comply with the Ind AS specified under Section 133 of the Act; (e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2023 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 with reference to standalone Financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure C"; (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 litigations on its Financial position in its standalone Financial statements. Refer Note 46 to the standalone Financial statements; ii. The Company has long-term contracts for which there were no material foreseeable losses as at March 31, 2023. Refer Note 16(a) to the standalone Financial statements. Further, the Company did not have any outstanding derivative contracts as at March 31, 2023; iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2023; iv. 1. 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 persons or entities, 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 ("Ultimate Beneficiaries") by or on behalf of the Company or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

2. The Management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, as on the date of this audit report, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate

Beneficiaries") by or on behalf of the Funding Party or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

3. Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, and according to the information and explanations provided to us by the Management in this regard nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (1) and (2) above, contain any material mis-statement.

v. The dividend declared and paid during the year by the Company is in compliance with section 123 of the Act. vi. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the company only w.e.f. April 1, 2023, reporting under this clause is not applicable.

3. In our opinion and according to information and explanations given to us, the remuneration paid and provided by the Company to its directors during the current year is within the limits prescribed under Section 197 of the Act and the rules thereunder.

Annexure A to the Independent Auditors Report on even date on the

Standalone Financial Statements of Rs..G. Infra Engineering Limited

Auditors Responsibilities for the Audit of the 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:

• 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.

• 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 with reference to standalone Financial statements 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 and Board of Directors.

• Conclude on the appropriateness of Managements and Board of Directors 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.

• 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.

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 de_ciencies 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 for the year ended March 31, 2023 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.

i. (a) A. The Company has maintained proper records showing full particulars including quantitative details and situation of Property, plant and equipment and relevant details of Right-of-use assets and Investment Property.

B. The Company has maintained proper records showing full particulars of Intangible assets.

(b) All the Property, plant and equipment are physically verified by the management according to a phased program designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this program, certain Property, plant and equipment has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties (other than properties where the Company is the lessee, and the lease agreements are duly executed in favor of the lessee) as disclosed in the standalone Financial statements are held in the name of the Company. (d) 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 revalued its Property, plant and equipment (including Right-of-use assets) and Intangible assets. Accordingly, the reporting under paragraph 3(i)(d) of the Order is not applicable to the Company.

(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, no proceeding has been initiated on or pending against the Company for holding benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) (formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)) and rules made thereunder. Accordingly, the provisions stated in paragraph 3(i)(e) of the Order are not applicable to the Company. ii. (a) The Inventory (excluding material in transit) has been physically verified during the year by the management. In our opinion, the frequency of verification, coverage and procedure of such verification is reasonable and appropriate. The discrepancies noticed on physical verification of inventory as compared to the book records were not 10% or more in aggregate for each class of inventory and have been properly dealt with in the books of account.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, during the year, the Company has been sanctioned working capital limits in excess of RS. crores, in aggregate, from banks on the basis of security of current assets and immovable properties. We have been informed that based on discussions between the Companys management and the respective lenders, the Company has been filing quarterly statements on mutually agreed basis for reporting of current assets, represented by adjusted balances of Accounts receivables (excluding withheld balances by the respective debtors), Accounts payable (excluding payables to service vendors, provisions and balance for retention payable), Inventory (except Goods in Transit), Contract assets (for outstanding upto three months), Advance to suppliers and Mobilization Advances. These statements, which have been filed for three quarters (upto December, 2022) by the Company are in agreement with the unaudited books of account of the Company for such respective quarters. Further, as on the date of this report, the Company is yet to file quarterly statement for the quarter ended March 31, 2023 (Refer note 55 (ii) to the standalone Financial statements). iii. (a) According to the information and explanation provided to us, the Company has made investment in Subsidiaries & Associates and granted unsecured loans to Subsidiaries and employees during the year. No advances in the nature of loans or guarantee or security provided by the Company during the year.

(A) The details of such loans to Subsidiaries are as follows:

Particulars	Loans ( Rs. in Millions)
Aggregate amount granted/provided during the year
- Subsidiaries	1,873.25
- Joint Ventures	-
- Associates	-
Balance Outstanding as at March 31, 2023 in respect of above cases
- Subsidiaries	2,116.41
- Joint Ventures	-
- Associates	-

(B) The Company has granted unsecured loans to its 209 employees amounting to RS.0.02 millions during the year. The balance outstanding as at March 31, 2023 in respect of this is RS.1.18 millions.

(b) According to the information and explanations given to us and based on the audit procedures performed by us, we are of the opinion that the terms and conditions in relation to loans granted and investments made are not prejudicial to the interest of the Company.

(c) In case of the loans, the schedule of repayment of principal and payment of interest have not been stipulated in respect of loans given to Subsidiary companies. In the absence of stipulation of repayment terms, we are not able to comment on the regularity of repayment of principal and payment of interest. In respect of loans given to employees which are interest-free, the schedule for repayment of principal has been stipulated and the repayments have been regular. (d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, in respect of loans given to Subsidiary companies, the aforesaid loans are either repayable on demand of the Company or repayable at the option of such Subsidiary companies. For loans repayable on demand, we have been informed that the repayment has been made during the year when demanded by the Company and for loans which are repayable at the option of subsidiary companies, there is no due date specified therein. Therefore, in respect of aforesaid loans, there is no amount which is overdue for more than 90 days.

In respect of loans given to employees, there is no amount which is overdue for more than 90 days. (e) According to the information and explanations provided to us, in respect of loans which are repayable on demand of the Company, the repayments have been done when demanded by the Company and therefore, these loans have not been renewed or extended. In respect of loans which are repayable at the option of subsidiary companies, the question of the amount falling due during the year does not arise. In respect of loans to employees, the repayments which have fallen due, during the year, have not been renewed or extended.

As mentioned in (d) above, there was no overdue amount during the year and therefore, the question of commenting whether any fresh loans were given to settle the overdue of existing loans does not arise.

(f ) According to the information explanation provided to us, the Company has granted loans which are repayable on demand of the Company or without specifying any terms or period of repayment. The details of the same are as follows:

(Amounts in Rs. million)

Particulars	All Parties	Promoters	Related Parties
Aggregate amount of loans granted during the year
- Repayable on demand of the Company (A)	438.61	-	438.61
- Agreement does not specify any terms or period of repayment	1,434.64	-	1,434.64
(repayable at the option of the borrowers) (B)
Total (A+B)	1,873.25	-	1,873.25
Percentage of aforesaid loans (A + B) to the total loans	98.94%

iv. In our opinion, and according to the information and explanations given to us, the Company is engaged in providing infrastructural facilities as specified in schedule VI of the Act and accordingly, the provisions of Section 186, except sub section (1), of the Act are not applicable to the Company. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186(1) of the Companies Act, 2013 in respect of the loans and investments made by it. v. The Company has not accepted any deposits or amounts which are deemed to be deposits within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified. vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. vii. (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 generally regular in depositing undisputed statutory dues in respect of income-tax, though there have been slight delay in a few cases, and is regular in depositing undisputed statutory dues including provident fund, employees state insurance, sales-tax, service tax, duty of custom, duty of excise, goods and services tax, value added tax, cess and other statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanation given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income tax, goods and services tax, customs duty, cess and any other statutory dues, as applicable, were outstanding, at the year end, for a period more than six months from the date they became payable.

(c) According to the information and explanation given to us and records of the Company examined by us, the particulars of dues referred to in sub clause (a) which have not been deposited on account of any dispute as at March 31, 2023, are as follows: (Amounts in Rs. million)

Name of the statute	Nature of dues	Amount Involved	Amount paid under Protest	Period to which the amount relates	Forum where dispute is pending
Income Tax Act, 1961	Income Tax Demand	10.19	-	2013-14	Commissioner of Income Tax (Appeals)
Income Tax Act, 1961	Income Tax Demand	9.16	1.83	2017-18	Commissioner of Income Tax (Appeals)
Income Tax Act, 1961	Income Tax Demand	7.21	-	2019-20	Commissioner of Income Tax (Appeals)

viii. According to the information and explanations given to us, there are no transactions (which are not accounted in the books of account) which have been surrendered or disclosed as income during the year in tax assessment of the Company. Hence, the provisions stated in paragraph 3(viii) of the Order are not applicable to the Company. ix. (a) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings or in payment of interest thereon to any lender during the year.

(b) According to the information and explanations given to us and on the basis of our audit procedures, we report that the Company has not been declared wilful defaulter by any bank or Financial institution or government or any government authority.

(c) In our opinion and according to the information and explanation given to us, money raised by way of term loans during the year have been applied for the purpose for which they were obtained.

(d) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the standalone Financial statements of the Company, we report that no funds raised on short-term basis have been used for long-term purposes by the Company.

(e) According to the information explanation given to us and on an overall examination of the standalone Financial statements of the Company, we report that the Company has not taken any funds from an any entity or person on account of or to meet the obligations of its subsidiaries, associates or jointly controlled operations.

(f ) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries, jointly controlled operations or associate companies. Hence, reporting under the paragraph 3 (ix)(f ) of the Order is not applicable to the Company. x. (a) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. Hence, the provisions stated in paragraph 3 (x)(a) of the Order are not applicable to the Company.

(b) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully, partly or optionally convertible debentures during the current year. xi. (a) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company, noticed or reported during the year, nor have we been informed of any such case by the management.

(b) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, a report under Section 143(12) of the Act, in Form ADT-4, as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 was not required to be filed with the Central Government. Accordingly, the reporting under paragraph 3(xi)(b) of the Order is not applicable to the Company.

(c) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, and as represented to us by the management, no whistle-blower complaints have been received during the year by the Company. Accordingly, the reporting under paragraph 3(xi) (c) of the Order is not applicable to the Company. xii. In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company. Accordingly, the provisions stated in paragraph 3(xii) of the Order are not applicable to the Company. xiii. According to the information and explanation given to us and based on our examination of the records of the

Company, transactions with related parties are in compliance with the provisions of Sections 177 and 188 of the Act. The details of such transactions have been disclosed in the Financial statements as required by the applicable Indian Accounting Standard 24 "Related Party disclosures" specified under Section 133 of the Act. xiv. (a) In our opinion and based on our examination, the Company has an internal audit system commensurate with the size and nature of its business.

(b) The reports of the Internal Auditor for the period under audit have been considered by us. xv. The Company has not entered into any non-cash transactions with its directors or persons connected with them. Accordingly, the reporting on compliance with the provisions of Section 192 of the Act under 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 and therefore, the provisions stated in paragraph 3 (xvi)(a) of the Order are not applicable to the Company.

(b) In our opinion, the Company has not conducted any Non-Banking Financial or Housing Finance activities during the year. Therefore, the reporting under paragraph 3 (xvi)(b) of the Order are not applicable to the Company.

(c) The Company is not a Core investment Company ("CIC") as defined in the regulations made by Reserve Bank of India. Therefore, the reporting under paragraph 3 (xvi) (c) of the Order are not applicable to the Company. (d) Based on the information and explanations provided by the management of the Company, the Group does not have any CICs, which are part of the Group. We have not, however, separately evaluated whether the information provided by the management is accurate and complete. Accordingly, the reporting under clause 3(xvi)(d) of the Order is not applicable to the Company. xvii. Based on the overall review of standalone Financial statements, the Company has not incurred cash losses in the current Financial year and in the immediately preceding Financial year. Hence, the provisions stated in paragraph 3 (xvii) of the Order are not applicable to the Company. xviii. There has been no resignation of the statutory auditors during the year. Hence, the provisions stated in paragraph 3 (xviii) of the Order are not applicable to the Company. xix. According to the information and explanations given to us and based on our examination of the Financial ratios, ageing and expected dates of realization of Financial assets and payment of Financial liabilities, other information accompanying the standalone Financial statements, our knowledge of the Board of Directors and Managements 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 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 reporting 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 get discharged by the Company as and when they fall due.

xx. According to the information and explanations given to us and based on our verification, the Company has made the required contributions during the year and there are no unspent amounts which are required to be transferred either to a Fund or to a Special Account as per the provisions of Section 135 read with schedule VII of the Act. Therefore, reporting under paragraph 3(xx) of the Order is not applicable to the Company. xxi. The reporting under paragraph 3(xxi) of the Order is not applicable in respect of audit of standalone Financial statements. Accordingly, no comment in respect of the said clause has been included in this report.

Annexure C to the Independent Auditors Report of even date on the

Standalone Financial Statements of Rs..G. Infra Engineering Limited

[Referred to in paragraph 2(f ) under ‘Report on Other Legal and Regulatory Requirements in the Independent Auditors Report of even date to the Members of Rs..G. Infra Engineering Limited on the standalone Financial statements for the year ended March 31, 2023]

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

We have audited the internal Financial controls with reference to standalone Financial statements of Rs..G. Infra Engineering Limited ("the Company") as of March 31, 2023 in conjunction with our audit of the standalone Financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, an adequate internal Financial controls with reference to standalone Financial statements and such internal Financial controls with reference to standalone Financial statements were operating effectively as at March 31, 2023, 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) (the "Guidance Note").

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. 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 and the Standards on

Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal Financial controls. 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 standalone 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 with reference to standalone 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 standalone 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 judgement, including the assessment of the risks of material misstatement of the standalone 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 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 standalone Financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal Financial control with reference to standalone 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 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 standalone Financial statements.

Inherent Limitations of Internal Financial Controls With reference to Standalone 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 standalone Financial statements to future periods are subject to the risk that the internal Financial control 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.

Other Matter

Reporting under section 143 (3) (i) of the Act in respect of the adequacy of the internal Financial controls with reference to the standalone Financial statements is not applicable to three jointly controlled operations.

Our opinion is not modified in respect of this matter.