Ircon International Ltd Auditor Reports

TO

THE MEMBERS OF

IRCON INTERNATIONAL LIMITED

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying Standalone Ind AS Financial Statements of Ircon Internationa! Limited ("the Company") which comprise the Balance Sheet as at 31st March, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and notes to the financial statements including a summary of the material accounting policies and other explanatory information in which are incorporated the Returns for the year ended on that date audited by branch auditors of the Companys branches at Algeria, Bangladesh, Sri Lanka and Myanmar (hereinafter referred to as the "Standalone Ind AS Financial Statements").

We have audited the financial statements of the three (3) foreign branches situated at South Africa, Malaysia and Sri Lanka (Indian part) for the year ended 31st March, 2024. However, we have not visited any foreign branch and the relevant information for the audit purpose was provided to us by the management at corporate level.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS 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 ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2024, the profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Ind AS Financial Statements 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 Ind AS 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 Ind AS Financial Statements under the provisions of the Act and the Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence obtained by us and other auditors in terms of their reports referred to it "Other Matter" paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS Financial Statements.

Emphasis of Matters

Reference is invited to footnote no. (iii) of Note no. 8.1 of the Standalone Ind AS Financial Statements wherein it has been stated that financial statements of one of the jointly controlled entities i.e. Indian Railway Stations Development Corporation Ltd. (IRSDC) have been prepared on liquidation basis and that the Company does not foresee any impairment in the value of investments held by it in IRSDC.

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Ind AS Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Ind AS Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter	How our audit addressed the matter
Revenue Recognition in terms of Ind AS 115 "Revenue from Contracts with Customers"	- Our audit procedures included considering the appropriateness of the Companys revenue recognition accounting policies and assessing compliance with the policies in terms of the applicable accounting standards.
Accounting Standard on Revenue which prescribes five steps revenue recognition model.
The Company recognizes revenue for a performance obligation satisfied over time after estimating its progress towards complete satisfaction of the performance obligation. The recognition of revenue requires assessments and judgments to be made on changes in work scope, claims (compensation, rebates etc.) and other payments to the extent performance obligation is satisfied. The company measures the performance obligation by applying input method. In the contracts where performance obligation cannot be measured by input method, the output method is applied, which faithfully depict the Companys performance towards complete satisfaction of the performance obligation.	We evaluated the effectiveness of control over the preparation of information that are design to ensure the completeness and accuracy. We selected a sample of contracts, and tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and satisfaction of performance obligations. We also examined costs included within WIP balances on a sample basis and tested their recoverability through comparing the net realizable values as per the agreements with estimated cost to complete.
During order fulfillment, contractual obligations may need to be reassessed. In addition, change orders or cancelations have to be considered. As a result, total estimated project costs may exceed total contract revenues and therefore require immediate recognition of the expected loss.	- We performed following substantive procedures over revenue recognition with specific focus on whether there is single performance obligation or multiple performance obligations in the contract and whether the performance obligation is being satisfied over the period of time or at a point in time:
Ind AS 115 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers.	• Read, analyzed and identified the distinct performance obligations in these contracts.
The application of the revenue accounting standard involves certain key judgements relating to -	• Compared these performance obligations with that identified and recorded by the Company.
i. identification of distinct performance obligations;	• Considered the terms of the contracts to verify the transaction price used to allocate to separate performance obligations.
ii. determination of transaction price of the identified performance obligations;	• Checked whether the performance obligation is being satisfied over the period of time or at a point in time.
iii. the appropriateness of the basis used to measure revenue recognized at a point in time or over time.	• Performed analytical procedures for reasonableness of revenues disclosed
Additionally, revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. Revenue recognition from these judgements were identified as a Key Audit Matter and required a higher extent of audit effort.
Refer Note no. 39 to the Standalone Ind AS Financial Statements.
Contingent Liabilities
There are a number of litigations pending before various forums against the Company and the managements judgement is required for estimating the amount to be disclosed as contingent liability. We identified this as a key audit matter because the estimates on which these amounts are based involve a significant degree of management judgement in interpreting the cases. Refer Note no. 37 of the Standalone Financial Statements, read with the Accounting Policy No. 2.2.16.	We have obtained an understanding of the Companys procedure in respect of estimation and disclosure of contingent liabilities and adopted the following audit procedure: .
	• Reviewing the current status and material developments of legal matters.
	• Examining recent orders from competent authorities and/or communication received from various authorities, judicial forums and follow-up action thereon.
	• Review and analysis of evaluation of the contentions of the company through discussions, collection of details of the subject matter under consideration, the likely outcome and consequent potential outflows on those issues
System Environment and internal Controls	Our procedures included but were not limited to:
The Company is having SAP system in place and only FI- CO & Payroll module is Implemented and other system like inventory, MM Module etc. is under the process of implementation Further, the SAP project system module (PS) is required to generate the projects invoices with integration support.	• Discussing with management and IT department on the IT environment and consideration of the key financial processes to understand where IT systems were integral to the financial reporting process.
The IT system in the company are not fully automated and manual interventions are in place in preparing and reporting of financial statements. This required a high degree of auditor judgement in evaluating the audit evidence and a higher extent of audit effort.	• Testing the design of the key IT controls relating to financial reporting systems of the company.
	• We also tested the companys controls around system interfaces.
	• We applied substantive audit procedures to ensure that areas where there are manual controls are operating effectively.
	• Our audit planning and procedures also includes the various reports which the system generates and without which it is difficult for us to collect the data of the various heads of the Balance sheet.

Information Other than the Standalone Ind AS 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 consolidated financial statements, the Standalone Ind AS Financial Statements and our auditors report thereon.

Our opinion on the Standalone Ind AS 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 Ind AS 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 Ind AS Financial Statements or our knowledge obtained during the course of our 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 Those Charged with Governance for the Standalone Ind AS 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 Ind AS 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 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 Ind AS 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 Ind AS Financial Statements, Management and the 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.

The Companys Board of Directors is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS 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 Standalone Ind AS 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 financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to Standalone Ind AS 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 the 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 Standalone Ind AS 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 Ind AS Financial Statements, including the disclosures, and whether the Standalone Ind AS Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Standalone Ind AS Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Ind AS 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 Ind AS Financial Statements.

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 financial controls 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 Ind AS 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.

Other Matters

• We did not audit the financial statements / financial information of four (4) foreign branches included in the Standalone Ind AS Financial Statement of the company whose financial statements/financial information reflect total assets of Rs. 831.76 Crores (Previous year Rs. 709.32 Crores) as at 31st March 2024, total revenue of Rs. 548.44 Crores (Previous Year Rs. 401.53 crores) and total PBT of Rs. 112.41 crores (previous year Rs. 84.32 crores), for the year ended on that date. The financial statements/information of these branches have been audited by the branch auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts and disclosure included in respect of these branches, is based solely on the reports of such branch auditors.

• The financial statements include profit/(loss) of (-) Rs.0.08 Crores (Previous Year Rs.0.08 Crores), the companys share in two (2) integrated joint operations (unincorporated) accounts which have been audited by other firms of chartered Accountants and profit/ (loss) of Rs.0.90 Crores (Previous Year Rs. 0.47 Crores) the companys share in two (2) joint operations accounts certified by the management for the year ended March 2024.

• Reference is invited to Note no. 46 (ii) of the Standalone Ind AS Financial Statements regarding amendments made in the IndAS-1. As explained by the Management there is no financial impact of such amendments.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government 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, based on our audit 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 and proper returns adequate for the purpose of our Audit has been received from branches not visited by us.

c. The reports on the accounts of branch offices of the Company audited under section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

d. The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

e. In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Ind AS specified under Section 133 of the Act.

f. Being a government company, provision of section 164(2) of the Act are not applicable pursuant to the notification No. G.S.R.463(E) dated 5 June 2015, issued by the Central Government.

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 in "Annexure B".

h. Being a government company, provision of section 197 of the Act are not applicable vide notification no. G.S.R. 463 (E) dated 5th June 2015, issued by the Central Government.

i. 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:

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Ind AS Financial Statements - Refer Note no.37 to the Standalone Ind AS Financial Statements.

ii. The Company has made provision, as required under the applicable law or accounting standards for material foreseeable losses, if any, on long-term contracts Refer Note no.19.2 to the Standalone Ind AS Financial Statements. The Company did not have any derivative contracts.

iii. There were no amounts which were 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, as disclosed in Note no. 45 to the accounts, 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 or entity, including foreign entity ("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.

b) The Management has represented that, to the best of its knowledge and belief as disclosed in Note no. 45 to the accounts, no funds have been received by the Company from any person or entity, including foreign entity ("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 ("Ultimate Beneficiaries") by or on behalf of the Funding Parties or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

c) Based on the audit procedures that have been 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 (i) and (ii) of Rule 11(e), as provided under

(a) and (b) above, contain any material misstatement.

v. As stated in Accounting Policy No. 2.2.15 to the standalone Ind AS Financial Statements

a) The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with section 123 of the Companies Act 2013 to the extent applicable.

b) The interim dividend declared and paid by the Company during the year and until the date of this report is in accordance with section 123 of the Act.

c) The Board of Directors of the company have proposed final dividend for the current year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend proposed is in accordance with section 123 of the Act to the extent applicable.

vi. Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account for the financial year ended 31st March, 2024 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 the audit trail feature being tempered with.

As proviso to Rule 3(1) of the Companies (Account) Rules 2014 is applicable from 1st April 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March, 2024.

3. As required by Section 143(5) of the Act and as per directions issued by Comptroller and Auditor General of India, we report that:

S. No Directions	Auditors Replies
1. Whether the company has system in place to process all the accounting transactions through IT systemRs 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 is using SAP S/4 Hana system for all its projects located in India and also in its foreign branches. As per information and explanation provided to us no accounting transactions have been processed outside the IT system except income billing for which no financial implication were observed.
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 loanRs If yes, the financial impact may be stated. Whether such cases are properly accounted forRs (In case, lender is a government company, then this direction is also applicable for statutory auditor of lender company).	No, the Company does not have any case of restructuring of an existing loan or cases of waiver/ write off of debts /loans / interest etc. made by a lender to the company. However, the Company has given a loan to one of its subsidiary, Ircon PB Tollway Ltd. (IPBTL). On request of the subsidiary company, the holding company has waived off interest for the current year. However, the company has booked interest on the basis of fair valuation as per Ind AS amounting to Rs. 16.31 crores.
3. Whether funds (grants/subsidy etc.) received/ receivable for specific schemes from Central/State Government or its agencies were properly accounted for/utilized as per its term and conditionsRs List the cases of deviation.	According to the information and explanation given to us and as per examination of records, no funds have been received/ receivable for any specific scheme from central/state agencies during the financial year 2023-24.

"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 Ircon International Limited of even date)

To the best of our information and according to the explanation provided to us by the Company and the books of accounts and records examined by us in the normal course of audit, we stated that:

(i) . In respect of the companys Property, Plant and Equipment and Intangible Assets:

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 Property, Plant and Equipment were physically verified by the management during the year. There is a regular program of verification, which in our opinion, is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such verifications.

c) According to the information and explanations given to us and on the basis of our examination of records of the company, we report that, the title/lease deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favor of the lessee) disclosed in the financial statement included under Property, plant and equipment are held in the name of the Company as at the balance sheet date. However, in some cases where the company is the lessee and the lease agreements are not executed in favor of the company.as disclosed in additional disclosure of "Note No 07" Right-of- use Assets.

d) The Company has not revalued its Property, Plant and Equipment (including Right of Use Assets) or Intangible Assets or both during the year.

e) No proceedings have been initiated or pending against the Company for holding any benami property under the Prohibition of Benami Transactions Act,1988 and rules made thereunder.

(ii) . a) The inventory (excluding stocks lying with

third parties) has been physically verified by the management at reasonable intervals during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the coverage and procedure of such verification is appropriate. No discrepancies of 10% or more in the aggregate for each class of inventory were noticed on comparison of physical verification with book records.

b) The Company has not been sanctioned any working capital limits at any points of time during the year, from banks or financial institutions on the basis of security of current assets and hence reporting under clause 3(ii)

(b) of the Order is not applicable.

(iii). According to the information and explanations given to us and on the basis of our examination of the records, the Company has not made any investment in, provided security to companies, firms, limited liability partnerships or any other parties during the year, except investment in Subsidiaries & Joint Venture of the company.

The Company has provided guarantee, granted unsecured loans and advances in nature of loans during the year to companies and other parties details of which are stated below. The company has not provided guarantees or granted loans or advances in the nature of loans during the year to firms, limited liability partnerships.

a) (A) Based on the audit procedures carried out by us and as per the information and explanations given to us, the company has granted loans, advances in the nature of loans and guarantees to subsidiaries and joint ventures as below:

	Guarantees	Loans	Interest Free Loan
Aggregate amount granted / provided during the year
-Subsidiaries*	0.78	Nil	165.76
-Joint Ventures*	350.74	-	63.62
Balance Outstanding as at the balance sheet date
-Subsidiaries*	2046.33	313.60	686.69
-Joint Ventures*	1712.30	-	245.33

*As per the companies Act

(B) Based on the audit procedure carried out by us and as per the information and explanations given to us, the Company has granted advances in the natures of loans to other parties as below:

	Advance in the nature of loans- Employee advances
Aggregate amount granted / provided during the year - Other Parties	0.30
Balance Outstanding as at the balance sheet date - Other Parties	1.27

b) In our opinion the investment made and guarantees provided and the terms and conditions of the grant of loans and advances in the nature of loans during the year are, prima facie, not prejudicial to the interest of the Company.

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, in our opinion, in the case of loans and advances in the nature of loans granted to Companies & Employees, the schedule of repayment of principal and receipt of interest has been stipulated and the repayment or receipts are regular as per stipulation except in case of one of its subsidiary, Ircon PB Tollway Ltd. (IPBTL) where company has waived off the interest for the period of October, 01 2019 till March, 31 2024.

d) In respect of loan granted by the company, there is no overdue amount more than 90 days remaining outstanding as at the balance sheet date.

e) No loan or advances in the nature of loans granted by the company which has fallen due during the year, has been renewed or extended or fresh loans granted to settle the over dues of existing loans given to same parties.

f) 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 during the year. Hence reporting under clause 3(iii)(f) is not applicable.

(iv) . In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 185 and 186 of the companies Act, in respect of loans, investments, guarantees and security.

(v) . The Company has not accepted any deposits within the provisions of Section 73 to 76 or any other relevant provision of the Companies Act, and rules made there under,

(vi) . The maintenance of cost records has been specified by the Central Government under Section 148(1) of the Companies Act, in respect Road & Infrastructure projects of the Company. We have broadly reviewed the records and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made any detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) . a) The Company is generally regular in depositing undisputed statutory dues including provident fund, income tax, goods and service tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable with the appropriate authorities. Employees State Insurance is not applicable to the Company. According to the information and explanation given to us, there are no undisputed statutory dues which were outstanding as on 31.03.2024 for a period of more than six months from the date the same become payable.

b) Details of Statutory dues referred to in sub-clause (a) above which have not been deposited as on 31.03.2024 on account of dispute are given below:

S. Name of the No. Statue	Nature of the Dues	Amount in (Crores)*	Period to which the amounts related	Forum where dispute is pending
1 Sales Tax	Sales Tax-AGRP	0.50	2007-08 to 2012-13	The Additional Commissioner, Commercial Taxes, Ghaziabad
2 Sales Tax	Entry Tax- AGRP	0.02	2008-09 to 2013-14	The Additional Commissioner, Commercial Taxes, Ghaziabad
3 Sales Tax	UP TRADE TAX UP-01	3.89	2004-05 to 2007-08	The Assessing Authority
4 Sales Tax	UPTT-UP-01 (Entry Tax)	0.16	2007-08	The Assessing Authority
5 Sales Tax	UPVAT ACT-UP-01	3.41	2007-08 & 2008-09	The Appellate Authority
6 Sales Tax	UPVAT ACT-UP-01 (Entry Tax)	0.15	2007-08 to 2009-10	The Appellate Authority
7 Sales Tax	UPVAT ACT-UP-01	0.01	2010-11	The Deputy Commissioner
8 Sales Tax	Sales Tax-BE-08	0.26	2007-08 to 2009-10	The Additional Commissioner Appeal, Noida
9 Sales Tax	Sales Tax-BE-08 Entry Tax	0.003	2014-15	The Additional Commissioner Appeal, Noida
10 Sales Tax	UPTT-UP-05	1.31	2006-07 to 2007-08	Tribunal Jhansi Bench
11 Sales Tax	UPTT-UP-05	0.01	2005-06	High Court Allahabad
12 Sales Tax	UPVAT-UP-05	3.27	2007-08 to 2009-10	Tribunal Jhansi Bench
13 Sales Tax	Sales Tax 201011- GED	0.05	2010-11	Asst Commercial Tax Officer, Margoa
14 Uttar Pradesh VAT Act, 2008	Demand raised for sales tax	0.08	1982-83 and 1989-90	Appellate Authority, Jhansi
15 Sales Tax	Sales Tax GED GOA	0.50	2011-12 to 2014-15	Asst Commercial Tax Officer, Margoa
16 Sales Tax	Demand Raised	1.19	2006-07	VAT Tribunal Chandigarh
17 Service Tax	Service Tax Demand	0.55	2015-16 to 2017-18	CESTAT Allahabad
18 Service Tax	Service Tax Demand	0.56	2015-16	Deputy/Assistant Commissioner Jaipur
19 Uttar Pradesh sales Tax Act 1948	UP sales tax - section 3 kha	1.24	2005-06 & 2006-07	Appeal pending in Tribunal
20 Uttar Pradesh VAT Act,2008	UP VAT (Regular) section 28(2)	0.12	2015-16 to 2017-18	Adjustment letter submitted to assessing authority
21 Uttar Pradesh sales Tax Act 1948	UP Entry Tax - GB Nagar	0.05	2002-03 & 2003-04	Allahabad High Court
22 Uttar Pradesh VAT Act,2008	UP VAT (Regular) section 28(2)	0.03	2016-17	Appeal fled with Additional commissioner Appeal
23 Maharastra GST Act 2017	Daund Project	0.22	2018-19	Appeal fled before the first appeal
24 Jammu & Kashmir GST Act, 1962	Sales Tax	14.36	1999-00 to 2005-06	J&K High Court, Jammu and Deputy Commissioner Commercial Sales Taxes (appeals), Srinagar
25 Sales Tax -MRO	Sales Tax - MRO	3.51	1995-96 & 1996-97	Bombay High Court
26 Sales Tax- MRO	Sales Tax - MRO	3.97	2010-11 & 2011-12	Sales Tax Office, Mumbai
27 West Bengal State Sales Tax Act 1994	Sales Tax	0.26	1998-99	Sr. Jt Commissioner (Appeals), Sales Tax, West Bengal
28 West Bengal VAT Act 2003	VAT	0.72	2004-05,2016-17 & 201718	Asst. Comm. Of Sales Tax College St. Charge, Kolkata
29 Service Tax	Service Tax (Behala)	0.87	2015-16 to 2016-17	Joint/Additional Commissioner Kolkata
30 Central Excise Act, 1944	Levy of Excise Duty on Bracket/ Cantilever Assemblies	0.66	1998-99	CESTAT (Dept. Appeal)
31 DGFT Cases FDTR Act, 1992	Duty Drawback	2.89	1991-1992	Appeal in Delhi High Court
32 Service Tax	Service Tax on Agency Fees	12.91	2010-11 to 2014-15	CESTAT
33 Service Tax	Service Tax on Agency Fees	5.60	2009-10 to 2013-14	CESTAT
34 Service Tax	Service Tax on Agency Fees	2.06	2016-17 to 2017-18	CESTAT
35 Bihar VAT Act	VAT TDS	5.98	2005-06 and 2006-07	Bihar VAT Department, West Circle Patna
36 Bihar VAT Act	VAT	0.003	2010-11	Bihar VAT Department, West Circle Patna
37 Bihar VAT Act	VAT	29.20	2012-13	Bihar VAT Department, West Circle Patna
38 Bihar VAT Act	Bihar VAT	33.46	2013-14	Writ Petition Filed before High Court
39 Bihar VAT Act	Bihar VAT	25.54	2014-15	Writ Petition Filed before High Court
40 Service Tax	Service Tax	2.16	2015-16	CESTAT, Kolkata
41 Bihar VAT Act 2005	Regular assessment under section 31	0.92	2015-16	Appeal before Bihar VAT Department, West Circle Patna
42 Service Tax	Service Tax Jagdalpur	2.84	2016-17 to 2017-18	Appeal Filed before Commissioner of Central and Customs Appeal, Chhattisgarh
43 Bihar VAT Act 2005	Regular assessment under section 31	19.63	2016-17	Appeal before Bihar VAT Department, West Circle Patna
44 Bihar GST Act,2017	Demand order u/s 73(9)	3.83	2017-18	Appeal before the first appeal.
45 Bihar GST Act,2017	Demand order u/s 73(9)	0.31	2018-19	Appeal before the first appeal.
46 UP VAT Act	UP VAT (Regular) section 28(2)	1.19	2010-11	Sales Tax Tribunal, Lucknow
47 UP VAT Act	UP VAT (Regular) section 28(2)	42.87	2014-15	Sales Tax Tribunal, Lucknow
48 UP VAT Act	UP VAT (Regular) section 28(2)	14.73	2015-16	Sales Tax Tribunal, Lucknow
49 Bangladesh VAT & Supplementary Act 2012	VAT Intelligence	0.45	2018-19 to 2022-23	VAT Intelligence
50 Income Tax Act	Assessment Demand	10.51	2021-22	CIT(Appeals)
51 Income Tax Act	Assessment Demand	0.07	2018-19	CIT(Appeals)
52 Income Tax Act	Traces Demand	0.25	2008-09 to 2010-11	Assessing Officer
53 Income Tax Act	Traces Demand	0.03	2013-14 to 2016-17	Assessing Officer

*As compiled by the management and relied upon by us.

(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 not defaulted in the

repayment of loans or other borrowings or in the payment of interest thereon to any lender.

b) The Company has not been declared willful defaulter by any bank or financial institution or other lender.

c) The Company did not have any term loan whose utilization was outstanding during the year and hence, reporting under clause 3(ix)

(c) of the Order is not applicable.

d) On an overall examination of the financial statement of the Company, we reported that the company has not raised any short- term funds during the year and hence reporting under clause 3(ix)(d) of the order is not applicable.

e) On an overall examination of the financial statement of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries and joint ventures.

f) The Company has not raised any loans during the year on the pledge of securities held in its Subsidiaries or Joint Venture Companies and hence reporting on clause 3(ix)(f) of the Order is not applicable.

(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 reporting under clause 3(x)(a) of the Order is not applicable.

b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause 3(x)(b) of the Order is not applicable.

(xi) . a) No fraud by the company or any fraud 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.

c) We have taken into consideration the whistle blower complaints received by the Company during the year, while determining the nature, timing and extent of our audit procedures.

(xii) . The Company is not a Nidhi Company as specified in the Nidhi Rules, 2014.Thus, the requirements under para 3(xii) (a), (b) & (c) of the Order is not applicable to the Company.

(xiii) . In our opinion and according to the information and explanations given to us, all transactions with related parties are in compliance with sections 177 and 188 of the Companies Act, where applicable and the details have been disclosed in notes to the financial statements, etc as required by the applicable accounting standards.

(xiv) . a) In our opinion the Company has an adequate internal audit system commensurate with the size and the nature of its business.

b) We have considered, the internal audit reports of the company issued till date, for the period under audit.

(xv) . According to the information and explanations given to us, in our opinion during the year the Company has not entered into any non-cash transactions with its directors or persons connected with its directors and hence provisions of section 192 of the Companies Act, are not applicable.

(xvi) . a) The Company is not required to be registered under section 45- IA of the Reserve Bank of India Act, 1934 (2 of 1934). Hence, clauses 3(xvi)(a) of the Order is not applicable.

b) The Company has not conducted any Non-Banking Financial or Housing Finance activities without obtained a valid Certificate of Registration (CoR) from the Reserve Bank of India as per the Reserve Bank of India Act, 1934.

c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. hence, clause 3(xvi)(c) of the Order is not applicable.

d) According to the information and explanations provided to us there is no Core Investment Company as a part of the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016), hence, the requirement to report on clause 3(xvi)(d) of the Order is not applicable.

(xvii) . The Company has not incurred cash losses in the current and in the immediately preceding financial year.

(xviii) . There has been no resignation of the statutory auditors during the year. Hence, clause 3(xviii) of the order is not applicable.

(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 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) . a) There are no unspent amount towards

Corporate Social Responsibility (CSR) on other than ongoing projects requiring a transfer 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. Hence, reporting under clause 3(xx) (a) of the Order is not applicable.

b) There are no unspent amount in respect of ongoing projects, which required to transferred in to a Special account within a period of 30 days from the end of the financial year in compliance with the provision of section 135(6) of the said Act. Hence, reporting under clause 3(xx)(b) of the order is not applicable.

"Annexure B" to the Independent Auditors Report of even date on the Standalone Ind AS Financial Statements of Ircon International Limited

for the year ended 31st March, 2024

Report on the Internal Financial Controls under Clause

(i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Ircon International Limited "the Company" as of 31st March, 2024 in conjunction with our audit of the standalone Ind AS 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 prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on

the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with 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 31st March, 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". However, internal control needs further strengthening in respect of the following areas identified as on 31st March, 2024 based on our audit.

a. The Company has an integrated ERP system which was not used at its full potential. Further, the SAP project system module (PS) is required to generate the projects invoices with integration support.

b. The Inventory records at some units are maintained manually and the inventory manual in SAP is under consideration.

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

Other Matters

Our aforesaid report under section 143 (3) (i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to branches, is based on the corresponding report of other auditors.

We have considered the identified areas and reported above in determining the nature, timing and extent of audit procedures applied in our audit of the standalone financial statement of the company for the year ended 31st March, 2024 and these areas do not affect our opinion on the Standalone financial statement of the company.

Place: New Delhi

Date : May 21, 2024