IVRCL Auditors Report


To

The members of

IVRCL Limited

Report on the Audit of Standalone Financial Statements

1. Disclaimer of Opinion

We were engaged to audit the accompanying standalone financial statements of IVRCL Limited (the "Company"), which comprise 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 on that date and a summary of the significant accounting policies and other explanatory information for the year then ended in which are incorporated the unaudited returns of all the branches of the Company for the year ended on that date. We do not express an opinion on the accompanying standalone financial statements of the Company. Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for the audit opinion. Accordingly, we do not express an opinion on the standalone financial statements of the Company for the year ended March 31, 2023.

2. Basis of Disclaimer of Opinion

We refer to the following notes in the accompanying standalone financial statements: a. Note 38 of the standalone financial statement, in respect of the preparation of standalone financial statements of the Company has incurred a Net Loss of Rs. 2,30,27.54 Million for the year ended March 31, 2023 resulting into accumulated losses of Rs. 1,47,686.35 Million and erosion of its Net worth as at March 31, 2023. This includes inter alia Rs. 5,799.10 Million towards Finance cost. The Company has obligations towards fund-based borrowings (including interest) aggregating to Rs. 1,64,936.55 Million as per books of accounts and non-fund based exposure aggregating to Rs. 3809.35 Million, operational creditors and statutory dues, subject to reconciliation/verification as stated in note below, that have been demanded/recalled by the financial/operating creditors pursuant to ongoing Liquidation process as going concern, obligations pertaining to operations including unpaid creditors and statutory dues as at March 31, 2023. As the company is a going concern by order of the NCLT dated 26th July 2019 with corrigendum order issued on July 31, 2019 and started receiving the bid amount under Third E-auction process for sale of the company as a going concern, in the opinion of the management, the company will continue its operations and the above results have been prepared on the basis that the Company is Going Concern and however, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business. The ultimate outcome of these matters is at present not ascertainable. Accordingly, we are unable to comment on the consequential impact, if any, on the accompanying Statement.

b. Note 39 of the standalone financial statement, in respect of recognition of deferred tax asset on account of carrying forward unused tax losses and other taxable temporary differences aggregating to Rs. 9,570.59 Million generated as on 31st March 2017. Subsequently, there has not been recognised deferred tax on unused tax losses and other taxable temporary difference a raised except on Ind AS adjustment. As the

However, in our opinion, in absence of convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized, such recognition is not in accordance with Indian Accounting Standard 12 company is a going concern by order of the NCLT dated 26th July 2019 with corrigendum order issued on July 31, 2019 and started receiving the bid amount under Third E-auction process for sale of the company as a going concern the management of the company is confident that sufficient future taxable income will be available against which such deferred tax asset will be realized.

"Income Taxes" (Ind AS 12). Had the aforesaid deferred tax assets not been recognized, loss after tax for the year ended March 31, 2023 would have been higher by Rs. 9,570.59 Million and other equity would have been lower by Rs. 9,570.59 Million.

c. Note 40 of the standalone financial statement in connection with the existence of material uncertainties over the reliability of bank guarantees encashed by customers, certain trade receivables, security deposit, withheld, claims of indirect taxes and other deposits including bank guarantees encashed by customers aggregating to Rs.16,393.62 Million which are subject matters of various disputes /arbitration proceedings/ negotiations with the customers and contractors due to termination / fore closure of contracts and other disputes. The management of Company is confident of positive outcome of litigation/ resolution of dispute and recovering the aforesaid dues. However, the management is in the process of initiating arbitration/other legal action for such invocations. Had the aforesaid assets been provided for impairment, loss after tax for the year ended March 31, 2023 would have been higher by Rs. 16,393.62 Million, and other equity would have been lower by Rs. 16,393.62 Million.

d. Note 41 of the standalone financial statement in respect of investment of Rs. 18,344.12 Million in subsidiaries, associate and joint ventures engaged in BOT and other projects as at March 31, 2023 which are under disputes with the concessionaire/clients and have significant accumulated losses as at March 31, 2023. The management of the Company is at various stages of negotiation/communication/arbitration with respective contractee/clients of such subsidiaries engaged in BOT and other projects to recover the dues and cost incurred by the Company and taking necessary steps to turnaround the loss-making subsidiary Companies. As the company is a going concern by order of the NCLT dated 26th July 2019 with corrigendum order issued on July 31, 2019 and started receiving the Bid amount under Third E-auction process for sale of the company as a going concern considering the long-term nature of investments and in view of ongoing discussion, no provision has been considered necessary by the management in respect of impairment in the value of investment. In absence of a fair valuation of these Investments, we are unable to comment upon the carrying value of these investments and the consequential impact, if any, on the accompanying standalone financial results.

e. Note 42 of the standalone financial statement in respect of loans and advances of Rs. 7,997.17 Million as at March 31, 2023 given to subsidiary companies, associate, net receivable against development rights, that are outstanding for long period. The management of the Company is at various stages of negotiation/communication/ with respective subsidiary/associate company to recover the dues and cost incurred by the Company. As the company is a going concern by order of the NCLT dated 26th July 2019 with corrigendum order issued on July 31, 2019 and started receiving the Bid amount under Third E-auction process for sale of the company as a going concern and accordingly, no provision has been considered necessary by the management in respect of impairment in the value of loans and advances. Had the aforesaid assets been provided for impairment, loss after tax for year ended March 2023 would have been higher by Rs. 7,997.17 Million, other equity would have been lower by Rs. 7,997.17 Million.

f. Note 38 and 43 of the standalone financial statement in respect commencement of Liquidation process as going concern by order of the NCLT dated 26th July 2019 with corrigendum order issued on July 31, 2019, various claims submitted by the operational creditors, the financial creditors, employees, statutory authorities and other creditors against the Company including the claims on Companys subsidiaries. Some of these claims are under further verification/validation and the same may be updated as per any additional information which may be received in the future. Hence there are differences between the liabilities admitted vis-a-vis balance as per books of account, that are currently under consideration/reconciliation. Pending reconciliation/admission of such claims, we are unable to comment on the consequential impact, if any, on the accompanying statement;

g. Note 45 of the standalone financial statement in respect of Confirmation of balances could not be obtained as at March 31, 2023 for bank balances, bank borrowings and for various trade receivables including retention, loans and advances, and trade payables including other financial/non-financial liabilities though, the management has requested for the confirmation of balances and the status is still continued. The Management believes that no material adjustments would be required in books of account upon receipt of these confirmations.

h. Note 46 of the standalone financial statement in respect of Physical verification for fixed assets aggregating to Rs.1,029.26 Million (net block as on March 31, 2023) and inventory aggregating to Rs. 520.14 Million (as on March 31, 2023) could not be carried out at majority locations including project site due to shortage of manpower and accessibility of the stock yards that are terminated/ foreclosed/ having slow progress and the status is still continued. The Management believes that no item of fixed assets and inventory has a net realizable value in the ordinary course of business which is less than the amount at which it is included in the fixed assets and inventories. Accordingly, no provision is required in respect of such fixed assets and inventories. In absence of any alternative corroborative evidence, we are unable to comment on the recoverability of the same.

i. Note 47 of the standalone financial statement in respect of various input credits and balances with various statutory authorities pertaining to service tax, sales tax /GST, Income Tax etc. aggregating to Rs. 2,388.26 Million as at March 31, 2023. The recovery of these amounts is subject to reconciliation, filing of returns and admission by respective statutory authorities and the status is still continued. No adjustments have been made in the books of accounts in respect of such amounts., thus we are unable to comment on whether any provision for impairment in the value of advances is required.

j. Note 53 of the standalone financial statement in respect of IVRCL Chengapally Tollways Limited, subsidiary of IVRCL Limited is into Corporate Insolvency Resolution Plan (CIRP) and the resolution plan has been approved vide order dated May 01, 2023 by Honble NCLT, Hyderabad. IVRCL Limited has an Equity investment of Rs. 2,285.53 Million in IVRCL Chengapally Tollways Ltd., thus we are unable to comment on whether any loss on account of realisation is to be account for in the value of investment is required.

k. As stated in Note 56 of the standalone financial statements, no impairment assessment of tangible and intangible assets has been carried out as at March 31, 2023. Therefore, we are unable to comment on the consequential impairment, if any, that is required to be made in the carrying value of property, plant and equipment and intangible assets

l. Certain audit sample relating to expenses vouchers and supporting documents pertains to site could not be made available. m. In view of the matters of ‘Basis for Disclaimer of Opinion, we are unable to obtain sufficient appropriate audit evidences regarding the extent of the loss allowance/impairment or potential liability to be recognised, if any, and the consequential impact on the standalone financial statements as at and for the year ended March 31, 2023. The matter respective statutory authorities and no provision has been made thus, we are unable to comment whether any provision for impairment in the value of advances is required

Stated above in para ‘m of ‘Basis for Disclaimer of Opinion give rise to the inappropriateness of use of generally accepted accounting principles that are applicable to the minimum presentation and disclosure requirement as per the schedule III of the Companies Act, 2013, as amended. Accordingly, we form a basis of disclaimer of opinion.

3. Emphasis of Matter

We draw attention to the following matters:

a. Note 48 of the standalone financial statement in respect of a Show Cause Notice U/s 279 (1) of the IT Act 1961 for initiation of prosecution proceedings U/s 276 (B) of the IT Act 1961 for failure to deposit the deducted Tax at Source within the due date in Central Government Account for the financial year 2016-17 & 2017-18 for the amount of Rs. 103.40 Million and Rs. 189.12 Million respectively.

In respect of the above, the IT department has also sent notices U/s 226 (3) of the IT Act 1961 to certain banks and customers of the company demanding the recovery of the aforesaid arrears.

Pursuant to the application under Section 60(5) of the Insolvency and Bankruptcy Code 2016, the National Company Law Tribunal, Hyderabad vide its order dated 17th December

2019 directs the IT department to withdraw the garnishee notices issued to the Banks and also directed the Banks to release any amount due to corporate Debtor.

Demand under section 271(1)(c) of the Income Tax Act 1961 for the AY. 2015-16, 2016-17 and 2017-18 aggregating Rs. 314.84 Million which has been adjusted against the Refund Receivables and the same has not been recognized in the books of accounts as the company appealed the matter before CIT(Appeals).

b. Note 49 of the standalone financial statement in respect of received order of the Regional Provident Fund Commissioner in the matter of levy of damages pertaining to the earlier years U/s 14 B of the Employees

Provident Funds and Miscellaneous Provisions Act, 1952 aggregating to Rs. 0.41 Million for the period from 10/1999 to 02/2009 and Rs. 60.86 Million for the period from 07/2009 to 03/2015.

In respect of the above, The Employees Provident Fund Organisation has also sent notice u/s 8 F of the Employees Provident Fund and Miscellaneous Provisions of the

Act, 1952 to a Bank demanding the recovery of Rs. 91.22 Million (including interest of Rs. 29.96 Million).

The company has filed an appeal U/s 7-I of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 with the Employees Provident

Fund Appellate Tribunal, Bangalore Bench regarding the damages amounting to Rs. 61.26 Million and the matter is presently sub-judice.

4. Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We were unable to determine the key audit matters because of the matters described in the Basis of Disclaimer of Opinion Section of our report.

5. Information Other than the Standalone Financial Statements and Auditors Report Thereon

In view of ongoing Liquidation process, the Liquidator is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include the standalone financial statements and our auditors report thereon. These reports could not be expected to be made available to us because of Board are not in existence.

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

6. Managements Responsibility for the Standalone Financial Statements

The Honble National Company Law Tribunal, Hyderabad Bench ("NCLT") has passed its Order dated July 26, 2019 read with corrigendum order issued on July 31, 2019 for Liquidation of M/s IVRCL Limited "as going concern" and the Resolution professional (RP) for the Company has been appointed as the Liquidator. The Liquidator shall exercise the powers and duties as enumerated in sections 35 to 50, 52 to 54 of the Insolvency and Bankruptcy Code, 2016 read with Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

The Honble National Company Law Appellate Tribunal, New Delhi ("NCLAT") vide its order dated September 06, 2019 ordered that the Liquidator to ensure that the company remains as going concern and the liquidator would not sell or transfer or alienate movable or immovable property of the corporate debtor without the prior approval of the Appellate Tribunal. The said order is vacated by the Honble National Company Law Appellate Tribunal, New Delhi ("NCLAT") vide its order dated May 29, 2020 and upholds the Order of NCLT, Hyderabad dated July 26, 2019 with corrigendum order dated July 31, 2019.

In view of ongoing liquidation process, The Liquidator is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act, read with relevant Rules issued there under.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters, related to going concern and using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. Under in sections 35 to 50, 52 to 54 of the Insolvency and Bankruptcy Code, 2016 read with Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, it is incumbent upon liquidator to manage the operations of the Company as a going concern and the standalone financial statements have been prepared on going concern basis.

The liquidator is also responsible for overseeing the Companys financial reporting process.

7. Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our responsibility is to conduct an audit of the standalone financial statements in accordance with Standards on Auditing and to issue an auditors report. However, because of the matter described in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these standalone financial statements.

We are independent of the Company in accordance with the Code of Ethics and provisions of the Act that are relevant to our audit of the standalone financial statements in India under the Act, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics and the requirements under the Act.

8. Other Matter

a. We did not audit the separate financial statements of 4 joint ventures included in standalone financial statements, whose financial results reflects companys share in net Loss of joint venture aggregating to 0.05 million for the year ended March 31, 2023. 28 joint ventures were not considered in standalone financial statement. In our opinion and according to the information and explanations given to us by the Management, these financial statements /financials information, in aggregate, are not material to the Company and have not been subjected to audit hence, we are unable to comment on the consequential impact, if any, on the accompanying statements.

b. We did not audit the financial statements/information of all branches included in the Standalone financial statements of the company whose financial statements/financial information reflects total assets of 768.83 Million as at March 31, 2023 and total revenue is NIL for the year ended on that date as considered in standalone financial statements.

Our opinion is not qualified in respect of these matters Our opinion on the standalone financial statements is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements/ financial information certified by the liquidator.

9. 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 section 143 (11) of the Act, and except for the possible effects, of the matter described in the Basis for Disclaimer of Opinion section, we give in the "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) As described in the Basis for Disclaimer of Opinion section, we were unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) Due to the effects/possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether 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 unaudited accounts/returns adequate for the purpose of our audit have been received from the branches not visited by us.

c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Cash Flow Statement and the Standalone Statement of Changes in Equity dealt with by this Report are in agreement with the books of account and the unaudited accounts/returns of the branches not visited by us.

d) Due to the effects/possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act.

e) The matters described in the Basis for Disclaimer of Opinion paragraph may have an adverse effect on the functioning of the Company;

f) In the term of section 17 (1) (b) of the Insolvency and Bankruptcy Code, 2016 ("the Code"), the powers of the board of directors have been suspended and be exercised by the Liquidator of the Company. Hence, written representation from directors have not been taken on record by the Board of Directors. Accordingly, we are unable to comment whether none of the director is disqualified as on March 31, 2023 from being appointed as a director in the terms of Section 164 (2) of the Act.

g) The reservation relating to maintenance of accounts and other matters connected therewith are as stated in the Basis for Disclaimer Opinion section.

h) With respect to the matter to be included in the Auditors Report under section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, the Company has not paid any remuneration to its directors during the current year.

i) 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". Our report expresses disclaimer of opinion on the adequacy and operating effectiveness of the Companys internal financial control over financial reporting.

j) 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 information and explanations given to us:

i. Except for the effects/possible effects of matters described under Basis for Disclaimer of Opinion paragraph, the Company has disclosed the impact of pending litigations on its financial position to the extent ascertained, in its standalone financial statements (Refer note 35);

ii. Except for the effects/possible effects of matters described under Basis for Disclaimer of Opinion paragraph, the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts and on derivative contracts, if any;

iii. There has been no delay in transferring the amounts that were due to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2023;

iv(a). The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

iv(b). The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

iv(c). Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause iv(a) and iv(b) contain any material misstatement.

v The Company has not recommended any dividend during the year therefore no question of compliance with Section 123 of the Act.

ANNEXURE ‘A TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 2 under ‘Report on other Legal and Regulatory Requirement section of our report to the Members of IVRCL LIMITED of even date)

i. (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment;
(B) The Company is maintaining proper records showing full particulars of intangible assets;
(b) As explained to us, the Property, Plant and Equipment have not been physically verified during the year by the management in accordance with a regular programme of verification. Hence, we are unable to comment on discrepancies that might be arose on such physical verification of Property, plant and equipment that are lying on all locations where physical verification could not be performed.
(c) According to the information and explanations given to us, the title deeds of immovable properties have been mortgaged as security with the lenders i.e. banks, financial institutions and others for security of the borrowings raised by the Company. On the basis of our examination of the records of the Company and the copies of the title deeds of immovable properties available with the Company, the title deeds are held in the name of the Company except for the details given in Appendix-1.
(d) According to the information and explanations given to us, the Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year. Accordingly, the reporting under Clause 3(i)(d) of the Order is not applicable to the Company.
(e) According to the information and explanations given to us, no proceedings have been initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Accordingly, the reporting under Clause 3(i)(d) of the Order is not applicable to the Company.
ii. (a) According to the information and explanations given to us, the management has not conducted physical verification of inventory at reasonable intervals during the year. We are unable to comment on the discrepancies that may arise on physical verification of inventories that are lying on locations where physical verification could not be performed.
(b) According to the information and explanations given to us, the Company has not been sanctioned working capital limits in excess of five crore rupees during any point of time of the year, from the bank, or financial institution on the basis of security of current assets. Accordingly, the reporting under Clause 3(ii)(b) of the Order is not applicable to the Company.
iii. According to the information and explanations given to us, the Company has not made investments in, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other party covered in the register maintained under section 189 of the Act, during the year. Accordingly, the reporting under Clause 3(iii)(a) to 3(iii)(f) of the Order is not applicable to the Company.
iv. Based on the information and explanations given to us in respect of loans, investments, guarantees and securities, except for the matter referred to in the Basis for Disclaimer of Opinion section in the audit report in respect of which we are unable to comment for the reasons described therein, the Company has complied with the provisions of Section 185 and 186 of the Act, to the extent applicable. Further, as the Company is engaged in the business of providing infrastructural facilities, the provisions of Section 186 [except for sub-section (1)] are not applicable to it.
v. According to the information and explanations given to us, the Company has not accepted any deposit or amounts which are deemed to be deposit within the meaning of the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules made thereunder during the year. Accordingly, the reporting under Clause 3(v) of the Order is not applicable to the Company.
vi. We have broadly reviewed the cost records maintained by the Company pursuant to the Rules made by the Central Government under sub-section (1) of Section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of these records with a view to determining 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, the Company has not been regular in depositing undisputed statutory dues in respect of provident fund, employees state insurance, income tax, goods and services tax, cess and any other statutory dues applicable to it with the appropriate authorities. There have been significant delays in a large number of case in depositing these dues with the appropriate authorities. Further, no undisputed amount payable in respect of these statutory dues was outstanding as on March 31, 2023 for a period of more than six months from the date they became payable except as given in Appendix-2.
(b) According to the information and explanations given to us and the records of the company examined by us, particulars of outstanding dues in respect of income tax, goods and services tax, cess and any other statutory dues which as at March 31, 2023 have not been deposited on account of any dispute are given in Appendix- 3.
viii. According to the information and explanations given to us, there are no transaction in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).
ix. (a) According to the information and explanations given to us, there is no loan or borrowing taken from Government, and has not been issued debentures during the year. As matters described in Note 23 to the financial statement and pursuance of repayment schedule stipulated in the sanction letter, the entire amount of borrowing including interest are overdue and the Company has made continue default in repayment of loans or borrowing to a financial institution, as on March 31, 2023. Therefore, we are unable to provide periods of default. Detail of defaults in respect of repayment of borrowing and interest are given in Appendix-4.
(b) According to the information and explanations given to us, the Company has not been declared wilful defaulter by any bank or financial institution or government or other lender
(c) According to the information and explanations given to us, the Company has not taken a term loan during the year. Accordingly, the reporting under Clause 3(ix)(c) of the Order is not applicable to the Company.
(d) According to the information and explanations given to us, the Company has not raised any short-term loan during the year. Accordingly, the reporting under Clause 3(ix)(d) of the Order is not applicable to the Company.
(e) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the financial statements of the Company, we report that the Company has not taken any fund from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures during the year. Accordingly, the reporting under Clause 3(ix)(e) of the Order is not applicable to the Company.
(f) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the financial statements of the Company, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies during the year. Accordingly, the reporting under Clause 3(ix)(f) of the Order is not applicable to the Company.
x. (a) According to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, the reporting under Clause 3(x)(a) of the Order is not applicable to the Company.
(b) According to the information and explanations given to us, the Company has neither made any preferential allotment nor private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year therefore the question of compliances in respect of the requirements of section 42 and section 62 of the Companies Act, 2013 and utilization of such fund for the purposes for which the funds were raised does not arise. Accordingly, the reporting under Clause 3(x)(b) of the Order is not applicable to the Company.
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 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 Clause 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, the Company has not received whistle-blower complaints during the year. Accordingly, the reporting under Clause 3(xi)(c) of the Order is not applicable to the Company.
xii. According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, the provision of Para 3 (xii) of the Order is not applicable to the Company.
xiii. According to the information and explanation given to us and on the based on our examination of the records of the company, except for the matter referred to in the Basis for Disclaimer of Opinion section in the audit report in respect of which we are unable to comment for the reasons described therein, transactions entered into by the Company with the related parties are in compliance with sections 177 and 188 of the Act, where applicable and the details of related party transactions as required by the applicable accounting standards have been disclosed in the standalone financial statements.
xiv. (a) In our opinion and according to the information and explanation given to us, the Company has not 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 not been provided to us hence we were unable to considered the same.
xv. According to the information and explanation given to us and based on our examination of the records of the Company, except for the matter referred to in the Basis for Disclaimer of Opinion section in the audit report, in respect of which we are unable to comment on any potential implications for the reasons described therein, the Company has not entered into any non-cash transaction with directors or persons connected with him as referred to in Section 192 of the Act.
xvi. (a) To the best of our knowledge and as explained to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the reporting under Clause 3(xvi)(a) of the Order is not applicable to the Company.
(b) The Company has not conducted non-banking financial / housing finance activities during the year. Accordingly, the reporting under Clause 3(xvi)(b) of the Order is not applicable to the Company.
(c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, the reporting under Clause 3(xvi)(c) of the Order is not applicable to the Company.
(d) Based on the information and explanations provided by the management of the Company, the Company does not have any CIC within the Group. Accordingly, the reporting under Clause 3(xvi)(d) of the Order is not applicable to the Company.
xvii. The Company has not incurred any cash losses in the financial year or in the immediately preceding financial year.
xviii. There has been no resignation of the statutory auditors during the year and accordingly the reporting under Clause 3(xviii) of the Order is not applicable to the Company.
xix. According to the information and explanations given to us, the company is under liquidation as a going concern and hence it could not be ascertained the capability of meeting its liabilities existing at the date of the balance sheet as and when they fall due within a period of one year from the balance sheet date.
xx. The Company is in the liquidation process hence no amount to be spent during the year as Corporate Social Responsibility as required under sub section (5) of Section 135 of the Act. Accordingly, reporting under clause 3(xx) of the Order is not applicable to the Company.
xxi. The reporting under Clause 3(xxi) of the Order is not applicable in respect of audit of financial statements. Accordingly, no comment in respect of the said clause has been included in this report.

ANNEXURE ‘B TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 2 (h) under ‘Report on other Legal and Regulatory Requirement section of our report to the Members of IVRCL LIMITED of even date)

Report on the internal financial controls with reference to the aforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We were engaged to audit the internal financial controls with reference to the standalone financial statements of IVRCL Limited (hereinafter referred to as "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.

Managements Responsibility for Internal Financial Controls

The Companys management are responsible for establishing and maintaining internal financial controls based on the internal control with reference to the standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Controls over Financial Reporting (the "Guidance Note") 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 (hereinafter referred to as "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 conducted 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 Act, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India.

Because of the matter described in the Disclaimer of Opinion section below, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on internal financial controls with reference to the standalone financial statements of the Company.

Meaning of Internal Financial controls with Reference to Standalone Financial Statements

A companys internal financial controls 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 controls with reference to standalone financial statements include 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 standalone financial statements.

Disclaimer of Opinion

As at March 31, 2023, the Company has investments in and amounts recoverable from subsidiaries, associates and joint ventures engaged in BOT and other projects aggregating to Rs. 18,344.12

Million as also bank guarantees encashed by customers aggregating to Rs. 16,393.62 Million given by the Company including in favour of certain related parties of the Company.

The company provided loans and advances of Rs. 7,997.17 Million to subsidiaries, associates and joint ventures

The company has recognized deferred tax assets of Rs. 9,570.59 Million on account of carry forward unused tax losses.

The company could not carry out physical verification for the fixed assets aggregating to Rs. 1,029.26 Million and inventory aggregating to Rs. 520.14 Million

Further, we could not obtain confirmation of balances in respect of bank balances, bank borrowings and trade receivables including retention, loans and advances and trade payables including other financial/non-financial liabilities.

We were unable obtain convincing evidence to evaluate about the recoverability and possible obligation towards the above. Accordingly, we are unable to determine the consequential implications arising therefrom in the standalone financial statements of the Company.

Because of the above reasons, we are unable to obtain sufficient appropriate audit evidence to provide a basis for our opinion whether the company had adequate internal financial controls with reference to standalone financial statements and whether such internal financial controls were operating effectively as at March 31, 2023.

We have considered the disclaimer reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company, and the disclaimer has affected our opinion on the standalone financial statements of the Company and we have issued a Disclaimer of Opinion on the standalone financial statements of the Company.