MBL Infrastructures Ltd Directors Report.

To The Members of

MBL INFRASTRUCTURES LTD

Report on the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of MBL INFRASTRUCTURES LTD ("the Company"), which comprise the Balance Sheet as at March 31, 2019, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanations provided to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended ("IndAS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, its loss, other comprehensive income, changes in equity and cash flows for the year ended on that date.

Basis of Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards of Auditing (SAs) specified under

Section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the standalone financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, 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 is sufficient and appropriate to provide a basis of our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of the 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 have determined the matters described below to be the key matters to be communicated in our report.

Revenue recognition - accounting for construction contracts

Key audit matter description There are significant accounting judgments including estimation of cost to complete, determining the stage of completion and the timing of revenue recognition.
The Company recognizes revenue and profit/loss on the basis of stage of completion based on the proportion of contract costs incurred at balance sheet date, relative to the total estimated costs of the contract at completion.
The recognition of revenue and profit/loss therefore rely on estimates in relation to total estimated costs of each contract.
Cost contingencies are included in these estimates to take into account specific uncertain risks, or disputed claims against the Company, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the contract life and adjusted where appropriate.
The revenue on contracts may also include variable consideration (variation and claims). Variable consideration is recognized when the recovery of such consideration is highly probable. Refer to Note Number 3(n) of the standalone financial statements
Principle Audit Procedures Our procedures included:
• Testing of the design and implementation of controls involved for the determination of the estimates used as well as their operating effectiveness;
• Testing the relevant information technology system access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard;
• Testing a sample of contracts for appropriate identification of performance obligation;
• For the sample selected, reviewing for change orders and the impact on the estimated costs to complete;
• Engaging technical experts to review estimates of costs to complete for sample contracts; and
• Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings

Revenue recognition and measurement of contracts assets in respect of un-invoiced amounts and measurement of receivables in respect of overdue invoices

Key audit matter description The Company, in its contract with customers, promises to transfer distinct services to its customers which may be rendered in the form of engineering, procurement and construction (EPC) services through design-build contracts, and other forms of construction contracts. The recognition of revenue is based on contractual terms, which could range from cost plus fee to agreed unit price to lump-sum arrangements. At each reporting date, revenue is accrued for costs incurred against work performed that may not have been invoiced. Identifying whether the Companys performance have resulted in a service that would be billable and collectable where the works carried out have not been acknowledged by customers as of the reporting date.
• Recognition of revenue before formal acknowledgment of receipt of services by the customer could lead to an over or under-statement of revenue and profit, whether intentionally or in error; and
• Assessing the recoverability of amounts overdue against invoices raised which have remained unsettled for a significant long period after the end of the contractual credit period also involves a significant amount of judgment
Refer to Note Number 3(n) of the standalone financial statements
Principle Audit Procedures The procedures performed included the following:
• Obtained an understanding of the Companys processes in collating the evidence supporting execution of work for each disaggregated type of revenue. Auditors have also obtained an understanding of the design of key controls for quantifying units of items / services that would be invoiced and the application of appropriate prices for each of such services;
• Tested the design and operating effectiveness of managements key controls in collating the units of services delivered and in the application of accurate prices for each of such services for samples of the un-invoiced revenue entries, which included testing of access and change management controls exercised in respect of related information systems;
• Tested samples of un-invoiced revenue entries with reference to the reports from the information system that records the costs incurred against the services delivered to confirm the work performed and application of appropriate margin applied for the respective services. The auditors have also tested whether appropriate adjustments have been made for the element of variable consideration related to committed service levels of performance. With regard to incentives, auditors tests were focused to ensure that accruals were restricted to only those items where contingencies were minimal;
• Tested cut-offs for revenue recognized against un-invoiced amounts by matching the revenue accrual against accruals for corresponding cost;
• Extended the testing up to the date of approval of financial statements by the Board of Directors of the Parent entity to verify adjustments, if any, that may have been necessary upon receipt of approvals from customers for services delivered prior to the reporting date and/or collections there against;
• Reviewed the delivery and collection history of customers against whose contracts un-invoiced revenue is recognised; and
• Verification of subsequent receipts, post balance sheet date

Assessment of the carrying value of unquoted equity instruments in loss making subsidiaries.

Key audit matter description The impairment review of unquoted equity instruments, with a carrying value of RS 28,799.48 lakhs, is considered to be a risk area due to the size of the balances as well as the judgmental nature of key assumptions, which may be subject to management override.
The carrying value of such unquoted equity instruments is at risk of recoverability. The net worth of the underlying entities has significantly eroded and the orders in hand are all also not substantial to carry out the operations of these entities. The estimated recoverable amount is subjective due to the inherent uncertainty involved in forecasting and discounting future cash flows.
Refer to Note Number 4(c) of the standalone financial statements
Principle Audit Procedures • Assessed recoverability of claims filed against suspension/ cancellation of projects.
• Besides obtaining an understanding of Managements processes and controls with regard to testing the
impairment of the unquoted equity instruments in loss making subsidiaries.
Our procedures included the following:
• Engaged internal fair valuation experts to evaluate managements underlying assumptions and appropriateness
of the valuation model used;
• Compared the Companys assumptions with comparable benchmarks in relation to key inputs such as long-
term growth rates and discount rates;
• Assessed the appropriateness of the forecast cash flows within the budgeted period based on their
understanding of the business and sector experience;
• Considered historical forecasting accuracy, by comparing previously forecasted cash flows to actual results
achieved; and
• Performed a sensitivity analysis in relation to key assumptions

Evaluation of uncertain tax positions

Key audit matter description The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes.
Refer to Note. Number 4(f) & (h) of the standalone financial statements
Principle Audit Procedures Our procedures included the following:
• Obtained understanding of key uncertain tax positions;
• Obtained details of completed tax assessments and demands for the year ended March 31, 2019 from the management;
• We along with our internal tax experts –
i. Discussed with appropriate senior management and evaluated the Managements underlying key assumptions in estimating the tax provision;
ii. Assessed managements estimate of the possible outcome of the disputed cases; and
iii. Considered legal precedence and other rulings in evaluating managements position on these uncertain tax positions.
Additionally, considered the effect of new information in respect of uncertain tax positions as at April1, 2018 to evaluate whether any change was required to managements position on these uncertainties

Information Other than the Standalone Financial Statements and Auditors Report

The respective Board of Directors of the Company and its Joint Operation Companies are responsible for the preparation of other information. The other information comprise the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, other than the standalone financial statements and auditors report.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained 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 material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Managements Responsibility for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (the "Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company including its joint operations in accordance with the Ind-AS and accounting principles generally accepted in India.

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

In preparing the standalone financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibility for the Audit of the Standalone Financial Statements

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

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

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

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

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

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

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the Company and its joint operations to express an opinion on the standalone financial statements. We are responsible for the direction, supervision and performance of the audit of the standalone financial statements of such entities included in the standalone financial statements.

Materiality

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

Communication with those charged with governance

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Emphasis of Matters a. The Resolution Plan under the Insolvency & Bankruptcy Code, 2016 (IBC, 2016) was approved by Honble National Company law Tribunal, Kolkata (Honble NCLT, Kolkata) by its order dated 18th April 2018. Some of the Banks have preferred appeals before Honble NCLAT against the order of Honble NCLT approving the Resolution Plan. The Company has received legal opinion that the Resolution Plan is legally approved and is binding on all stakeholders and there is no merit in the appeals. The financial statements have been prepared giving effect of the approved Resolution Plan. In an unlikely event of ultimate rejection of the Resolution Plan, the Company may go under liquidation and may not be a going concern and financial statements may have to be restated.

b. In forming our opinion on the Financial Statements, the Financial Statements are prepared on going concern basis, considering the NCLT order dated April 18, 2018 approving resolution plan.

c. Note No.6.4 regarding the Company as at March 31, 2019 has (i) Non-Current Investment amounting to RS 1,000.00 Lakhs (March

31, 2018; RS 1,000.00 Lakhs) in its subsidiary MBL (MP) Road Nirman Company Limited in which the Company is holding 25.14% directly and balance through wholly owned subsidiary MBL Projects Ltd.; (ii) Non-Current Investment amounting to RS 1,200.00 Lakhs (March 31, 2018; RS 1,200.00 Lakhs) in its wholly owned subsidiary AAP Infrastructures Limited; (iii) Non-Current Investment amounting to RS 5,110.00 Lakhs (March 31, 2018; RS 5,110.00 Lakhs) in its wholly owned subsidiary MBL Highway Development Company Limited. All the above entities have incurred losses due to suspension/ cancellation of projects and net worth of above entities as at March 31, 2019 have been fully eroded and accordingly the net worth of these subsidiaries do not represent true market value. The Company has filed claims against the suspension / cancellation of projects. These claims are based on the terms & conditions implicit in the contract in respect of substantially closed/ suspended projects. Considering the contractual tenability, legal advice obtained and progress of negotiations/ discussions/ arbitration/ litigations, the management is confident of recovery in these claims. In view of this, the management is confident that the realisable amount is higher than the carrying value of non-current assets and, therefore, considering the investment in above subsidiaries as good and recoverable.

d. Note No.6.5 regarding the Company as at March 31, 2019 has Non-Current Investment amounting to RS 2,984.25 Lakhs (March 31, 2018; RS 1,495.11 Lakhs) holds 100% shares in MBL Projects Ltd., the net worth of the subsidiary which does not represent true market value. The subsidiary holds shares in downstream SPVs in which projects were cancelled/ suspended. The SPVs have filed claims against suspension/cancellation of projects. These claims are based on the terms & conditions implicit in the contract in respect of substantially closed/ suspended projects. Considering the contractual tenability, legal advice obtained and progress of negotiations/ discussions/ arbitration/ litigations, the management is confident of recovery in these claims. In view of this, the management is confident that the realisable amount is higher than the carrying value of non-current assets and, therefore, considering the investment in above subsidiary as good and recoverable.

e. Note No.6.6 regarding the Company as at March 31, 2019 has Non-Current Investment amounting to RS 18,505.23 Lakhs (March 31, 2018; RS 11,527.00 Lakhs) holds 99.99% shares in Suratgarh Bikaner Toll Road Company Private Limited. which has capitalised the entire amount spent till date and commenced commercial operations(toll collection) w.e.f. February 17, 2019. The net worth of Suratgarh Bikaner Toll Road Company Private Limited does not represent true market value as the value of underlying investments/ assets. Based on TEV study report, certain estimates like future business plan, growth prospects and other factors, the management is confident that the realisable amount is higher than the carrying value of non-current assets and therefore considering the investment in above subsidiary as good and recoverable.

f. Note No.38 regarding deletion of Regulation 38(1) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 which provided for liquidation value to dissenting financial creditors. Consequent to above deletion of the regulation during the year, the amount payable to the dissenting creditors has been restated and capital receipt earlier recognised as Exceptional item during FY 17-18 and transferred to Capital Reserve is reversed during FY 2018-19 to the tune of RS 28,371.30 Lakhs in compliance of implementation of the law and shown as exceptional item in accordance with Ind As.

Our opinion on the standalone financial statements and our report on Other Legal and Regulatory Requirements below are not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub- section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable

As required by Section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in

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

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A".

g) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its 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 including derivative contracts;

iii. There has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Company except H0.27 Lakhs stated in Note No.15.1.

(h) with respect to others matters to be included in the auditors report in accordance with the requirments of section 197 (16) of the act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration (Including sitting fees) paid by the Company to its directors during the current year is in accordance of the provision of section 197 of the act and is not in excess of the limit laid down therein.

For SARC & Associates
Chartered Accountants
ICAI Firm Registration No.006085N
Kamal Aggarwal
Place: New Delhi Partner
Dated: May 30, 2019 Membership No.: 090129

ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of MBL INFRASTRUCTURES LTD of even date) Report on the Internal financial controls Over Financial Reporting 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 MBL INFRASTRUCTURES LTD (‘the Company) as at March 31, 2019 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 Board of Directors of the Company 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. 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 respective 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 internal financial controls over financial reporting of the Company 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") issued by the Institute of Chartered Accountants of India 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. 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, resolution professional 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 provided to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of internal financial controls over financial reporting issued by the Institute of Chartered Accountants of India.

For SARC & Associates
Chartered Accountants
ICAI Firm Registration No.006085N
Kamal Aggarwal
Place: New Delhi Partner
Dated: May 30, 2019 Membership No.: 090129

ANNEXURE ‘B TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 2 under Report on Other Legal and Regulatory Requirements section of our report to the Members of MBL INFRASTRUCTURES LTD of even date)

1. In respect of the Companys property, plant and equipment:

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

b. The Company has a program of verification to cover all the items of property, plant and equipment in a phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the management during the year. According to the information and explanations provided to us, no material discrepancies were noticed on such verification.

c. According to the information and explanations provided to us, the records examined by us and based on the examination of the conveyance deeds provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date.

2. According to the information and explanations provided to us, the inventory has been physically verified at reasonable intervals during the year by the management. In our opinion and according to the information and explanations provided to us, the interval of such physical verification is reasonable having regard to size of the Company and nature of its business and according to the information and explanations provided to us, no material discrepancies were noticed on such verification.

3. The Company has granted loans to parties covered in the register maintained under section 189 of the Companies Act, 2013.

a. In our opinion and according to the information and explanations provided to us, the terms & conditions of the grant of such loan is not, prima facie, prejudicial to the Companys interest;

b. The schedule of repayment of the principal and the payment of the interest has not been stipulated and hence we are unable to comment as to whether repayment/receipts of the principal amount and interest are regular;

c. In the absence of the stipulated schedule of repayment of principal and payment of interest, we are unable to comment as to whether there is any amount which is overdue for more than 90 days and whether reasonable steps have been taken by the Company for recovery of the principal amount and interest.

4. In our opinion and according to the information and explanations provided to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 20013 have been complied with by the Company in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and guarantees and securities.

5. The Company has not accepted any deposits within the meaning of section 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of Clause 3(v) of the Order are not applicable to the Company.

6. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub section (1) of Section 148 of the Companies Act in respect of Company products/services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. The cost records of the Company have been audited by M/s Dipak Lal & Associates Cost Accountants. The Management has furnished to us the cost audit report for the financial year 2017-18; the cost auditor has expressed an unmodified opinion in the report. The audit of cost records for the financial year 2018-19 is under progress. We have relied on the opinion expressed by the cost auditor in his report.

7. According to the information and explanations provided to us and, in respect of statutory dues:

a. Undisputed statutory dues including provident fund, employee state insurance, income tax, sales tax, service tax, excise duty, value added tax, goods and service tax (GST), cess and other material statutory dues as applicable, have not been regularly deposited with the appropriate authorities and there have been significant delays in a large number of cases. Undisputed amounts payable in respect thereof, which were outstanding at the year-end for a period of more than six months from the date they became payable are as follows:

Statement of arrears of statutory dues outstanding for more than six months:- H In Lakhs
S.No. Particulars Amount
1 Provident Fund 235.99
2 Employee State Insurance 34.31
3 Goods and Service Tax 21.76
4 Service Tax 210.11
5 Tax Deducted at Sources 592.43
6 Dividend Distribution tax 253.18

b. Details of dues of income tax, sales tax, wealth tax, service tax, customs duty, excise duty, value added tax, Goods and Service tax (GST), cess which have not been deposited as on March 31, 2019 on account of disputes are given below:

( H in Lakhs)
Name of the statute Nature of Forum where dispute is pending Period Amount
Dues
Income Tax Act, 1961 Income Tax High Court A.Y. 2004-05 1.83
Income Tax Act, 1961 Income Tax High Court A.Y. 2005-06 373.68
Income Tax Act, 1961 Income Tax DCIT- Central 2(2) A.Y. 2005-06 15.63
Income Tax Act, 1961 Income Tax DCIT- Central 2(2) A.Y. 2011-12 252.65
Income Tax Act, 1961 Income Tax CIT (Appeals) - Central I/ Kolkata A.Y. 2012-13 1369.39
Income Tax Act, 1961 Income Tax CIT (Appeals) - Central I/ Kolkata A.Y. 2013-14 459.27
Income Tax Act, 1961 Income Tax CIT (Appeals) - Central I/ Kolkata A.Y. 2014-15 1596.23
Income Tax Act, 1961 Income Tax CIT (Appeals) - Central I/ Kolkata A.Y. 2016-17 4751.38
WB VAT Act, 2003 Sales Tax Commercial Tax Officer A.Y. 2007-08 40.65
WB VAT Act, 2003 Sales Tax Commercial Tax Officer A.Y. 2008-09 275.28
WB VAT Act, 2003 Sales Tax WB Taxation Tribunal A.Y. 2009-10 684.05
WB VAT Act, 2003 Sales Tax WB Commercial Taxes Appellate & Revision Board A.Y. 2010-11 251.26
BVAT Act, 2005 Sales Tax Commercial Tax Tribunal A.Y. 2010-11 54.81
BVAT Act, 2005 Sales Tax Commercial Tax Tribunal A.Y. 2010-11 94.74
BVAT Act, 2005 Sales Tax Commercial Tax Tribunal A.Y. 2011-12 451.96
BVAT Act, 2005 Sales Tax Commercial Tax Tribunal A.Y. 2011-12 55.25
UP VAT Act, 2008 Sales Tax Add. Commissioner- Commercial tax A.Y. 2011-12 5.99
BVAT Act, 2005 Sales Tax Commercial Tax Joint Commissioner A.Y. 2011-12 0.55
BVAT Act, 2005 Sales Tax Commercial Tax Joint Commissioner A.Y. 2011-12 0.41
KVAT Act Sales Tax Sr. Joint Commissioner A.Y. 2011-12 30.38
BVAT Act, 2005 Sales Tax Commercial Tax Tribunal A.Y. 2012-13 482.23
BVAT Act, 2005 Sales Tax Commercial Tax Tribunal A.Y. 2012-13 92.22
BVAT Act, 2005 Sales Tax Commercial Tax Joint Commissioner A.Y. 2012-13 0.55
BVAT Act, 2005 Sales Tax Commercial Tax Joint Commissioner A.Y. 2012-13 0.50
RVAT Act, 2003 Sales Tax Commercial Tax Officer A.Y. 2013-14 2.17
UP VAT Act, 2008 Sales Tax Commercial Tax Deputy Commissioner A.Y. 2013-14 0.64
BVAT Act, 2005 Sales Tax Commercial Tax Joint Commissioner A.Y. 2013-14 0.55
UP VAT Act, 2008 Sales Tax Commercial Tax Deputy Commissioner A.Y. 2014-15 37.04
RVAT Act, 2003 Sales Tax Commercial Tax Officer A.Y. 2014-15 70.04
UTTRANCHAL VAT Act, 2005 Sales Tax Additional Commissioner A.Y. 2015-16 0.51
UTTRANCHAL VAT Act, 2005 Sales Tax Additional Commissioner A.Y. 2015-16 0.61
DVAT Act, 2005 Sales Tax Joint Commissioner A.Y. 2015-16 0.50
DVAT Act, 2005 Sales Tax Joint Commissioner A.Y. 2015-16 0.50
BVAT Act, 2005 Sales Tax Commercial Tax Assistant Commissioner A.Y. 2015-16 147.00
JVAT Act Sales Tax Commercial Tax Assistant Commissioner A.Y. 2015-16 351.25
CENTRAL EXCISE ACT, 1994 Service Tax CESTAT 2011-2013 103.17

8. The Company was under Corporate Insolvency Resolution Process under Insolvency and Bankruptcy Code 2016, during the financial year 2017-18. The Resolution Plan of the Company was approved by Honble National Company Law Tribunal (NCLT) Kolkata Bench vide its Order dated April 18, 2018.The Company has issued 0.10% Secured Non-Convertible Debentures of RS 118,834.07 Lakhs to Banks in terms of the approved Resolution Plan during the year.

9. In our opinion and 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) or term loans and hence reporting under paragraph 3 (ix) of the Order is not applicable to the Company.

10. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Financial Statements and according to the information and explanations provided by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.

11. According to the information and explanations given to us managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by provisions of section 197 read with schedule V to the act.

12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and hence reporting under paragraph 3 (xii) of the Order is not applicable to the Company.

13. In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Act, where applicable, for all transactions with related parties and the details of such related party transactions have been disclosed in the financial statements as required by the applicable accounting standards.

14. The Company has made preferential allotment and private placement of shares or fully or partly paid convertible debentures amounting to RS 633 Lakhs and RS 118,834.07 Lakhs respectively during the year under review.

15. According to the information and explanations provided by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of the Companies Act, 2013. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

16. According to the information and explanations provided to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

For SARC & Associates
Chartered Accountants
ICAI Firm Registration No.006085N
Kamal Aggarwal
Place: New Delhi Partner
Dated: May 30, 2019 Membership No.: 090129