patel engineerin Auditors report

To The Members of Patel Engineering Limited Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying Standalone Financial Statements of Patel Engineering Limited ("the Company") and its joint operations, which comprise the Balance Sheet as at 31st March 2023, the Statement of Profit and Loss (including the of Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and Notes to Standalone Financial statements, including a summary of significant accounting policies and other explanatory information, these also include financials of the Real Estate Division Branch of the company for the year ended on that date audited by the branch auditor of the companys branch located in Mumbai (hereinafter referred to as "Standalone Financial Statements")

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial statements give the information required by the Companies Act, 2013, as amended ("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, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2023, and its profit including other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

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

Emphasis of Matter

The independent Branch Auditors of Patel Engineering Limited (Real Estate Division) ("the Division"), have without qualifying their audit report dated 15th May, 2023 on the Standalone Ind AS financial statement of the Division for the year ended March 31, 2023 have drawn attention to the Note regarding Companys investment and given loans and advances to Waterfront Developers Limited, a wholly owned subsidiary, where notice dated 4th June 2015 was received from Government of Mauritius for the termination of lease agreement entered on 11th December, 2009 with Les Salines Development Limited (a Step-down subsidiary of Waterfront). In this case the process of arbitration with the Government of Mauritius has been completed during the year and management of the branch is expecting the favorable order for the same.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements for the financial year ended 31st March, 2023. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors responsibilities for the audit of the Standalone Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Standalone Financial Statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Standalone Financial Statements.

Sr No	Key Audit Matter	Auditors Response
1	Accuracy of recognition, measurement, presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers"	Principal Audit Procedures
	The application of the revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations, determination of transaction price of the identified performance obligations, the appropriateness of the basis used to measure revenue recognized over a period. Additionally, the 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.	Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
	Refer notes 1. k and 26 to the Standalone Financial Statements	Evaluated the design of internal controls relating to implementation of the revenue accounting standard.
		Selected a sample of continuing and new contracts, and tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation, performance and inspection of evidence in respect of operation of these controls.
		Tested the relevant information technology systems access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the revenue accounting standard
		Selected a sample of continuing and new contracts and performed the following procedures:
		o Read, analyzed and identified the distinct performance obligations in these contracts.
		o Compared these performance obligations with that identified and recorded by the Company.
		o Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation
		o Samples in respect of revenue recorded for time and material contracts were tested using a combination of customer acceptances, subsequent invoicing and historical trend of collections and disputes.
		o Performed analytical procedures for reasonableness of revenues disclosed.

 

2	Accounting of contract work-in-progress for engineering construction projects	Principal Audit Procedures
	The company recognized contract revenue and contract costs from contract work-in-progress for engineering construction projects by reference to the stage of completion of the contract activity at the end of each reporting period. The stage of completion is measured by reference to work performed. The accounting for such engineering construction projects is complex due to high level of estimation in determining the costs to complete. This is due to the nature of the operations, which may be impacted by the technological complexity of projects, the precision of cost estimation during the budgeting process and the actual progress of each project during the financial year. Accordingly, the accounting of contract work-in progress for engineering construction projects is identified as a key audit matter.	Our audit procedures included the following:
	Refer notes 1.j and 10 to the Standalone Financial Statements.	Review of contract terms and conditions and the contractual sums and substantiated project revenues and costs incurred against underlying supporting documents.
		Perused customers and subcontractor correspondences and discussed the progress of the projects with project managers for any potential disputes, variation order claims, known technical issues or significant events that could impact the estimated contractual costs.
		Analyzed changes in estimates of costs from prior periods and assessed the consistency of these changes with progress of the projects during the year

 

Sr No	Key Audit Matter	Auditors Response
3	Valuation of claims under settlement	Principal Audit Procedures
	The Company has certain significant open legal proceedings under arbitration for various complex matters with the Clients and other parties, continuing from earlier years, which are as under:	Our audit procedures included the following:
	Non acceptance of certain work by the client.	Assessing the procedures implemented by the Company to identify and gather the risks it is exposed to.
	Cost overruns in certain contracts.	Obtaining an understanding of the risk analyses performed by the Company, with the relating supporting documentation, and studying written statements from internal and external legal experts, where applicable.
	Reimbursement of the cost incurred by the company for the client.	Discussion with the management on the development in these litigations during the year ended 31st March, 2023.
	Due to complexity involved in these litigation matters, the recognition of claims/variations are included in revenues when it is highly probable of recovery based on estimate and assessment of each item by the management based on their experience of recovery Refer note 1 k and 26 & 43 to the Standalone Financial Statements	Obtaining representation letter from the management on the assessment of these matters as per SA 580 (revised) – Written representations.

 

4	Assessment of impairment of investment in and loans given to subsidiaries, joint ventures and associates	Principal Audit Procedures
	Investments in subsidiaries, joint operations and associates and loans given to such entities account for a significant percentage of the Companys net assets. Each year management reviews such investments and loans to assess presence of any indications of impairment and determines the recoverable amounts of the investments/loans. Determining the recoverable value of these long-term investments/ loans is mainly based on the evaluation of Networth of such entities, quality of assets held by such entities and the judgement by Management for realisation of investments and recovery of loans along with interest.	We gained an understanding of the process used by the Company to assess the valuation of Investments and Loans & advances, analyze their recoverability and impairment tests performed by the management, and verified that the criteria used to perform these tests are consistent with those established in applicable reporting standards.
	Refer notes 3 and 5 to the Standalone Financial Statements	Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
		Consideration and evaluation of companys analyses on its overall exposure to each of these subsidiaries;
		Analyses and assessment of the appropriateness of the key judgements and assumptions, used by companys management.
		As a result of our analysis and test performed, we consider that Managements conclusion regarding providing impairment on investments, wherever required, the estimates made and the information disclosed in the accompanying annual accounts are adequately supported and are consistent with the information currently available

Information Other than the Standalone 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 Annual Report, but does not include the Standalone Financial Statements and our auditors report thereon. The other information is expected to be made available to us after the date of the 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.

Responsibility of Management for the Standalone Financial Statements

The Companys Management and Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position,

financial performance, changes in equity and cash flows 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 the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal Financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, the

Management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors are also responsible for overseeing the Companys Financial reporting process.

Auditors Responsibilities for the Audit of the 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 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 control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

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

Conclude on the appropriateness of the managements use of the going concern basis of accounting in preparation of Standalone Financial statements 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 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 financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Ind AS 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.

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 standalone financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

1. We did not audit the financial statements and other financial information in respect of:

i. The division whose financial statements reflect total assets of 4,507.85 Million as at March 31, 2023, total revenue of 191.62 Million, total profit/ (loss) after tax of (530.45) Million and total comprehensive income of (530.45) Million for the year ended March 31, 2023

ii. 20 unincorporated joint operations, whose financial results reflect total assets of 2,797.73 Million as at March 31, 2023, Companys Share in total revenue of 7,425.38 Million, total profit/(loss) after tax of _114.29 Million and total comprehensive income of _114.29 Million for the year ended March 31, 2023.

These Ind AS financial statement of the entities mentioned in (i) and (ii) and other financial information have been audited by other auditors, which financial statements, other financial information and auditors reports have been furnished to us by the management. Our opinion on the Standalone Financial Statements, in so far as it relates to the amounts and disclosures included in respect of these branch and joint operations, and our report in terms of subsection (3) and (11) of Section 143 of the Act including report on other information, in so far as it relates to the aforesaid branch and joint operations, is based solely on the report(s) of such other auditors.

2. The accompanying Standalone Financial Statements include unaudited financial statements and other unaudited financial information in respect of:

i. 11 unincorporated joint operations whose financial results reflect total assets of 617.39 Million as at March 31, 2023, Companys Share in total revenue is 1,668.87 Million, total Profit/(loss) after tax of _(2.06) Millions and total comprehensive income of _(2.06) Millions for the year ended March 31, 2023.

These unaudited financial statements and other unaudited financial information have been furnished to us by the management. Our opinion, in so far as it relates amounts and disclosures included in respect of this joint operation, and our report in terms of sub-section (3) and (11) of Section 143 of the Act including report on other information in so far as it relates to the aforesaid joint operations, is based solely on such unaudited financial statements and other unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, these financial statements and other financial information are not material to the Company.

Our opinion above on the Standalone Financial Statements, and our report on other legal and regulatory requirements below, 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 and other financial information certified by the Management.

3. The comparative financial information of the Company for the year ended 31st March, 2022, prepared in accordance with Ind AS, included in this Statement have been taken from the merged financial statements certified by us dated 29th October 2022, correctly giving effect as per NCLT Mumbai divisional bench order dated 16th June 2022 and NCLT Hyderabad divisional bench dated 22nd July 2022. The comparative financial information in these Financial Statements will not match with the previous year published financial statements which were audited by the other auditor who have by their audit report dated 23rd May, 2022 have expressed an unmodified opinion on the previous year financial statements.

Our opinion on the Standalone Financial Statements is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government in terms of sub-section (11) of Section 143 of the Act, we give in the "Annexure A" of this report 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 further report, to the extent applicable 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 of the aforesaid Standalone Financial Statements;

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 Flow dealt with by this Report are in agreement with the relevant books of account; d) In our opinion, the aforesaid Standalone Financial Statements comply with the IND AS specified under Section 133 of the Act;

e) On the basis of the written representations received from the directors as on 31st March, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the Internal Financial controls Over Financial reporting of the Company with reference to these Financial Statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" to this report;

g) With respect to the other matters to be included in the Auditors Report in accordance with the requirement 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 remunerations paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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 as at 31st March, 2023 on its financial position in its Standalone Financial statements to the extent determinable/ ascertainable. – Refer Note 47 to the Standalone Financial Statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kinds of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether , directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company or ("Ultimate Beneficiaries") or provide any guarantee, security or the like to or on behalf of the ultimate Beneficiaries.

(b) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, 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.

(c) Based on such audit procedures as 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. During the year no dividend is declared or paid by the company.

i) Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording_audit_trail_(edit_log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit_and Auditors) Rules, 2014 is not applicable for the financial year ended 31st March 31, 2023.

For Vatsaraj& Co.

Chartered Accountants FRN: 111327W

Dr CA B.K. Vatsaraj

Partner M. No.:039894 UDIN: 23039894BGZCSN3040

Mumbai, 15th May, 2023

Annexure A to the Independent Auditors Report on Standalone Financial Statements of Patel Engineering Limited as on 31st March 2023, referred to in paragraph 1 under "Report on Other Legal and Regulatory requirement" section of our report of even date, we report the following: i (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment & right to use assets.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) The property, plant and equipment are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the Property, Plant and Equipment has been physically verified by the management during the year and no material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties held by the Company (other than properties where the Company is the lessee and the lease agreements are duly executed in favor of the lessee) disclosed in Note 2 to the financial statements are held in the name of the Company, except for the following:

Description	Gross carrying value	Held In the Name of	Whether promoter, director or their relative or employees	Property Held from	Reason for not being held in the name of Company
Land	6,044.22	PEL Power Ltd., Jayshe Gas Power Pvt. Ltd.,	Step-down	FY 2021-22	This land is
		Patel Energy Assignment Pvt. Ltd.,	subsidiaries company		transferred through
		Patel Energy Operations Pvt. Ltd.,	(Merged entities) of		merger order given
		Patel Energy Projects Pvt. Ltd.,	Patel Engineering		by Competent
		Patel Thermal Energy Projects Pvt. Ltd.,	Limited		authority and the
		PEL Port Pvt. Ltd.			same is in process of transferring in the name of the company.
Land & building	183.34	PEL Power Ltd.
Building	7.64	PEL Power Ltd.
Land	8.02	Mr. Muthuraj	Employee	FY 2009-10	Ownership of asset by Directors / officials of the Company was permitted as per Companies act. The land was purchased accordingly.
Land	23.71	Mrs. Silloo Yezdi Patel	Ex-director	FY 2001-02
Land	4.07	Mr. Rupen Pravin Patel	Director	FY 2000-01

(d) The Company has not revalued its Property, Plant and Equipment, (including Right to Use assets) or intangible assets during the year.

(e) Based on the information and explanations furnished to us, no proceedings have been initiated or are pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended) and rules made thereunder.

ii. (a) The management has conducted physical verification of inventory at reasonable intervals during the year. In our opinion, the coverage and procedure of such verification by the management is appropriate having regard to the size of the Company and nature of its operations. In respect of inventories of stores and spares, the Management has a verification Programme designed to cover the items over a period of three years. No discrepancies of 10% or more in the aggregate for each class of inventory were noticed as compared to book records.

(b) The Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets; according to the information and explanations given to us, the quarterly returns or statements filled by the Company with such banks are in agreement with the books of account.

iii According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any investment or provided any security or granted advances in the nature of loans to companies, firms, limited liability partnership or other parties during the year. The Company has provided guarantees to and unsecured loan to companies and Joint operations/ Joint ventures during the year.

(a) Based on the audit procedures carried out by us and as per the information and explanation given to us, the Company has provided guarantees to a subsidiary company, a joint venture and an associate company and granted unsecured loans to 21 companies and 8 entities. The aggregate amount of guarantee provided

188.34 million and unsecured loan granted 44.80 million during the year and balance outstanding at the balance sheet date with respect to such guarantees and unsecured loans to subsidiaries companies, associate company/ joint operations/joint ventures is 4,287.68 million and 4,612.29 million respectively.

(b) In respect of the aforesaid guarantees and unsecured loans, the terms and conditions under which such guaranteed provided and loans were granted are prima facie, not prejudicial to the interest of the company, based on the information and explanations provided by the company.

(c) In respect of loans outstanding as on the balance sheet date, the schedule of repayment of principal and payment of interest has been stipulated and the repayments of principal amounts and receipts of interest are regular as per stipulation.

(d) There is no loan and interest are overdue as per agreed stipulation. Hence, clause 3(iii)(d) of the Order is not applicable to the Company.

(e) During the year there is no loan which are due as per agreed stipulation, hence clause 3(iii)(e) of the Order is not applicable to the Company.

(f) The loans granted during the year, including to related parties has stipulated the schedule repayment of principal and payment of interest and the same were not repayable on demand.

iv In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013, to the extent applicable, in respect of the loans, investments, guarantees and security.

v In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits or there are no amounts which have been deemed to be deposits within the meaning of sections_73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, reporting under clause 3(v) of the Order is not applicable to the Company.

vi The Central Government has specified maintenance of cost records under sub-section (1) of section 148 of the Act in respect of the products of the Company. 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 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.

vii (a) In our opinion, and according to the information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues including goods and services tax, provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, the records of the Company examined by us, the disputed statutory dues that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Particulars	Financial year to which amount relates	Amounts in Million()	Forum where dispute is pending
The Sales	2005-2006 to 2007-2008 and 2011-2012	31.94	Appellate Tribunal, Kolkata
Tax Act	2012-13	3.55	Senior Joint commissioner for Sales Tax Kolkata
	2008-2009 to 2010-11	23.08	W.B.C.T. Appellate and Revisional Board, Kolkata
Finance Act,	April 2003 to July 2006	2.54	Custom, Excise and Service Tax Appellate Tribunal
1994	September 2015	71.52
	October 2009 to September 2010	108.31	Hon‘ble Supreme Court
	June 2007 to September 2009	651.88
CGST & SGST	September 2018 to March 2019	46.77	Hon‘ble High Court Patna
Act, 2017	Oct-2014 to Jun-2017	9.30	Commissioner of CGST
The	2001-02 to 2007-08	905.01	Hon‘ble High Court
Income Tax
	2008-09, 2011-12, 2013-14, 2014-15 to	1,893.37	Commissioner of Income Tax (Appeals)
Act,1961
	2017-18
	2017-18, 2018-19	27.99	Commissioner of Income Tax (Appeals) TDS
	2019-20	85.92	Magistrate Court Ballard Pier
Provident	2007-08 to 2011-12	14.35	Hon‘ble High Court, Shimla Himachal Pradesh
fund	January 2013 to August 2015	1.44	The Employee Provident Fund Appellate Tribunal
Custom Duty	2011-2012	17.62	Custom, Excise and Service Tax Appellate Tribunal, Chennai
With respect to Independent Branch Patel Engineering Ltd (Real Estate Division)
Sales Tax	2016-17	13.50	Deputy Commissioner of State Tax Appeal
The Finance	November 2009 to June 2012	404.69	Custom, Excise and Service Tax Appellate Tribunal
Act, 1994
	April 2015 to June 2017	54.14	Commissioner of Service Tax
Income Tax	2015-16 to 2016-17	71.13	Commissioner of Income Tax (Appeals)
Act, 1969	2015-2016 to 2016-17	35.16	The Director, Objections Appeals and Dispute Resolutions
			Dept. Mauritius

viii According to the information and explanations given to us, no transactions were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961) which have not been previously recorded in the books of accounts.

ix (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lenders during the year.

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

(c) In our opinion and according to the information and explanations given to us, money raised by way of term loans were applied for the purposes for which these were obtained.

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

(e) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

(f) According to the information and explanations given to us, the Company has not raised any loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

x (a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments), during the year. Accordingly, reporting under clause 3(x)(a) of the Order is not applicable to the Company.

(b) During the year, the Company has made preferential allotment of shares to a category I registered FPI and right issue to the existing shareholders of the company. In our opinion and according to the information and explanations given to us, the Company has complied with the requirements of section 42 and section 62 of the Act and the Rules framed thereunder with respect to the same.

In our opinion and according to the information and explanations given to us, the company has utilized funds raised by way of preferential allotment for the purpose for which were raised. The utilization of funds raised by way of right issue of shares is stated as under:

( In million)

Sr. No.	Nature of Securities viz. Equity shares/ Preference shares/ Convertible debentures	Purpose for which funds were raised	Total Amount Raised	Amount utilized	Unutilized* balance as at 31st March, 2023	Remark, if any
1(a)	Equity Shares	Repayment of Promoters Loan	1,300	1,300	-
1(b)	Equity Shares	Prepayment/ Repayment of certain outstanding Borrowings (including interest thereon)	1,023.55	597.95	425.60	The unutilised proceeds are kept by the company in separate Bank account and temporarily invested
2	Equity Shares	General Corporate Purpose	809.50	705.60	103.90	in fixed deposit
	Total		3,133.05	2,603.55	529.50

*Includes accrued interest on Fixed Deposit.

xi (a) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or no material fraud on the Company has been noticed or reported during the period covered by our audit.

(b) According to the information and explanations given to us including the representation made to us by the management of the Company, no report under sub-section 12 of section 143 of the Act has been filed by the auditors in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014, with the Central Government for the period covered by our audit.

(c) According to the information and explanations given to us including the representation made to us by the management of the Company, there are no whistle-blower complaints received by the Company during the year.

xii The Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it. Accordingly, reporting under clause 3(xii) 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 entered into by the Company with the related parties are in compliance with sections 177 and 188 of the Act, where applicable. Further, the details of such related party transactions have been disclosed in the standalone financial statements, as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified in Companies (Indian Accounting Standards) Rules 2015 as prescribed under section 133 of the Act.

xiv (a) In our opinion and according to the information and explanations given to us, the Company has an internal audit system as per the provisions of section 138 of the Act which is commensurate with the size and nature of its business

(b) We have considered the reports issued by the Internal Auditors of the Company till date for the period under audit.

xv According to the information and explanation given to us, the Company has not entered into any non-cash transactions with its directors or persons connected with its directors and accordingly, reporting under clause 3(xv) of the Order with respect to compliance with the provisions of section 192 of the Act are not applicable to the Company.

xvi (a) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, reporting under clause 3(xvi)(a)(b) and (c) of the Order are not applicable to the Company.

(d) Based on the information and explanations given to us and as represented by the management of the Company, the Group (as defined in Core Investment Companies (Reserve Bank) Directions, 2016) does not have any CIC.

xvii The Company has not incurred any cash losses during the financial year as well as the immediately preceding financial year.

xviii There has been no resignation of the statutory auditors during the year. Accordingly, reporting under clause 3(xviii) of the Order is not applicable to the Company.

xix According to the information and explanations given to us and on the basis of the Financial ratios, ageing and expected dates of realisation of Financial assets and payment of Financial liabilities, other information accompanying the Standalone Financial statements, our knowledge of the plans of the Board of Directors and management 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 According to the information and explanations given to us, the Company does not have any unspent amounts towards Corporate Social Responsibility in respect of any ongoing or other than ongoing project as at the end of the standalone financial year. Accordingly, reporting under clause 3(xx) (a) & (b) 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 standalone financial statements of the Company. Accordingly, no comment has been included in respect of said clause under this report

For Vatsaraj& Co.

Chartered Accountants FRN: 111327W

Dr CA B.K. Vatsaraj

Partner M. No.:039894 UDIN: 23039894BGZCSN3040

Mumbai, 15th May, 2023

ANNEXURE B to Independent Auditors Report on the Standalone Financial Statement of Patel Engineering Limited, Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act, referred to in paragraph 2(f) under "Report on Other Legal and Regulatory requirement" section of our report of even date.

We have audited the Internal Financial controls Over Financial reporting of Patel Engineering Limited ("the Company") as of 31st March, 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 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 ("the Guidance Note").These responsibilities include the design, implementation and maintenance of adequate internal Financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with 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 applicable to an audit of Internal Financial Controls and, 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 judgement, 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 with respect to these Financial Statement.

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 Standalone 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 and based on the consideration of the reports of the other auditor on internal financial controls system over financial reporting of the Real Estate Division Branch and joint operations referred to in the Other Matters paragraph below, the Company has, in all material respects, adequate internal financial controls system over Financial reporting with reference to these Standalone Financial Statements and such internal Financial controls over Financial reporting were operating effectively as at 31st March, 2023, 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.

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 insofar as it relates to Real Estate Division Branch and joint operations, is based on the corresponding report of the other auditor of such branch and joint operations.

Our opinion is not modified in respect of this matter.

For Vatsaraj& Co.

Chartered Accountants FRN: 111327W

Dr CA B.K. Vatsaraj

Partner M. No.:039894 UDIN: 23039894BGZCSN3040

Mumbai, 15th May, 2023