sadbhav infra Directors report

To

The Members,

Your Directors have pleasure in submitting their 17th Annual Report of the Company together with the Audited Statements of Accounts for the financial year ended on 31st March, 2023.

FINANCIAL RESULTS

The Groups financial performances for the year under review along with previous years figures are given hereunder:

(Rs. In Million)

PARTICULARS	Standalone		Consolidated
	2022-23	2021-22	2022-23	2021-22
Revenue from Operations	894.14	2042.10	8247.27	9623.25
Other Income	379.48	302.35	2683.58	8747.70
Total Revenue	1273.62	2344.45	10930.85	18370.95
Profit Before Taxation	(3970.06)	(2267.55)	(3855.45)	(375.64)
Less: Tax Expense	394.59	351.08	206.30	162.85
Profit/(Loss) for the period after tax and minority interest	(3975.48)	(1916.47)	(3649.15)	(212.79)
Other comprehensive income	0.38	2.57	1.07	5.11
Total comprehensive income (after tax)	(3575.10)	(1913.90)	(3648.08)	(207.68)

DIVIDEND

Directors do not recommend any dividend for the financial year ended on 31st March, 2023.

DIVIDEND DISTRIBUTION POLICY

Securities and Exchange Board of India (SEBI), by its notification dated 8th July, 2016, has amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), introducing new Regulation 43A and further amended the same on 5th May, 2021 mandating the top 1000 listed entities, based on market capitalization calculated as on 31st March of every financial year, to formulate a Dividend Distribution Policy and disclose the same on the website of the listed entity and a web-link shall also be provided in their annual reports.

Accordingly, the Board of the Company has adopted a Dividend Distribution Policy. The Policy, as approved by the Board, is uploaded on the Companys website at the web link: https://www.sadbhavinfra.co.in/en/pdf/dividend-distribution-policy.pdf

AMOUNT TO BE CARRIED TO RESERVES

The Company transfers entire sum of net loss incurred to Retained Earnings during the year under review.

SHARE CAPITAL

The paid up Equity Share Capital as at 31st March, 2023 is Rs 352,22,52,160/-. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. The Company has no scheme of provision of money for purchase of its own shares by employees or by trustees for the benefit of employees. Hence the details under rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014 are not required to be disclosed.

DEBENTURES

The Company has following Non-convertible Debentures (NCDs) as on 31st March, 2023:

1. Series A - 39,000 (Thirty Nine Thousand) Unlisted, Unrated, Secured, Redeemable, Non-convertible Debentures of face value of Rs. 67,408/- (Rupees Sixty Seven Thousand Four Hundred and Eight only) each, aggregating up to Rs. 262,89,12,000/-(Rupees Two Hundred Sixty Two Crores Eighty Nine Lakhs and Twelve Thousand only) ("Debentures").

2. Series B - 16,000 (Sixteen Thousand) Unlisted, Unrated, Secured, Redeemable, Non- Convertible Debentures of a face value of Rs. 1,00,000/- (Rupees One Lakh Only) each of an aggregate nominal value of up to Rs. 160,00,00,000/- (One Hundred Sixty Crores Only) ("Debentures").

REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS

During the year, Company reported at standalone level, the Revenue from Operations amounting to Rs 894.14 million as against Rs 2042.10 million in the previous year. The Net Loss reported for the year was Rs 3975.48 million against Net Loss of Rs 1916.47 million as per previous year. The Consolidated Revenue from Operations was Rs 8247.27 million as against Rs 9623.25 million in the previous year. Your Company has achieved consolidated total income of Rs 10930.85 million as against Rs 18370.95 million in the previous year.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on corporate governance under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with the certificate from the Practicing Company Secretary confirming the compliance, is annexed and forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS (MDA)

The Management Discussion and Analysis report, capturing your Companys performance, industry trends and other material changes with respect to your Company is presented in a separate section forming part of the Annual Report. The Report provides a consolidated perspective of economic, social and environmental aspects material to our strategy and our ability to create and sustain value to our key stakeholders and includes aspects of reporting as required by Regulation 34(2) (e) read with Schedule V of the Listing Regulations.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There are no material changes in the nature of business during the year.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There are no material changes and commitment if any affecting the financial position of the company occurred between the ends of the financial year to which this financial statements relate and the date of the report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

RISK MANAGEMENT

Risk management comprises all the organizational rules and actions for early identification of risks in the course of doing business and the management of such risks.

Pursuant to the provisions of Regulation 21 of the Listing Regulations, the Company is not required to constitute a Risk Management Committee; however, as a measure of good governance, the Company has constituted a Risk Management Committee of the Board. The Company has laid down procedures to inform Board members about the risk assessment and minimization procedures. The Companys management systems, organizational structures, processes, standards, code of conduct, Internal Control and Internal audit methodologies and processes that governs as to how the Company conducts its business and manages associated risks. The Company also has in place a Risk Management Policy to identify and assess the key risk areas. The Members of the Audit Committee monitors and reviews the implementation of various aspects of the Risk Management Policy. This robust Risk Management framework seeks to create transparency, minimize adverse impact on business objectives and enhance the Companys competitive advantage. Major risks identified by the Company are systematically addressed through mitigating actions on a continuous basis. The Company has also adopted Risk Assessment, Minimization and Control Procedures. At present no particular risk whose adverse impact may threaten the existence of the Company is visualized.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS.

The Company has appropriate internal control systems for business processes with regard to its operations, financial reporting and compliance with applicable laws and regulations. It has documented policies and procedures covering financial and operating functions and processes. These policies and procedures are updated from time to time and compliance is monitored by the internal audit function as per the audit plan. The Company continues its efforts to align all its processes and controls with best practices.

Details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of the Boards Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

i. Changes in Directors and Key Managerial Personnel

Pursuant to Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Jatin Thakkar [DIN: 09312406], Director of the Company, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting. The Board recommends his re-appointment. His brief resume and other details as required under the Act and Listing Regulations for his re-appointment as Director are provided in the Notice of the 17th Annual General Meeting of your Company.

1) Mr. Pradip Kumar Agarwal has tendered his resignation from the post of Chief Financial Officer of the Company with effect from 02/11/2022.

2) Mr. Vasistha C. Patel has tendered resignation from the position of Managing Director of the Company w.e.f. 21/11/2022.

3) Mr. Nitin R. Patel (DIN: 00466330), Director of the Company has tendered his resignation from the post of Director of the Company w.e.f. 21/11/2022.

4) Mr. Rohit Modi was appointed as Chief Executive Officer (CEO) of the Company in the category of Key Managerial Personnel w.e.f. 21/11/2022.

5) Mr. Jatin Thakkar has been appointed as Chief Financial Officer (CFO) of the Company in the category of Key Managerial Personnel w.e.f. 17/12/2022.

6) Mr. Shashin V. Patel (DIN: 00048328) has been appointed and designated as the Executive Chairman of the Company in the category of Key Managerial Personnel a period of three (3) years w.e.f. 14th February, 2023 to 13th February, 2026 (both days inclusive) on such terms and conditions as the Board has decided.

7) Mr. Rohit Modi, Chief Executive Officer (CEO) of the Company has tendered resignation from the post of CEO of the Company w.e.f 14/02/2023.

8) Mr. Rohit Modi has been appointed as Group CEO of the Sadbhav Group of Companies including Sadbhav Infrastructure Project Limited (SIPL) w.e.f 14/02/2023.

9) Mr. Dwigesh Joshi (DIN: 09733282) has been appointed as an Additional Non-Executive Director of the Company w.e.f. 15th March, 2023 and subsequently shareholders of the Company has confirmed his appointment vide Postal Ballot resolution passed on 29th April, 2023.

10) Mr. Jatin Thakkar (DIN: 09312406) has been appointed as an Additional Executive Director of the Company for a period of three (3) years w.e.f. 15th March, 2023 to 14th March, 2026 (both days inclusive) and subsequently shareholders of the Company has confirmed his appointment vide Postal Ballot resolution passed on 29th April, 2023.

ii. Declaration by an Independent Director(s)

Mr. Sandip V. Patel, Mr. Arun S. Patel and Mrs. Daksha Shah, Independent Directors, hold office for a term of five years. They are not liable to retire by rotation in terms of Section 149(13) of the Act.

All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Regulation 16 (1) (b) of the Listing Regulations. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of strategy, auditing, tax and risk advisory services, financial services, corporate governance, etc. and that they hold highest standards of integrity. The Independent Directors of the Company have undertaken requisite steps towards the inclusion of their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014.

iii. Procedure for Nomination and Appointment of Directors:

The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, and financial condition and compliance requirements.

The Nomination and Remuneration Committee conducts a gap analysis to refresh the Board on a periodic basis, including each time a Directors appointment or re-appointment is required. The Committee is also responsible for reviewing and vetting the CVs of potential candidates vis-a-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

iv. Criteria for Determining Qualifications, Positive Attributes and Independence of a Director:

The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Regulation 19 read with Part D of Schedule II of the Listing Regulations.

Independence: In accordance with the above criteria, a Director will be considered as an Independent Director if he/she meets with the criteria for Independent Director as laid down in the Act and Regulation 16 (1) (b) of the Listing Regulations.

Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers the manner in which the function and domain expertise of the individual will contribute to the overall skill domain mix of the Board.

Positive Attributes: In addition to the duties as prescribed under the Act, the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong interpersonal and communication skills and soundness of judgment. Independent Directors are also expected to abide by the Code for Independent Directors as outlined in Schedule IV to the Act.

v. Annual Evaluation of Board Performance and Performance of its Committees and of Directors:

Pursuant to the applicable provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.

The Boards functioning was evaluated on various aspects, including inter alia structure of the Board, including qualifications, experience and competency of Directors, diversity in Board and process of appointment; Meetings of the Board, including regularity and frequency, agenda, discussion and dissent, recording of minutes and dissemination of information; functions of the Board, including strategy and performance evaluation, corporate culture and values, governance and compliance, evaluation of risks, grievance redressal for investors, stakeholder value and responsibility, conflict of interest, review of Board evaluation and facilitating Independent Directors to perform their role effectively; evaluation of managements performance and feedback, independence of management from the Board, access of Board and management to each other, succession plan and professional development; degree of fulfillment of key responsibilities, establishment and delineation of responsibilities to Committees, effectiveness of Board processes, information and functioning and quality of relationship between the Board and management.

Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Executive Chairman.

Directors were evaluated on aspects such as professional qualifications, prior experience, especially experience relevant to the Company, knowledge and competency, fulfillment of functions, ability to function as a team, initiative, availability and attendance, commitment, contribution, integrity, independence and guidance/ support to management outside Board/Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including effectiveness of leadership and ability to steer meetings, impartiality, ability to keep shareholders interests in mind and effectiveness as Chairman.

Areas on which the Committees of the Board were assessed included mandate and composition; effectiveness of the Committee; structure of the Committee; regularity and frequency of meetings, agenda, discussion and dissent, recording of minutes and dissemination of information; independence of the Committee from the Board; contribution to decisions of the Board; effectiveness of meetings and quality of relationship of the Committee with the Board and management.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors, who also reviewed the performance of the Board as a whole. The NRC also reviewed the performance of the Board, its Committees and of the Directors.

The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.

NUMBER OF MEETINGS OF THE BOARD

During the year, Nine (9) board meetings were convened and held on 27th May, 2022, 20th June, 2022, 9th August, 2022, 15th October, 2022, 12th November, 2022, 21st November, 2022, 17th December, 2022, 14th February, 2023 and 15th March, 2023. Details of board meetings and committee meeting are given in the corporate governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

COMMITTEES OF BOARD

In compliance with the requirements of Companies Act, 2013 and Listing Regulations, your Board had constituted various Board Committees to assist it in discharging its responsibilities. The Board has adopted charters setting forth the roles and responsibilities of each of the Committees. The Board has constituted following Committees to deal with matters and monitor activities falling within the respective terms of reference:

a) Mandatory Committees

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

b) Non-Mandatory Committees

• Risk Management Committee

• Finance and Investment Committee

Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report.

The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Regulations. NOMINATION AND REMUNERATION POLICY

The Company has adopted a Nomination and Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and the Listing Regulations. The philosophy for remuneration of Directors, Key Managerial Personnel and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. The Remuneration Policy of the Company is aligned to this philosophy.

The Nomination and Remuneration Committee has considered following factors while formulating Policy:

i. The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

ii. Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

iii. Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company.

Details of the Remuneration Policy are given in the Corporate Governance Report.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS), form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.

The annual financial statements of the subsidiaries and related detailed information will be kept at the Registered Office of the Company, as also at the registered offices of the respective subsidiary companies and will be available to investors seeking information at any time.

The Company has adopted a Policy for determining Material Subsidiaries in terms of Regulation 16 (1) (c) of Listing Regulations. The Policy, as approved by the Board, is uploaded on the Companys website and the weblink of the same is https://www.sadbhavinfra.co.in/en/investors.html

The consolidated financial results reflect the operations of the following subsidiaries.

NO Name of Company	CIN/GLN	Address of The Company	Holding/Subsidiary/ Associate
1 Ahmedabad Ring Road Infrastructure Limited	U45203GJ2006PLC048981	"Sadbhav House", Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006.	Wholly owned Subsidiary Company
2 Rohtak Hissar Tollway Private Limited	U45203GJ2013PTC074446	- do -	Wholly owned subsidiary Company
3 Rohtak Panipat Tollway Private Limited	U45202GJ2010PTC059322	- do -	Wholly owned subsidiary Company
Sadbhav Nainital Highway Limited 4. (Formerly known as Sadbhav Nainital Highway Private Limited)	U45309GJ2016PLC091777	- do -	Wholly owned subsidiary Company
Sadbhav Rudrapur Highway Limited 5. (Formerly known as Sadbhav Rudrapur Highway Private Limited)	U45203GJ2016PLC091774	- do -	Wholly owned subsidiary Company
Sadbhav Bhavnagar Highway Limited 6. (Formerly known as Sadbhav Bhavnagar Highway Private Limited)	U45309GJ2016PLC092557	- do -	Wholly owned subsidiary Company#
Sadbhav Una Highway Limited 7. (Formerly known as Sadbhav Una Highway Private Limited)	U45500GJ2016PLC092589	- do -	Wholly owned subsidiary Company#
8 Sadbhav Bangalore Highway Private Limited	U45202GJ2016PTC094257	- do -	Wholly owned subsidiary Company
Sadbhav Vidarbha Highway Limited 9. (Formerly known as Sadbhav Vidarbha Highway Private Limited)	U45500GJ2017PLC097040	- do -	Wholly owned subsidiary Company
Sadbhav Udaipur Highway Limited 10. (Formerly known as Sadbhav Udaipur Highway Private Limited)	U45309GJ2017PLC097508	- do -	Wholly owned subsidiary Company
Sadbhav Jodhpur Ring Road Private . Limited	U45309GJ2018PTC100367	- do -	Wholly owned subsidiary Company
Sadbhav Kim Expressway Private . Limited	U45309GJ2018PTC101800	- do -	Wholly owned subsidiary Company
Sadbhav Infra Solutions Private 13 Limited (Formerly known as Sadbhav Bhimasar Bhuj Highway Private Limited)	U45309GJ2018PTC101821	- do -	Wholly owned subsidiary Company
Sadbhav Maintenance Infrastructure 14 Private Limited (Formerly known as Sadbhav Vizag Port Road Private Limited)	U45309GJ2018PTC101832	- do -	Wholly owned subsidiary Company
Sadbhav Hybrid Annuity Projects . Limited	U45500DL2018PLC335787	- do -	Wholly owned subsidiary Company
16 Maharashtra Border Check Post Network Limited	U45201GJ2009PLC056327	- do -	Subsidiary*

* Sadbhav Infrastructure Project Limited (SIPL) and Adani Road Transport Limited (ARTL) executed Share Purchase Agreement (SPA) on August 16, 2021 (Amended and restated on January 27, 2022), for sale of equity shares of Maharashtra Border Check Post Network Limited (MBCPNL) a subsidiaries of SIPL, out of which 49% shares have been transferred to ARTL for the year ended March 31, 2023.

# The members of the Company have passed special resolution on 21st March, 2023 through Postal Ballot for the proposed sale and transfer of 100% of the equity shares capital held by the Company (including through its nominees) in Sadbhav Bhavnagar Highway Limited and Sadbhav Una Highway Limited, to Kalthia Engineering & Construction Limited ("Kalthia Group" or the "Buyer") in one or more tranches. However, Sadbhav Bhavnagar Highway Limited and Sadbhav Una Highway Limited ceased to be wholly-owned subsidiaries of the company pursuant to share transfer executed in the month of June-July, 2023.

Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement

Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013 read with rules made thereunder and pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company had prepared consolidated financial statements of the Company and its subsidiaries and a separate statement containing the salient features of financial statement of subsidiaries, joint ventures and associates in Form AOC-1 attached as Annexure-1 which forms part of this Report.

Particulars of loans, guarantees or investments under section 186

The provisions of Section 186 (except sub-section [1] of Section 186) of the Companies Act, 2013, with respect to a loan, guarantee or security is not applicable to the Company as the Company is engaged in providing infrastructural facilities. The details of investment made during the year under review are disclosed in the financial statements.

FIXED DEPOSITS

During the year under review, your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on 31 March 2023, there were no deposits which were unpaid or unclaimed and due for repayment.

INSURANCE

All properties and insurable interests of the company to the extent required have been adequately insured.

Particulars of contracts or arrangements with related parties:

All the related party transactions entered into during the financial year were on arms length basis and were in the ordinary course of business. Your Company had not entered into any transactions with related parties, which could be considered material in terms of SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015. Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Act in Form AOC 2 is attached as Annexure-2, which forms part of this Report.

There are no materially significant related party transactions made by the company with promoters, key managerial personnel or other designated persons, which may have potential conflict with interest of the company at large. The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Companys website at the web link: https://www.sadbhavinfra.co.in/en/pdf/policv-on-related-partv-transaction.pdf

DIRECTORS RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors, including audit of the internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during the financial year 2022-23.

Accordingly, pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards had been followed and that there are no material departures;

ii. they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii. they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they had prepared the annual accounts on a going concern basis;

v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi. they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF).

The Company have transferred unclaimed/unpaid IPO Application money lying in IPO account held with ICICI Bank Limited to Investor Education and Protection Fund as per the provisions of Companies Act, 2013 during the year under review. However, there is no unclaimed and unpaid dividend transferred to Investor Education and Protection Fund (IEPF) in the current financial year.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) is a companys sense of responsibility towards the community and environment in which it operates. It is the continuing commitment by business to behave ethically and contribute to economic development of the society at large and building capacity for sustainable livelihoods. The Company believes in conducting its business responsibly, fairly and in utmost transparent manner. It continually seeks ways to bring about an overall positive impact on the society and environment where it operates and as apart of its social objectives. The policy has been formally formulated and adopted in terms of Section 135 of the Act and Rules framed thereunder to undertake CSR activities.

The Board has constituted a Corporate Social Responsibility Committee headed by Mr. Shashin Patel as Chairman and Mrs. Daksha Shah and Mr. Sandip V. Patel as Members of the Committee.

The responsibilities of the CSR Committee include:

i. Formulating and recommending to the Board of Directors the CSR Policy and indicating activities to be undertaken.

ii. Recommending the amount of expenditure for the CSR activities.

iii. Monitoring CSR activities from time to time.

The provisions regarding Corporate Social Responsibility ("CSR") as enumerated under section 135 of the Companies Act 2013 are

applicable to the Company. During the year under review, on account of losses suffered, Company has not spent any expense on CSR as per CSR Policy of the Company. The Annual Report on CSR activities in the prescribed Form is attached as "Annexure-3" to this report.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.

Pursuant to provision of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, Complaint Redressal Committee has been Comprises of Mrs. Janki Shah as Chairperson, Mrs. Rajal Patel as Presiding Officer and Ms. Aakansha Shah as Member.

The Company has not received any complaint of sexual harassment during the financial year 2022-23 and No meeting of Complaint Redressal Committee was held during the year.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has made compliant under Vigil Mechanism/ Whistle Blower Mechanism.

FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of SEBI Regulations, the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarization programme are explained in the Corporate Governance Report. The same is also uploaded on the Companys website i.e. https://www.sadbhavinfra.co.in/.

Auditors

i. Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. S G D G & Associates LLP, Chartered Accountants, Ahmedabad (S G D G) (Firm Registration No. W100188) were appointed as Statutory Auditor of the Company from conclusion of 12th AGM held in the year 2018 till the conclusion of the 17th AGM to be held in the year 2023.

Therefore, their re-appointment for another term of five years is recommended at this Annual General Meeting.

The Auditors Report has following qualification, reservation or adverse remark on the financial statements for the year ended on 31st March, 2023.

For Standalone:

a) Audit Qualification (each audit qualification separately):

The Statutory Auditors have provided following qualification in their audit report -

1. We draw attention to Note 47 and Note 48 to the accompanying Standalone Financial Results with respect to investment in and loan & advances to Rohtak Panipat Tollway Private Limited and Rohtak Hissar Tollway Private Limited, subsidiaries of the Company. Both the subsidiaries have issued notice of termination of concession agreement to National Highway Authority of India (NHAI) on account of Force Majeure Event as per concession agreement. As explained in the said note, the company has carried out impairment assessment of investment in these subsidiaries considering the expected payment arising out of aforesaid termination and other claims filed with NHAI and based on the above assessment, management has concluded that no impairment / adjustment to the carrying value of the investment and loans & advances aggregating to INR 7976.40 million are necessary as at March 31, 2023.

We have not been able to corroborate the managements contention of realising the carrying value of investments, loans and advances and Trade and other receivables related to both subsidiaries aggregating to INR 7976.40 million as on March 31, 2023. Accordingly, we are unable to comment on appropriateness of the carrying value of such investment and loans and advances and their consequential impact on the financial results and financial position of the Company as at and for the quarter and year ended on March 31, 2023.

Our Audit Opinion on financial statements for the financial year ended on March 31, 2023 and conclusion on financial results for the quarter ended on June 30, 2022, September 30, 2022 and December 31, 2022 were qualified in respect of this matter.

2. We draw attention to Note 49 of the accompanying Standalone Financial Results with respect to Sadbhav Vidarbha Highway Limited (Concessionaire or SVHL), subsidiary of the Company, in which case, lender of SVHL, in the month of February, 2023, have exercised its right to substitute concessionaire. The SVHL vide its letter dated May 5, 2023 had recommended National Highway Authority of India (NHAI), Harmonious substitution of concessionaire. The approval of NHAI is awaited. As explained in the said note, management has carried out impairment assessment of Investment (including subdebt), loan and other receivables in this subsidiary duly considering the expected payment arising out of aforesaid substitution and based on the above assessment, management has concluded that no impairment / adjustment to the carrying value of Investment (including subdebt) , loan and

other receivables aggregating to INR 1176.53 million is considered necessary as at March 31, 2023.

However, we have not been able to corroborate the managements contention of realizing the carrying value of Investment (including subdebt), loan and other receivables balance amounting to INR 1176.53 millions as at March 31, 2023.

Accordingly, we are unable to comment on appropriateness of the carrying value of Investment (including subdebt), loan and other receivables and their consequential impact on the financial results and financial position of the company as at reporting date and for the quarter and year ended on March 31, 2023.

3. We draw attention to Note 51 of the accompanying Standalone Financial Results with respect to Sadbhav Hybrid Annuity Project Limited (SHAPL), subsidiary of the company in which auditors of the said subsidiary expressed concerns over subsidiary s ability to continue as going concern as the net worth of the subsidiary has been completely eroded. As explained in the said note, management has carried out impairment assessment of Investment (including subdebt), loan and other receivables in this subsidiary duly considering expected payment to be received by the said subsidiary and based on the that, management has concluded that no impairment / adjustment to the carrying value of Investment (including subdebt), loan and other receivables aggregating to INR 680.39 millions is considered necessary as at March 31, 2023.

However, we have not been able to corroborate the managements contention of realizing the carrying value of Investment (including subdebt), loan and other receivables balance aggregating to INR 680.39 millions as at March 31, 2023. Accordingly, we are unable to comment on appropriateness of the carrying value of Investment (including subdebt), loan and other receivables and their consequential impact on the financial results and financial position of the company as at reporting date and for the quarter and year ended on March 31, 2023.

4. Material uncertainty related to going concern

We draw attention to Note no. 52 to the accompanying Standalone Financial Results, which indicates that, current liabilities exceeds current assets by INR 2348.21 millions and the Company finds difficulty in meeting obligations of payment to suppliers and statutory dues. Further, company is in the process of divestment of its investment in subsidiary companies and subsidiary companies finds difficulty in meeting obligation of lenders and accounts by the lenders of some subsidiary companies have been classified as Non-Performing Assets. These events or conditions along with other matters as set forth in the said note indicate that a material uncertainty exists that may cast significant doubt on the Companys ability to continue as a going concern. Managements evaluation of the events and conditions and managements plans regarding these matters are also described in the said note.

Our opinion is not modified in respect of this matter.

Reply of Directors for above qualifications raised by Statutory Auditors in its Audit Reports:

1. The Company has investments of INR 217.74 million and subordinate debts of INR 4688.73 million and trade & other Receivables of INR 79.14 millions in Rohtak Panipat Tollway Private Limited,a subsidiary company which is engaged in construction, operation and maintenance of infrastructure projects under concession agreement with National Highways Authorities of India(NHAI). The net worth of this subsidiary company has fully eroded. Further the toll collection was forcefully suspended due to agitation and protest held by farmers and other unions against agri-marketing laws from December 25, 2020. Accordingly, the subsidiary company could not collect toll user fees from December 25, 2020. The subsidiary company had sent various communications to NHAI for such forceful suspension of toll. The said subsidiary company has issued notice for termination of concession agreement on July 27, 2021 considering the above event as Force Majeure Event in terms of concession agreement. The said subsidiary has filed claim amounting to INR 39,578.44 million relating to termination payments, O&M cost due to force majeure, Covid claim & demonetization etc. with NHAI in terms of concession agreement. In respect of such claims, NHAI has approached to the company for settlement of all these claims by way of conciliation proceedings, which has been consented by the company.

Considering the management assessment of probability and tenability of receiving above claims from NHAI as per the terms of concession agreement, which is backed by legal opinion and communications from NHAI for conciliation, the management has assessed that there is no impairment in the value of investments made by the company in the subsidiary and consequently no provision/adjustment to the carrying value of Investments and subordinate debts, loans and advances and trade and other receivables as at March 31, 2023 is considered necessary.

The Company has investments of INR 107.68 million and subordinate debts of INR 2893.42 million and other receivable of INR 44.17 millions in its one subsidiary namely Rohtak Hissar Tollway Private Limited, a subsidiary company which is engaged in construction, operation and maintenance of infrastructure projects under concession agreement with National Highways Authorities of India. The net worth of this subsidiary company has fully eroded. Further the toll collection was forcefully suspended due to agitation and protest held by farmers and other unions against agri-marketing laws from December 25, 2020. Accordingly, the subsidiary company could not collect toll user fees from December 25, 2020. The subsidiary company had sent various communications to NHAI for such forceful suspension of toll. The said subsidiary company has issued notice for termination of concession agreement on August 27, 2021 considering the above event as Force Majeure Event in terms of concession agreement. The said subsidiary has filed claim amounting to INR 14,969.77 million relating to termination payments, O&M cost due to force majeure, Covid claim & demonetization etc with NHAI in terms of concession agreement.

Considering the management assessment of probability and tenability of receiving above claims from NHAI as per the terms of concession agreement and communications from NHAI for conciliation, the management has assessed that there is no impairment in the value of investments made by the company in the subsidiary and consequently no provision/adjustment to the carrying value of Investments and subordinate debts and loans and advances as at March 31, 2023 is considered necessary.

2. The Company has investments of INR 257.99 million and subordinate debts of INR 813.83 million and other receivables of INR

104.72 million in one of its subsidiaries namely Sadbhav Vidarbha Highway Limited (SVHL or concessionaire), a subsidiary company which is engaged in construction, operation and maintenance of infrastructure project under concession agreement with National Highways Authorities of India (NHAI), the lenders of the subsidiary in the month of February, 2023, have exercised its right to substitute concessionaire. The SVHL vide its letter dated May 5, 2023 had recommended National Highway Authority of India (NHAI), harmonious substitution of concessionaire. The approval of NHAI is awaited.

Pending the final approval for substitution from NHAI, no adjustment to the carrying value of investments has been made in the financial statements.

3. Sadbhav Hybrid Annuity Projects Limited (SHAPL) has been able to meet its obligations in the ordinary course of the business complimented by the continuing financial support offered from the company. The company being an investment company and holding portfolio of various Toll and HAM assets, planning & churning the various strategic option to hive off the investment, to support the subsidiary, Having regard to all these aspects, the financial statements of SHAPL have been prepared assuming that the subsidiary will continue as a going concern.

4. The Companys current liabilities exceeded its current assets by INR 2,297.91 millions. The management represents that the company holds investments in various Toll and HAM assets, The liquidity position improved on account of receipt of PCOD for six HAM projects and conclusion of sale of stake in three of the SPVs. The management of the company has prepared projections of cash flows for the next 12 months with focus on enhancing resource availability by timely execution of HAM Projects, realisation of claims, monetization of assets and cost control. Basis the said projections, the management of the company believes that it will be able to pay debts as they fall due in coming 12 months period from the reporting date and there is no threat to going concern assumption adopted in preparation of financial results for the quarter and year ended on March 31, 2023.

Further, the Statutory Auditors have mentioned following qualifications in Report on the Internal Financial Controls with reference

to standalone financial statements:

a) The Companys internal financial controls with reference to standalone financial statements as at March 31, 2023 as regards evaluation of uncertainty for realizing the carrying value of investments (including sub-debt), loan and other receivables as explained in Note 47, Note 48, Note 49 and Note 51 to the standalone financial statements were not operating effectively which could potentially lead to not providing adjustments, if any, that may be required to the carrying values of investments (including sub-debt), loan and other receivables from such subsidiaries and its consequential impact on the earnings, other equity and related disclosures in the standalone financial statements.

b) The Companys internal process with regards to the confirmation and reconciliation of trade payables, trade receivables, other incidental balances pertaining to the said trade payables and trade receivables, recognition of income and expenses are not operating effectively which could have consequential effect on balances.

c) Based on our audit procedure, in our opinion, the Company has inadequate system for processing of journal entries in accounting software indicating absence of maker checker system which could results into possible effect to the processing of transaction and its consequential effect on balances.

Reply of Directors for above qualifications raised by Statutory Auditors in its Report on the Internal Financial Controls with

reference to standalone financial statements:

a) Members of the Company are requested to refer point no 1 to 3 of the Reply given by Directors for qualifications raised by Statutory Auditors in its Standalone Audit Report as mentioned above.

b) Company has adequate system for balance confirmation of trade payable and receivables. The Company is reconciling the outstanding balance of trade payables and receivables on regular intervals. The Company has an internal audit system which is commensurate with the size and nature of its business and there is no weakness in recognition of income and expenses Further as part of internal audit scope such balances are also reviewed by them and hence possibility of misstatement is not there.

c) The company has adequate system of manual approval of processing of journal entries in accounting software and journal entries are also verified by the internal auditor. The Company has an internal audit system which is commensurate with the size and nature of its business Company are in process of incorporating the maker checker process in accounting software for processing of journal entries.

It may be noted that there were no material misstatements due to the weakness in system for processing of journal entries in accounting software due to absence of maker checker system.

For Consolidated:

a) Audit Qualification (each audit qualification separately):

The Statutory Auditors have provided following qualification in their audit report -

1. As detailed in Note 55 of the accompanying statement, with respect to Sadbhav Vidarbha Highway Limited (Concessionaire or SVHL), subsidiary of the group in which case lenders of SVHL has exercised right of substitution of concessionaire in the month of February, 2023. The Concessionaire vide its letter dated May 5, 2023 had recommended National Highway Authority of India (NHAI), Harmonious substitution of concessionaire. The approval of NHAI is awaited. As mentioned in the said note, no adjustment to the carrying value of assets and liabilities have been made in the financial statements of SVHL and the financial statements

of SVHL is prepared on going concern basis. Owing to the uncertainty of outcome of substitution proceedings and lack of other alternate audit evidence, we are unable to comment about adjustment that may be required to the carrying value of assets and liabilities and their consequential impact on the financial position of the Group as on March 31, 2023.

The auditors of SVHL have expressed qualified opinion on the financial statement of SVHL for the year ended March 31, 2023 vide their report dated May 26, 2023.

2. As detailed in Note 56 of the accompanying statement, with respect to Sadbhav Nainital Highway Limited (Concessionaire or SNHL), subsidiary of the group in which case National Highway Authority of India (NHAI) vide its letter dated April 17, 2023 has given In-Principal approval for harmonious substitution of concessionaire. As mentioned in the said note, no adjustment to the carrying value of assets and liabilities have been made in the financial statements of SNHL and the financial statements of SNHL is prepared on going concern basis pending compliance of conditions prescribed by NHAI for substitution.

The auditors of SNHL have expressed qualified opinion on the financial statement of SNHL for the year ended March 31, 2023 vide their report dated May 25, 2023.

3. As detailed in Note 48 & Note 49 of the accompanying Consolidated Financial Results, with respect to Rohtak Panipat Tollway Private Limited (RPTPL) and Rohtak Hisar Tollway Private Limited (RHTPL), subsidiaries of the Group in which interest on rupee term loan from banks and financial institutions as well as unsecured loans from group companies have not been accounted considering the fact that both subsidiaries have issued termination notices and lenders of both subsidiaries have classified all the secured borrowings as non-performing assets. This has resulted in the understatement of finance cost and the related interest liability and corresponding understatement of losses, amount of which is unascertained.

The auditors of RPTPL and RHTPL have expressed qualified opinion on the financial statement of RPTPL and RHTPL for the year ended March 31, 2023 vide their report dated May 25, 2023.

4. As detailed in Note 53 of the accompanying consolidated Financial Results, with respect to Sadbhav Jodhpur Ring Road Private Limited (SJRRPL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 155.45 Million under Other Current assets. However, during financial year 2022-2023, the SJRRPL does not have any business activity nor are we informed about the management plan for taking up other business activity.

Hence we are unable to comment about the utilization/realization of such tax credits in foreseeable future

5. As detailed in Note 54 of the accompanying consolidated Financial Results, with respect to Sadbhav Banglore Highway Private Limited (SBGHPL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 426.74 Million under the Other Current assets. However, during financial year 2022-2023, the SBGHPL does not have any business activity nor are we informed about the management plan for taking up other business activity.

The auditors of SBGHPL have expressed qualified opinion on the financial statement of SBGHPL for the year ended March 31, 2023 vide their report dated May 26, 2023 mentioning that they are unable to comment about the utilization of tax credits in foreseeable future.

6. Material uncertainty related to going concern

We draw attention to Note no. 63 to the accompanying consolidated Financial Results, which indicates that, Groups accumulated losses exceeds paid-up capital and reserves by INR 1651.58 million and, as of that date the current liabilities of the Group exceeded the current assets by INR 5959.10 million. and the Group finds difficulty in meeting obligations of payment to suppliers and statutory dues. Further, Group is in the process of divestment of its investment in subsidiary companies and subsidiary companies finds difficulty in meeting obligation of lenders and accounts by the lenders of the some of the subsidiary companies have been classified as Non-Performing Assets. These events or conditions along with other matters as set forth in the said note indicate that a material uncertainty exists that may cast significant doubt on the Groups ability to continue as a going concern. Managements evaluation of the events and conditions and managements plans regarding these matters are also described in the said note.

Reply of Directors for above qualifications raised by Statutory Auditors in its Audit Reports:

1. Sadbhav Vidarbha Highway Limited (Concessionaire or SVHL), subsidiary of the group in which case lenders of SVHL has exercised right of substitution of concessionaire in the month of February, 2023. The proposed buyer, Gawar Construction Limited (GCL), has submitted Expression of Interest (EOI) to the Lenders. However, the Concessionaire vide its letter dated May 5, 2023 had recommended National Highway Authority of India (NHAI), Harmonious substitution of concessionaire. The approval of NHAI is awaited. The company and SVHL are in active discussion with GCL for executing endorsement agreement. Owing to the uncertainty of outcome of substitution proceeding note, no adjustment is made to the carrying value of assets and liabilities in the financial statements of SVHL and the financial statements of SVHL is prepared on going concern basis.

2. Sadbhav Nainital Highway Limited (Concessionaire or SNHL), subsidiary of the group in which case National Highway Authority of India (NHAI) vide its letter dated April 17, 2023 has given In-Principal approval for harmonious substitution of concessionaire. The proposed buyer, Gawar Construction Limited (GCL), has submitted Expression of Interest (EOI) to the SNHL. SNHL are in active discussion with Gawar Construction Limited for executing endorsement agreement. As per the Binding Term Sheet, the recoverability of the amount invested by the company as Equity and Sub-debt is substantially certain and hence as per management estimate, no provision is required to be made to the carrying value of assets and liabilities in the financial statements of SNHL and the financial statements of SNHL is prepared on going concern basis.

3. (a) One of the subsidiary of the Group namely Rohtak Panipat Tollways Private Limited (RPTPL) has issued the termination notice on July 27, 2021, to National Highway Authority of India (NHAI) by exercising the criteria of "Event of Defaults" under the concession

agreement. Since the project of the company has been terminated, the management of RPTPL is of the view that going concern assumption for preparation of accounts is not appropriate and accounts have been drawn accordingly on non-going concern basis. In this regard the management of RPTPL lodged total claims amounting to INR 39,578.44 million relating to termination payments, O&M cost due to force majeure, Covid claim & demonetization etc. In view of the above, RPTPL has given following accounting treatments in its financial statements for the quarter and year ended 31.03.2022:

- Impaired intangible assets related to Toll Collection Rights, amounting to INR 909.78 million and transferred balance amount from Intangible Assets to "Receivable from the NHAI" under the head Other Current Financial Assets. The management of RPTPL is of the view that amount recoverable from NHAI are fully recoverable.

- Written back the liability of premium obligation amounting to INR 3,695.92 million.

- Written back major maintenance provision amounting to INR 929.43 million.

During the quarter ended on March 31, 2023, RPTPL has reversed interest of INR 1,026.94 million provided during the earlier period considering the fact that the project of RPTPL has been terminated and lenders have classified loans as Non- Performing Assets.

(b) One of the subsidiary of the group namely Rohtak Hissar Tollways Private Limited (RHTPL) has issued the termination notice on August 27, 2021, to NHAI by exercising the criteria of "Event of Defaults" under the concession agreement. Since the project of the company has been terminated, the management of RHTPL is of the view that going concern assumption for preparation of accounts is not appropriate and accounts have been drawn accordingly on non-going concern basis.

In this regard the management of RHTPL lodged total claims amounting to INR 14,969.77 million relating to termination payments, O&M cost due to force majeure, Covid claim & demonetization etc. In view of this RHTPL has given following accounting treatments in its financial statements for the quarter and year ended 31.03.2022:

- Transferred amount of Toll Collection Rights from Intangible Assets to Receivable from the NHAI under the head Other Current Financial Assets. Further, the management of RHTPL is of the view that amounts recoverable from NHAI are fully recoverable and hence no impairment loss is envisaged.

- Written back major maintenance provision amounting to INR 786.18 million.

During the quarter ended on March 31, 2023, RHTPL has reversed interest of INR 1,228.09 million provided during the earlier period considering the fact that the project of RPTPL has been terminated and lenders have classified loans as Non Performing Assets.

4. Sadbhav Jodhpur Ring Road Private Limited (SJRRPL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 155.45 Million under the Other Current assets. Presently, the company does not carry out any business activity. However, management of SJRRPL is evaluating various option for utilising above mention credit and is confident about the utilization of the credit.

5. Sadbhav Banglore Highway Private Limited (SBGHPL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 426.74 Million under the Other Current assets. Presently, the company does not carry out any business activity. However, management of SBGHPL is evaluating various option for utilising above mention credit and is confident about the utilization of the credit.

6. The Group has accumulated losses as at March 31, 2023, which has resulted in erosion of the Groups net worth; mainly because of COVID-19 exceptional situation, inflationary pressure and constraint of the resources of the parent. The Management of the Group is focused on speedy monetization and execution of the projects, cost controls and deleveraging the business. The liquidity position is improved on account of receipt of PCODs for six HAM projects and conclusion of some of the monetization events and progress for the monetization of the balance SPVs. The management of the group has prepared projections of cash flows for the next 12 months with a focus on optimizing the resources by way of timely monetization of the SPVs, legal process of the claims, and cost control. Basis on the said projections, the management of the group believes that it will be able to service the debt as they fall due in the coming 12 months period from the reporting date out of the above mentioned monetization events and there is no threat to going concern assumption adopted in preparation of financial results for the quarter and year ended on March 31, 2023.

Further, the Statutory Auditors have mentioned following qualifications in Report on the Internal Financial Controls with reference to consolidated financial statements:

a) The Holding Companys internal process with regards to the confirmation and reconciliation of trade payables, trade receivables, other incidental balances pertaining to the said trade payables and trade receivables are not operating effectively which could have consequential effect on balances.

b) The Holding Company has inadequate system for processing of journal entries in accounting software indicating absence of maker checker system which could results into possible effect to the processing of transaction and its consequential effect on balances.

Reply of Directors for above qualifications raised by Statutory Auditors in its Report on the Internal Financial Controls with reference to consolidated financial statements:

a) The Holding Company has adequate system for balance confirmation of trade payable and receivables. The Company is reconciling the outstanding balance of trade payables and receivables on regular intervals. The Holding Company has an internal audit system which is commensurate with the size and nature of its business and there is no weakness in recognition of income and expenses Further as part of internal audit scope such balances are also reviewed by them and hence possibility of misstatement is not there. .

The Holding Company has adequate system of manual approval of processing of journal entries in accounting software and journal entries are also verified by the internal auditor. The Holding Company has an internal audit system which is commensurate with the size and nature of its business Company are in process of incorporating the maker checker process in accounting software for processing of journal entries.

It may be noted that there were no material misstatements due to the weakness in system for processing of journal entries in accounting software due to absence of maker checker system.

ii. Cost Auditors

The company has received a letter from the cost auditor M/s. J B Mistri & Co., Cost Accountants in Practice having Firm Reg. No. 101067 to the effect that their appointment, if made, would be within the prescribed limits under section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for appointment.

The board of directors of the company has appointed M/s. J B Mistri & Co. & Associates, Cost Accountants as the cost auditors of the Company to conduct the audit of cost records maintained by the Company as required by the Companies (Cost Records and Audit) Rules 2014 as amended from time to time. The Cost Audit Report for the year 2021-22 was filed with the Ministry of Corporate Affairs within stipulated time period. The members are requested to ratify the remuneration to be paid to the cost auditors of the company.

iii. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Ashish Shah & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2023. The Secretarial Audit Report is annexed as Annexure-4.

Qualifications to the secretarial audit report:

1. Regulation 17 (1) (c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 requires that the Board of directors of the top 2000 listed entities shall comprise of not less than six directors. Minimum Directors requirement was not fulfilled by the Company for a period of 21 days. Accordingly, Company was in default of Regulation 17(1)(c) for a period of 21 days from 21st February 2023 till 14th March 2023. To that extent Company has not complied with the said provisions of SEBI LODR Regulations.

Reply - The Company was in process of identifying the suitable candidate to fill the vacancy created by the resignation of Directors. The Board of Directors of the Company in its meeting held on 15th March, 2023 has considered and approved appointment of

a) Mr. Dwigesh Joshi (DIN: 09733282) as an additional Non - Executive Director of the Company.

b) Mr. Jatin Thakkar (DIN:09312406) as an additional Executive Director of the Company with effect from 15th March, 2023 for the period of 3 consecutive years.

Hence, the composition of Board has been complied pursuant to Regulation 17(1)(c) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable provisions.

And appointment of abovementioned Directors also confirmed approved by the shareholders of the Company through Postal Ballot.

2. Pursuant to Regulation 31 (1) (b) of SEBI LODR Regulations, the listed entity shall submit to the stock exchange(s) a statement showing holding of securities and shareholding pattern separately for each class of securities, in the format specified by the Board from time to time on a quarterly basis, within twenty-one days from the end of each quarter. There was a delay in Filing of Shareholding Pattern for the Quarter ended June 2022 by 20 days which is in violation of Regulation 31 (1) (b). Thus, Company has not complied with the said provisions of SEBI LODR Regulations to that extent.

Reply - Due to inadvertent circumstances, there was a delay of 20 days in Filing of Shareholding Pattern for the quarter ended 30-06-2023. However, the Company have submitted the Shareholding Pattern to the Stock Exchange after 20 days and also paid penalty for the same.

SECRETARIAL STANDARDS OF ICSI

The Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS - 1) and General Meetings (SS - 2) issued by The Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs.

ANNUAL RETURN

As per the provisions of section 92(3) of the Companies Act, 2013, the Annual Return of the Company for the FY 2022-23 is placed on the website of the Company and weblink for the same is https://www.sadbhavinfra.co.in/en/pdf/2023-09/SIPL%20MGT-7%202022-23.pdf

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

There was no earning and expenditure in the foreign currency.

Since the Company does not have any manufacturing activities, the other particulars required to be provided in terms of Section 134(3) (m) of the Companies Act, 2013 are not applicable.

PARTICULARS OF MANAGERIAL REMUNERATION AND EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 (12) of the Act and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided separately as Annexure-5 to this Report.

Your Directors state that none of the Executive Directors of the Company receives any remuneration or commission from any of its Subsidiaries. There was no employee holding by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company.

THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:

Insolvency Proceedings to which Company is/was Respondent is mentioned below:

Sr. No.	Particulars	Type of Creditors	Status as at the end of financial year
1	Gautam Highway Solutions #	Operational Creditor	Pending before the Honble NCLT Bench, Ahmedabad
2	HCC Concessions Ltd	Operational Creditor	Pending before the Honble NCLT Bench, Ahmedabad
3	Mantra Corporation #	Operational Creditor	Pending before the Honble NCLT Bench, Ahmedabad

# The matter has been dismissed by the Honble NCLT Bench, Ahmedabad till the date of this report.

THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF: Not

Applicable during the year under review.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

2. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

3. The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board and General Meetings.

4. The Managing Director of the Company has not received any commission from the Company and not disqualified from receiving any remuneration or commission from any of subsidiaries of the Company.

5. No fraud has been reported by the Auditors to the Audit Committee or the Board.

ACKNOWLEDGEMENTS

Your Directors thank the Central and various State Governments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year and look forward to their continued support in future.

Your Directors wish to place on record their sincere appreciation for the dedicated efforts and consistent contribution made by the employees at all levels, to ensure that the Company continues to grow and excel.

	For and on behalf of the Board of Directors
	Sadbhav Infrastructure Project Limited
	Shashin V. Patel
Date: 14-08-2023	Executive Chairman
Place: Ahmedabad	DIN: 00048328