To
The Members of
Simplex Infrastructures Limited
Report on the Audit of Standalone Financial Statements
Qualified Opinion
We have audited the accompanying Standalone Financial Statements of Simplex Infrastructures Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the Standalone Financial Statements including a summary of the significant accounting policies and other explanatory information which includes 14 (Fourteen) joint operations (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 and based on the consideration of reports of other auditors on separate financial statements and on the other financial information of the joint operations except for the possible effects of the matters described in the "Basis for Qualified Opinion" section of our report, 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 March 31, 2024, and its loss (including Other Comprehensive Income), changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
As Stated in:
a) Note 40 to the accompanying Standalone Financial Statements, regarding non provision of interest, the Company defaulted in servicing of its Debts (including interest) to all lenders. The Company has not provided any interest on fund based borrowing facility provided by various lenders for the year ended March 31, 2024 amounting to Rs. 71,062 lacs (PY Rs. Nil) as referred in the Note. The interest is based on managements assessment.
Our audit report dated May 30, 2023 on the Standalone Financial Statements for the year ended 31 March 2023 was not qualified.
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing ("SA"s) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditors Responsibilities for the Audit of the Standalone 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 made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence which we have obtained is sufficient and appropriate to provide a basis for our Qualified Audit Opinion on the Standalone Financial Statements.
Emphasis of Matter
a) We draw attention to the following matters:
1. The accompanying Standalone Financial Statements
Note 41(a) regarding uncertainties relating to recoverability of unbilled revenue pending for certification amounting Rs. 76,497 lacs (PY Rs. 41,584 lacs), Note 38 regarding trade receivables and retention monies amounting Rs. 19,775 lacs (PY Rs. 13,935 lacs) and Rs. 6,043 lacs (PY Rs. 3,271 lacs), respectively, as at March 31, 2024, which represent receivables in respect of completed/ substantially completed/ suspended/ terminated projects. As explained to us the Company is at various stages of negotiation/ discussion with the clients or legal action/arbitration (few cases) has been initiated in respect of the aforementioned receivables. Considering the contractual tenability, progress of negotiations/ discussions the management is confident of recovery of these receivables.
2. Note 38 to the accompanying Standalone Financial Statements regarding inventories aggregating Rs. 843 lacs (PY Rs. 887 lacs) pertaining to certain completed/ suspended/ terminated projects in the view of management are good and readily useable. In the absence of any sufficient appropriate convincing audit evidence to support the significant judgments and estimates relating to managements view on usability of such items, we are unable to comment whether the aforesaid inventories are usable.
3. Note 36 to the accompanying Standalone Financial Statement, regarding borrowings the Company is in default in payment of Financial debts to its banker and other financials lender amounting to Rs. 4,98,884 lacs (PY 4,83,021 lacs) as on March 31, 2024. Out of above majority of lender has assigned their outstanding debt as of July 29, 2023 (cut-off date) in favour of National Asset Reconstruction Company Limited ("NARCL") for which confirmation is not available as on March 31, 2024.
4. The Company has recognized net deferred tax assets amounting to Rs. 95,290 lacs (PY Rs. 92,085 lacs) as at March 31, 2024, which includes deferred tax assets on carried forward unused tax losses, unused tax credit and other taxable temporary differences on the basis of expected availability of future taxable profit for utilization of such deferred tax assets. The management is confident that the deferred tax assets will be set off against the future foreseeable profit by the Company.
Our opinion is not modified in respect of these matters.
b) The accompanying Standalone Financial Statements the Company has incurred net loss of Rs. 7,189 lacs (PY Rs. 50,624 lacs) during the year ended March 31, 2024, as also there is default in payment of financial debts, to its bankers and others amounting to Rs. 4,98,884 lacs (PY Rs. 4,83,021 lacs). As stated in Note 36 to the accompanying statement, these financial statements are prepared by the management on going concern basis for the reasons stated therein.
Our opinion is not modified in respect of this matter. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements for the financial year ended March 31, 2024. 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. In addition to the matters described in the "Basis for Qualified Opinion" section. We have determined the matters described below to be the key audit matters to be communicated in our report. For each matter below, our description of how our audit addresses the matter is provided in that context.
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 procedure designed to response 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 |
| Assessment of going concern basis of accounting (as described in Note 36 of the Standalone Financial Statements) | |
| 1 The company has incurred net loss of Rs.7,189 lacs (PY Rs. 50,624 lacs) during the year ended 31st March, 2024 and as of that date has accumulated losses aggregating Rs.1,16,343 lacs (PY Rs. 1,08,980 lacs) resulting in substantial erosion of its net worth. | Our audit procedures included but were not limited to, the following in relation to assessment of appropriateness of going concern basis of accounting: |
| While the above factors indicate doubt on the Companys ability to continue as a going concern, the company has taken into consideration the following mitigating factors in its assessment for going concern basis of accounting in preparation of the accompanying standalone financial statements: | • Obtained an understanding of the process followed by management for identifying events or conditions that could impact the Companys ability to continue as a going concern and process followed to assess the corresponding mitigating factors existing against such events or conditions. Also, obtained an understanding around the methodology adopted by the Company to assess their future business performance of a cash flow forecast for the business; |
| • Expected successful implementation of the resolution plan with the lenders. | • Evaluated the design and tested the operating effectiveness of key controls relating to managements assessment of going concern as above; |
| • Time bound monetization of certain non-core assets; and | • Evaluated the managements assessment of the successful implementation of the resolution plan, current status of requisite approvals from lenders, reading of the minutes of the meetings held and understanding obtained from the management; and |
| We have considered the assessment of managements evaluation of going concern basis of accounting as a key audit matter due to the pervasive impact thereof on the standalone financial statements and the significant judgements and assumptions that are inherently subjective and dependent on future events, involved in preparation of cash flow projections and determination of the overall conclusion by the management. | Assessed the appropriateness and adequacy of the disclosures made by the management in respect of going concern in accordance with the applicable accounting standards. |
| Correctness of Project Revenue recognition - Construction Contracts (as described in Note 1.14(i) and 32(i) of the Standalone Financial Statements) | Our procedures included: |
| 2 Revenue from construction contracts is recognised over a period of time in accordance with the requirements of Ind AS 115, Revenue from Contracts with Customers. Revenue recognition involves usage of percentage of completion method which is determined based on proportion of contract costs incurred to date compared to estimated total contract costs, which involves significant judgments, reliable estimation of total project cost, identification of contractual obligations in respect of Companys rights to receive payments for performance completed till date, estimation of period of recovery of receivables, changes in scope and consequential revised contract price and recognition of the liability for loss making contracts/ onerous obligations. | • Testing of the design and implementation of controls involved for the determination of the estimates used as well as their operating effectiveness; |
| Project revenue recognition is significant to the financial statements based on the quantitative materiality and the degree of management judgment required to apply the percentage of completion method. Management has also considered this area to be a key accounting estimate as disclosed in the critical estimates and judgements Note 1A to the Standalone Financial Statements. We therefore determined this to be a key audit matter. | • Testing 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 new revenue accounting standard; |
| • Testing a sample of contracts for appropriate identification of performance obligations; | |
| • For the sample selected, reviewing for amendments of orders and the impact on the estimated costs to complete; | |
| • Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings. | |
| Unbilled Revenue balance, Trade Receivables and Retention Money relating to construction contracts of the Company (as described in Note 7(b) and Note 9 of the Standalone Financial Statements) | |
| 3 Unbilled Revenue balance, Trade Receivables and Retention Money of the Company aggregates Rs. 5,94,851 lacs (PY Rs. 6,04,662 lacs) as at March 31, 2024. | As part of our audit procedures: |
| The collectability of above balances is a key element of the Companys working capital management. In assessing the recoverability of the aforesaid balances, managements judgment involves consideration of status of the project, the likelihood of collection based on the terms of the contract and evaluation of litigations, if any. | • Testing of the design and implementation of controls involving managements assessment of recoverability of Unbilled Revenue balance, Trade Receivables and Retention Money relating to construction contracts. |
| We considered this as key audit matter due to the materiality of the amounts and significant estimates and judgments as stated above | • We performed test of details and tested relevant contracts and documents on the basis of materiality for Unbilled Revenue, Trade Receivables and Retention Money balances. |
| • We also carried out additional test procedures, in respect of long outstanding balances, i.e. tested subsequent documents with customers with respect to recoverability of the same. | |
| • We tested contracts to determine the provisioning requirement for loss making contracts/onerous obligations, if any. | |
| Pending litigations (as described in Note 34 of the Standalone Financial Statements) | |
| 4 The Company is subject to number of claims and litigations including arbitrations, mainly with customers and tax authorities. The assessment of the likely outcome of these matters can be judgmental due to the uncertainty inherent in their nature. | Principal Audit Procedures: |
| This area is significant to our audit, since the accounting and disclosure of claims and litigations are complex and judgmental, and the amounts involved are, or may be, material to the Standalone Financial Statements. | Our audit approach was a combination of test of internal controls and substantive procedures including: |
| • Assessing the appropriateness of the design and implementation of the Companys controls over the assessment of litigations and completeness of disclosures. Supporting documentations are tested to assess the status of Arbitration/legal proceedings with reference to related counselors views for likely outcome of these matters. |
Information Other than the Standalone Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the preparation of other information. The other information comprises the information included in the Report of the Board of Directors, Management Discussion and Analysis Report, Report on CSR activities, Business Responsibility Report, Corporate Governance Report and other annexure to Directors Report including Shareholders Information, but does not include the Standalone Financial Statements and our 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 during the course of our audit or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we will read the other information on availability of the same to us and if there is anything to report in this regard as required under SA 720 "The Auditors Responsibilities Relating to Other Information", we will communicate accordingly.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive Income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, the Board of Directors 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is 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 Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
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 of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matters
a) We have been appointed as joint auditors of the Company along with M/s Chaturvedi & Co. LLP, Chartered Accountants (the other Joint Auditor). We are issuing a separate audit report in accordance with the requirements of SA 299 "Responsibility of Joint Auditors" in view of the difference of opinion with the other joint auditor regarding the matters reported under "Basis for Qualified Opinion" paragraph.
b) We did not audit the financial statement and other financial information, in respect of 11 joint operations whose annual financial statements and other financial information reflects total assets of Rs. 8,008 lacs as at March 31, 2024 and total revenues of Rs. 1,564 lacs, total profit/(loss) after tax of Rs. 14 lacs and total comprehensive income/(loss) of Rs. 14 lacs for the year ended on that date and net cash inflows of Rs. 8 lacs for the year ended March 31, 2024 as considered in the financial statements which have been audited by the other auditors.
c) We have audited the annual financial statement and other financial information, in respect of 3 joint operations whose annual financial statements and other financial information reflects total assets of Rs. 9,018 lacs as at March 31, 2024 and total revenues of Rs. 1,703 lacs, total profit/(loss) after tax of (Rs. 67 lacs) and total comprehensive income/(loss) of (Rs. 67 lacs) for the year ended on that date and net cash outflows of Rs. 81 lacs for the year ended March 31, 2024 as considered in the financial statements.
The financial information of this joint operation have been audited by the other auditor whose report have been furnished to us by the Companys management and our conclusion in so far as it relates to the amounts and disclosures included in respect of this joint operation, is based solely on the report of such other auditor.
Our opinion on the Statement is not modified in respect of above matter with respect to our reliance on the work done by the other auditor and report thereon.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act based on our audit and on the consideration of report of the other auditor on separate financial statement and the other financial information of joint operations, as noted in the "Other Matters" paragraph, we give in "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2) As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained, except for the matter(s) described in the "Basis for Qualified Opinion" paragraph as well as reported "Emphasis of Matters" paragraph all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, 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) Except for the matter(s) described in the Basis for Qualified Opinion and Emphasis of Matters paragraph. In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act.
e) In view of the matter(s) described in the Basis for Qualified Opinion and Emphasis of Matter paragraph above, we are unable to comment whether these may have an adverse effect on the functioning of the company.
The Company has defaulted in redemption of debentures on the due date or payment of interest due thereon and such failure to pay or redeem had continued for more than one year. Consequently, re-appointment of a director of the Company is not in accordance with the provision of Section 164(2)(b) of the Act.
f) With respect to the adequacy of the Internal Financial Controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
g) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended:
The remuneration provided by the company to its whole-time director & chief financial officer amounting to Rs. 37 lacs during the year is not in accordance with the provisions of Section 197 of the Act, as prior approval from the lenders/financial institutions/non-convertible debenture holders or any other secured creditors has not yet received.
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 knowledge & belief and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements- [Refer Note No.34 to the accompanying Standalone Financial Statements].
ii. The Company has made provision as required under applicable law or accounting standards for material foreseeable losses. The Company did not have any long-term derivative contracts.
iii. There has been no delay in transferring amounts which were required to be transferred to the Investors 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 kind 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 ("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 Companyfrom anypersons 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 from or on behalf of the Ultimate Beneficiaries; and
c. Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. The Company has not declared any dividend during the year.
vi. Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account for the financial year ended March 31, 2024 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not
come across any instance of audit trail feature being tampered with.
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, as amended is applicable to the Company only w.e.f. April 1, 2023, therefore, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, as amended, on preservation of audit trail as per the statutory requirements for record retention is not applicable for financial year ended 31 March 2024.
ANNEXURE A
TO THE INDEPENDENT AUDITORS REPORT
{Referred to in Paragraph (1) of "Report on Other Legal and Regulatory Requirements" section of our Independent Auditors Report}
I. In respect of the Companys property, plant and equipment, right-of-use assets and intangible assets:
(a) (A) The Company has maintained proper records
showing full particulars, including quantitative details and situations of Property, Plant and Equipment.
(B) The Company has maintained proper records showing full particulars of intangible assets.
(b) As per the information and explanations provided by the management and on the basis of our examination of the records of the Company, there is a programme of physical verification of all the Property, Plant and Equipment ("PPE") of the company under which the assets are physically
verified in a phased manner over a period of 3 years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Further, the management of Oman, Ethiopia, Dubai & Abudhabi Branch has not conducted physical verification of PPE for more than 2 years.
(c) According to the information and explanations given to us, the records examined by us and based on the Title deeds provided to us, we report that, the title deeds, comprising all the immovable properties (including leased assets where the Company is a lessee) of land and building, are held in the name of the Company as on the balance sheet date except for the following where the title deeds are not in the name of the Company:
| Relevant line item in the Balance sheet | Description of Property | Gross Carrying Value (Rs. in Lacs) | Held in the name of | Whether promoter, director or their relative or employee | Property held - indicate range, where appropriate | Reason for not being held in name of Company |
| Property, Plant and Equipment | Flat No. 207 In Vaikunth Building, 82-83 Nehru Place, Delhi | 2 | Shri K. L. Bhatia | 1984 | Purchase agreement and Mutation is endorsed in the name of the Company Municipal taxes are paid by the Company. | |
| Property, Plant and Equipment | Flat No. 209 In Vaikunth Building, 82-83 Nehru Place, Delhi | 2 | Mrs. Sunita Bhan | 1992 | Purchase agreement and Mutation is endorsed in the name of the Company Municipal taxes are paid by the Company. | |
| Property, Plant and Equipment | Flat No. 204 Vaikunth Nehru Place | 5 | Shri Bhuvan Chawla | 1997 | Purchase agreement and Mutation is endorsed in the name of the Company Municipal taxes are paid by the Company. | |
| Property, Plant and Equipment | Flat At Sector-29, Vashi, Navi, Mumbai | 5 | Amitabh Das Mundhra | 2000 | Flat being acquired in a cooperative society was required to be registered in the name of a non-corporate. |
(d) 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 revalued its Property, plant and equipment (including Right-of-use assets) or Intangible assets or both during the year.
(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.
II. (a) As informed, the inventories of the Company
have been physically verified by the management during the year except for one of the contract, inventory valuing Rs. 2,815 lacs which is under the custody of third party (contractee) and is under arbitration. In our opinion and according to the information and explanations given to us, the frequency of such verification is reasonable and procedures and coverage as followed by management were appropriate. No discrepancies were noticed on verification between the physical stocks and the book records that were 10% or more in the aggregate for each class of inventory. Minor discrepancies noticed during physical verification were properly dealt within the books of account.
(b) 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 been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets. In our opinion, the quarterly returns or statements filed by the Company with such banks are in agreement with the books of account of the Company, except the quaterly return or statement for the 4th quarter is not filed till the signing of Report.
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 investments in subsidiaries and provided guarantee or security which are characterized as loans secured or unsecured to LLPs, firms or companies or any other
person during the year. Accordingly, provisions of clause 3(iii)(a), 3(iii)(b), 3(iii)(c), 3(iii)(d), 3(iii)(e) and 3(iii)(f) of the Order are not applicable to the Company.
IV. In our opinion and according to information and explanations given to us the Company has, in respect of loans, investments, guarantees, and security, complied with the provisions of section 185 and 186 of the Act.
V. The Company has not accepted any deposits or amounts which are deemed to be deposits from the public within the meaning of sections 73 to 76 or any other relevant provisions of the Act. In respect of overdue earnest money deposits and security deposits, Management is of the view that overdue earnest money deposits and security deposits of suppliers/contractors appearing in the books are in the nature of retention money for performance of contracts for supply of goods and services and accordingly, not to be treated as deemed deposits by virtue of amendment in rule 2, sub rule (1), clause (c) of the Companies (Acceptance of Deposits) Amendment Rules 2016.
VI. We have broadly reviewed the books of accounts maintain by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(i) of the companies Act, 2013, related to its product/services, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
VII. In respect of statutory dues:
(a) Based on the information and explanations given to us and according to the records maintained by the Company, in our opinion, there is delays in depositing dues in respect of Provident Fund, Employees State Insurance (ESI), Pension Fund and Professional Tax during the year, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Goods and Service Tax, Cess, Value Added Tax and other material statutory dues applicable to it.
According to the information and explanations given to us, the extent of the arrears of statutory dues outstanding as at March 31, 2024 for a period of more than six months from the date they became payable are as follows :
Statement of Arrears of Statutory Dues outstanding for more than Six months
Note-We are not reporting few cases as outstanding amount below Rs. 10,000.
(b) Based on information and explanations given to us and according to the records maintained by the Company, the dues in respect of sales tax, service tax, income tax, professional tax, duty of excise and value added tax, entry tax that have not been deposited on account of any dispute, are as follows:
| Name of the statute | Nature of dues | Period to which the amount relates | Forum where the dispute is pending | Amount involved (Rs in Lacs) | Amount Unpaid (Rs in Lacs) |
| 2007-08 | CESTAT - HYDERABAD | 149.67 | 84.42 | ||
| 2009-10 to 2010-11 | CESTAT - NEW DELHI | 30.00 | 30.00 | ||
| April 2009 - December 2009 | CESTAT, Bangalore | 36.10 | 34.30 | ||
| April 2014 - December 2015 | CESTAT, Delhi | 37.17 | 36.15 | ||
| Central Excise Act, 1944 | Excise Duty | March 2013 - February 2016 | Karnataka High Court | 179.12 | 172.44 |
| January 2012 - March 2016 | CESTAT, Bangalore | 175.71 | 175.71 | ||
| January 2013 - February 2016 | CESTAT, Bangalore | 252.00 | 242.93 | ||
| 2013-14 to 2015-16 | Commissioner Appeal | 70.75 | 70.65 | ||
| Sales Tax | 2003-04 | The Under Secretary, Commecial Tax Department Government of Chattisgarh | 5.49 | - | |
| Chhattisgarh Commercial Tax Act, 1994 | Sales Tax | 2004-05 | 4.16 | - | |
| VAT | 2005-06 | Taxation Tribunal | 42.98 | - | |
| West Bengal Value Added Tax Act, 2003 | VAT | 2006-07 | High court of Calcutta | 3.93 | 3.93 |
| 2006-07 | West Bengal Taxation Tribunal | 2,111.10 | 2,111.10 | ||
| 2010-11 | West Bengal Taxation Tribunal | 1,296.46 | 1,296.46 | ||
| 2015-16 | Appellate forum-CD-2, West Bengal | 271.74 | 228.87 | ||
| Jharkhand Value Added Tax Act, 2005 | VAT | 2006-07 | Yet to be filed | 80.31 | 80.31 |
| Maharashtra Value Added Tax Act, 2002 | VAT | 2012-13 | Joint Commissioner of Sales Tax | 5,539.05 | 5,332.80 |
| 2013-14 | Maharashtra State Tribunal | 407.12 | 375.54 | ||
| 2014-15 | Joint Commissioner Sales Tax | 55.06 | 51.88 | ||
| Andhra Pradesh Value Added Tax Act, 2005 | VAT | 2007-08 | Andhra Pradesh High Court | 128.40 | 128.40 |
| 2008-09 | Andhra Pradesh High Court | 372.57 | 372.57 | ||
| 2009-10 | Andhra Pradesh High Court | 397.32 | 397.32 | ||
| 2010-11 | Andhra Pradesh High Court | 114.27 | 114.27 | ||
| 2011-12 | Andhra Pradesh Taxation Tribunal | 27.87 | 24.82 | ||
| Chhattisgarh Value Added Tax Act, 2005 | VAT | 2006-07 | Sales Tax Tribunal, Raipur | 132.71 | - |
| 2007-08 | Sales Tax Tribunal, Raipur | 86.56 | - | ||
| 2008-09 | Sales Tax Tribunal, Raipur | 103.79 | - | ||
| 2014-15 | Additional Commissioner, Commercial Tax, Bilaspur | 35.37 | 28.29 | ||
| Kerala Value Added Tax Act, 2003 | VAT | 2007-08 | DC (Appeal), Ernakulam | 15.72 | 12.58 |
| 2009-10 | AC (Works Contract), Ernakulam | 9.24 | 4.30 | ||
| 2011-12 | DC (Appeal), Ernakulam | 35.94 | - | ||
| Haryana Value Added Tax Act, 2003 | VAT | 2009-10 | Haryana VAT Tribunal | 12.18 | 12.18 |
| 2012-13 | Haryana VAT Tribunal | 22.43 | 22.43 | ||
| 2013-14 | Haryana VAT Tribunal | 34.07 | 34.07 | ||
| 2014-15 | Haryana VAT Tribunal | 58.79 | 58.79 | ||
| 2015-16 | Haryana VAT Tribunal | 32.51 | 32.51 | ||
| 2016-17 | Addl VAT Liability on Service Tax etc. | 191.17 | 191.17 | ||
| 2017-18 | Addl VAT Liability on Service Tax and disallowance of ded. claimed for labour & services. | 405.28 | 405.28 | ||
| Uttar Pradesh Value Added Tax, 2008 | VAT | 2017-18 | Deputy Commissioner | 158.45 | 158.45 |
| Karnataka Value Added Tax Act, 2003 | VAT | 01.04.2017 to 30.06.2017 | Karnataka High Court | 14.38 | 14.38 |
| 2016-17 | Karnataka High Court | 24.67 | 24.67 | ||
| Andhra Pradesh General Sales Tax Act, 1957 | Sales Tax | 2003-04 | Appellate Tribunal in Vizag | 8.59 | 7.71 |
| Goa Sales Tax Act, 1964 | Sales Tax | 2004-05 | Additional CCT (Appeal), Margao | 64.36 | 64.36 |
| Orissa Sales Tax Act, 1947 [For Sambalpur] | Sales Tax | 1985-86, 1988-89 & 1989-90 | Sales Tax Appellate Tribunal | 2.58 | 2.58 |
| Bombay Sales Tax Act,1959 | Sales Tax | 2003-04 & 2004-05 | Mazz India has filed Writ Petition in Bombay High Court | 144.34 | 144.34 |
| Tamil Nadu General Sales Tax Act, 1959 | Sales Tax | 2000-2001 | Sales Tax Appellate Tribunal (STAT) | 320.86 | 320.86 |
| Goa - Central Sales Tax Act, 1956 | CST | 2003-04 | Additional CCT (Appeal), Margao | 7.12 | 7.12 |
| CST | 2006-07 | Sales Tax Appellate Authority | 0.50 | 0.50 | |
| The Central Sales Tax (Orissa) Rules, 1957 | CST | 2013-14 & 2014-15 | Additional CCT (Appeal), Cuttack | 1.95 | 1.56 |
| Kerala CST Rules, 1957 | CST | 2014-15 | Sales Tax Office (WC), Ernakulam | 0.72 | 0.72 |
| The Uttar Pradesh Central Sales Tax Act 1956 | CST | 2017-18 | Deputy Commissioner | 2.00 | 2.00 |
| 2005-06 to 2008-09 | High Court- Bilaspur | 78.85 | - | ||
| The Chhattisgarh Tax on Entry of Goods Act, 1976 | 2009-10 | CG Taxation Tribunal | 51.73 | 35.17 | |
| Entry Tax | 2010-11 | CG Taxation Tribunal | 25.24 | 21.45 | |
| 2011-12 | Addl CCT Bilaspur | 39.97 | 39.97 | ||
| 2012-13 | CG Taxation Tribunal | 23.24 | 23.24 | ||
| 2013-14 | Addl CCT Bilaspur | 33.84 | 28.41 | ||
| 2006-07 | Supreme Court | 64.74 | 64.74 | ||
| The Uttar Pradesh Tax on Entry of Goods Act, 2000 | 2007-08 | Supreme Court | 47.97 | 47.97 | |
| Entry Tax | 2008-09 | Supreme Court | 61.88 | 61.88 | |
| 2010-11 | Supreme Court | 59.79 | 59.79 | ||
| 2017-18 | Deputy Commissioner | 25.00 | 25.00 | ||
| The Orissa Entry Tax Act, 1999 | Entry Tax | 2013-14 & 2014-15 | Addl CCT (Appeal), Cuttack | 10.51 | 9.81 |
| WBTEGLA Act, 2012 | Entry Tax | 2015-16 | Taxation Tribunal | 100.03 | 100.03 |
| Foreign Trade Policy 2015-2020 | SEIS Benefit | 2015-2020 | DGFT, Kolkata | 641.09 | 641.09 |
| High Court in Ranchi, Jharkhand | |||||
| Goods & Service Tax Act, 2017-Jharkhand | GST | 2019-20 | & Addl. Commissioner (Appeal), Ranchi | 1,038.31 | 961.96 |
| 2017-18 | Joint Commissioner | 124.77 | 124.77 | ||
| Goods & Service Tax Act, 2017-Karnataka | GST | 2017-18 | High Court in Karnataka | 1,179.35 | 1,179.35 |
| Goods & Service Tax Act, 2017-Bihar | GST | 2017-18 | Tribunal yet to constitute | 108.92 | 106.16 |
| 2017-18 | Commissioner (Appeals) | 19.50 | 18.58 | ||
| Goods & Service Tax Act, 2017-Assam | GST | 2017-18 | Commissioner (Appeals) | 2.47 | 2.47 |
| 2018-19 | Yet to be filed | 19.16 | 19.16 | ||
| 2017-18 | High Court of Punjab & Haryana | 1,383.62 | 1,383.62 | ||
| Goods & Service Tax Act, 2017-Haryana | GST | 2018-19 | WP yet to be filed | 4,777.61 | 4,777.61 |
| 2018-19 | WP yet to be filed | 234.03 | 234.03 | ||
| 2019-20 | WP yet to be filed | 1,452.05 | 1,452.05 | ||
| 2017-18 | Commissioner & Odisha High Court | 140.05 | 137.12 | ||
| Goods & Service Tax Act, 2017-Odisha | GST | 2018-19 | Commissioner & Odisha High Court | 404.45 | 399.18 |
| 2019-20 | Commissioner & Odisha High Court | 381.17 | 376.75 | ||
| 2017-18 | Commissioner (Appeals) | 156.20 | 149.05 | ||
| Goods & Service Tax Act, 2017-West Bengal | GST | 2018-19 | Yet to be filed | 145.31 | 145.31 |
| TRAN-1 | Tribunal yet to constitute | 17.82 | 16.97 | ||
| Goods & Service Tax Act, 2017- Chhattisgarh | GST | 2017-18 | Additional Commissioner (Appeal) | 130.66 | 124.22 |
| 2019-20 | Additional Commissioner (Appeal) | 2.35 | 0.49 | ||
| Goods & Service Tax Act, 2017- Tamil Nadu | GST | 2017-18 | Deputy Commissioner (Appeal) | 171.81 | 154.63 |
| Goods & Service Tax Act, 2017- Maharashtra | GST | 2017-18 | Commissioner (Appeal) | 197.64 | 179.67 |
| Goods & Service Tax Act, 2017- Kerala | GST | 2017-18 | Commissioner (Appeal) | 159.48 | 151.89 |
| Goods & Service Tax Act, 2017-Telangana | GST | 2018-19 | Joint Commissioner (Appeal) | 21.97 | 19.97 |
| 2019-20 | Joint Commissioner (Appeal) | 120.94 | 109.96 | ||
| 2017-18 | Joint Commissioner (Appeal) | 5.33 | 4.88 | ||
| Goods & Service Tax Act, 2017- Uttar Pradesh | GST | 2018-19 | Additional Commissioner (Appeal) | 316.83 | 280.83 |
| 2019-20 | Additional Commissioner (Appeal) | 462.76 | 410.17 | ||
| 2017-18 | Additional Commissioner (Appeal) | 206.39 | 196.92 | ||
| Goods & Service Tax Act, 2017-Gujarat | GST | 2017-18 | Assistant Commissioner (Appeal) | 160.51 | 152.99 |
| 2017-18 | Assistant Commissioner (Appeal) | 4.03 | 3.90 | ||
| 2018-19 | Additional Commissioner (Appeal) | 5.52 | 5.34 | ||
| Goods & Service Tax Act, 2017- Madhya Pradesh | GST | 2017-18 | Commissioner (Appeal) | 344.59 | 333.28 |
| 2019-20 | Commissioner (Appeal) | 32.93 | 31.70 | ||
| 2020-21 | Commissioner (Appeal) | 13.17 | 12.64 | ||
| Finance Act,1994-Service Tax | Service Tax | 2007-08 & 200809 | Commissioner of Central Excise (Appeals) | 1.26 | 1.26 |
| Oct15-June17 | Commissioner (Appeals) | 177.99 | 164.64 | ||
| Income-Tax (80IA Matter) | Income Tax | 2005-06 | High Court | 268.48 | 268.48 |
| 2006-07 | High Court | 413.93 | 413.93 | ||
| 2008-09 | High Court | 379.51 | 379.51 | ||
| 2009-10 | High Court | 257.74 | 257.74 | ||
| 2009-10 | CIT (Appeal) | 66.74 | 66.74 | ||
| Professions Trades Callings and Employment Act 1979 | Professional Tax | 1981-82 to 199495 | Honourable Asst. Commissioner of P.Tax | 4.34 | 4.34 |
VIII. According to the information and explanations given to us and on the basis of our examination of the records of the Company, there were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).
IX. (a) The Company has defaulted in repayment of principal and interest thereon which are due on cash credit, WCDL, Term loan etc. obtained from banks/financial institution and non-convertible debentures holder as set out below:-
| Default in repayment of principle and interest (D in Lacs) | |||||||
| Nature of borrowing, including debt securities | Name of lender | Amount not paid on due date (D in Lacs) | Whether principal or interest | Upto 180 days | From 181 Days to 365 Days | Above 365 Days | Remarks, if any |
| Axis Bank Ltd. | 7,739 | Both | - | - | 7,739 | ||
| Bank of Baroda (Employees) Pension Fund | 774 | Both | - | - | 774 | ||
| Secured NonConvertible Debentures | Bank of Baroda Provident Fund Trust | 774 | Both | - | - | 774 | |
| General Insurance Corporation of India | 2,105 | Both | - | - | 2,105 | ||
| HDFC Trustee Company Ltd. A/C HDFC Credit Risk Debt Fund | 19,519 | Both | - | - | 19,519 | ||
| National Asset Reconstruction Company Ltd. | 44,057 | Principle | - | - | 44,057 | ||
| HDFC Bank Limited | 2,648 | Both | 7 | 26 | 2,615 | ||
| Secured Rupee Term Loan from Bank | ICICI Bank Ltd. | 127 | Both | - | 11 | 116 | |
| Axis Bank Ltd. | 32 | Both | - | - | 32 | ||
| IndusInd Bank Ltd. | 7,936 | Both | 402 | 317 | 7,217 | ||
| The Federal Bank Ltd. | 1,137 | Both | - | - | 1,137 | ||
| Sundaram Finance Ltd. | 76 | Both | 1 | 75 | |||
| Tata Capital Financial Services Ltd. | 85 | Both | - | - | 85 | ||
| Srei Equipment Finance Ltd. | 4,626 | Both | - | 28 | 4,598 | ||
| Secured Rupee Term Loan from Financial Companies | Kotak Mahindra Prime Ltd. | 29 | Both | - | - | 29 | |
| Mahindra & Mahindra Financial Services Ltd. | 321 | Both | 4 | 35 | 282 | ||
| J C Flowers Assets Reconstruction Pvt. Ltd. | 170 | Principle | - | - | 170 | ||
| National Asset Reconstruction Company Ltd. | 1,097 | Principle | - | - | 1,097 | ||
| Secured Foreign Currency Term Loan from Bank | Bank Muscat | 4,778 | Both | - | - | 4,778 | |
| Axis Bank Ltd. | 2,758 | Interest | 110 | - | 2,648 | ||
| Rupee Working Capital Loans repayable on demand from Bank | HDFC Bank Ltd. | 5,317 | Both | 96 | 75 | 5,146 | |
| ICICI Bank Ltd. | 11,615 | Both | 1,532 | 1,384 | 8,699 | ||
| IndusInd Bank Ltd. | 4,988 | Interest | 659 | 697 | 3,632 | ||
| DBS Bank India Ltd. | 669 | Both | - | - | 669 | ||
| Rupee Working Capital Loans repayable on demand from Financial Company | J C Flowers Assets Reconstruction Pvt. Ltd. | 6,232 | Principle | - | - | 6,232 | |
| National Asset Reconstruction Company Ltd. | 369,275 | Principle | - | 12,560 | 356,715 | ||
| 498,884 | 2,810 | 15,134 | 480,940 | ||||
(b) 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 been declared a willful defaulter by any bank or financial institution or other lender.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, term loans were applied for the purpose for which the loans were obtained.
(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, funds raised on short term basis have, prima facie, not been used during the year 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, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries or joint ventures. Accordingly, clause 3(ix)(e) of the Order is not applicable.
(f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries or joint ventures. Accordingly, clause 3(ix)(f) of the Order is not applicable.
X. (a) In our opinion and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, clause 3(x)(a) of the Order is not applicable.
(b) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly or optionally convertible debentures during the year. Accordingly, clause 3 (x)(b) of the Order is not applicable to the Company.
XI. (a) Based on examination of the books and records of the Company and according to the information and explanations given to us, considering the principles of materiality outlined in Standards on Auditing, we report that no fraud by the Company or on the Company has been noticed or reported during the course of the audit.
(b) According to the information and explanations given to us, no report under sub-section (12) of Section 143 of the Companies Act, 2013 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.
(c) According to the information and explanations given to us, no whistle blower complaints have been received by the company during the year.
XII. The Company is not a Nidhi Company. Hence, reporting under clauses 3(xii)(a), (b) and (c) of the Order is not applicable to the Company.
XIII. According to the information and explanations given to us by the management and based on our examination of books of accounts, transactions with the related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable and the details of such transactions have been disclosed in the Note No. 30 to the Standalone Financial Statements as required by the applicable accounting standards.
XIV. (a) The company is having Internal Audit Department responsible for carrying out the internal audit of various contacts/project sites and process (i.e. Sales, Pay roll etc.) at periodical intervals as per the approved audit plan. The internal audit system adopted by the internal audit department is commensurate with the size and nature of the business of the company.
(b) We have considered the internal audit reports for the year under audit, submitted by Internal Audit Department to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures.
XV. According to the information and explanations given to us and as represented to us by the management and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, clauses 3(xv) of the Order are not applicable.
XVI. According to the information and explanations given to us and based on our examination of the records of the Company,
(a) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
(b) The company has not conducted any Non- Banking Financial or Housing Finance activities during the year.
(c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India.
(d) The Group does not have any CIC.
Accordingly, clauses 3(xvi) (a), (b), (c) and (d) of the Order are not applicable.
XVII. The Company has incurred cash losses in current and in the immediately preceding financial year to the extent of Rs. 302 lacs and Rs. 70,701 lacs respectively.
XVIII. There has been no resignation of the statutory auditors during the year. Accordingly, clause 3(xviii) of the Order is not applicable.
XIX. According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the Standalone Financial Statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, the company has incurred net loss Rs. 7,189 lacs for the year ( P.Y. Rs. 50,624 lacs) and also there was default in payment of financial debts, to its bankers and other amounting to Rs. 4,98,884 lacs as on March 31, 2024 (P.Y. Rs.4,83,021 lacs). Based on deed of assignment dated March 28, 2024, the majority of Lenders had assigned their outstanding debt as of July 29, 2023 (cut-off date) in favour of National Asset Reconstruction Company Limited("NARCL"). The Company is in the process of finalizing a resolution plan with its lenders. The payment of financial liabilities depends on successful completion of resolution plan and improving credit profile of the company and in time bound realization of its assets, arbitration claims etc as mentioned note no. 36 of Standalone Financial Statements. 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, will get discharged by the Company.
XX. In our opinion and according to the information and explanations given to us, the company has negative average net profit of three immediately preceding financial years; the company was not required to spend any amount towards corporate social responsibilities under the provision of Section 135 of the Companies Act, 2013. Accordingly, reporting under clause 3(xx) of the Order is not applicable to the Company.
ANNEXURE B
TO THE INDEPENDENT AUDITORS REPORT
{Referred to in Paragraph (2)(g) of "Report on Other Legal and Regulatory Requirements" section of our Independent Auditors Report}
To The Independent Auditors Report of even date on The Standalone Financial Statement of Simplex Infrastructure Limited
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Simplex Infrastructures Limited (hereinafter referred as "the Company") as of March 31, 2024 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable
to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls 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 with reference to these Standalone Financial Statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the internal financial controls system over financial reporting of the Company.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditor on internal financial controls with reference to Standalone Financial Statements ofthe joint operation, the Company has, in all material respects, an adequate internal financial controls with reference to Standalone Financial Statements and such internal financial controls with reference to Standalone Financial Statements were operating effectively as at March 31, 2024, based on the criteria for internal financial control with reference to Standalone Financial Statements established by the respective Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls with reference to Standalone
Financial Statements issued by the Institute of Chartered Accountants of India.
Explanatory Paragraph
We also have audited, in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under section 143(10) of the Act, these Standalone Financial Statements of Simplex Infrastructures Limited, which comprise the Balance Sheet as at March 31, 2024, and the related statement of Profit & Loss and Cash Flow Statements for the year then ended, and a summary of Significant Accounting Policies and other explanatory information. These material weaknesses were considered in determining the nature, timing and extent of audit test applied in our audit of the March 31, 2024 Standalone Financial Statements of Simplex Infrastructures Limited and the Report does not affect our report dated May 29, 2024 which express a qualified opinion on those financial statements.
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