spml infra ltd share price Auditors report


To the Members of SPML Infra Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of SPML Infra Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of other auditors in respect of certain joint operations, as referred to in the Other Matters section of our report below, except for the effects/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 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Indian Accounting Standards ("Ind AS") prescribed under Section 133 of the Act, of the state of affairs of the Company as at 31st March, 2022, its profit 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 no. 42 to the standalone financial statements, interest on YTM basis amounting to Rs. 6,027.24 lakhs (31st March, 2021: Rs. 5,560.59 lakhs) was not provided on Optionally Convertible Debentures (‘OCDs) issued to lenders under S4A scheme, which is not in accordance with the requirements of Ind AS 23: Borrowing Costs read with Ind AS 109:Financial Instruments. Had such interest expense been recognized, the finance costs, profit before tax, profit after tax and total comprehensive income would have been impacted to the extent of the aforesaid amount for the year ended 31st March, 2022. Further, since the issue of OCDs , the total liability not provided for in respect of such interest on YTM basis is Rs 23,314.53 lakhs as at 31st March, 2022 (31st March, 2021: Rs. 17,287.29 lakhs). The Auditors Report for the year ended 31st March, 2021 was also qualified in respect of this matter.

b. Note no. 16.8 to the standalone financial statements, interest expense of Rs. 19,795.66 lakhs on the Companys borrowings from certain financial creditors (banks & financial institutions) has not been recognized for the year ended 31st March, 2022 (31st March, 2021: Rs. 18,685.60 lakhs). This is not in accordance with the requirements of Ind AS 23: Borrowing Costs read with Ind AS 109: Financial Instruments. Had the aforesaid interest expense been recognized, the finance costs, profit before tax, profit after tax and total comprehensive income would have been impacted to the extent of the aforesaid amount for the year ended 31st March, 2022. The Auditors Report for the year ended 31st March, 2021 was also qualified in respect of this matter. Further, Rs.463.74 lakhs representing liability upto 31st March, 2021, towards interest expense on the Companys borrowings from financial creditors (other than banks and financial institutions), had been written back during the year ended 31st March, 2022 and interest expense of Rs.714.06 lakhs on such borrowings has not been recognized for the year ended 31st March, 2022. This is not in accordance with the requirements of Ind AS 23: Borrowing Costs read with Ind AS 109: Financial Instruments. Had the aforesaid liability towards interest expense not been written back and the aforesaid interest expense been recognised, the finance costs, profit before tax, profit after tax and total comprehensive income would have been impacted to the extent of the aforesaid amounts for the year ended 31st March, 2022.

Note no. 43 to the standalone financial statements, the Companys trade receivables (net of ECL) and inventories as at 31st March, 2022 include Rs. 8,066.17 lakhs and Rs.1,042.44 lakhs respectively (31st March, 2021: Rs. 8,017.29 lacs and Rs. 1,120.38 Lacs respectively) relating to certain projects where the claims are presently under arbitration/ litigation proceedings. Pending the ultimate outcome of these matters (fate of which is presently unascertainable), we are unable to comment on the recoverability thereof. The Auditors Report for the year ended 31st March, 2021 was also qualified in respect of this matter.

We conducted our audit in accordance with the Standards on Auditing (‘SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the 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 thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Emphasis of Matters

We draw attention to the following notes to the standalone financial statements:

(i) Note no. 44 , regarding uncertainties relating to the recoverability of certain trade & other receivables as at 31st March, 2022 and recognition of interest income thereon, arising out of arbitration awards pronounced in favour of the Company.

(ii) Note no. 41, regarding write back of Rs. 727.96 lakhs (31st March, 2021: Rs. 2,118.18 lakhs) in respect of certain credit balances.

(iii) Note no. 48, regarding postponement of recognition of income from interest on unsecured loans given to certain subsidiaries, joint ventures and associates which are impaired fully/partially by way of expected credit losses.

(iv) Note no. 47 , which describes the effects of uncertainties relating to COVID-19 pandemic outbreak on the Companys operations and managements evaluation of its impact on the standalone financial statements.

(v) Note no. 16.7 , which indicates that the Company has defaulted in payment of dues to financial creditors, is facing working capital constraints and its borrowing facilities are irregular with certain financial creditors as at 31st March, 2022. Based on ongoing discussion with such creditors for formulation of a resolution plan and other mitigating factors as mentioned in the aforesaid Note no. 16.7 , the Companys Board of Directors is of the view that going concern basis of accounting is appropriate for preparation of the standalone financial statements.

Our opinion is not modified in respect of these matters. Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current year. 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 hereinabove, we have determined the matters described below to be the key audit matter to be communicated in our report.

Key Audit Matter How our audit addressed the key audit matter
Correctness of Project Revenue Recognition and related costs - Construction Contracts (refer Note nos. 2(xiv) and 24 to the standalone financial statements ) Our audit approach was a combination of test of internal controls and substantive procedures which included the following:
Revenue from construction contracts is recognized 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 liability for loss making contracts/onerous obligations, if any. • Evaluating the appropriateness of the Companys accounting policy for revenue recognition;
• Obtaining an understanding of the Companys processes and testing the design and operating effectiveness of key internal financial controls, including those related to review and approval of contract estimates;
• 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 revenue accounting standard;
• Testing a sample of contracts for appropriate identification of performance obligations and the appropriateness of contract revenue recognized by evaluating key management judgments inherent in the forecasted contract revenue and costs to complete;
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. Changes in these judgements, and the related estimates as contracts progress can result in material adjustments to revenue and margins. As a result of the above judgments, complexities involved and material impact on the related financial statement elements, this area has been considered a key audit matter in the audit of the standalone financial statements. • For costs incurred to date, testing samples to appropriate supporting documents and performing cut-off procedures;
• Testing the forecasted cost by obtaining executed purchase orders/agreements and evaluating the reasonableness of managements judgments/estimates; .
• Performing analytical procedures for reasonableness of revenue recognition; and
• Evaluating the appropriateness and adequacy of the disclosures related to contract revenue and costs in the standalone financial statements in accordance with the applicable accounting standards.

Information other than the Standalone Financial Statements and Auditors? Report thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report but does not include the standalone financial statements and our auditors report thereon. The Annual Report is expected to be made available to us after the date of this auditors report.

Our opinion on the standalone financial statements does not cover the other information and we will 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 identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

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, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015 as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, 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 financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

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

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

a. We did not audit the financial statements / financial information of 3 (three) joint operations included in the standalone financial statements, whose financial statements / financial information reflect total assets of Rs. 78.79 lakhs as at 31st March, 2022, total revenues of Rs. 0.64 lakhs and total net loss after tax of Rs. 9.04 lakhs for the year ended on that date, as considered in the standalone financial statements. These financial statements / financial information have been audited by other auditors whose reports have been furnished to us by the Companys management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on the audit reports of such other auditors and on the procedures performed by us as stated in the section Auditors Responsibilities for the Audit of the Standalone Financial Statements hereinabove.

b. We did not audit the financial statements / financial information of 7 (seven) joint operations included in the standalone financial statements, whose financial statements / financial information reflect total assets of Rs. 8,791.64 lakhs as at 31st March, 2022, total revenues of Rs. 10,607.19 lakhs and total net loss after tax of Rs. 12.29 lakhs for the year ended on that date, as considered in the standalone financial statements. These financial statements / financial information are unaudited and have been furnished to us by the Companys management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such un-audited financial statements/financial information. In our opinion and according to the information and explanations given to us by the Companys management, these financial statements / financial information are not material to the Standalone Financial Statements.

c. Owing to non-availability of financial statements/ financial information/financial results of 2 (two) joint operations, the same were not included in the standalone financial statements. According to the information and explanations given to us by the Companys management, such financial statements/ financial information/financial results are not material to the Statement.

Our opinion is not modified in respect of these matters.

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 sub-section (11) of section 143 of the Act, we give in "Annexure - A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, based on our audit we report that:

a) We have sought and except for the possible effect of the matters described in the Basis for Qualified Opinion section hereinabove, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) Except for the possible effects of the matters described in the Basis for Qualified Opinion section hereinabove, 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 books of account;

d) Except for the effects of the matters described in the Basis for Qualified Opinion section hereinabove, in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended ;

e) In view of the matters described in the Basis for Qualified Opinion section hereinabove, we are unable to comment whether these may have an adverse effect on the functioning of the Company;

f) On the basis of the written representations received from the directors as on 31st March, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2022 from being appointed as a director in terms of Section 164 (2) of the Act.;

g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion section hereinabove;

h) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure - B" ;

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note no. 31 to the standalone financial statements;

ii. Except for the possible effects of the matters described in the Basis for Qualified Opinion section hereinabove, the Company has made provision, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

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 person or entity, including a foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

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

(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) of the Companies (Audit and Auditors) Rules, 2014, as amended, as provided under (a) and (b) above, contain any material misstatement.

v. No dividend has been declared or paid during the year by the Company. Hence, compliance with Section 123 of the Act is not applicable.

3. In our opinion, according to the information and explanations given to us, remuneration paid by the Company to its directors for the year ended 31st March, 2022 has been in accordance with the provisions of section 197 read with Schedule V to the Act;

Annexure-A to the Independent Auditors? Report

[Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements? in the Independent Auditors? Report of even date, to the members of SPML Infra Limited on the standalone financial statements for the year ended March 31, 2022]

To the best of our information and according to the explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, we state that:

(i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

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

(b) The Company has a regular program of physical verification of its Property, Plant and Equipment under which they are verified in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this program, certain Property, Plant and Equipment were physically verified by the management and no material discrepancies between the book records and the physical inventory have been noticed on such verification.

(c) The title deeds of immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee ), disclosed in the standalone financial statements and included under the head ‘Property, Plant and Equipment, are held in the name of Company as at the balance sheet date.

(d) The Company has not revalued any of its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year. Hence, reporting under clause 3(i)(d) of the Order is not applicable.

(e) No proceedings have been initiated during the year or are pending against the Company as at March 31, 2022 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder

ii. (a) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year and the coverage and procedure of such verification by the management seems to be appropriate; no discrepancies of 10% or more in the aggregate for each class of inventory were noticed on such physical verification.

(b) The Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks/financial institutions on the basis of security of current assets of the Company; as explained and represented to us by the Company, the quarterly returns or statements filed by the Company with such banks/financial institutions are not in agreement with the books of account of the Company but the details in respect of the discrepancies have not been made available to us. Note No. 16.9 to the standalone financial statements may also be referred to in this respect.

iii. (a) During the year, the Company has not provided loans, advances in the nature of loans, stood guarantee or provided security to any other entity. Accordingly, reporting under clause 3(iii)(a) of the Order is not applicable.

(b) In our opinion, the investments made by the Company are prima facie not prejudicial to the Companys interest. The Company has not provided any guarantees or given any security; the terms and conditions of grant of certain loans to companies which are ‘related parties are prima facie prejudicial to the Companys interest on account of the fact that they are unsecured and were granted at rates of interest which are lower than the cost of funds to the Company.

(c) In respect of loans granted by the Company, the schedule of repayment of principal and payment of interest has been stipulated but in some cases the repayments of principal and receipts of interest are irregular.

(d) In respect of loans granted by the Company, there is no overdue for more than 90 days as at the balance sheet date.

(e) There were no loans or advances in the nature of loan granted to any parties which had fallen due during the year, that have been renewed or extended or fresh loans granted to settle the overdues of existing loans given to the same parties.

(f) The Company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment during the year. Hence, reporting under clause

3(iii) (f) of the Order is not applicable.

iv. In our opinion, Company has complied with the provisions of section 185 and 186 of the Act, to the extent applicable, in respect of loans, investments, guarantees, and security.

v. The Company has not accepted any deposits or amounts which are deemed to be deposits. Hence, reporting under clause 3(v) of the Order is not applicable.

vi. The Company is required to maintain cost records under sub-section (1) of section 148 of the Act. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records u/s 148 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

We have not, however, made a detailed examination of the same.

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

Name of the statute Nature of the dues Amount (Rs In Lakhs) Period to which the amount relates Due date Date of payment
Professional Tax Professional Tax 5.12 June 2016 to August 2020 15th day of the subsequent month Not yet paid
Employee State Insurance,1948 Employee State Insurance Dues 21.53 June 2016 to August 2020 15th day of the subsequent month Not yet paid
Gujarat Value Added Tax Act, 2003 Works Contract Tax 3.82 Apr 2017 to June 2017 15th day of the subsequent month Not yet paid
Uttar Pradesh Value Added Tax Act, 2008 Works Contract Tax 3.17 Mar 2016 to June 2017 15th day of the subsequent month Not yet paid
Delhi Value Added Tax Act, 2005 Works Contract Tax 11.94 Apr 2017 to June 2017 15th day of the subsequent month Not yet paid
Jharkhand Value Added Tax Act, 2005 Works Contract Tax 4.19 Apr 2017 to June 2017 15th day of the subsequent month Not yet paid
Tripura Value Added Tax Act, 2005 Works Contract Tax 1.22 Apr 2017 to June 2017 15th day of the subsequent month Not yet paid
Bihar Value Added Tax Act, 2005 Works Contract Tax 124.48 Apr 2015 to August 2016 15th day of the subsequent month Not yet paid
Rajasthan Value Added Tax Act, 2003 Works Contract Tax 2.09 Apr 2017 to June 2017 15th day of the subsequent month Not yet paid
The Orissa Value Added Tax Act, 2004 Works Contract Tax 1.76 Apr 2015 to June 2017 15th day of the subsequent month Not yet paid

(b) Details of statutory dues referred to in sub-clause (a) above which have not been deposited with the appropriate authorities as on March 31, 2022, on account of any dispute, are as follows:

Name of the statute Nature of the dues Amount (Rs In Lakhs) Amount paid under Protest (Rs In Lakhs) Period to which the amount relates Forum where dispute is pending
Central Sales Tax Act, 1956 Non production of C and E forms 105.10 FY 2005-06 West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata
Central Sales Tax Act, 1956 Claim exemption u/s 6(2)of Central Sales Tax Act,1956 293.97 FY 2007-08 West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata
West Bengal Value Added Tax Act, 2003 Non production of C and E forms 105.34 FY 2007-08 West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata
Central Sales Tax Act, 1956 Claim exemption u/s 6(2)of Central Sales Tax Act,1956 404.98 FY 2008-09 West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata
Name of the statute Nature of the dues Amount (Rs In Lakhs) Amount paid under Protest (Rs In Lakhs) Period to which the amount relates Forum where dispute is pending
Central Sales Tax Act, 1956 Non production of C and E forms 285.55 FY 2009-10 West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata
West Bengal Value Added Tax Act, 2003 Denial of deduction u/s18(2) of the WB VAT Act 335.63 FY 2009-10 West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata
West Bengal Value Added Tax Act, 2003 Exemption under RGGVY scheme & Denial of deduction u/s18(2) of the WB VAT Act 95.74 FY 2008-09 West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata
West Bengal Value Added Tax Act, 2003 Disallowance of input tax credit , interest charged and demand of purchase and output tax 75.27 FY 2012-13 West Bengal Commercial Taxes Appellate and Revisional Board, Kolkata
Bihar VAT Act, 2005 Disallowance of labour component 43.13 - FY 2007-08 JCCT Appeals, Patna
Bihar VAT Act, 2005 Denied the exemption u/s 6(2) of the CST Act, on the grounds of pre-determined sales and non-production of statutory forms 234.27 FY 2010-11 JCCT Appeals, Patna
Central Sales Tax Act, 1956 Our CST Sales u/s 6(2) IS accepted and taxed where Form C and E1 are due to be received and produced, interest added 82.12 FY 2011-12 JCCT Appeals, Patna
UP VAT Act, 2008 Tax Liability on Exempted project RGGVY sales 44.13 8.82 FY 2007-08 Additional Commissioner, Agra
Jharkhand VAT Act, 2005 Tax Demand on receipts and suppression of turnover 193.41 - FY 2005-06 to 2010-11 JCCT (Appeals) Jamshedpur
Jharkhand VAT Act, 2005 Tax Demand on receipts and suppression of turnover 38.24 - FY 2011-12 JCCT (Appeals) Jamshedpur
Central Sales Tax Act, 1956 Tax Demand on receipts and suppression of turnover 61.53 - FY 2011-12 JCCT (Appeals) Jamshedpur
Delhi VAT Act, 2004 Miscellaneous Demand 26.00 - FY 2012-13 Commissioner DVAT, Delhi
Rajasthan VAT Act, 2003 Tax liability on interstate Sales 9.37 - FY 2009-10 Deputy Commissioner, Appeals-II Jaipur
Rajasthan VAT Act, 2003 Tax liability on interstate Sales 110.64 - FY 2011-12 Deputy Commissioner, Appeals-II Jaipur
Bihar VAT Act, 2005 Denied the exemption u/s 6(2) of the CSTAct, on the grounds of pre-determined sales and non-production of statutory forms 163.49 20.00 FY 2013-14 JCCT Appeals, Patna
Finance Act, 1994 Service Tax 23.13 - FY 2005-06 to 2006-07 Commissioner Service Tax, Kolkata
West Bengal Value Added Tax Act, 2003 CST 6(2) sales taxed under VAT Act at full rate. 1,132.94 FY 2016-17 Sr JCCT, Appeals, Commercial Taxes, Kolkata
Central Sales Tax Act, 1956 Non submission of "C" forms and "E" forms 91.44 FY 2014-15 Appeal filed at JCCT - Patna

(viii) 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.

(a) As at March 31, 2022, the Company is in default in respect of repayment of loans/ borrowings and in the payment of interest thereon to the following banks and financial institution as detailed below:

Nature of Borrowing Name of lender Amount not paid on due date Rs. lakhs Whether principal or interest No. of days delay or unpaid Remarks if any
Banks
Cash Credit Andhra Bank 1,348.38 Principal 821 -
Cash Credit Bank of Baroda 6,547.80 Principal 852 -
Cash Credit Canara Bank 26,098.68 Principal 807 -
Cash Credit ICICI Bank 4,214.67 Principal 821 -
Cash Credit Oriental Bank of Commerce 3,065.33 Principal 883 -
Cash Credit Punjab National Bank 13,372.29 Principal 883 -
Cash Credit State Bank of India 23,445.87 Principal 854 -
Cash Credit Syndicate Bank 8,479.62 Principal 807 -
Cash Credit Union Bank of India 2,046.87 Principal 821 -
Working Capital Demand Loan ICICI Bank 4,759.03 Principal 821 -
Working Capital Demand Loan Oriental Bank of Commerce 761.47 Principal 883 -
Working Capital Demand Loan State Bank of India 10,286.53 Principal 854 -
Term Loan Canara Bank 1,246.28 Principal 807 -
Term Loan Oriental Bank of Commerce 111.98 Principal 883 -
Term Loan State Bank of India 258.19 Principal 854 -
Term Loan State Bank of India 920.86 Principal 854 -
Term Loan State Bank of India 183.48 Principal 854 -
Term Loan Union Bank of India 67.07 Principal 821 -
Financial Institution
Term Loan IFCI 332.34 Principal 730 -

(b) As represented to us by the management, the Company has not been declared a wilful defaulter by any bank or financial institution or other lender.

(c) In our opinion, prima facie the term loans were applied for the purpose for which the loans were obtained.

(d) On an overall examination of the financial statements of the Company, prima facie no funds raised on short-term basis have been utilised for long-term purposes by the Company.

(e) On an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person specifically on account of or to meet the obligations of its subsidiaries or associates.

(f) The Company has not raised any loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies. Hence reporting under clause 3(ix)(f) of the Order is not applicable.

(x) (a) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year and hence reporting under clause 3(x)(a) of the Order is not applicable.

(b) During the year, the Company has made preferential allotment of shares towards extinguishment of existing unsecured loans and the requirements of section 42 and section 62 of the Companies Act, 2013 have been complied with. No private placement of shares or convertible debentures (fully, partially or optionally convertible) was made by the Company during the year.

(xi) (a) As represented to us by the management, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.

(b) 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, during the year and upto the date of this report.

(c) As represented to us by the management, there were no whistle-blower complaints received by the Company during the year.

(xii) The Company is not a Nidhi Company and hence reporting under clause 3(xii) of the Order is not applicable.

(xiii) In our opinion, transactions with the related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013 where applicable and the details of related party transactions have been disclosed in notes to the standalone financial statements, as required by the applicable accounting standards.

(xiv) (a) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(b) We have considered the internal audit reports for the year under audit in determining the nature, timing and extent of our audit procedures.

(xv) As represented to us by the management, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with its directors. Hence, provisions of Section 192 of the Companies Act, 2013 are not applicable to the Company.

(xvi) (a) In our opinion, 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) As represented to us by the management, the Group does not have any CIC as part of the Group.

(xvii) The Company has incurred a cash loss of Rs. 23,234.21 lakhs in the financial year covered by our audit and Rs. 32,373.84 lakhs in the immediately preceding financial year. The aforesaid figures have been arrived at after considering the effect of the quantified qualifications in the audit reports for the respective years. The effect of the unquantified qualifications has not been taken into consideration for the purpose of making comments in respect of this clause.

(xviii) There has been no resignation of the statutory auditors during the year.

(xix) On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, we believe that as on the date of this audit report there are constraints regarding the Companys capability to meet its liabilities existing as at the date of balance sheet, as and when they fall due within a period of one year from the balance sheet date. In this regard, we draw attention to Note No 16.7 to the standalone financial statements of the Company, which mentions the rationale as to why the Board of Directors of the Company considers it appropriate to prepare the financial results on a going concern basis. We further state that our reporting is based on the facts up to date of this audit report.

(xx) (a) In respect of other than ongoing projects (i) the Company is not required to spend any sum during the financial year 2021-22, on Corporate Social Responsibility (‘CSR), as envisaged under Section 135(5) of the Companies Act, 2013 and hence the question regarding ‘unspent amount in respect of financial year 2021-22 does not arise, and (ii) in respect of previous financial years i.e. financial years prior to the financial year 2021-22, the Company has not transferred the unspent amount to a Fund specified in Schedule VII to the Companies Act, 2013 within a period of six months of the expiry of the financial year, so as to be in compliance with second proviso to sub-section (5) of section 135 of the said Act. As explained and represented to us by Company, it has been facing financial crisis since the last few years and is

in the process of formulating a resolution plan with its financial creditors i.e banks, which is at an advanced stage of discussions after completion of various processes ( refer Note No.16.7 to the standalone financial statements ). As further explained and represented to us, due to the financial stress and mismatch in cash flows the Company was unable to spend the CSR amount. However, the Company is in the process of transferring the unspent amount to a Fund specified in Schedule VII.

(b) There is no unspent amount towards CSR in respect of ‘ongoing project, requiring a transfer to a special account in compliance with the provisions of sub-section (6) of Section 135 of the Companies Act, 2013. Accordingly, reporting under clause 3(xx)(b) of the Order is not applicable.

Annexure-B to the Independent Auditors? Report of SPML Infra Limited [ Referred to in paragraph 2(h) under "Report on Other Legal and Regulatory Requirements" section in our Independent Auditors? Report of even date to the members of SPML Infra Ltd. on the standalone financial statements for the year ended 31st March, 2022 ]

Report on the Internal Financial Controls with reference to Financial Statements under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls with reference to financial statements of SPML Infra Limited ("the Company") as of 31stMarch, 2022 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management?s Responsibility for Internal Financial Controls

The Companys Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal control with reference to financial statements 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 (the "Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors? Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by the ICAI. 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 with reference to financial statements were 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 with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal controls based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls with reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A companys internal financial control with reference to financial statements 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 with reference to financial statements 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 authorisations 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 with reference to Financial Statements

Because of the inherent limitations of internal financial controls with reference to financial statements, 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 with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements 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, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 31st March, 2022, based on the internal control with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For Maheshwari & Associates
Chartered Accountants
FRN:311008E
CA. Bijay Murmuria
Partner
Place: Kolkata Membership No.: 055788
Date: 28th May, 2022 UDIN: 22055788ANAFXG4429