Supreme Infrastructure India Ltd Auditor Reports

To the Members of Supreme Infrastructure India Limited Report on the Audit of Standalone Financial Statements Qualified Opinion

1. We have audited the accompanying standalone financial statements of Supreme Infrastructure India Limited (‘the Company), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone Financial Statements").

2. In our opinion and to the best of our information and according to the explanations given to us, 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 (‘Act) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Indian Accounting Standards (‘Ind AS) specif ied under section 133 of the Act, of the state of affairs (financial position) of the Company as at March 31, 2023, and its loss (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

3. As stated in :

i. Note 11.3 to the accompanying standalone financial statements, the Companys trade receivables and other current assets as at March 31, 2023 include trade receivables amounting to Rs 74,749.41 lakhs and unbilled revenue amounting Rs 3,965.57 lakhs respectively, which have been outstanding for a substantial period (including receivables in respect of projects closed/ substantially closed). Management has assessed that no adjustments are required to the carrying value of the aforesaid balances, which is not in accordance with the requirements of Ind AS 109, ‘Financial Instruments considering the period of outstanding. Consequently, in the absence of sufficient and appropriate evidence to support the managements contention of recover ability of these amounts and balance confirmations, we are unable to comment upon the adjustments, if any, that are required to the carrying value of trade receivables and other current assets, and consequential impact, if any, on the accompanying standalone financial statements. The audit Opinion on the Companys Standalone Financial Statements for the previous year ended 31 March 2022 was also modified in respect of this matter.

ii. Note 4.4 to the accompanying Standalone financial Statements, the Companys non-current investments and trade receivable as at March 31, 2023 include non-current investments in Subsidiary Company, Supreme Infrastructure BOT Private Limited and trade receivables from step down subsidiaries of the said subsidiary amounting to Rs 142,556.84 lakhs and Rs Rs 1,848.31 lakhs respectively. The said subsidiar y Company has significant accumulated losses, and its consolidated net-worth is fully eroded. Further, the said Company is facing liquidity constraints due to which it may not be able to realise projections as per the approved business plans. Also, during the previous year, The National Company Law Tribunal, Mumbai (NCLT) vide Order dated February 25, 2022 ("Admission Order"), has appointed an Interim Resolution Professional ("IRP") on a petition initiated by one of the operational creditors under the Insolvency and Bankruptcy Code 2016 (‘IBC). The said Admission Order has been subsequently assailed by one of the suspended directors before the Honble National Company Law Appellate Tribunal ("NCLAT"). The Honble NCLAT has vide its order dated September 02, 2022 has annulled the Admission Order and other factors described in the aforementioned note. The management has considered such balances as fully recoverable and assessed that no adjustments are required to the carrying value of the aforesaid balances, which is not in accordance with the requirements of Ind AS 109, ‘Financial Instruments. In the absence of suff icient appropriate evidence to support the managements assessment as above, accumulated losses in this subsidiary as on March 31, 2023, and other relevant alternate evidence, we are unable to comment upon adjustments, if any, that may be required to the carrying values of these non-current investments and trade receivables from step down subsidiaries of said Subsidiary Company and the consequential impact on the accompanying Standalone Financial Statements. The audit opinion on the Companys Standalone Financial Statements for the previous year ended March 31, 2022 was also modified in respect of this matter.

iii. Note 4.5 to the accompanying standalone financial Statements, the Companys non-current investments, trade receivable and other current assets as at March 31, 2023 include investments in one of its subsidiary Supreme Panvel Indapur Tollways Private Limited (SPITPL), trade receivable and unbilled revenue from said subsidiary amounting to Rs 15,677.52 lakhs, Rs 3,814.66 lakhs and 3,201.67 lakhs respectively. During the previous year, National Highways Authority of India ("NHAI") had issued an intent to terminate notice to this subsidiary, the said notice has been subsequently stayed by order of the Honble High Court of Delhi and the matter has been referred to arbitral tribunal in order to adjudicate the dispute between the parties during the previous year. In terms of the order passed by the

Honble Arbitral Tribunal dated March 10, 2023 in furtherance to the Honble Apex Court directions dated February 7, 2023, this subsidiary and NHAI have been directed to explore mutual conciliation under policy of NHAI, which are currently ongoing as informed by the management. The management has considered these non-current investments, trade receivable and other current assets as fully recoverable and has assessed that no adjustments are required to the carrying value of the aforesaid balances, which is not in accordance with the requirements of Ind AS 109, ‘Financial Instruments. In the absence of sufficient and appropriate evidence to support the managements assessment as above, stoppage of operations and non-recognition of trade payable to holding Company in books of this subsidiary, and also considering the fact that NHAI has appointed new vendor to complete the remaining work of the ongoing project, and no cash flows due to the aforesaid termination notice and matter under arbitration, we are unable to comment upon impact of adjustments, that may be required to the carrying values of these non-current investments, trade receivables and other current assets and the consequential impact on the accompanying standalone financial Statements. The audit opinion on the Companys Standalone Financial Statements for the previous year ended March 31, 2022 was also modif ied in respect of non-current investments.

iv. Note 18.4 to the accompanying standalone financial Statements, the Companys current borrowings as at March 31, 2023 include balance amounting to Rs 32,772.84 Lakhs (Principal Amount), in respect of which confirmations/statements from the respective banks/lenders have not been received. Further, in respect of certain loans where principal balance has been confirmed from the confirmations issued by the banks/lenders, the interest accrued amounting Rs 3,20,650.01 Lakhs and Margin Money amounting to Rs 498.53 lakhs included in other non-current assets as on March 31, 2023 have not been confirmed by banks/ lenders. In cases where lenders have given confirmation for interest outstanding, differences are noticed in the balances since Banks/lenders have stopped accrual of interest as the accounts of the Company are classified as NPA in their books. In the absence of such conf irmation from banks/lenders or suff icient and appropriate alternate audit evidence for differences, we are unable to comment on the adjustments and changes in results and classification of balances in accordance with the principle of Ind AS 1, presentation of financial statements, that may be required to carrying value of the aforementioned balances in the accompanying standalone financial Statements. The audit Opinion on the Companys standalone financial Statements for the previous year ended March 31, 2022 was also modified in respect of this matter.

v. Note 42 to the accompanying standalone financial Statements regarding non compliances with the requirements of section 129(3), 92 and 137, of the Act related to Filing of annual return and annual accounts for the financial year ended March 31, 2022 for which the no provision for penalty is done in its Standalone financial statements. Further, additional financial impact if any due to other non-compliances of the Act and SEBI regulations on the financial statements is presently not ascertainable.

4. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor s 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 there under, 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.

Material Uncertainty Related to Going Concern

5. We draw attention to Note 38 to the accompanying standalone financial Statements, which indicates that the Company has incurred a net loss of Rs 95,354.28 lakhs during the year ended March 31 2023 and, has also suffered losses from operations during the preceding financial years, the Companys accumulated losses amounts to Rs 4,19,011.91 lakhs and its current liabilities exceeded its current assets by Rs 5,29,591.92 lakhs as on that date. Further, as disclosed in Note 38 to the said financial statements, Company has defaulted in repayment of principal and interest in respect of its borrowing outstanding as at March 31, 2023. The above factors, along with other matters as set forth in the aforesaid note, indicate that a material uncertainty exists that may cast significant doubt on the Companys ability to continue as a going concern. However, based on ongoing negotiations with the lenders for restructuring/settlement of the loans, future business plans, and other mitigating factors mentioned in the aforementioned note, Management is of the view that going concern basis of accounting is appropriate.

The above assessment of the Companys ability to continue as going concern is by its nature considered as a key audit matter in accordance with SA 701. In relation to the above key audit matter, our audit work included, but was not limited to, the following procedures:

i. Obtained an understanding of the managements process for identifying all events or conditions that may cast significant doubt over the companys ability to continue as a going concern and a process to assess the corresponding mitigating factors existing against each such event or condition. Also, obtained an understanding around the methodology adopted by the Company to assess their future business performance including the preparation of a cash flow forecast for the business.

ii. Evaluated the design and tested the operating effectiveness of key controls around aforesaid identification of events or conditions and mitigating factors, and controls around cash flow projections prepared by the management.

iii. We obtained from the management, its projected cash flows for the next twelve months basis their future business plans.

iv. Assessed the methodology used by the management to estimate the cash flow projections including the appropriateness of the key assumptions in the cash flow projections for next 12 months by considering our understanding of the business, past performance of the Company, external data and market conditions apart from discussing these assumptions with the management and the Audit Committee.

v. Tested mathematical accuracy of the projections and applied independent sensitivity analysis to the key assumptions mentioned above to determine and ensure that there was sufficient headroom with respect to the estimation uncertainty impact of such assumptions on the calculations.

Our opinion is not modified in respect of this matter.

Emphasis of Matter

6. As stated in Note 40 to the accompanying Statement regarding Comprehensive Scheme of Compromise and Settlement with its operational creditors under the provisions of the Companies Act, 2013 the Honble NCLT vide its order dated June 16, 2022 has approved the said Scheme. The said scheme had been approved in a court convened meeting where in more than 92% of the operational Creditors present and voting had voted in favour of scheme. The said order has been registered with Regional Director, Ministry of Corporate Affairs (Maharashtra) on 23 August

2022. In the Extra-Ordinary General Meeting held by the Company on January 23, 2023 the members have approved issuance of Non-Convertible Non-Cumulative Redeemable Preference Shares (NCCRP) to the operational creditors. Accordingly, balances of these creditors are now recognised as borrowing based as per Ind AS 109 due to issuance of NCCRP.

7. As stated in Note 30.1 to the accompanying Standalone financial statements regarding corporate guarantees by the Company to various lenders of its subsidiary/group companies amounting to Rs 1,63,816 lakhs against their borrowings. These Companies have defaulted in repayment of their borrowings. However, the Company has not recognised financial liability for these corporate guarantees due to defaults in repayment by subsidiary/group companies. Management has assessed that there is no liability required to be recognised in respect of above due to reason that none of the lenders have invoked any of the above guarantees and they are also a part of overall debt restructuring/settlement negotiations currently under discussion and stand still clause in relation to facilities granted is also one of the conditions of Inter Creditor Agreement (ICA).

Our report is not qualified in respect of this matters.

Key Audit Matter

8. 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 period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

9. In addition to the matters described in the Basis for Qualified Opinion and Material Uncertainty Related to Going Concern sections, we have determined the matter 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
Recognition of contract revenue, margin and contract costs
The Companys revenue primarily arises from construction contracts which, by its nature, is complex given the significant judgements involved in the assessment of current and future contractual performance obligations.	Our audit of the recognition of contract revenue, margin and related receivables and liabilities included, but were not limited to, the following:
Effective 1 April 2018, the Company has adopted Ind AS 115 ‘Revenue from Contracts with Customers using the cumulative catch-up transition method. Accordingly, the Company recognizes revenue and margins based on the stage of completion which is determined on the basis of the proportion of value of goods or services transferred as at the Balance Sheet date, relative to the value of goods or services promised under the contract. All the projects of the Company satisfy the criteria for recognition of revenue over time (using the percentage of completion method) since the control of the overall asset (property/ site / project) lies with the customer who directs the	• Evaluated the appropriateness of the Companys revenue recognition policies;
Company. Further, the Company has assessed that it does not have any alternate use of these assets.	• Assessed the design and implementation of key controls over the recognition of contract revenue and margins, and tested the operating effectiveness of these controls;
The recognition of contract revenue, contract costs and the resultant profit/loss therefore rely on the estimates in relation to forecast contract revenue and the total cost. These contract estimates are reviewed by the management on a periodic basis.	• For a sample of contracts, tested the appropriateness of amount recognized by evaluating key management judgements inherent in the forecasted contract revenue and
In doing so, the management is required to exercise judgement in its assessment of the valuation of contract variations and claims and liquidated damages as well as the completeness and accuracy of forecast costs to complete and the ability to deliver contracts within contractually determined timelines. The final contract values can potentially be impacted on account of various factors and are expected to result in varied outcomes.	costs to complete that drive the accounting under the percentage of completion method, including:
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 standalone financial statement elements, this area has been considered a key audit matter in the audit of the standalone financial statements.	- reviewed the contract terms and conditions; - evaluated the identification of performance obligation of the contract
	- evaluated the appropriateness of managements assessment that performance obligation was satisfied over time and consequent recognition of revenue using percentage of completion method.
	- tested the existence and valuation of claims and variations within contract costs via inspection of correspondence with customers;
	- obtained an understanding of the assumptions applied in determining the forecasted revenue and cost to complete;
	- assessed the ability of the Company to deliver contracts within budgeted timelines and exposures, if any, to liquidated damages for late delivery; and
	• Assessed that the disclosures made by the management are in accordance with applicable accounting standards.

 

Evaluation of Contingent Liabilities
The Company has material uncertain positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Contingent liabilities are not recognized in the Standalone Financial Statements but are disclosed unless the possibility of an outflow of economic resources is considered remote. Contingent liabilities disclosed are in respect of items which in each case are above the threshold limit.	The following audit procedures were carried out in this regard:
	• We examined sample items above the threshold limit for determination of contingent liabilities and obtained details of completed Income tax assessment, service tax assessment, disputed GST liability, corporate guarantees given by the company as well as other disputed claims against the company as on March 31, 2023. The company has obtained opinion from tax consultants in various disputed matters. We have relied upon such opinions and litigation history where the company has concluded that possibility of cash outflow is remote while preparing its Standalone Financial statements.
	• We have assessed the Managements underlying assumptions in estimating the possible outcome of such disputed claims/ cases against the company, based on records and judicial precedents made available.
Migration of Accounting System
The Company has migrated to a different accounting software system for maintaining its books of accounts w.e.f. October 1, 2022.	The following audit procedures were carried out in this regard:
The accounting system of the company is complex therefore, migration of data and balances from the old to the new accounting software system require special consideration and independent migration audit. As a result of the above complexities involved and material impact on the related standalone financial statement elements, this area has been considered a key audit matter in the audit of the standalone financial statements.	• No independent migration audit was carried out by the Company for migration of data and balances from the old to the new accounting software system. However we have gone through the overall process followed by the management for migration of data from old to the new accounting software.
	The Company has also provided us with the reconciliation of the general ledger/Trial balance between old software and new software on the date when transition happened. We have reviewed the said reconciliation and checked the accuracy of a few sample ledger balances migrated to new software.

Information other than the Standalone Financial Statements and Auditors Report thereon

9. 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 Annual Report, 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

10. 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 state of affairs (financial position), profit or loss (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 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 statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

11. In preparing the standalone f inancial 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.

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

Auditors Responsibilities for the Audit of the standalone Financial Statements

13. 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 Standards on Auditing 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.

14. As part of an audit in accordance with Standards on Auditing, 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 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 auditor s 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 auditor s 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 f inancial statements represent the underlying transactions and events in a manner that achieves fair presentation.

15. 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.

16. 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.

17. From the matters communicated with those charged with governance, we determine those matters that were of most signif icance in the audit of the standalone f inancial 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.

Report on Other Legal and Regulatory Requirements

18. The Company has not paid or provided for any managerial remuneration during the year. Accordingly, reporting under section 197(16) of the Act is not applicable.

19. 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, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

20. Further to our comments in Annexure 1, as required by section 143(3) of the Act, we report that:

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

b) except for the possible effects of the matters described in the Basis for Qualified Opinion section, 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 standalone financial statements dealt with by this report are in agreement with the books of account;

d) except for the possible effects of the matters described in the Basis for Qualified Opinion section, in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

e) the matters described in paragraphs 3,5 and7 under the Material Uncertainty related to Going Concern / Basis for Qualified Opinion section, in our opinion, may have an adverse effect on the functioning of the Company;

f) In the absence of information regarding Director Disqualification in terms of section 164(2) of the Act as on 31^st March 2023, we are unable to comment upon the same.

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

h) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated November 10, 2023 as per Annexure 2 expressed modified opinion; and

i) with respect to the other matters to be included in the Auditor s 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, as detailed in Notes 4.4, 11.3, 18.5, 18.8, 30(A)(i), 30(A)(iii), 30(A)(iv) to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2023.

ii. except for the possible effects of the matters described in the Basis for Qualif ied Opinion section, the Company, as detailed in Note 2.1 xxiv to the standalone financial statements, has made provision as at 31 March 2023, 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 during the year ended 31 March 2023;

iv. 1. 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(s) or entity(ies), 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 on behalf of the Ultimate Beneficiaries;

2. The Management has represented, that, to the best of its knowledge and belief, no funds have been received by the company from any person(s) or entity(ies), including foreign entities ("Funding Par ties"), with the understanding, whether recorded in writing or other wise, 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

3. Based on such audit procedures that we have 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 (1) and (2) above, contain any material mis-statement.

v. Dividend is neither declared nor paid during the year by the Company and therefore compliance with Section 123 of the Companies Act, 2013 is not applicable for current financial year. vi. As proviso to rule 3(1) of the Companies(Accounts) Rules, 2014 is applicable to the company only w.e.f.

1^st April, 2023, reporting under this clause (Rule 11(g)) is not applicable.

Annexure 1 to the Independent Auditors Report

of even date to the members of Supreme Infrastructure India Limited, on the standalone financial statements for the year ended 31 March 2023

(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 does not hold any intangible assets during the financial year hence reporting under paragraph 3(i)(a)(B) of the Order is not applicable to the Company.

(b) The Company is not regular in conducting physical verification of its property, plant and equipment (PPE) which, in our opinion, is not appropriate having regard to the size of the Company and the nature of its assets. (c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of all the immovable properties (which are included under the head ‘Property, plant and equipment) are held in the name of the Company.

(d) According to the information and explanations given to us, the company has not revalued its PPE during the year.

(e) According to the information and explanations given to us, no proceedings have been initiated or are pending against the company 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 material discrepancies observed during physical verification has been properly dealt with in the books of accounts.

(b) The company has not been sanctioned working capital limits in excess of five crores, in aggregate during the year from banks or financial institutions on the basis of security of current assets.

(iii) According to the information and explanations provided to us, during the year the Company has not made any investment, not granted any loan and advances in the nature of loan, not provided any guarantees or securities to the Company, firm, limited liability partnership or any other party. Accordingly, the requirement to report on clause 3(iii)(a) to (f) of the Order is not applicable and hence not commented upon.

(iv) According to the information and explanations provided to us, there are no loans granted, investments made, guarantees and securities given by the Company to which provisions of sections 185 and 186 of the Act are applicable and accordingly, the requirement to report on clause 3(iv) of the Order is not applicable and hence not commented upon.

(v) In our opinion, the Company has not accepted any deposits or the amounts which are deemed to be deposits, within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the requirement to report on clause 3(v) of the Order is not applicable and hence not commented upon.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under subsection (1) of Section 148 of the Act in respect of Companys products/services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

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

Statement of arrears of statutory dues outstanding for more than six months:

Name of the statute	Nature of the dues	Amount (Rs in lakhs)	Period to which the amount relates	Due Date	Date of Payment
Income Tax Act, 1961	Tax Deducted at Source	2,380.63	April 2015 to March 2023	Various Dates	Not yet Paid
The Employees Provident Funds and Miscellaneous Provisions Act, 1952	Provident Fund	400.95	April 2016 to March 2023	Various Dates	Not yet Paid
Profession Tax Act,1975	Profession Tax	17.64	April 2016 to March 2023	Various Dates	Not yet Paid
Employees State Insurance Act, 1948	Employees State Insurance Corporation	28.79	April 2016 to March 2023	Various Dates	Not yet Paid
Maharashtra Value Added Tax, 2002	Value Added Tax	144.67	April 2014 to June 2017	Various Dates	Not yet Paid
The Central Excise Act, 1944	Excise Duty	33.23	December 2012 to June 2017	Various Dates	Not yet Paid

(b) There are no dues in respect of sales-tax, duty of customs and duty of excise that have not been deposited with the appropriate authorities on account of any dispute. The dues outstanding in respect of service tax, value added tax, goods and service tax and income tax on account of any dispute, are as follows:

Statement of Disputed Dues:

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
The Finance Act, 1994	Service tax	11,987.26	-	F.Y. 2008-09 to 2011-12	Custom, Excise and Service Tax Appellate Tribunal
Maharashtra Value Added Tax, 2002	Value Added Tax	1,919.78	-	F.Y. 2014-15 to 2015-16	Assistant commissioner of State Tax.
Goods and Service Tax Act, 2017	Goods and Service Tax	2,797.22	-	July 2017 to Oct 2018	Assistant commissioner of State Tax.
Income Tax Act, 1961	Income Tax	7,040.05	-	A.Y 2007-08 to 2015-16	Income Tax Officer, Commissioner of Income Tax (Appeals), CPC Bengaluru

(viii) According to the information and explanations provided to us, the Company has not surrendered or disclosed an income in tax assessments during the year under the Income tax Act, 1961 any transaction, previously not recorded in the books of account.

Accordingly, the requirement to report on clause 3(viii) of the Order is not applicable and hence not commented upon. (ix) (a) The Company has defaulted in repayment of following dues to the banks and financial institutions during the year.

Banks/Financial Institution	Principal amount of default as on 31 March 2023(Amount in Lakhs)	Period of Default
State Bank of India	1,02,341.98	> 365 days
Union Bank of India	23,865.90	> 365 days
Punjab National Bank	29,653.13	> 365 days
Bank of India	14,897.17	> 365 days
Central Bank of India	11,531.20	> 365 days
Canara Bank	19,723.00	> 365 days
ICICI Bank	12,273.40	> 365 days
Axis Bank	1,794.00	> 365 days
HDFC Bank	255.00	> 365 days
Indian Overseas Bank	1,367.00	> 365 days
SREI	13,031.00	> 365 days
JM Financial Asset Reconstruction	8,167.23	> 365 days
L&T Finance Limited	265.00	> 365 days

(b) According to the information and explanations given by the management, the company is not declared wilful defaulter by any bank or financial institution or other lender during the year under audit; (c) There are no new term loans taken by the company during FY 22-23 and hence reporting under this clause is not applicable; (d) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds have been raised on short-term basis by the Company during the year. Accordingly, clause 3(ix)(d) of the Order is not applicable.

(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 as defined under the Companies Act, 2013.

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 as defined under the Companies Act, 2013. Accordingly, clause 3(ix)(f) of the Order is not applicable.

(x) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments) or term loans or Private placement or preferential allotment and hence reporting under paragraph 3(x)(a) to (b) of the Order is not applicable to the Company.

(xi) (a) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or 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 is required to be filed by the auditors in Form ADT-4 as prescribed under Rules, 2014 with the central government.

(c) Based on our enquiries and according to the information and explanation given by the management, we have been informed that no whistle blower complaint has been received during the year.

(xii) The Company is not a Nidhi Company and hence reporting under paragraph 3(xii)(a) to (c) of the Order are not applicable to the Company; (xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the standalone financial statements, as required by the applicable Ind AS.

(xiv) (a) In our opinion and according to the information and explanations provided to us, areas covered in internal audit system is not commensurate with the size and nature of Companys business.

(b) In our opinion and according to the information and explanations provided to us, the internal audit reports pertaining to the year under audit that have been issued till the date of this audit report, have been considered by us while determining the nature, timing and extent of our audit procedures.

(xv) According to the information and explanations given to us and based on our examination of the records, the Company has not entered into any non-cash transactions with its directors or persons connected with them during the year and hence reporting under clause 3 (xv) of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934) are not applicable to the Company. Accordingly, the requirement to report on clause (xvi) (a) to (d) of the Order is not applicable and hence not commented upon.

(xvii) The company has incurred cash losses of 92,173.50 lakhs in the current f inancial year and 75,988.51 lakhs in the immediately preceding financial year.

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

(xix) Company has incurred a net loss of Rs 95,354.28 lakhs during the year ended March 31 2023 and as of that date, the Companys accumulated losses amounted to Rs 4,19,011.91 lakhs which have resulted in a full erosion of net worth of the Company and its current liabilities exceeded its current assets by Rs 5,29,591.92 lakhs. Further, as disclosed in Note 38 to the said standalone financial statements, Company has defaulted in repayment of principal and interest in respect of its borrowing and has overdue operational creditor outstanding as at March 31, 2023. The above factors, along with other matters as set forth in the aforesaid note, indicate that a material uncertainty exists as on the date of the audit report that company is not capable of meeting its liabilities existing as and when they fall due within a period of one year from the balance sheet date.

(xx) The Company has, at aggregate level, net losses during the immediately preceding three financial years and hence it is not required to spend any money under sub-section (5) of section 135 of the Act. Accordingly, reporting under clause (xx) of the Order is not applicable to the Company for the year.

(xxi) Since this is report on the standalone Financial Statements of the Company hence reporting under paragraph 3(xxi) of the Order is not applicable to the Company.

For Borkar & Muzumdar	For Ramanand & Associates
Chartered Accountants	Chartered Accountants
Firm Registration No: 101569W	Firm Registration No: 117776W
Devang Vaghani	Ramanand Gupta
Partner	Partner
Membership No: 109386	Membership No: 103975
UDIN No: 23109386BGWGSD8590	UDIN No: 23103975BGWHZG5103
Place: Mumbai	Place: Mumbai
Date: November 10, 2023	Date: November 10, 2023

Annexure 2: Independent Auditors report

on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

1. In conjunction with our audit of the standalone financial statements of Supreme Infrastructure India Limited ("the Company") as at and for the year ended 31 March 2023, we have audited the internal financial controls over financial reporting ("IFCoFR") of the Company as at that date.

Managements Responsibility for Internal Financial Controls

2. The Companys Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal control over f inancial 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 (‘the Guidance Note) issued by the Institute of Chartered Accountants of India ("the 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 the Companys 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

3. Our responsibility is to express an opinion on the Companys IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note 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 IFCoFR were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the Companys IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A companys IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone f inancial statements for external purposes in accordance with generally accepted accounting principles. A companys IFCoFR include 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 standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of IFCoFR, 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 IFCoFR to future periods are subject to the risk that IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Basis for Qualified opinion

8. According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified in the operating effectiveness of the Companys internal financial controls over financial reporting as at 31 March 2023: a. The Companys internal financial control in respect of super visory and review controls over process of determining impairment allowance for trade receivables which are doubtful of recovery were not operating effectively. Absence of detailed assessment conducted by the management for determining the recoverability of trade receivables that remain long outstanding, in our opinion, could result in a potential material misstatement to the carrying value of trade receivables, and consequently, could also impact the loss (financial performance including comprehensive income) after tax.

b. The Companys internal financial control in respect of supervisory and review controls over process of determining the carr ying value of non-current investments were not operating effectively. Absence of detailed assessment conducted by the management for determining the carr ying value of non-current investments, in our opinion, could result in a potential material misstatement to the carrying value of non-current investment, and consequently, could also impact the loss (f inancial performance including comprehensive income) after tax. c. The Companys internal financial control in respect of supervisory and review controls over identification and transactions with related parties and reconciliation of balance outstanding with related parties were not operating effectively. Absence of proper control over booking related parties transactions and non-reconciliation of related parties balances on regular interval, in our opinion, could result in a potential material misstatement while recording related parties transactions and carrying value of balance of related parties and consequently, could also impact the loss (f inancial performance including comprehensive income) after tax. d. The Companys internal financial control in respect of supervisory and review controls over of migration to a different accounting software system for maintaining its books of accounts was not effective and no separate migration audit carried out by the Company for migration of data and balances from the old to the new accounting software system.

9. A ‘material weakness is a deficiency, or a combination of deficiencies, in internal f inancial control over f inancial reporting, such that there is a reasonable possibility that a material misstatement of the companys annual or interim financial statements will not be prevented or detected on a timely basis.

Qualified Opinion

10. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting as at 31 March 2023, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI, and except for the possible effects of the material weaknesses described above in the Basis for Qualified Opinion paragraph, the Companys IFCoFR were operating effectively as at 31 March 2023.

11. We have considered the material weaknesses identified and reported above in determining the nature, timing and extent of audit tests applied in our audit of the standalone financial statements of the Company as at and for the year ended 31 March 2023 and the material weakness has affected our opinion on the standalone f inancial statements of the Company and we have issued a qualified opinion on the standalone financial statements.

For Borkar & Muzumdar	For Ramanand & Associates
Chartered Accountants	Chartered Accountants
Firm Registration No: 101569W	Firm Registration No: 117776W
Devang Vaghani	Ramanand Gupta
Partner	Partner
Membership No: 109386	Membership No: 103975
UDIN No: 23109386BGWGSD8590	UDIN No: 23103975BGWHZG5103
Place: Mumbai	Place: Mumbai
Date: November 10, 2023	Date: November 10, 2023