Valecha Engineering Ltd Auditor Reports

Independent Auditors Report

To The Members Of

VALECHA ENGINEERING LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Valecha Engineering Limited (the "Company"), which comprise the standalone balance sheet as at 31^st March 2025, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of material accounting policies and other explanatory information (hereinafter referred to as "standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March 2025, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act.

Our responsibilities under those SAs 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 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 obtained by us is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Emphasis of Matters

i. We draw attention to Note 43 of the financial statements regarding the Corporate Insolvency Resolution Process (CIRP) initiated against the Company pursuant to the Honble NCLT, Mumbai Bench order dated 21.10.2022 in CP (IB) No.594/MB-IV/2021, and the subsequent approval of the Resolution Plan on 25.06.2024. Pursuant thereto, the Successful Resolution Applicant has infused funds aggregating Rs. 69.52 crores towards settlement of creditors and Rs.10.05 crores towards capital expenditure, working capital, and contingent liabilities

ii. We draw attention to Note 44 to the Standalone financial statements:

a. As per the NCLT Order vide dated 25^lh June, 2024, amounts over and above the final settlement of Rs. 69.52 crores (including Rs. 68.02 crores to Financial Creditors, Rs. 0.50 crores to Operational Creditors, and Rs. 1.00 crore towards CIRP Costs, plus Rs. 0.05 crore reserved for contingencies) have been written back. During the year ended March 31, 2025, the Company in compliance with Ind AS 109 - Financial Instruments, recognised the derecognition gain of Rs. 640.55 crores through the Statement of Profit and Loss under Exceptional Items (Net). Further, an amount of Rs. 454.77 crores being capital receipt has been transferred from Retained Earnings to Capital Reserve.

b. Where during the year ended March 31, 2025, the Company has written off assets comprising irrecoverable receivables, loans, and advances amounting to Rs.185.64 crores and this amount have been charged to the Statement of Profit and Loss and presented under "Exceptional Items (Net)"

c. An amount of Rs.21.29 crores was paid by the Resolution Professional (RP) to Secured Financial Creditors pursuant to the approved Resolution Plan, towards corporate guarantee obligations invoked in respect of Holding Company by the lenders of subsidiaries companies. This amount has been charged to the Statement of Profit and Loss and presented under "Exceptional Items (Net)"

iii. We draw your attention to the Note No 45 to the Standalone financial statements, the Honble NCLT Order dated 25th June 2024, which states that upon approval of the Resolution Plan by the Adjudicating Authority, all claims not forming part of the Resolution Plan shall stand extinguished. Accordingly, all liabilities, including contingent liabilities, commitments, claims, and obligations pertaining to the period up to 25th June 2024 whether recorded in the books or not stand extinguished. As a result, no outflow of economic benefits or loss is expected, except for a contingency amount of Rs. 5 lakhs provided under the Resolution Plan.

iv. We draw your attention to the Note No 46 to the Standalone financial statements regarding Valecha Kachchh Toll Roads Limited (VKTRL), a subsidiary of the Company, against which the Honble NCLT, Mumbai Bench, admitted an application for initiation of CIRP on 9th October 2023. The Resolution Plan approved by the CoC on 28th March 2025 is pending for adjudication before the Honble NCLT. Pending the outcome of the CIRP and recoverability assessment, the Company continues to carry its investment of Rs. 39.84 crores and loans of Rs. 76.36 crores (aggregating to Rs. 116.20 crores) at book value. As required under Ind AS 109 and Ind AS 36, these balances are ordinarily subject to impairment testing; however, no impairment has been recognised at this stage. The impact, if any, will be considered upon conclusion of the CIRP

v. We draw your attention to the Note No.47 of the Standalone financial statements, The Company continues to carry investments of Rs. 2.18 crores in four subsidiary companies, along with loans and advances aggregating Rs. 169.02 crores extended to four subsidiaries and one step-down subsidiary, at their respective book values. These amounts have been retained pending a detailed assessment of the recoverability of the underlying assets. In accordance with Ind AS 109 - Financial Instruments, such financial assets are measured at amortized cost or fair value, with recognition of expected credit losses (ECL) where applicable. The Company has performed a preliminary review and will undertake a detailed assessment of recoverability and recognition of expected credit losses, if necessary. Management believes that the carrying amounts are appropriately stated and will make adjustments under applicable Indian Accounting Standards, if required.

vi. We draw attention to Note 48 of the Standalone financial statements, which describes matters relating to the recoverability and impairment assessment of certain financial assets. The Company continues to carry certain investments and loans at book value, pending a detailed assessment of their recoverability. In accordance with Ind AS 109 - Financial Instruments, such financial assets are required to be measured at amortised cost or fair value, with recognition of expected credit losses (ECL) where applicable. While a preliminary review has been conducted, a comprehensive assessment, including evaluation of ECL, is yet to be completed. Management believes that the carrying amounts are currently appropriate and any necessary adjustments under applicable Indian Accounting Standards will be made in due course. The Company has not evaluated expected credit losses on long outstanding trade receivables amounting to Rs.170.27 crores. Further, impairment provisions as required under Ind AS 109 have not been assessed for loans given to related parties (excluding subsidiaries, step-down subsidiaries, and associate companies) amounting to Rs.6.50 crores, loans to other parties amounting to Rs.5.03 crores, and advances to suppliers amounting to Rs.17.54 crores as at March 31, 2025. Additionally, we draw attention to a receivable of Rs.15.41 crores from Canara Bank, currently classified under "Other Non Current Financial Assets," the adjustment of which is pending in light of the NCLAT order dated 12.02.2020 in Company Appeal No. (AT) 127 of 2019.

vii. We draw your attention to the Note No. 49 of the Standalone financial statements, Other Non-Current Assets as at March 31, 2025 includes Rs 20.46 crores receivable towards various indirect taxes from Government Authorities which are pending for assessments. However, in view of unavailability of information on status of such assessments or status of recoverability, we are unable to comment upon the resultant impact, if any on the financial statements for the year ended March 31, 2025. Had the Company made provision towards such indirect taxes from Government Authorities, the Net Profit of the Company would have increased by Rs 20.46 Crores.

viii. We draw your attention to the Note No. 50 of the Standalone financial statements, we draw attention to the fact that certain project sites, operational as of March 2017, have since been de-mobilized, completed, terminated, or rendered non-operational. Due to the closure of these sites, detailed transaction records could not be obtained through the previously operated bank accounts. No operations have occurred at these sites during the period ended March 31, 2025.In accordance with Ind AS, the Company has written off trade receivables of Rs. 70.46 crores, loans to other parties of Rs. 5.54 crores, and balances with revenue authorities of Rs. 8.22 crores, resulting in a full write-off of assets related to the Piling Division.

ix. We draw attention to Note 52 of the Standalone Financial Statements, which states that unpaid liabilities amounting to Rs. 1.69 Crores as at March 31, 2025, relating to amounts withheld from payments to sub-contractors and expenses accrued during the Corporate Insolvency Resolution Process (CIRP) period, are yet to be settled from the funds available with the Committee of Creditors (CoC). These amounts have been disclosed under the relevant heads of liabilities in the financial statements.

x. We draw attention to Note 53, which discloses undistributed pending payables amounting to Rs.4.38 crores, comprising Gratuity (Rs. 1.67 crores), EPFO dues (Rs. 2.66 crores), other contingencies (Rs. 0.04 crores), and fixed deposit holders (Rs. 0.01 crores). These liabilities are to be settled from the funds received from the Successful Resolution Applicant (SRA) under the Resolution Plan approved by the Honble NCLT. In accordance with Ind AS 37, no provision has been made in the books for Rs. 3.15 crores, as these amounts have not yet been recognized.

xi. We draw attention to Note no 54 to the Standalone financial statements in respect of the utilization Cash and Cash equivalents after payment of pending CIRP expenses, Rs.2.35 Crores has been distributed among secured financial creditors and the said amount has been debited to respective financial creditors.

xii. As explained in Note no 55 to the Standalone financial statements, the accounts of certain Loans & Advances given, Trade Receivables, Other Current Assets, are subject to confirmations, reconciliations and adjustments, if any, having consequential impact on standalone financial statement for the year ended March 31, 2025 the amounts whereof are presently not ascertainable.

xiii. We draw attention to Note no 56 to the Standalone financial statements regarding the classification of the Perpetual Loan amounting to Rs. 35.65 crore, which during the period has been reclassified from "Unsecured Loan" to "Equity" in accordance with Ind AS 32 Financial Instruments: Presentation. The instrument is perpetual in nature, carries no contractual repayment obligation, and the payment of non-cumulative distributions at 6% per annum is entirely at the discretion of the Company.

xiv. We further draw your attention that the Company Trade Payables have been bifurcated into two parts i.e., MSME and others and further sub- divided as disputable or otherwise. Disputed trade payables are taken only in cases where matter is under litigation. In case of delayed outstanding against MSME/ others, beyond the period of Credit policy of the Company have been considered as undisputable by the management. Assessment for identifying disputable one is not available. In absence of any audit evidence with regards to classification, assessment of disputable or otherwise, we are unable to comment thereon and impact thereof on year ended standalone financial statement.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements 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.

Sr. No. Key Audit Matter	Auditors Response
1 Recoverability and valuation of financial assets -	Our audit procedures included, among others:
The Companys financial assets comprise trade receivables, loans (to subsidiaries, related parties, and others), advances to suppliers, and other noncurrent financial assets, carried at book value. These balances aggregate to Rs. 386.86 crores, including items under legal restrictions (such as amounts with Canara Bank of Rs. 15.41 crores under NCLAT order) and assets pending realization or subject to disputes. Management has disclosed that these assets are carried at book value, pending assessment of recoverability and recognition of expected credit losses in accordance with Ind AS 109. Significant judgments are involved in evaluating recoverability, especially in light of ongoing proceedings, delays in settlement, and operational uncertainties of counterparties.	• Obtaining schedules of all significant financial assets and reconciling with general ledger balances.
	• Assessing managements basis for carrying the assets at book value, including evaluation of legal documentation, external confirmations where available, and correspondence with counterparties.
	• Testing the appropriateness of disclosures relating to uncertainties, expected credit losses, and restrictions in use.
	• Evaluating whether managements presentation and disclosure are consistent with Ind AS 109 and Ind AS 107.
	• Assessing whether appropriate Emphasis of Matter or Other Matter paragraphs are required in our report.

 

2 Write-offs and provisions relating to non-operational divisions/ projects	Audit procedures included:
- During the year, the Company has written off trade receivables of Rs. 70.46 crores, loans of Rs. 5.54 crores, and balances with revenue authorities of Rs. 8.22 crores relating to the piling division/project sites. The timing, completeness, and appropriateness of these write-offs require judgment.	• Reviewing the basis and approvals for write-offs by management and Board.
	• Testing whether write-offs are in accordance with applicable Ind AS and company policy.
	• Assessing disclosures made in the notes regarding such writeoffs.

 

3 Pending payables and obligations under Resolution Plan	Audit procedures included:
- As per the Resolution Plan approved by NCLT, certain statutory and employee-related payables (Gratuity Rs. 1.67 crores, EPFO Rs. 2.66 crores, contingencies Rs. 0.04 crores, FD holders Rs. 0.01 crores) are pending settlement, some of which are expected to be met by the Implementation & Monitoring Committee. Judgments are involved in presentation, measurement, and classification of such items.	• Examining the approved Resolution Plan and tracing disclosures in the financial statements.
	• Assessing completeness of such liabilities and testing whether appropriate provisions/disclosures have been made.
	• Evaluating whether obligations are classified appropriately between "Provision," "Contingent Liability," and "Payables."

 

Sl. No. Key Audit Matter	How the Matter was Addressed in Audit
1 Valuation and Recoverability of Financial Assets	• Obtained a detailed schedule of all financial assets and tested the arithmetical accuracy and reconciliations.
The Companys financial assets comprise trade receivables (Rs. 170.27 crores), loans and advances (Rs. 245.38 crores including subsidiaries and related parties), other non-current financial assets (Rs. 16.14 crores), and advances to suppliers (Rs. 17.54 crores).	• Evaluated managements process for assessing recoverability and impairment, including consideration of resolution proceedings and NCLT orders.
These assets are stated at their respective book values, pending assessment of recoverability and recognition of expected credit losses (ECL) under Ind AS 109. Certain balances are subject to legal restrictions, resolution proceedings, or bank holdbacks (eg., Canara Bank deposit Rs. 15.41 crores). Given the magnitude of these balances and the significant management judgment involved in evaluating recoverability, classification, and adequacy of disclosures, we consider this a key audit matter.	• Performed ageing analysis of receivables and tested subsequent collections on a sample basis.
	• Obtained external confirmations for significant receivables and loans; where confirmations were not received, performed alternate procedures.
	• Verified restrictions on balances (e.g., bank-held deposits) and traced to relevant legal documents/orders.
	• Reviewed correspondence with counterparties, legal/professional advisors, and regulatory bodies to assess the impact on recoverability.
	• Assessed the adequacy and transparency of disclosures in the financial statements regarding uncertainties and pending assessments.
2 Implementation of Resolution Plan and Impact on Equity & Liabilities	• Inspected NCLT-approved Resolution Plan and managements workings of the accounting effects and Professional advise taken in this regards .
The Resolution Plan approved by NCLT led to (i) infusion of equity reallocation of shareholding (SRA 95%, others 5%), and (iii) distribution of Rs. 2.35 crores to secured financial creditors. Given the complexity of accounting adjustments required under Ind AS and the significant legal and governance aspects, this matter required significant audit attention.
	• Tested journal entries passed for extinguishment of existing capital and recognition of fresh infusion.
	• Verified allocation of equity shareholding post-implementation.
	• Assessed compliance with Ind AS 32 and Schedule III presentation requirements.
	• Reviewed disclosures in Notes to Accounts to ensure completeness and accuracy.
3 Pending Statutory and Employee-Related Liabilities	• Verified gratuity provisions with actuarial valuation reports.
The Company has pending obligations towards gratuity (Rs. 1.67 crores), EPFO (Rs. 2.66 crores), other contingencies (Rs. 0.04 crores), and FD holders (Rs. 0.01 crores). Settlement of these is envisaged through the Implementation & Monitoring Committee under the Resolution Plan.	• Examined supporting records for EPFO and reconciled balances with statutory filings.
	• Evaluated managements representation and correspondence with the SRA regarding settlement commitments.
Given the statutory nature of these obligations and the dependency on third-party settlement, there is risk around timing, provisioning, and disclosure.	• Reviewed classification and disclosures made in accordance with Ind AS 19 and Ind AS 37.
4 Going Concern Assessment
Post-resolution, the Companys ability to continue as a going concern depends on successful implementation of the Resolution Plan, timely infusion of capital, and operational revival.	• Evaluated managements cash flow forecasts and assumptions.
This involves significant management judgment in forecasting cash flows and assessing uncertainties.	• Considered funding commitments made by the SRA and traced equity infusion.
	• Reviewed Board minutes, strategic plans, and correspondence with lenders/creditors.
	• Assessed appropriateness of going concern disclosures in the financial statements under Ind AS

Information other than the Standalone Financial Statements and Auditors Report thereon

The Companys Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companys annual report, but does not include the standalone financial statements and our auditors report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Board of Directors and Those Charged with Governance for the Standalone Financial Statements

The Companys Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the state of affairs (financial position), profit/loss and other comprehensive income, 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. 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 which, in the opinion of the Board, are adequate and are being made more robust, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

The Board of Directors is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, it being noted that such controls are the primary responsibility of the management and are continuously being made more robust, but not for the purpose of expressing an opinion on the effectiveness of such.

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

• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

• Obtain sufficient appropriate audit evidence regarding the Standalone Financial Statements of the Company to express an opinion on the Standalone Financial Statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, This includes any matters relating to internal financial controls that, in our judgment, could be made more robust, without implying a material deficiency, identified during our audit.

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143 (11) of the Act, we give in the "Annexure- A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on March 31,2025 taken on record by the Board of Directors, none of the directors are disqualified as on March 31,2025 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure -B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting.

g) 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 if any as at 31 March 2025 on its financial position in its standalone financial statements.

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

(iii) There are no amounts that are 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(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;

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

(c) Based on audit procedures which we considered reasonable and appropriate in the circumstances, nothing has come to their notice that has caused them to believe that the representations under sub-clause (i) and (ii) contain any material mis-statement.

(v) The company has not declared dividend during the financial year.

(vi) Based on our examination, which included test checks, we observed that the company has used accounting software for maintaining its books of account for the year ended 31st March 2025 that does not have the audit trail (edit log) feature as required under the Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014. As a result, any modifications to transactions during the year have not been captured or recorded through an audit trail in the software.

(vii) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197 (16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, no remuneration paid by the Company during year to its directors therefore, the provisions of section 197 of the Act not applicable to company.

For Jain Jagawat Kamdar & Co.

Chartered Accountants

FRN: 122530W

CA Basant Jain

Partner

M.No. 122463

UDIN: 25122463BMIIYW5648

Date: 24^th September, 2025

Place: Mumbai

Annexure-A to the Independent Auditors Report on Standalone Financial Statements of VALECHA ENGINEERING LIMITED for the year ended 31^st March 2025

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory requirements section our report of even date)

i. Property, Plant and Equipment

(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) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has a regular programme for physical verification of the property, plant & equipment for all major locations. In our opinion, the frequency of verification is reasonable, considering the size of the Company and nature of its property, plant and equipment. Pursuant to the program of the physical verification of property, plant and equipment, physical verification of the assets has been carried out during the year and no material discrepancies were noticed on such verification.

(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 immovable properties, other than properties where the company is lessee and lease agreements are duly executed in favour of the Company, are held in the name of the Company.

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not revalued its Property, Plant and Equipment (including right to use assets) or intangible assets or both during the year.

(e) According to information and explanations given to us and on the basis of our examination of the records of the Company, there are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.

ii. Inventories

a) According to the information and explanations given to us, the inventories have been physically verified during the year by the management at reasonable intervals and no material discrepancies were noticed on such verification.

b) In our opinion and according to the information and explanations given to us, the Company had been sanctioned working capital limits in excess of Rs.5 crore, in aggregate, from banks on the basis of security of current assets prior to initiation of the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016.

The Company was subsequently admitted into CIRP and, pursuant to the approval of the Resolution Plan by the Honble National Company Law Tribunal (NCLT) vide order dated 25th June, 2024, all such banking arrangements and working capital limits stood settled or terminated in accordance with the approved plan.

Accordingly, during the CIRP period and subsequent to the implementation of the Resolution Plan, the Company has not been sanctioned any working capital limits in excess of Rs 5 crore from banks or financial institutions on the basis of security of current assets. Therefore, the requirement to file yearly returns or statements with such banks does not arise.

iii. Investment Guarantee/Security, Loans or Advances

According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made investments, granted loans and advances in the nature of loans, secured or unsecured to companies, limited liability partnership and other parties, hence paragraph 3(iii) of the order is not applicable to the company.

(a) The aggregate amount during the year, and balance outstanding at the balance sheet date with respect to such loans or advances and guarantees or security to subsidiaries, joint ventures and associates;

Based on the audit procedures carried on by us and as per the information and explanations given to us, the Company has provided loans to any other entity as below:

				(Rs.in Crores)
Particulars	Guarantees	Security	Loans	Advances in nature of loans
Aggregate amount during the year
Subsidiaries	-		3.15	-
Joint Ventures				-
Associates				-
Others				-
				-
Balance outstanding as at balance sheet date
Subsidiaries			245.38	-
Joint Ventures				-
Associates				-
Others	-	-	6.50	-

(b) According to the information and explanations given to us and based on the audit procedures conducted by us, in our opinion the investments made, guarantees provided during the year and the terms and conditions of the grant of loans and guarantees provided during the year are, prima facie, not prejudicial to the interest of the Company.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, in the case of unsecured loans given, in our opinion the repayment of principal and payment of interest has not been stipulated which is repayable on demand. As informed to us, the Company has not demanded repayment of the loan during the year. Thus, there has been no default on the part of the party to whom the money has been lent. Further, the Company has not given any advance in the nature of loan to any party during the year.

(d) According to the information and explanations given to us and as per the records examined, subsequent to the NCLT-approved Resolution Plan under the IBC vide order dated 25^th June, 2024, on the basis of our examination of the records of the Company, there are no overdue amount for more than ninety days in respect of loans given. Further, the Company has not given any advances in the nature of loans to any party during the year

(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no loan or advance in the nature of loan granted falling due during the year, which has been renewed or extended or fresh loans granted to settle the overdue of existing loans given to same parties.

iv. Compliance of provisions of Secs. 185 & 186

According to the information and explanations given to us and on the basis of our examination of records of the Company, the Company has not entered into any transactions in respect of any loans or investment or provided any guarantee or security to the parties covered under Section 185 and 186 of the Act, therefore, paragraph 3(iv) of the order is not applicable to the company.

v. Public Deposit

According to the information and explanations given to us, the Company has not accepted any deposits or amounts which are deemed to be deposits within the meaning of provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Therefore, the clause (v) of paragraph 3 of the Order is not applicable to the Company.

vi. Maintenance Cost Records

We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government of India, regarding the maintenance of cost records under sub-section (1) of Section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. Statutory Dues

According to the information and explanations given to us and on the basis of our examination of the records of the Company, in our opinion amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Goods and Services Tax (‘GST), Provident fund, Employees State Insurance, Income Tax, Labour cess, Professional tax, Property tax, Cess and other statutory dues have generally been regularly deposited with the appropriate authorities. As explained to us, the Company did not have any dues on account of wealth tax and Custom duty.

(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company has generally been regular in depositing its undisputed dues payable. Hence no undisputed amounts payable in respect of Goods and Services Tax (‘GST), Provident fund, Employees State Insurance, Income Tax, Duty of Customs, Cess and other statutory dues were in arrears as at 31 March 2025 for a period of more than six months from the date they became payable.

Name of the statute	Nature of dues	Amount in Crores	Period to which the amount relates
Income Tax	Tax Deducted at Source		F.Y.2016-17
Income Tax	Tax Deducted at Source	2.43*	F.Y.2021-22
Income Tax	Tax Deducted at Source		F.Y.2022-23
Income Tax	Tax Deducted at Source	0.01	F.Y.2023-24
Income Tax	Tax Deducted at Source	0.0013	F.Y.2024-25
Profession Tax	Profession Tax Act,1975	0.0025	F.Y.2024-25
Total		2.4438

*Subject to adjustments/effects in accordance with the NCLT Order dated 25 June, 2024.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no dues relating to Income- tax, Sales tax, Service Tax, Value added tax, Goods and service tax or other statutory dues which have not been deposited on account of any dispute except below:

Name of the statute	Nature of dues	Amount in Crores	Period to which the amount relates	Forum where the dispute is pending/ Rectifications, if any
Income Tax	Penalty proceedings towards Under Reporting Income	0.44	AY 2017-18	Commissioner of Income-tax (Appeals)
Income Tax	Penalty proceedings towards Under Reporting Income	0.55	AY 2019-20	Commissioner of Income-tax (Appeals)
Goods & Service Tax	Goods and Service tax	11.94	F.Y.2017-18	Interlocutory Application filed
Goods & Service Tax	Goods and Service tax	5.45	F.Y.2018-19	Interlocutory Application filed
Goods & Service Tax	Goods and Service tax	6.41	F.Y.2019-20	Interlocutory Application filed
Goods & Service Tax	Goods and Service tax	0.52	F.Y.2020-21	Interlocutory Application filed
Goods & Service Tax	Goods and Service tax	2.47	F.Y.2021-22	Interlocutory Application filed
Goods & Service Tax	Goods and Service tax	0.16	F.Y.2022-23	Interlocutory Application filed
Goods & Service Tax	Goods and Service tax	0.01	F.Y.2023-24	Interlocutory Application filed
Total		23.045

viii. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not surrendered or disclosed any transactions, previously unrecorded as income in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year. Accordingly, the requirement to report on clause 3(viii) of the Order is not applicable to the Company.

ix. a) In our opinion and according to the information and explanations given to us, the Company had defaulted in repayment of certain loans and borrowings and in payment of interest thereon to its lenders prior to initiation of the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. The matter was admitted by the Honble National Company Law Tribunal (NCLT) and a Resolution Plan was approved vide order dated 25^th June, 2024. Pursuant to the said approval and implementation of the Resolution Plan, all outstanding dues to the lenders were settled/adjusted in accordance with the said plan. Accordingly, as at the balance sheet date, the Company has no outstanding loans or borrowings and there have been no defaults in repayment of loans or payment of interest subsequent to implementation of the Resolution Plan.

b) In our opinion and according to the information and explanations given to us, the Company was not declared a wilful defaulter by any bank, financial institution, government, or any government authority subsequent to implementation of the Resolution Plan approved by the Honble NCLT under the Insolvency and Bankruptcy Code, 2016 vide order dated 25^th June, 2024.

c) According to the information and explanations given to us and as per the records examined, the Company has not obtained any new term loans during the year subsequent to implementation of the Resolution Plan approved by the Honble National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016 in the first year of the financial year. Accordingly, reporting under this clause regarding application of term loans for the purpose for which they were obtained does not arise.

d) In our opinion and according to the information and explanations given to us has not raised any funds on a short-term basis. Hence, reporting under this clause regarding utilisation of short-term funds for long-term purposes is not applicable.

e) According to the information and explanations given to us, after implementation of the Resolution Plan approved by the Honble NCLT under the Insolvency and Bankruptcy Code, 2016, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures. Hence, reporting under this clause is not applicable.

f) According to the information and explanations given to us, subsequent to approval and implementation of the Resolution Plan by the Honble NCLT under the Insolvency and Bankruptcy Code, 2016 vide order dated 25^th June, 2024, the Company has not raised any loans on the pledge of securities held in its subsidiaries, joint ventures or associate companies. Accordingly, reporting under this clause is not applicable.

x. Application of fund raise through public offer

(a) According to the information and explanations given to us, the Company has not raised money by way of Initial public offer or further public offer (including debt instrument) during the year and hence, reporting under Clause 3(x)(a) of the Order is not applicable to the Company.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, clause 3(x)(b) of the Order is not applicable.

xi. Frauds

(a) Based on examination of the books and records of the Company and according to the information and explanations given to us, no fraud by the Company or on the Company has been noticed or reported during the course of the audit.

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

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

xii. Provisions applicable to Nidhi Company

According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause 3(xii) a to c of the Order is not applicable.

xiii. Compliances of sections 177/188 of Companies Act

In our opinion, the Company is in compliance with sections 177 and 188 of the Act, where applicable, for all transaction with related parties and details of related party transactions have been disclosed in the Standalone Financial Statements as required by the applicable accounting standards.

xiv. Internal Audit

Based on information and explanations provided to us and our audit procedures, in our opinion, the Company has an internal audit system commensurate with the size and nature of its business. We have considered the internal audit reports of the Company issued till date for the period under audit.

xv. Non cash transactions with directors

In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected to its directors and hence, provisions of Section 192 of the Act are not applicable to the Company.

xvi. Applicability of section 45-1A of RBI

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

(b) In our opinion, and according to the information and explanations provided to us and on the basis of our audit procedures, the Company has not conducted any Non-Banking Financial or Housing Finance activities during the year as per the Reserve bank of India Act 1934. Accordingly, clause 3(xvi)(b) of the Order is not applicable.

(c) In our opinion, and according to the information and explanations provided to us, the Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India.

(d) In our opinion, and according to the information and explanations provided to us, the Group does not have any Core Investment Company (CIC) as part of the Group contained in the Core Investment Companies (Reserve Bank) Directions, 2016. Therefore, provisions of clause (xvi) (d) of paragraph 3 of the Order are not applicable to the Company.

xvii. Cash Losses

In our opinion and according to the information and explanations provided to us, the Company has not incurred any cash losses during the current financial year. However, it had incurred cash losses amounting to Rs.1.00 crores in the immediately preceding financial year.

xviii. Resignation of Statutory Auditors

According to the information and explanations given to us, the previous statutory auditors, M/s Bagaria & Co. LLP, Chartered Accountants, have resigned with effect from 27^th December, 2025 We have taken into consideration the issues, objections, or concerns raised by the outgoing auditors, if any, during the course of our audit.

xix. Capability of meeting the liabilities

According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that the Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx. CSR compliances

The Provisions of Section 135 are not applicable to the company during the current financial year therefore, reporting under Clause 3(xx) (a) & (b) of the order is not applicable.

xxi. The reporting under clause 3(xxi) is not applicable in respect of audit of standalone financial statements of the Company. Accordingly, no comment has been included in respect of said clause under this report.

For Jain Jagawat Kamdar & Co.

Chartered Accountants

FRN:122530W

CA Basant Jain

Partner

M.No. 122463

UDIN: 25122463BMIIYW5648

Date: 24^th September, 2025

Place: Mumbai

Annexure-B to the Independent Auditors report on the Standalone Financial Statements of Valecha Engineering Limited for the period ended 31^st March 2025.

Report on the internal financial controls with reference to the aforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (Referred to in paragraph 2 (A) (f) under ‘Report on Other Legal and Regulatory Requirements section of our report of even date)

We have audited the internal financial controls with reference to standalone financial statements of Valecha Engineering Limited ("the Company") as of 31^st March 2025 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Board of Directors Responsibility for Internal Financial Controls

The Companys management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (hereinafter referred to as "the Act").

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to standalone financial statements. 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 standalone financial statements were established and maintained and whether 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 standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of such internal financial controls, 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 standalone 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 standalone financial statements.

Meaning of Internal Financial Controls with reference to Standalone Financial Statements

A companys internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial controls with reference to standalone financial statements 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 authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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 with reference to Standalone Financial Statements

Because of the inherent limitations of internal financial controls with reference to standalone 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 standalone financial statements to future periods are subject to the risk that the internal financial controls with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorates.

Opinion

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements and such internal financial controls were operating effectively as at 3l^st March 2025, based on the internal financial controls with reference to standalone 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 issued by the Institute of Chartered Accountants of India (the "Guidance Note").

For Jain Jagawat Kamdar & Co.

Chartered Accountants

FRN: 122530W

CA Basant Jain

Partner

M.No. 122463

UDIN: 25122463BMIIYW5648

Date: 24^th September, 2025

Place: Mumbai