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Gayatri Projects Ltd.

BSE: 532767 Sector: Infrastructure
NSE: GAYAPROJ ISIN Code: INE336H01023
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VOLUME 123146
52-Week high 48.60
52-Week low 12.15
P/E
Mkt Cap.(Rs cr) 561
Buy Price 29.80
Buy Qty 549.00
Sell Price 29.90
Sell Qty 1.00
OPEN 29.30
CLOSE 28.80
VOLUME 123146
52-Week high 48.60
52-Week low 12.15
P/E
Mkt Cap.(Rs cr) 561
Buy Price 29.80
Buy Qty 549.00
Sell Price 29.90
Sell Qty 1.00

Gayatri Projects Ltd. (GAYAPROJ) - Auditors Report

Company auditors report

To the Members of Gayatri Projects Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the Standalone Financial Statements of Gayatri Projects Limited("the

Company") which comprise the Balance Sheet as at 31stMarch 2020 andthe Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and notes tothe Standalone Financial Statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "theStandalone Financial Statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31st March 2020 and the loss andother comprehensive loss changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing (SAs) as specified under Section 143(10) of the Companies Act2013. Our responsibilities under those standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport.

We are independent of the Company in accordance with the ‘Code of Ethics' issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Companies Act 2013 and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone financial statements.

Emphasis of Matters

(Note Nos. referred hereunder are with reference to respective Notes forming part ofthe Standalone Financial Statements)

We draw attention to the following matters: i) As stated in Note No.33.17 pursuantto significant erosion of Networth of the wholly owned subsidiary company the managementof the company has recognized the diminution in the value of investment (i.e impairment ofinvestment) held by the company in the wholly owned subsidiary company as an exceptionalitem in the financial statements. ii) As stated in Note No. 33.18 the Investee Company inwhich the Company has invested by way of Compulsorily Convertible Cumulative PreferenceShares ("CCCPS") has incurred considerable losses there has been significanterosion of Networth and further business operations of the investee company are severelyimpacted due to COVID – 19 Pandemic. No provision for diminution / impairment forcarrying value of the investment is provided for the year ended 31st March2020 and the financial statements of the said investee company have been prepared on goingconcern basis for the detailed reasons stated in the said note. iii) As stated in Note No.33.19 the associate company in which the company has substantial amounts of investmentsand considerable amount to be receivable from said associate company has been incurringoperating losses during the past few years the financial statements of the said associatecompany have been prepared on going concern basis for the detailed reasons stated in thesaid note. iv) As stated in Note No. 33.20 the Inter Corporate Loan grouped under‘Non-current Loans' and accumulated interest thereon long pending for recovery. v) Asstated in Note No. 33.21 the recovery of trade receivables is delayed for the detailedreasons stated in the said note. Further as stated in the same note the company hasgiven an irrevocable and unconditional corporate guarantee to a subsidiary of theassociate company which has defaulted in repayment of dues to the lenders.

vi) As stated in Note No. 33.22 the amount receivable from the erstwhile associatecompany is long pending for recovery as the same is based on the receipt of claims by thesaid erstwhile associate company.

vii) As stated in Note No. 33.23 the work advances in respect of certain contractworks given to a sub-contractor grouped under ‘Other Current Assets' which are longpending for recovery.

viii) As stated in the Note No. 33.26 the Company and Gayatri Highways Limited("GHL") – an Associate Company jointly and severally agreed to repay theloan availed by GHL from IL&FS Financial Services Limited (IL&FS) amounting toRs.12500 lakhs along with interest to be paid on or before 30th April 2020but the Associate Company has defaulted in repayment of principal amount and interestamount of Rs.9800 lakhs and 788.88 lakhs respectively as on the date of the financialstatements.

ix) As stated in the Note No. 33.27 wherein it is explained the COVID – 19Pandemic effects and impact on the business operations of the company and however theactual effect will be known based on the future developments.

Our opinion is not modified in respect of above matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements for the year ended 31stMarch2020. These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bekey audit matters to be communicated in our report.

Key Audit Matter Audit Process
1 Revenue recognition and measurement of contract assets in respect of unbilled amounts We have obtained the procedure and process involved in estimating the percentage of completion of the projects.
The management of the company has applied significant judgement in determining the revenue to be recognised in case of performance obligation satisfied over a period of time; revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. We have also obtained and verified the costs incurred on the project/works up to the reporting date for the revenues accounted in respect of works on sampling basis.
Revenue is recognized on fixed price construction contracts in accordance with the percentage of completion basis which necessarily involve technical estimates of the percentage of completion and costs to completion of each contract / activity on the basis of which profits and losses are accounted. We have also obtained the certified copies (i.e percentage of completed work approved by the relevant authorities) of works executed till the reporting date in respect of revenues accounted on sampling basis.
We have also performed analytical procedures for reasonableness of revenues recognised.
We have also verified the reasonableness of the estimation of remaining costs to be incurred to complete the project / work and profit / loss estimated in the project / work.
When the outcome of the contract is ascertained reliably contract revenue is recognized at cost of work performed on the contract plus proportionate margin using the percentage of completion method. Percentage of completion is the proportion of cost of work performed up to the date to the total estimated contract costs. Reviewed the delivery and collection history of customers against whose contracts un-billed revenue is recognised
The stage of completion of contracts is measured by reference to the proportion that contract costs incurred for work performed up to the reporting date bear to Tested relevant contracts for measurement of work completed during the period for unbilled revenue.
the estimated total contract costs for each contract. Further at the reporting date revenue is accrued for costs incurred against work performed and which are not billed and further measurement of work completed/cost incurred during the period for recognition of unbilled revenue.
2 Physical Verification of Inventory
According to the information and explanations given to us the inventories have been physically verified during the year by the management. The management of the company was unable to conduct physical verification of the inventory at work sites for the year ended 31st March 2020 due to COVID – 19 Pandemic impact and related lockdown restrictions. We have performed alternate audit procedures based on documents and other information made available to us to audit the existence of inventories as per the Guidance provided by the Standard on Auditing (SA) 501 Audit Evidence - Specific Considerations for Selected items and have obtained sufficient appropriate audit evidence.
However the Company's management conducted physical verification of inventory on dates other than the date of financial statements but prior to the date of the board meeting to be held for the purpose of adopting the financial results at certain project work sites and has made available the documents in confirmation thereof. We have obtained the information and documents related to physical verification of inventory conducted at certain project work sites prior to the date of the board meeting to be held for the purpose of adopting the financial statements.
We have reviewed the process followed by the company for the inventory management accounting movement of the inventory and related internal controls and records and documents maintained for the inventory. We have obtained & reviewed the documents and information related to physical verification of inventory conducted at certain project work sites and also obtained and reviewed the inventory reconciliation statements for the difference between the date of the financial statements and date of physical verification of the inventory.
3 Defaults in repayment of loans / borrowings and Debt Resolution Plan: We have reviewed the borrowings status and default status as on the balance sheet date.
As stated in note no.16.6 & 20.3 the company has defaulted in repayment of certain loans / borrowings and also defaulted in payment of interest dues. We have reviewed the outstanding status of various statutory and other dues.
As stated in note no.33.29 the company has been facing severe liquidity constraints over the last few months due to cash flow mismatches which have resulted in delayed repayments and interest payments to its lenders consortium. In this regard the company has proposed a Debt Resolution Plan to the lending consortium which essentially involves sources to meet the repayment of debt service obligations through monetization of arbitral awards monetization of Claims under process either through a Conciliation & Settlement Mechanism disposing of non-core assets and cash flows from normal operations of the Company. As a part of the resolution process the lending consortium has signed an Inter-Creditor Agreement (ICA) on 21st March 2020. We have obtained and verified the following documents / information with regard to the progress achieved by the company as stated in the note no.33.29:
i) Copy of the Resolution Plan submitted to the lending consortium.
ii) Copies of GOI Circulars and NHAI policy guidelines referred in the note.
We have determined the above area as a key audit matter in view of the implementation of the above submitted resolution plan involves approval from consortium lenders and monetization of claims and arbitral awards is based on the requisite approvals of govt. authorities and fulfilment of terms and conditions related thereto. Further mis-match in cash flow will affect the working capital cycle and there by affects the business operations of the company and leads to default in repayments of loan / borrowing dues and interest thereon. iii) Copies of Bank Guarantee sanction letters received by the company. iv) Copy of the Inter Creditor Agreement.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and analysis Boards Report including annexures to Board's Report Businessresponsibility Report Corporate Governance and Shareholder's Information but does notinclude the Standalone Financial Statements and our auditor's report thereon.

Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone Financial Statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and those Charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Financial Statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules

2015 as amended.This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Financial Statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion.

Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic 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 andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the StandaloneFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Standalone Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report.

However future events or conditions may cause the Company to cease to continue as agoing concern.

• Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

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

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the StandaloneFinancial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of subsection (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified 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 bestof 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 theCompany so far as it appears from our examination of those books.s

c) The Balance Sheet the Statement of Profit and Loss including other ComprehensiveLoss the Statement of Changes in Equity and the statement of Cash Flow dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

e) On the basis of the written representations received from the directors as on 31stMarch2020 taken on record by the Board of Directors none of the directors is disqualified ason 31st March 2020 from being appointed as a director in terms of Section 164(2) of theAct.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditors Report inaccordance with the requirements of Section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the company to its directors is in excess of the limits prescribedunder section 197 of the Act. As stated in note no. 33.25 the Company is in the process ofcomplying with the prescribed statutory requirements to regularize such excess payment.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. As stated in Note no. 33.1(a)of the Standalone Financial Statements the Companyhas disclosed the impact of pending litigations on its financial position in itsStandalone Financial Statements.

ii. As per the information and explanations given by the Company the Company did nothave any long- term contracts including derivative contracts for which there were anymaterial foreseeable losses.

iii. As per the information and explanations given by the Company there has been nodelay in transferring the amounts which are required to be transferred to InvestorEducation & Protection Fund.

for M O S & Associates LLP
Chartered Accountants
Firm Registration No.: 001975S/
S200020
Sd/-
S V C Reddy
Partner
Membership Number: 224028
UDIN: 20224028AAAAAD7949
Place: Hyderabad
Date: 30thJune 2020

Annexure A to the Auditors' Report

The Annexure referred to in the Independent Auditors' Report to the members of theCompany on the Standalone Financial Statements for the year ended 31stMarch2020 we report that:

(i) In respect of Fixed Assets: a. In our opinion and as per the information andexplanations given to us the Company has maintained proper records showing particularsincluding quantitative details and situation of fixed assets;

b. The management of the company has verified the fixed assets at reasonable intervalsduring the year. According to the information and explanations given to us no materialdiscrepancies were noticed on such physical verification.

c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) According to the information and explanations given to us the inventories havebeen physically verified during the year by the management. In our opinion the frequencyof such verification is reasonable. The discrepancies noticed on physical verification ofinventories as compared to the book records which in our opinion were not material havebeen properly dealt with. (Refer point 2 of Key Audit Matter of our main Audit Report.)

(iii) According to information and explanations given to us the Company has grantedunsecured Loans of Rs.20928.60 lakhs to parties covered in the Register maintained undersection 189 of the Companies Act 2013.

In respect of such loans

a. In our opinion and according to information and explanations given to us the termsand conditions of such loans given by the Company are not prima facie prejudicial to theinterest of the company.

b. The Schedule of repayment of the principal and interest has not been stipulated asthe principal amount is repayable on demand.

c. There is no repayment schedule and therefore there is no overdue amount.

(iv) According to information and explanations given to us and in our opinion thecompany has complied with the provisions of sections of 185 and 186 of the Act to theextent applicable in respect of grant of loans making investments and providingguarantees and securities.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from public within the meaning of Sections 73 to 76 of the Act andthe Companies (Acceptance of Deposits) Rules 2014 (as amended) during the year.Accordingly the provisions of clause 3(v) of the Order are not applicable to the Company.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Records and Audit) Rules 2014 as amended and prescribed by theCentral Government under section 148(1) of the Companies Act 2013 and are of the opinionthat prima facie the prescribed cost records have been made and maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate or complete.

(vii) In respect of statutory dues

a. According to the information and explanations given to us and based on ourexamination of records of the Company the company has been generally regular indepositing amounts deducted/ accrued in the books of accounts in respect of statutory duesincluding provident fund value added tax cess and other material statutory dues exceptincome tax and goods and service tax for which there have been delays in few cases.

b. According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income- tax servicetax sales-tax goods and service tax duty of custom duty of excise value added taxCess and other material statutory dues were outstanding at the year end for a period ofmore than six months from the date they became payable except as given below;

Name of the statute Nature of Dues Period to which the amount relates Amount involved Rs in Lakhs
Income Tax Act 1961 TDS 2019-20 1083.08
Goods and Service Tax Act 2017 GST dues 2019-20 851.28

c. According to the information and explanation given to us there are no dues of Salestax Income Tax Wealth Tax Service Tax Customs Duty Goods and Service Tax and Cesswhich have not been deposited as on 31stMarch 2020 on account of any disputeexcept the following:

Name of the Statute Name of the Tax Due Forum where Dispute is pending Amount Rs in Lakhs Financial Years
1 Central Sales Tax Act 1956 and Sales Tax Acts of Various States Sales Tax/Vat Appeals pending before High Courts of respective states and Appellate Tribunals and other appropriate authorities. 1150.12 2001-02 and 2004-05 to 2009-10
2 Central Excise Act 1944 Service Tax Appeals pending before various Authorities 1760.09 2007-08 to 2011-12
3 Goods and Service Tax Act 2017 GST Dues Appeal filed before the Commissioner (Appeal) Guwahati 186.66 2017-18

(viii) Based on our audit procedures and according to the information and explanationsgiven to us we are of the opinion that the Company has defaulted in repayment of loans orborrowings to Bank Financial Institutions / Non Banking Financial Corporations (NBFCs)during the year and as on the Balance Sheet date.

The details of the defaults / dues which were not paid as at the balance sheet date areas follows:

Non-Current borrowings

Particulars Principal Interest
0-30 days 31-60 days 0-30 days 31-60 days
Banks
Andhra Bank 186.55 186.55 37.35 44.78
Bank of Baroda 323.10 320.94 109.90 115.19
IDBI Bank Ltd 188.00 180.37 177.58 189.26
Indian Overseas Bank 140.06 140.06 105.03 111.29
Syndicate Bank 197.84 197.84 101.50 110.59
United Bank of India 132.29 132.29 96.98 102.75
Financial Institutions / NBFCs
SREI Equipment Fin.Ltd. 147.69 538.73 49.72 209.86
Sundaram Finance Ltd - 6.38 - -
Tata Motors Finance Ltd - 25.73 - -
Total 1315.53 1728.89 678.05 883.72
Total 3044.41 1561.77

Current Borrowings – Secured Working Capital Facilities

Name of the Bank Interest
0-30 days 31-60 days
Canara Bank 245.90
IDBI Bank Ltd 149.54
Punjab National Bank 233.46 59.72
Bank of Baroda 186.99 -
State Bank of India 29.94 -
Syndicate Bank 11.16 11.72
Inter Corporate Loan 10.26
Total 867.25 71.44
Total 938.69

(ix) According to information and explanations given to us the company has not raisedmoneys by way of public offer (including debt instruments). Based on our audit proceduresand according to the information and explanations given to us in our opinion the Termloans availed by the Company were prima facie applied for the purpose for which theywere obtained.

(x) During the course of our examination of the books and records of the companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the company or on the company by its officers or employeesnoticed or reported during the year nor we have been informed of any such case by themanagement.

(xi) In our opinion and according to the information and explanations given to us thecompany has paid or provided for managerial remuneration in excess of the limitsprescribed under Section 197 of the Act read with Schedule V to the Act. For details andother information refer disclosure made in clause (g) of point (2) under the heading"Report on Other Legal and Regulatory Requirements" of our main Audit Report.

(xii) As the Company is not a Nidhi Company provisions of clause 3(xii) of the Orderare not applicable to the Company.

(xiii) According to the information and explanations given to us and based onexamination of records of the Company transactions with related parties are in complianceof Sections 177 and 188 of the Act where applicable and details of such transactions havebeen disclosed in the Standalone Financial Statements as required by the applicableAccounting Standards.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made preferential allotmentor private placement of shares or fully or partly convertible debentures and hencereporting under clause (xiv) of the order is not applicable to the company.

(xv) According to the information and explanations given to us and based on examinationof records of the Company the Company has not entered into any non-cash transaction withdirectors or persons connected with them. Hence Clause 3(xv) of the Order is notapplicable for the current year under report.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 and accordingly the provisions of Clause 3(xvi) of the Order arenot applicable to the Company.

for M O S & Associates LLP
Chartered Accountants
Firm Registration No.: 001975S/
S200020
Sd/-
S V C Reddy
Partner
Membership Number: 224028
UDIN: 20224028AAAAAD7949
Place: Hyderabad
Date: 30th June 2020

Annexure - B to the Auditors' Report

(Referred to in paragraph 2(f) under "Report on Other Legal and RegulatoryRequirements" section of our main audit report) Report on the Internal FinancialControls Over Financial Reporting under Clause (i) of Subsection 3 of Section 143 of theCompanies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of GayatriProjects Limited ("the Company") as of 31st March 2020 inconjunction with our main audit of the Standalone Financial Statements of the Company forthe year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk.

The procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Standalone Financial Statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneFinancial Statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the StandaloneFinancial Statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us read together with our observations under paragraph Emphasis of Matter of our mainreport the Company has in all material respects an adequate internal financial controlssystem over financial reporting with reference to these Standalone Financial Statementsand such internal financial controls over financial reporting were operating effectivelyas at 31st March 2020 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

for M O S & Associates LLP
Chartered Accountants
Firm Registration No.: 001975S/
S200020
Sd/-
S V C Reddy
Partner
Membership Number: 224028
UDIN: 20224028AAAAAD7949
Place: Hyderabad
Date: 30th June 2020

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