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GPT Infraprojects Ltd.

BSE: 533761 Sector: Infrastructure
NSE: GPTINFRA ISIN Code: INE390G01014
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VOLUME 2567
52-Week high 107.75
52-Week low 34.00
P/E 9.39
Mkt Cap.(Rs cr) 231
Buy Price 78.90
Buy Qty 54.00
Sell Price 79.50
Sell Qty 17.00
OPEN 76.40
CLOSE 79.60
VOLUME 2567
52-Week high 107.75
52-Week low 34.00
P/E 9.39
Mkt Cap.(Rs cr) 231
Buy Price 78.90
Buy Qty 54.00
Sell Price 79.50
Sell Qty 17.00

GPT Infraprojects Ltd. (GPTINFRA) - Auditors Report

Company auditors report

To the Members of GPT Infraprojects Limited

Report on the Audit of the Standalone Financial Statements Qualified Opinion

We have audited the Standalone Financial Statements of GPT Infraprojects Limited("the Company") which comprise the Balance Sheet as at March 31 2021 and theStatement of Profit and Loss Statement of Changes in Equity and Statement of Cash Flowsfor the year then ended and notes to the Standalone Financial Statement including asummary of significant accounting policies and other explanatory information which includetwenty five (25) joint operations.

In our opinion and to the best of our information and according to the explanationsgiven to us and based on the consideration of the reports of other auditors (includingjoint auditor SN Khetan & Associates) on the separate financial statement and otherfinancial information of twenty five (25) joint operations except for the possibleeffects of the matter described in the Basis for Qualified Opinion section of our reportthe aforesaid Standalone Financial Statement give the information required by theCompanies Act 2013 as amended ("the Act") in the manner so required and give atrue and fair view in conformity with the Indian Accounting Standards prescribed undersection 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015 asamended and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2021 and its profit changes in equity and itscash flows for the year ended on that date.

Basis for Qualified Opinion

The company has recognised unbilled revenue accrued price escalations and tradereceivables aggregating H 2079.44 Lakh (H 2535.13 Lakh as at 31st March 2020) oncertain completed construction contracts which are yet to be billed/ realised by theCompany and are outstanding for more than 3 years. Due to unavailability of sufficientappropriate audit evidence to corroborate management's assessment of recoverability of theabove said amounts we are unable to comment on the recoverability of the same. Noprovision with respect to the same has been made in the books of account (Refer note 34(D)to the Standalone Financial Statements)

This matter was also qualified in our report on the Standalone Financial Statement forthe year ended 31st March 2020.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India("ICAI") together with the ethical requirements that are relevant to our auditof the Standalone Financial Statement under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Emphasis of Matter

We draw attention to the following matters in the Notes to the Standalone FinancialStatement:

a) I. Note 34(B) of the Standalone Financial Statement which states that there areuncertainties on recoverability of Company's share of unbilled revenue trade and otherreceivables aggregating H 1815.18

Lakh (H 2013.99 Lakh as at 31st March 2020) in respect of two joint operationswherein the underlying projects have been completed and as represented to us themanagement of such joint operations have initiated arbitration proceedings for recovery ofdues.

II. Note34(B)oftheStandaloneFinancialStatementwhich states that there are uncertaintieson recoverability of trade and retention receivables aggregating H 282.14

Lakh (H Nil Lakh as at 31st March 2020 in respect of certain completed constructioncontracts where the management has initiated arbitration proceedings for recovery of dues.

b) Note 34(C) of the Standalone Financial Statement which states that a subsidiary ofthe Company and its customer has initiated conciliation process in terms of the provisionscontained in Part-III of the Arbitration and Conciliation (Amendment) Act 2015 towards aclaim of the Subsidiary on the customer and the consequent uncertainty on recoverabilityof net assets of the Company aggregating H 2033.89 Lakh as at March 31 2021(H2.034.73 Lakh as at

31st March 2020). The net assets are in relation to an EPC (Engineering Procurementand Construction) contract received by the Company from its subsidiary in an earlier yearwhose execution was discontinued by the Company pursuant to termination of concessionagreement between the Subsidiary and its customer.

Our opinion is not modified in respect of these matters.

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

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Corporate Information Chairman's Statement Director's ReportManagement discussion and analysis and report on Corporate Governance 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 thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact.

As fully described in the Basis for Qualified Opinion sectionaboveweareunabletocommentontherecoverabilityofunbilled revenue accrued price escalationsand trade receivables aggregating to H 2079.44 Lakh (H 2535.13 Lakh as at 31st March2020). The other information included in Management Discussion and Analysis reportChairman's Statement Director's Report and Report on Corporate Governance have not beenadjusted for the said impact. Accordingly we are unable to conclude whether or not theother information is materially misstated with respect to this matter.

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 March31 2021. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. In addition to the matter described in the Basis forQualified Opinion section we have determined the matters described below to be the keyaudit matters to be communicated in our report.

Sr. No Key audit matters How the Key Audit Matter was addressed in our audit
1 Revenue recognition – Construction Contracts Refer to Note 41 of the Standalone Financial Statements Our audit procedures in respect of this area included:
Revenue from construction contracts is recognised over a period of time in accordance with the requirements of Ind AS 115 Revenue from Contracts with Customers. 1. Evaluated the accounting policy for revenue recognition of the Company and assessed Compliance of the policy in terms of principles enunciated under Ind AS 115.
Revenue recognition involves usage of percentage of completion method which is determined based on proportion of contract costs incurred to date compared to estimated total contract costs which involves significant judgements reliable estimation of total project cost identification of contractual obligations in respect of Company's rights to receive payments for performance completed till date estimation of period of recovery of receivables changes in scope and consequential revised contract price price escalations and recognition of the liability for loss making contracts/ onerous obligations. 2. Verified controls over revenue recognition with specific focus on determination of progress of completion recording of costs incurred and estimation of total project cost.
We have considered this as a Key Audit Matter on account of Project revenue recognition being significant to the financial statements and significant degree of management judgment is required to be applied with respect to percentage of completion. 3. Inspected the underlying customer contracts verified costs incurred with estimated total project costs to identify significant variations and assess whether those variations have been considered in estimating the total project costs and consequential determination of stage of completion.
4. Verified the management's evaluation process to recognise revenue over a period of time status of completion for projects and total cost estimates.
5. Evaluated the contracts to determine the level of provisioning required for loss making contracts/onerous obligations if any.
6. Assessed the disclosures made by management in compliance of Ind AS 115.
2 Recoverability of contract assets comprising unbilled revenue on construction contracts accrued unbilled price variations and retention money with customers Our audit procedures in respect of this area included:
Refer to Note 34(B) 34(D) and 41 of the Standalone Financial Statements As of March 31 2021 the value of contract assets aggregated H 28533.03 Lakh which amounts to around 43% of the total assets of the Company. 1. Read the underlying construction contracts.
Accrual of unbilled revenue involves significant judgements including determination of total contract costs including expected cost to complete the project and percentage of completion of the respective construction contracts of the Company. 2. Verified on a sample basis the ageing of retention money with customers and receivables at the year end.
The recoverability of the same is mainly based on certification of the work done by the customers as per the specific requirements of the contracts. 3. Verified on sample basis the computation of unbilled revenue on construction contracts and accrued unbilled price variations.
The unbilled price variations are accrued as per the relevant escalation index of material and labour on specific contracts on the basis of amount of expenditure incurred by the Company during the period. Retention amount is withheld by the customer as per the agreed contractual terms and are released on satisfactory completion of the contract. 4. Verified on a sample basis subsequent invoicing by the Company and collections from customers to identify if there were any indicators of impairment of the contract assets.
We have considered recoverability of the contract assets as a key audit matter as it involves key management's estimates and judgements of the percentage completion of the contract and compliance with the key contractual terms over the contract period. 5. In respect of material contract balances inspected relevant contracts and correspondence with the customers.
6. Verified management's control for evaluation of recoverability of receivables.
7. Assessed the disclosures made by the Company 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 Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows of the Company including its joint operations in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Financial Statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has 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 assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.

We give in "Annexure A" a detailed description of Auditor's responsibilitiesfor Audit of the Standalone Financial Statements.

Other Matter

1. We did not audit the financial statements and other financial information of twentyfour (24) joint operations included in the Standalone Financial Statements of the Companywhose financial statements and other financial information reflect Company's share oftotal assets of H 5554.25 Lakh as on 31st March 2021 Company's shareof total revenue of H 11662.80 Lakh and Company's share of total net profit of H 596.98Lakh and Company's share of total comprehensive income of H 596.98 Lakh and the Company'sshare in net cash flow of H (72.48) Lakh for the year ended March 31 2021 as consideredin the Standalone Financial Statements. The financial statements and other financialinformation of these joint operations have been audited by other auditors (including oneof the joint auditors of the Company SN Khetan & Associates) whose reports have beenfurnished to us and our opinion in so far as it relates to the amounts and disclosuresincluded in respect of these joint operations is based solely on the report of suchauditors.

2. The Standalone Financial Statements include the financial information of one (1)joint operation which have not been audited and is certified by the management whosefinancial statements reflect Company's share of total assets of H 13.81 Lakh as on 31stMarch 2021 Company's share of total revenue of H nil and Company's share of total netprofit of H nil and Company's share of total comprehensive income of H nil and theCompany's share in net cash flow of H (4.57) Lakh for the year ended March 31 2021 asconsidered in the Standalone Financial Statements of the Company. According to theinformation and explanations given to us by the Management these financial informationare not material to the Company.

Our opinion is not modified in respect of these matters.

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 sub-section (11) of section 143 ofthe Act we give in the "Annexure B" a statement on the matters specified inparagraphs 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 except for the matters described in basis of qualified opinionparagraph obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit.

(b) Except for the possible effects of the matter described in the Basis of QualifiedOpinion section above in our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books and thereport of other auditors.

(c) The Balance Sheet the Statement of Profit and Loss the Statement of Changes inEquity and the Statement of Cash Flow dealt with by this Report are in agreement with thebooks of account.

(d) Except for possible effect of the matter described in the Basis of QualifiedOpinion section above in our opinion the aforesaid Standalone Financial Statementscomply with the Accounting Standards specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014.

(e) The matter described in Basis of Qualified Opinion paragraph above and Emphasis ofmatter paragraph above in our opinion may have an adverse effect on the functioning ofthe Company.

(f) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors aredisqualified as on 31st March 2021 from being appointed as a director in termsof Section 164 (2) of the Act.

(g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.

(h) With respect to the adequacy of the internal financial controls with reference toStandalone Financial Statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure C".

(i) 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. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements – Refer Note 34 to the StandaloneFinancial Statements;

ii. Except for the matters described in Basis for Qualified Opinion section above theCompany has made provision as required under the applicable law or accounting standardsfor material foreseeable losses if any on long-term contracts including derivativecontracts – Refer Note 44 to the Standalone Financial Statements;

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

3. As required by The Companies (Amendment) Act 2017 in our opinion according toinformation explanations given to us the remuneration paid by the Company to itsdirectors is within the limits laid prescribed under Section 197 of the Act and the rulesthereunder.

Annexure A to the Independent Auditor's Report

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT ON EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF GPT Infraprojects Limited

Auditor's Responsibilities for the Audit of the 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

Standalone Financial Statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasinternal financial controls with reference to Standalone Financial Statements in place andthe operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 tocontinue as a going concern.

Evaluate the overall presentation structure and content of the

Standalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financialstatements/financial information of the jointly controlled operations to express anopinion on the Standalone Financial Statements. We are responsible for the directionsupervision and performance of the audit of financial information of such entitiesincluded in the Standalone Financial Statements of which we are the independent auditors.For the other entities included in the Standalone Financial Statements which have beenaudited by other auditors such other auditors remain responsible for the directionsupervision and performance of the audits carried out by them. We remain solelyresponsible for our audit opinion.

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 Standalone Financial 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.

ANNEXURE B TO INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF GPT Infraprojects Limited FOR THE YEAR ENDED 31st March 2021

[Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report] i. (a) The company has maintainedproper records showing full particulars including quantitative details and situation offixed assets (Property Plant and Equipment).

(b) All the fixed assets (Property Plant and Equipment) have not been physicallyverified by the management during the year but there is a regular programme ofverification of all fixed assets over a period of three years which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies were noticed on such 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. The inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on verification between the physical stock and the book records.

iii. The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnerships (LLP) or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 (‘the Act'). Accordingly the provisionsstated in paragraph

3 (iii) (a) to (c) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act in respect ofloans investments guarantees and security made.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of

Sections 73 74 75 and 76 of the Act and the rules framed there under. Accordinglythe provisions of clause 3(v) of the order are not applicable to the Company.

vi. We have broadly reviewed the books of account relating to materials labour andother items of cost maintained by the Company pursuant as specified by the CentralGovernment for the maintenance of cost records under sub-section (1) of section 148 of theAct and we are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have not however made a detailed examination of the recordswith a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion undisputed statutory dues including providentfund employees' state insurance income-tax sales-tax service tax duty of custom dutyof excise value added tax goods and service tax cess and other statutory dues have notbeen regularly deposited with the appropriate authorities in large number of cases. Thoughthe delays in deposits have not been serious.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax goods and service tax cessand other statutory dues were outstanding at the year end for a period of more than sixmonths from the date they became payable.

(c) According to the information and explanation given to us and examination of recordsof the Company the outstanding dues of income-tax goods and service tax customs dutycess and any other statutory dues on account of any dispute are as follows:

Name of the statute Nature of dues Amount K in Lakh Period to which the amount relates Forum where dispute is pending
Central Excise Act Claim of excess refund granted towards de- escalation in prices of sleeper 6.35 2008-09 to 2009-10 Customs Excise and Service Tax Appellate Tribunal
West Bengal Value Added Tax Act 2003 Various disallowances of labour and supervision charges payment to sub- contractor disallowance of Input Tax Credit due to mismatch in purchase / sales and works contract tax from taxable contractual transfer Price etc 1490.82 2010-11 to 2016-17 West Bengal Commercial Tax Appellate & Revisional Board and Appellate Forum CD-II
Uttar Pradesh Value Added Tax Act 2008 Disallowance of Labour and Supervision charges and Disallowance of Input Tax Credit due to mismatch in purchase / sales etc. 20.85 2013-14 Additional Commissioner (Grade - 2) Appeal

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to the financial institution or banks.During the year the company did not have any outstanding dues to government and therewere no outstanding debentures.

ix. In our opinion according to the information explanation provided to us moneyraised by way of term loans during the year have been applied for the purpose for whichthey were raised. The Company has not raised any money by way of initial public offer orfurther public offer (including debt instruments) during the year.

x. During the course of our audit 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 employees.

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/ provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi

Company. Accordingly the provisions stated in paragraph 3(xii) of the Order are notapplicable to the Company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Standalone Financial Statements as required by theapplicable accounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly the provisions stated in paragraph 3 (xiv) of the Order are notapplicable to the Company.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly provisions statedin paragraph 3(xv) of the Order are not applicable to the Company.

xvi. In our opinion the Company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions stated in paragraphclause 3 (xvi) of the Order are not applicable to the Company.

ANNEXURE C TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF GPT Infraprojects Limited

[Referred to in paragraph 2(h) under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report]

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to Standalone FinancialStatements of GPT Infraprojects Limited ("the Company") as of March 31 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date which includes twenty five (25) joint operations.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to financial statementscriteria 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 (ICAI) (the"Guidance Note"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to Standalone Financial Statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingissued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether internal financial controls with reference tostandalone financial statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to Standalone Financial Statements and their operatingeffectiveness. Our audit of internal financial controls with reference to StandaloneFinancial Statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the Company's internal financialcontrols with reference to standalone financial statements.

Meaning of Internal Financial Controls with reference to Standalone FinancialStatements

A Company's internal financial control with reference to Standalone FinancialStatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A Company's internalfinancial control with reference to standalone financial statements includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the Standalone Financial Statements.

Inherent Limitations of Internal Financial Controls with reference to StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference toStandalone Financial Statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified in the operating effectiveness of thecompany's internal financial control with reference to the Standalone Financial Statementsas at March 31 2021:

a) The Company's internal financial controls for evaluation of recoverability ofunbilled revenue accrued price escalations and trade receivables on constructionscontracts completed three years ago were not operating effectively as on March 31 2021which could potentially result in the Company not recognizing appropriate provision in thestandalone financial statements in respect of receivables that are doubtful of recovery.

This matters were also qualified in our audit report on the Standalone FinancialStatements for the year ended March 31 2020.

A ‘material weakness' is a deficiency or a combination of deficiencies ininternal financial control with reference to financial statements such that there is areasonable possibility that a material misstatement of the company's annual or interimfinancial statements will not be prevented or detected on a timely basis.

In our opinion and to the best of our information and according to the explanationsgiven to us the company has in all material respects maintained internal financialcontrols with reference to the Standalone Financial Statements as of March 31 2021 basedon the internal control with reference to standalone financial statements criteriaestablished by the company considering the essential components of internal control statedin the Guidance Note and except for the possible effects of the material weaknessesdescribed above on the achievement of the objectives of the control criteria theCompany's internal financial controls with reference to Standalone Financial Statementswere operating effectively as of March 31 2021.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2021Standalone Financial Statements of the Company and this material weaknesses has effectedour opinion on the Standalone Financial Statements of the Company and we have issued aqualified opinion on the Standalone Financial Statements.

Other Matters

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operatingeffectiveness of the internal financial controls with reference to financial statements inso far as it relates to Company does not include the reports of the twenty five (25) jointoperations as the said reporting on internal Financial Control is not applicable to thesaid joint operations.

For MSKA & Associates For SN KHETAN & ASSOCIATES
Chartered Accountants

Chartered Accountants

ICAI Firm Registration Number: 105047W ICAI Firm Registration Number: 325653E
Puneet Agarwal Sanjay Kumar Khetan
Partner

Partner

Membership No. :064824 Membership No. :058510
UDIN: 21064824AAAABT1587 UDIN: 21058510AAAACA8864
Place: Kolkata Place: Kolkata
Date: 21st June 2021 Date: 21st June 2021

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