You are here » Home » Companies » Company Overview » Jyoti Structures Ltd

Jyoti Structures Ltd.

BSE: 513250 Sector: Infrastructure
NSE: JYOTISTRUC ISIN Code: INE197A01024
BSE 00:00 | 01 Dec 13.73 0.65
(4.97%)
OPEN

13.73

HIGH

13.73

LOW

13.73

NSE 00:00 | 01 Dec 13.65 0.65
(5.00%)
OPEN

13.65

HIGH

13.65

LOW

13.65

OPEN 13.73
PREVIOUS CLOSE 13.08
VOLUME 56391
52-Week high 25.95
52-Week low 11.40
P/E
Mkt Cap.(Rs cr) 871
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 13.73
CLOSE 13.08
VOLUME 56391
52-Week high 25.95
52-Week low 11.40
P/E
Mkt Cap.(Rs cr) 871
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Jyoti Structures Ltd. (JYOTISTRUC) - Auditors Report

Company auditors report

To The Members of Jyoti Structures Limited

Report on the audit of the Standalone Financial Statements

Disclaimer of Opinion

1. We were engaged to audit the accompanying Standalone FinancialStatements of Jyoti Structures Limited (the "Company") for the year ended March31 2021 which comprise the Balance Sheet as at March 31 2021 the Statement of Profitand Loss (including Other Comprehensive Income) Statement of Cash Flows and the Statementof Changes in Equity for the year then ended and a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "Standalonefinancial statements") in which we draw your attention the following :-

a. The Standalone Financial Statements include out of the totalfourteen branches

i. Audited amounts for the year ended March 31 2021 - onebranch;

ii. Unaudited Management reported amounts for the year ended March31 2021- ten branches;

iii. Unaudited Amounts till December 31 2017 – one branch;

iv. This results do not include the amounts in respect of two branches.

b. We have relied on the Statement of Cash Flows provided by theManagement for the year ended March 31 2021 since the erstwhile auditor did not audit theStatement of Cash Flows.

We do not express an opinion on the accompanying Standalone FinancialStatements of the Company. Because of the significance of the matter described in theBasis for Disclaimer of opinion section of our report read along with our comments inAnnexure – A we have not been able to obtain sufficient appropriate audit evidenceto provide a basis for an audit opinion on these standalone financial statements.

2. Basis for Disclaimer of Opinion

i) The Hon'ble National Company Law Tribunal (NCLT) pursuant toapplication filed under Corporate Insolvency Resolution Process (CIRP) had passed orderdated March 27 2019 approving a plan for resolution of the company which shall amongstothers require giving effect to changes in the reported amount of assets and liabilitiesthe effect of which shall be taken in the books upon fulfilment of conditions precedent asper the plan.

Since the conditions have not been fulfilled the standalone financialstatement does not include any adjustment which may arise from giving effect to theapproved plan.

Further the effect of the process of claims reconciliation has notbeen fully taken in the standalone financial statements which have been further disclosedin Note no. 32 (10 & 32) of the standalone financial statements. Due to theseconditions at the date of this report we are unable to ascertain the impact of the sameon the accompanying standalone financial statements.

The management has prepared these standalone financial statements on agoing concern basis despite of following facts and circumstances:

a) The company has reported loss after tax of INR 175846.74 lacs(EBIDT of Rs.- 25458.53 Lacs) during the year;

b) The net-worth of the company has been fully eroded and is INR (-)1134726.39 Lacs as at 31 Mar 2021;

c) There are no operations at plants during the current financialearlier year's and revenue activities have also stopped on the same;

The persistence of aforementioned conditions cast doubt about thecompany's ability to continue as a going concern. The Company may be unable todischarge its liabilities in the normal course of business and adjustments may have to bemade to reflect the situation that assets may need to be realized other than in the normalcourse of business and at amounts which could differ significantly from the amounts atwhich they are currently recorded in the financial statements.

ii) "Disclaimer of opinion" was issued by the erstwhileauditor in the audit report for each of the financial year ended March 31 2020 March 312019 March 31 2018 & March 31 2017.

No details / documents have been provided to us with respect to thematters / balances for which disclaimer were issued and hence we are unable to verify thesame during current year in so far as it relates to the opening balances for the year.

iii) We refer to Note No. 32(34) of the standalone financial statementswherein management has stated that in the absence of details effect of debits and creditsaggregating to the following amounts Rs. 224.82 lacs and Rs.140359.31 lacs respectivelyin bank statement(s) has not been taken in books of accounts.

iv) The audited financial statements / balance confirmations andother details in respect of various related parties including subsidiaries and jointventures of the company are not available due to which we are unable to comment on theimpact it may have on the carrying amount and the impairment if any in respect ofinvestments loans advances receivables payable provision for guarantees provided ifany disclosures for liabilities crystalized or contingent etc.

v) The inventory records / stock ledger (being part of books ofaccounts) are not available due to which we are unable to trace / reconcile the movementif any in the same through purchase sales consumption etc. and comment on theprovision if any required based on the condition and usability of the stocks. As furtherreferred in Note No. 32(36) the external stock auditor appointed for physicalverification of inventories could verify only the inventories partially. We have notverified the inventories and have relied on the Company's representation.

Accordingly we are unable to comment on the impact if any on thestandalone financial statements.

vi) In respect of its expenses:

a) Reference is made to Note No. 32(37) of the standalone financialstatements wherein it has been stated that during the year employee costs have been bookedas ascertained by the Company. In view of the underlying records being made availablepartly we are unable to comment on the Employee Costs of Rs. 397.58 Lacs debited toStatement of Profit and Loss.

b) In the absence of separate records of foreign currency(ies) balancesmaintained by the Company and as per our paragraph 1 of the audit report ("Disclaimerof Opinion") we are unable to verify the adequacy of foreign exchange loss (net ofgain) of Rs. 1290.17 lacs (including for foreign branches). Accordingly we are unable tocomment of the impact on the standalone financial statements.

vii) Statutory Dues / Compliances

a) The company has been in default w.r.t payment of interest to itslenders payment of statutory dues to government authorities and filing of periodicreturns thereof; delay in workers' dues etc. which may entail interest / penaltyetc. which is not ascertainable and hence not provided for.

b) Balances with statutory authorities and input credits are subject toreconciliation filing / revision of return(s) and their admission by the respectivestatutory authorities is pending from the Company. Accordingly we are unable to commentwhether any provision for impairment in the value of such receivables is required.

c) There are ongoing proceedings/claims pending before governmentauthorities under various statutes the resultant impact if any has not been determined.

viii) Revenue & Contracts and Trade Receivables

a) In the absence of any documentary evidence of the customers on thecontinuation of live contracts we are unable to comment on the status of the contractsand adjustment if any required for the same in the standalone financial statements.Further the details of work in progress with the age stage of completion acceptabilityto customers estimated future cost to completion progress billing etc. not madeavailable due to which we are unable to comment on the requirements of provision if anyfor WIP foreseeable losses and income accrued but not due.

b) No workings are available for the calculation of liquidated damagescontractually leviable for delay in completion of contracts and the costs for DefectLiability Period (DLP) which are contractually required to be incurred. Accordingly weare unable to comment on provision if any required for the same.

c) As against the total amount of Trade Receivables of Rs. 439195.55Lacs as at March 31 2021 Provision for Rs. 326291.07 Lacs has been made till March 312021 based on the assessment being made by the company. In the absence of Confirmationfrom all the parties pending reconciliation with them disputed dues which are beingcontested by the Company encashment of guarantees etc. we are unable to comment on theadequacy of the provision made by the Company.

ix) Identified non compliances of Companies Act

We are unable to comment on the impact if any of these identifiednon-compliances of the provisions of Companies Act 2013 on the accompanying standalonefinancial statements:

a) The Company has not appointed Internal Auditors which is not incompliance with Section 138 of the Companies Act 2013;

b) The company has provided for an amount of Rs. 114.80 Lacs for theyear ended March 31 2021 in respect to the interest payable to Micro and SmallEnterprises for which no working/ basis are available. Further no provision for interestpayable in respect of delayed payments to other vendors have been made;

c) As further detailed at Note No. 32(39) of the standalone financialstatements due to the directors being disqualified by MCA Annual Return in DPT – 3filing is under process in respect of Public Deposits accepted by the company as requiredunder the Companies Act 2013;

d) As further detailed at Note No. 32(39) of the standalone financialstatements due to the directors being disqualified by MCA the compliances w.r.t variousfilings with the Ministry of Corporate Affairs and entries / up-dation of variousregisters / forms as required under the Companies Act 2013 is in process.

x) a) As referred to in paragraph 1 of our report the financialstatements include the assets liabilities income and expenditure in respect of fourteenbranches are subject to changes on completion of audit.

In the absence of details we are unable to comment on the impact itmay have on the standalone financial statements. Further there are transactions andbalances for inter branch and Head office which has not been eliminated.We further drawyour attention to the note of erstwhile auditor :

b) During 2017-18 the company had incorporated financial statements offive branches for the period till December 31 2017. During 2018-19 unaudited financialstatements were available however details w.r.t intervening period from 01.01.2018 to31.03.2018 is not available. Further there are opening difference in the branch trialbalance aggregating to Rs. 69.38 lacs which have been debited to Reserves and Surplus forwhich the underlying details are not available. This has also resulted in thecorresponding period figures not being comparable.

A summary table is reproduced below for your perusal

Particulars

Branches (Rs. in Lacs)

Total Assets 16884.07
Total Liabilities 30058.69
Total Income Nil
Total Expenditure 701.11
Total Profit/(Loss) including (701.11)
Other Comprehensive Income

Further the foreign exchange rates considered for translating theitems in statement of profit and loss is also not being correctly taken.

c) In view of pending confirmations/reconciliation from certain banksand financial institutions / others for different types of accounts and borrowingsincluding non-fund based limits we are unable to comment on the impact if any on thestandalone financial statements arising out of such pending confirmations /reconciliation.

d) The company is carrying Rs. 799.49 Lacs as prepaid expenses as onMarch 31 2021 in respect of which the underlying details are not available and hence weare unable to comment on the adequacy of the same being charged off or carried forward.

xi) Others:

a) The company has partially complied with the applicablerequirements of

Ind AS 1 – Presentation of Financial Statements;

Ind AS 2 – Inventories ;

Ind AS 8 – Accounting Policies Change in AccountingEstimates and Errors;

Ind AS 21 – The Effects of Changes in Foreign ExchangeRates;

Ind AS 23 – Borrowing Costs; Ind AS 36 – Impairmentof Assets ;

Ind AS 37 - Provisions Contingent Liabilities &Contingent Assets;

Ind AS 105 Non-Current assets held for sale and discontinuedoperations;

Ind AS 109 Financial Instruments;

Ind AS 116 – Leases;

b) The internal controls in the company needs to be significantlystrengthened considering the following the impact of which if any cannot beascertained:

i) The accounting software used is Tally ERP which is an independentstandalone accounting system which should be integrated with other operational areas suchas Inventory HR Production Sales etc. to have better control having regard to the factthat sufficient details for the same manually are also not available;

ii) There has been no system of Risk Control Matrix / Process Controlsin place to check the adherence to guidelines wherever framed by company and to monitordeviations if any;

iii) The process of controls w.r.t booking and maintenance of back uprecords in respect of expenses needs to be improved.

iv) The underlying records for monitoring the progress of work forbilling such as Measurement book and reconciliation of the same with Invoices raised / WIPare not made available which is an important control documents for revenue from suchactivities.

c) With respect to disclosure requirements of Schedule – III tothe Companies Act 2013 identified non-compliances or non-availability of details are asunder:

i) Bifurcation of interest payable on loan is not being done properlyin view of some part of it being included with principal and part of it being disclosedunder Interest Payable.

ii) The entire amount of trade receivables have been classified ascurrent notwithstanding the contracted terms with the respective customers;

iii) Amount and period of default in repayment of borrowing andinterest have not been provided in order to comply with the presentation and disclosurerequirement as per the schedule III of the Companies Act 2013

iv) The additional disclosures as required under schedule – IIIare as compiled by the management and have been provided to the extent details areavailable with the management. In the absence of underlying details we are unable toverify and comment in respect of the same;

v) Classification as current and non-current for various items ofassets and liabilities has not been done as per contracted terms as required under IndAS;Similarly the bifurcation between secured and unsecured could not be verified in theabsence of details.

vi) The company has not disclosed the information pursuant to therequirement of Segment Reporting in respect of its geographical segments (viz. withinIndia & outside India) the same is also not in compliance with the requirements ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and Ind AS108-Operating Segment.

d) Interest on borrowings have been provided as per the amountsreflected in the corresponding loan statements wherever the same are available. In casewhere the statements are not available interest is provided @ 14% p.a. in respect of theborrowings including in respect of credit card dues irrespective of the contractedrates. In respect of external commercial borrowings grossing up for tax thereon has notbeen done. Further effect of exchange fluctuation on foreign currency loan balances havenot been considered for the purpose of calculation of interest. In the absence of thesame we are unable to comment on the impact if any on the standalone financialstatements.

e) Pending the finalisation of claims reconciliation process thead-hoc accounting of operational and financial creditors as done in the earlier yearscontinue. Further no interest has been accrued in respect of part of the amount. In theabsence of details we are unable to verify the same.

3. Basis for Qualified Opinion

i) In respect of its Fixed Assets

Fixed assets register providing inter-alia details of the assetslocation identification number useful life etc. is not available in the absence ofwhich we are unable to comment on the maintenance of adequate records w.r.t fixed assets.Further the assets have not been physically verified during the quarter under review.

ii) In respect of its Investments:

a) The original share certificates / holding statement (viz. from DP /other sources) to substantiate the ownership of the company towards equity and otherInvestments in subsidiaries / associates / others amounting to aggregate carrying valueRs. 667.04 Lacs are not made available due to which are unable to comment on theexistence title and carrying amount of such investments under Non-current assets.

b) There are no documents / working available for assessment ofcarrying value of all the Non-Current investments in the absence of which we are unableto comment on the adequacy of impairment loss of Rs. 1647.77 Lacs as at the year end andcarrying amount of investments as at March 31 2021.

The balance of Trade Receivables Bank Balances (including loanbalance) are subject to confirmation reconciliation and consequential adjustments ifany. Revert in respect of the same has not been received.

iii) Contingent Liabilities

a) The company has Rs. 52095.18 lacs under contingent liabilities forBank Guarantees. However as per details compiled by the management Bank Guarantees ofRs. 6464.00 lacs are live bank guarantees of Rs. 28100.87 lacs has been expired andRs.17530.31 lacs have been cancelled.

The Company is continuing to show the expired and cancelled BankGuarantees aggregating to Rs. 45631.18 lacs as Contingent Liability.

Further provision for BG commission has been made to the extentdetails in respect of the same is made available by the lenders.

b) The details in respect of corporate guarantees of Rs. 74108.44 lacsfor its subsidiary / associate company for loans and other matters. The financialstatements and other operating details in respect of these companies are not available.The liability of these corporate guarantee if invoked by lender has not been ascertainedin the absence of which we are unable to comment whether any provision in respect of thesame is required or not.

iv) Balances with banks (including for loans & term deposits)trade and other receivables advances TDS and other deposits and various payables aresubject to confirmation reconciliation and consequential adjustments if any. In absenceof alternative corroborative evidence we are unable to comment on the extent to whichsuch balances are recoverable. Impact whereof on the financial statements if any is notpresently ascertainable.

Bank statements / confirmation directly from banks in respect ofborrowings as well as current and deposit accounts are not available in some cases. In theabsence of which it is not possible to confirm the balances as reported in the financialsand as per bank.

v) The company had issued preference shares of face value of Rs. 2500Lacs which were repayable along with 69% redemption premium i.e. Rs.1725 lacs on14.03.2018 the company was not able to redeem the same and liability of Rs. 4225 lacs isin books of accounts.

vi) In connection with the existence of material uncertainties over therealizability of bank guarantees encashed by customers unbilled revenue tradereceivables and withheld amount included in standalone financial statements and otherassets which are past due/ subject matters of various disputes /arbitration proceedings/negotiations with the customers and contractors due to termination / foreclosure ofcontracts and other disputes the management is yet to assess the change in risk ofdefault and resultant expected credit loss allowance on such assets. Pending suchdetermination the impact on the financial statements cannot be ascertained.

4. Material Uncertainty Related to Going Concern

We refer to Note 32 of the standalone financial statements the Companyhas incurred loss of Rs. 175846.74 Lacs (EBITA of Rs. (-) 25458.53 Lacs) during theyear and has a negative net-worth of Rs. 1134726.39 Lacs as at March 31 2021. Furtherthe company had been at recurring defaults w.r.t debts covenants legal statutory andemployee dues and compliances; operations at its plants have been significantly reduced.The company has been admitted under Corporate Insolvency Resolution Process (CIRP) underwhich the resolution plan submitted by the company has been approved by the Hon'bleNCLT. This plan interalia includes certain conditions precedent which are yet to becomplied with. The matters described in the Basis for Disclaimer of Opinion section aboveand Report on Other Legal and Regulatory Requirements section below may also have animpact on the Company's ability to continue as a going concern.

All these developments raise a significant doubt on the ability of theCompany to continue as a going concern and therefore it may be unable to realise itsassets and discharge its liabilities including potential liabilities in the normal courseof business. The ability of the Company to continue as a going concern is dependent uponthe successful implementation of the plan and the resuming of operational activities whichare not fully within the control of the company. The Management has prepared thesestandalone financial statements using going concern basis of accounting based on itsassessment of the successful outcome of above referred actions.

5. Responsibilities of Management and Those Charged withGovernance for the Financial Statements

The Company's Management is responsible for the matters stated inSection 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards ("Ind AS")prescribed under Section 133 of the Act read with relevant rules issued thereunder. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements management is responsible forassessing 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 management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process. The Hon'ble National Company LawTribunal Mumbai ("NCLT") on July 4 2017 admitted the Corporate InsolvencyResolution Process ("CIRP") application filed against the Company and appointedMs. Vandana Garg as the Interim Resolution Professional in terms of the Insolvency andBankruptcy Code 2016 ("Code"). Further the committee of creditors constitutedduring the CIR process has confirmed appointment of Ms. Vandana Garg as the ResolutionProfessional ("RP") to manage the affairs of the Company. In view of thependency of the CIR process the power and responsibilities of the Board of Directorsshall vest with the RP under the provisions of the Code and these powers are exercisabletill the date of handover of the management.

6. Auditor's Responsibilities for the Audit of theFinancial Statements

Our responsibility is to conduct an audit of the entity'sfinancial statements in accordance with Standards on Auditing and to issue anauditor's report. However because of the matters described in the Basis forDisclaimer of Opinion section of our report we were not able to obtain sufficientappropriate audit evidence to provide a basis for an audit opinion on these financialstatements.

We are independent of the entity in accordance with the ethicalrequirements in accordance with the requirements of the Code of Ethics issued by ICAI andthe ethical requirements as prescribed under the laws and r aegulations applicable to theentity.

7. Report on Other Legal and Regulatory Requirements

I. As required by the Companies (Auditor's Report) Order 2016(lithe Order") issued by the Central Government of India in terms of sub-section (11)of section 143 of the Companies Act 2013 (the Act) we give in "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the said Order to the extentapplicable which is subject to the possible effect of the matters described in the Basisfor Disclaimer of Opinion section above and our separate Report on the Internal Controlsover Financial Reporting.

II. As required under section 143 (1) of the Act we report that inrespect of various loans and advances made by the company in the absence of details ofthe terms w.r.t. the same we are unable to comment whether the same are duly secured ornot and whether or not the same are made at terms which are prejudicial to the interest ofthe company or its members.

III. As required by section 143(3) of the Act we report that:

a) As described in the basis for disclaimer of opinion paragraph wesought but were unable to obtain all the information and explanations which to the best ofour knowledge and belief were necessary for the purpose of our audit;

b) Due to the possible effects of the matter described in the basis fordisclaimer of opinion paragraph and having regard to the fact that inventory and fixedassets register were not available or did not have the required details access to branchdetails are limited etc. we are unable to state whether proper books of account asrequired by law have been kept by the Company so far as it appears from our examination ofthose books;

c) The Standalone Financial Statements include out of the totalfourteen branches

i. Audited amounts for the year ended March 31 2021 - onebranch;

ii. Unaudited Management reported amounts for the year ended March31 2021- ten branches;

iii. Unaudited Amounts till December 31 2017 – one branch;

iv. This results do not include the amounts in respect of two branches.

These branch accounts have been incorporated based on managementaccounts and hence we are unable to comment on the possible impact if any arising onaudit thereof.

d) Due to the possible effects of the matter described in the Basis forDisclaimer of Opinion paragraph we are unable to comment if the balance sheet thestatement of profit and loss (including other comprehensive income) the statement of cashflows and the statement of statement of changes in equity dealt with by this report are inagreement with the books of account.

e) Due to the possible effects of the matter described in the basis fordisclaimer of opinion paragraph we are unable to state whether the aforesaid standalonefinancial statements comply with the Indian Accounting Standards prescribed under section133 of the Act read with relevant rules issued thereunder;

f) The matters described in the basis for disclaimer of opinion andReport on Internal Financial Controls over financial reporting (Annexure B) as well asour comments under Material Uncertainty related to going concern status in our opinionmay have adverse effect on the functioning of the Company;

g) In the term of section 17 (1) (b) of the Insolvency and BankruptcyCode 2016 ("the Code") the powers of the board of directors have beensuspended and be exercised by the interim resolution professional. Further in view of thecompany being in default w.r.t payment of interest and principal of its deposits and suchdefaults continuing for a period of more than one year the directors of the company aredisqualified from being re-appointed u/s 164 (2) of the Act. Hence written representationfrom directors have not been taken on record by the Board of Directors except for itsindependent director.

h) The reservation relating to the maintenance of accounts and othermatters connected therewith are as stated in the basis for disclaimer of opinion paragraphabove and Report on Internal Financial Controls over financial reporting (Annexure B) Withrespect to the adequacy of the internal financial controls over financial reporting of theCompany and the operating effectiveness of such controls refer to our separate report in"Annexure B"

i) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended no remuneration is paid by the Company to its directors during the year.

j) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us :

i. In view of the related matters described in the basis for disclaimerof opinion paragraph we are unable to state whether Note 32 to the standalone financialstatements discloses the complete impact of pending litigations on its financial position;

ii. In view of the related matters described in the basis fordisclaimer of opinion paragraph we are unable to state whether the Company has madeprovision as required under the applicable law or accounting standards for materialforeseeable losses if any on long-term con-tracts.

The Company does not have any derivative contract; and

iii. Unclaimed dividend amounting to Rs. 17.7 Lacs required to betransferred to Investor Education and Protection Fund by the company during the year hasnot been transferred as at the date of this report.

For G. P. Sharma & Co. LLP
Chartered Accountants
Firm Registration No.: 109957W/W100247
Sd/-
CA. Utkarsh Sharma
Partner
UDIN: 21147906AAAAKZ2525
Membership No: 147906
Place: Mumbai
Date: 6th August 2021

Annexure – A to the Independent Auditors Report

Referred to in para 6 of our report of even date to the members ofJyoti Structures Limited for the year ended March 31 2021.

i) (a) In our opinion the company does not maintain proper records inrespect of its fixed assets since no fixed assets register containing the required basicdetails such as location identification number residual value life etc. is available.It is explained that fixed assets register was hitherto maintained in SAP but due torestrictions in gaining access to the same the company has maintained / extracted detailsin excel sheets and standalone software being Tally where such fixed assets related datais not integrated. These assets have not been physically verified by the management duringthe year under audit. However the RP in the course of the CIRP had carried out exerciseof valuation of these assets.

(b) In the absence of any documents being made available tosubstantiate the conduct of physical verification and no policies on the same beingprovided we are unable to comment on the process of physical verification of the fixedassets by the company.

(c) The title deeds in respect of immovable properties as per the booksof accounts were not made available in the absence of which we are unable to comment onwhether the same are in the name of the company.

ii) The working papers to substantiate the carrying out the exercise ofphysical verification of inventories during the year are not available due to which we areunable to comment on whether physical verification was carried out. The ResolutionProfessional has however got the physical verification being done by an external agencyduring the previous year the necessary impact of the differences has been given in thebooks as explained. However on a perusal of such reports we observed that the totalvalue of inventory which has been subject to physical verification is significantly lessin relation to the total value of inventories held by the company. Further the inventorylying with third parties / project sites have been neither confirmed nor verified.

iii) On a perusal of details and previous records in our opinion andaccording to the information and explanation given to us the company has balances ofoutstanding loans granted to parties which are covered in the register maintained undersection 189 of the Companies Act 2013. However the necessary documents / agreement / termsheet having the details of the terms and conditions of such loans have not been providedto us. Further the required registers to be maintained under section 189 of the Act arenot available / not updated. Due to the same we are unable to report on reportingrequirements as specified under subclause (a) to (c) of clause (iii) of the order.

iv) The registers required to be maintained under section 185 & 186have not been provided for our verification or are under updation due to which we areunable to comment on the reporting requirements specified under clause (iv) of the order.

v) As represented to us the company has not accepted any depositsduring the period under audit. However in respect of the balance amounts of depositsaccepted during the earlier year(s) and outstanding as on 31 Mar 2018 we report that:

i) The annual return for the status of deposits in DPT – 3 has notbeen filed.

ii) The register of deposits as required to be maintained has not beenprovided for our verification;

iii) The entire amount of Rs. 857.76 Lacs outstanding as on 31 Mar 2021is overdue and hence there is recurring default on repayment of deposit and interest Asrepresented to us no order has been passed by the Company Law Board or National CompanyLaw Tribunal or Reserve Bank of India or any court or other tribunal against the companyin respect of these deposits.

vi) The maintenance of cost records has been specified by the CentralGovernment under sub-section (1) of section 148 of the Act for the company in ouropinion. However no cost records have been provided for our verification due to which weare unable to comment on whether the same have been made and maintained.

vii) (a) According to the information and explanations given to us andbased on the records of the company examined by us the company is not regular indepositing the undisputed statutory dues including provident fund employees' stateinsurance income tax sales tax service tax VAT GST duty of customs duty of excisevalue added tax cess and any other material statutory dues as applicable with theappropriate authorities in India. According to the information and explanations given tous and the records maintained by the company the details of undisputed amounts in respectof the aforesaid statutory dues which in arrears as at March 31 2021 for a period of morethan six months from the date they became payable are as under:

Sr No Particulars Amount Due (Rs. In lacs)
1 Provident Fund and Employee's State Insurance 2881.71
2 Professional Tax 47.47
3 Direct Taxes (Income Tax Wealth Tax & Property tax) 22254.76
4 Income Tax- Tax Deducted at Source 2859.04
5 VAT WCT & Octroi 1719.60
6 GST 85.14

Excludes taxation in respect of branches; Amounts stated are grossamounts before adjusting advance tax / TDS / ITC.

(b) According to the information and explanations given to us andaccording to the records made available to us the details of statutory dues which havenot been deposited on account of any dispute as on 31 Mar 2021 are as under:

Type of the Status Nature of Dues Amount (Rs. in Lacs) Financial year to which the amount relates Forum where dispute is pending
1 Sales Tax Tax & Interest 32.68 Various years between 1995-96 to 1998 - 99 Appellate Tribunal
2 Entry Tax Tax & Interest 18.86 2004-05 and 2005-06 Appellate Tribunal
3 Commercial Taxes Tax & Interest 70.34 2006-07 Revision Board
4 Sales Tax Tax & Interest 81.71 2009-10 Appellate Tribunal
5 Sales Tax Tax & Interest 103.77 2011-12 Appellate Tribunal
6 Sales Tax Tax & Interest 1650.93 2005-06 2006-07 and 2007-08 Maharashtra Sales Tax Tribunal
7 Sales Tax Tax & Interest 14930.19 2010-11; 2011-12 2012-13 and 2013-14 Deputy Commissioner of Sales Tax appeal in a case to be filed.
8 WCT TDS Tax & Interest 27564.58 2010-11 2011-12 2012-13 and 2013-14 Madras High Court Chennai
9 Central Excise Tax & Interest 3162.83 2010-11 to 2014-15 CESTAT
10 Income Tax Tax & Interest 54.70 2005-06 Commissioner of Income Tax (Appeals)
11 Income Tax Tax & Interest 229.11 2006-07 Commissioner of Income Tax (Appeals)
12 Income Tax Tax & Interest 62.03 2010-11 Income Tax Appellate Tribunal
13 Income Tax Tax & Interest 4169.44 2011-12 Income Tax Appellate Tribunal
14 Income Tax Tax & Interest 295.78 2012-13 Income Tax Appellate Tribunal
15 Income Tax Tax & Interest 2267.52 2012-13 Income Tax Appellate Tribunal order against which appeal to be filed.

The aforesaid details are provided based solely on the details madeavailable by the company which could not be independently verified.

viii) Based upon the audit procedures carried out by us and on thebasis of information and explanations provided by the Company we are of the opinion thatthe company has been defaulting in repayment of dues to banks/ Financial Institutions andDebenture holders as well as Public Deposit on account of interest as well as principal.The company does not have any borrowings from government. The company has been atcontinuous default w.r.t. the repayment of its loan as well as interest thereon. Theborrower wise and period of default details have not been provided / compiled by themanagement and hence could not be provided.

ix) According to the information and explanations given to us no freshterm loans were taken by the company during the year under audit.

x) Based on the audit procedures to be performed by us for the purposeof reporting the true and fair view of the financial statements and as per the informationand explanations given to us by the management we report that we have neither come acrossany instance of fraud by the company or on the company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement.

xi) According to the information and explanations given to us thecompany has not paid / provided any managerial remuneration during the year.

xii) As represented to us the company is not a Nidhi Company and hencethe reporting requirements under clause (xii) of paragraph 3 of the order are notapplicable.

xiii) In our opinion and according to the information and explanationprovided to us by the management as the register under section 189 has not been updatedwe are unable to comment on compliance with section 177 and Section 188 of the CompaniesAct 2013 with respect to transactions with related parties. However details of relatedparty transactions to the extent available with the management have been disclosed in Note34 to the standalone financial statements as certified by the management.

xiv) The company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year under audit.

xv) As per the information and explanations provided to us the Companyhas not entered into any non-cash transactions with directors or persons connected withthem.

xvi) In our opinion and according to the information and explanationsgiven to us the company is not required to be registered under Section 45 – IA ofthe Reserve Bank of India 1934.

For G. P. Sharma & Co. LLP
Chartered Accountants
Firm Registration No.: 109957W/W100247
Sd/-
CA. Utkarsh Sharma
Partner
UDIN: 21147906AAAAKZ2525
Membership No: 147906
Place: Mumbai
Date: 6th August 2021

Annexure – B to the Independent Auditors Report

Referred to in para 6 of our report of even date to the members ofJyoti Structures Limited for the year ended March 31 2021.

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act") We wereengaged to audit the internal financial controls over financial reporting of JyotiStructures Limited ("the Company") as of March 31 2021 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

Because of the matter described in Disclaimer of Opinion paragraphbelow we were not able to obtain sufficient appropriate audit evidence to provide a basisfor an audit opinion on internal financial controls system over financial reporting of theCompany.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of 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 timelydetection of unauthorized acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.

Disclaimer of Opinion

The system of internal financial controls over financial reporting withregard to the Company were not made available to us to enable us to determine if theCompany has established adequate internal financial control over financial reporting andwhether such internal financial controls were operating effectively as at March 31 2021.

We have considered the disclaimer reported above in determining thenature timing and extent of audit tests applied in our audit of the Standalone financialstatements of the Company and the disclaimer has affected our opinion on the Standalonefinancial statements of the Company and we have issued a disclaimer of opinion on thestandalone financial statements.

For G. P. Sharma & Co. LLP
Chartered Accountants
Firm Registration No.: 109957W/W100247
Sd/-
CA. Utkarsh Sharma
Partner
UDIN: 21147906AAAAKZ2525
Membership No: 147906
Place: Mumbai
Date: 6th August 2021

.