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Patel Engineering Ltd.

BSE: 531120 Sector: Infrastructure
NSE: PATELENG ISIN Code: INE244B01030
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VOLUME 12055
52-Week high 34.95
52-Week low 13.82
P/E 13.25
Mkt Cap.(Rs cr) 1,073
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 23.15
CLOSE 22.30
VOLUME 12055
52-Week high 34.95
52-Week low 13.82
P/E 13.25
Mkt Cap.(Rs cr) 1,073
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Patel Engineering Ltd. (PATELENG) - Auditors Report

Company auditors report

To the Members of Patel Engineering Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying Standalone Financial Statements of Patel EngineeringLimited which includes joint operations ("the Company") which comprise theBalance Sheet as at March 31 2021 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year then ended and notes to the Standalone Financial Statements including asummary of significant accounting policies and other explanatory information. These alsoinclude financials of the Real Estate Division Branch of the Company for the year ended onthat date audited by the branch auditor of the Company's branch located at Mumbai.

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 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2021 its loss includingother comprehensive income changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the Standalone Financial Statements under the provisions of the Act andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our opinionon the Standalone Financial Statements.

Emphasis of Matter

The independent Branch Auditors of Patel Engineering Ltd (Real Estate Division) havewithout qualifying their audit report on the Standalone Ind AS financial statements forthe year ended March 31 2021 have drawn attention with respect to Note No. 46 regardingCompany's investment and loans and advances in Waterfront Developers Limited where noticedated June 04 2015 was received from Government of Mauritius for the termination of LeaseAgreement entered on December 11 2009 with Les Salines Development Limited (a step downsubsidiary of Waterfront). In this case the process of Arbitration has been initiated withthe Government of Mauritius.

Our opinion is not modified in respect to this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the Standalone Financial Statements for the financial yearended March 31 2021. These matters were addressed in the context of our audit of theStandalone Financial Statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditors' responsibilities for the audit of the Standalone Financial Statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Standalone Financial Statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying Standalone Financial Statements.

Sr. No. Key Audit Matter Auditor's Response
1 Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" Principal Audit Procedures
The application of the revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. Additionally the revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
Refer Notes 1.j and 25 to the Standalone Financial Statements. Evaluated the design of internal controls relating to implementation of the revenue accounting standard.
Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price.
We carried out a combination of procedures involving enquiry and observation performance and inspection of evidence in respect of operation of these controls.
Tested the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the revenue accounting standard.
Selected a sample of continuing and new contracts and performed the following procedures:
Read analyzed and identified the distinct performance obligations in these contracts. Compared these performance obligations with that identified and recorded by the Company.
Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation.
Samples in respect of revenue recorded for time and material contracts were tested using a combination of customer acceptances subsequent invoicing and historical trend of collections and disputes.
Performed analytical procedures for reasonableness of revenues disclosed.
2 Accounting of contract work-in-progress for engineering construction projects Principal Audit Procedures
The company recognized contract revenue and contract costs from contract work-in-progress for engineering construction projects by reference to the stage of completion of the contract activity at the end of each reporting period. The stage of completion is measured by reference to work performed. The accounting for such engineering construction projects is complex due to high level of estimation in determining the costs to complete. This is due to the nature of the operations which may be impacted by the technological complexity of projects the precision of cost estimation during the budgeting process and the actual progress of each project during the financial year. Accordingly the accounting of contract work-in progress for engineering construction projects is identified as a key audit matter. Our audit procedures included the following:
Review of contract terms and conditions and the contractual sums and substantiated project revenues and costs incurred against underlying supporting documents.
Perused customers and subcontractor correspondences and discussed the progress of the projects with project managers for any potential disputes variation order claims known technical issues or significant events that could impact the estimated contractual costs.
Analyzed changes in estimates of costs from prior periods and assessed the consistency of these changes with progress of the projects during the year.
Refer Notes 1.i and 10 to the Standalone Financial Statements.
Sr. No. Key Audit Matter Auditor's Response
3 Valuation of claims under settlement Principal Audit Procedures
The Company has certain significant open legal proceedings under arbitration for various complex matters with the Clients and other parties continuing from earlier years which are as under: Our audit procedures included the following:
Non acceptance of certain work by the client. Cost overrun in certain contracts. Assessing the procedures implemented by the Company to identify and gather the risks it is exposed to.
Reimbursement of the cost incurred by the company for the client. Obtaining an understanding of the risk analyses performed by the Company with the relating supporting documentation and studying written statements from internal and external legal experts where applicable.
Due to complexity involved in these litigation matters the recognition of claims / variations are included in revenues when it is highly probable of recovery based on estimate and assessment of each item by the management based on their experience of recovery Discussion with the management on the development in these litigations during the year ended March 31 2021.
Refer Notes 1.r 45 and 47 to the Standalone Financial Statements Obtaining representation letter from the management on the assessment of these matters as per SA 580 (revised) – Written representations.
4 Investments and loans/advances given to subsidiaries and associates Principal Audit Procedures
Investments in subsidiaries joint venture and associates and loans given to such entities account for a significant percentage of the Company's net assets. Each year management reviews such investments and loans to assess presence of any indications of impairment and determines the recoverable amounts of the investments / loans. We gained an understanding of the process used by the Company to assess the valuation of investments and loans & advances analyze their recoverability and impairment tests performed by the management and verified that the criteria used to perform these tests are consistent with those established in applicable reporting standards.
Determining the recoverable value of these long-term investments / loans is mainly based on the evaluation of Networth of such entities quality of assets held by such entities and the judgement by Management for realisation of investments and recovery of loans alongwith interest. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
Refer Notes 1.h and 3 to the Standalone Financial Statements Consideration and evaluation of company's analyses on its overall exposure to each of these subsidiaries;
Analysis and assessment of the appropriateness of the key judgements and assumptions used by company's management.
As a result of our analysis and test performed we consider that Management's conclusion regarding providing impairment on investments wherever required the estimates made and the information disclosed in the accompanying annual accounts are adequately supported and are consistent with the information currently available
5 IT systems and control over financial reporting Principal Audit Procedures
We identified IT systems and controls over financial reporting as a key audit matter for the Company because its financial accounting and reporting systems are fundamentally reliant on IT systems and IT controls to process significant transaction volumes. Our procedures included to the following:
Automated accounting procedures and IT environment controls which include IT governance general IT controls over program development and changes access to programs and data and IT operations and IT application controls are required to be designed and to operate effectively to ensure accurate financial reporting. Assessment of the complexity of the environment through discussion with the head of IT.
Assessment of the design and evaluation of the operating effectiveness of general IT controls over program development and changes access to programs and data and IT operations.
Assessment of the design and evaluation of the operating effectiveness of IT application controls in the key processes impacting financial reporting of the Company.

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 information included in the Annual Report but does not includethe Standalone Financial Statements and our auditors' 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 such other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibility of Management for the Standalone Financial 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 includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgements and estimates that are reasonable and prudent; and designimplementation 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 FinancialStatements that give a true and fair view and are free from material misstatement whetherdue 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 unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic 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. As part of an audit inaccordance with SAs we exercise professional judgement and maintain professionalscepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the Standalone FinancialStatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of 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 hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the

financial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant de_ciencies 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 Statementsfor the financial year ended March 31 2021 and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matters

1. W e did not audit the financial statements and other financial information inrespect of:

i. the real estate division whose financial statements reflect total assets of Rs4745.44 million as at March 31 2021 and the total revenue of the Rs 245.19 milliontotal profit (net) after tax of Rs 49.08 million and total comprehensive income (net) ofRs 49.25 million for the year ended March 31 2021

ii. 18 joint operations whose financial results reflect total assets of Rs 1907.75million as at March 31 2021 Group's share in total revenue after elimination of Rs1880.57 million total profit (net) after tax of Rs 62.18 million and total comprehensiveincome (net) of Rs 62.18 million for the year ended March 31 2021

These Ind AS financial statement of the entities mentioned in (i) and (ii) and otherfinancial information have been audited by other auditors which financial statementsother financial information and auditors' reports have been furnished to us by themanagement. Our opinion on the Standalone Financial Statements in so far as it relates tothe amounts and disclosures included in respect of these joint operations and branch andour report in terms of sub-section (3) of Section 143 of the Act in so far as it relatesto the aforesaid branch and joint operations is based solely on the report(s) of suchother auditors.

2. The accompanying Standalone Financial Statements include unaudited financialstatements and other unaudited financial information in respect of:

i. 9 unincorporated joint operations whose financial results reflect total assets of Rs209.15 million as at March 31 2021 Group's share in total revenue after elimination ofinter-company revenue is Rs 32.53 million total profit (net) after tax of Rs 0.01million and total comprehensive income (net) of Rs 0.01 million for the year ended March31 2021.

These unaudited financial statements and other unaudited financial information havebeen furnished to us by the management. Our opinion in so far as it relates amounts anddisclosures included in respect of this joint operation and our report in terms ofsub-section (3) of Section 143 of the Act in so far as it relates to the aforesaid jointoperation is based solely on such unaudited financial statements and other unauditedfinancial information. In our opinion and according to the information and explanationsgiven to us by the Management these financial statements and other financial informationare not material to the Company.

Our opinion above on the Standalone Financial Statements and our report on Other Legaland Regulatory Requirements below is not modified in respect of the above matters withrespect to our reliance on the work done and the reports of the other auditors and thefinancial statements and other financial information certified by the Management.

Report on Other Legal and Regulatory Requirements

1. A s required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the "Annexure A" ofthis report a statement on the matters specified in paragraphs 3 and 4 of the Order tothe 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;

(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Statement of Changes in Equity and the Cash Flow Statementdealt with by this Report 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 March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 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) In our opinion the managerialremuneration for the year ended March 31 2021 has been paid/provided by the Company toits directors in accordance with the provisions of section 197 read with Schedule V to theAct;

(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. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements – Refer Note 47 to the StandaloneFinancial Statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There was no amount which was required to be transferred to the Investor Educationand Protection Fund during the year.

For T. P. Ostwal & Associates LLP

Chartered Accountants

(Registration No. 124444W/W100150)

Anil A. Mehta

Partner

Membership Number: 030529

Place: Mumbai

Date: June 11 2021

UDIN: 21030529AAAAEN1639

Annexure - A to the Independent Auditors' Report on the Standalone Financial Statementsof Patel Engineering Limited

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our Report of even date) i (a) The Company has maintained properrecords showing full particulars including quantitative details and situation of fixedassets.

(b) The Company has a regular programme for physical verification in a phased periodicmanner which in our opinion is reasonable having regards to the size of the Company andthe nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us by the management thetitle deeds of immovable properties included in property plant and equipment's /investment properties are held in the name of the Company except for Freehold lands withgross block and net block of Rs 5.66 million. ii As explained to us the inventories werephysically verified during the year by the Management at reasonable intervals and nomaterial discrepancies were noticed on physical verification. iii According to informationand explanation given to us the Company has not granted any loan secured or unsecured tocompanies firms Limited Liability Partnership firm or other parties covered in theregister maintained under section 189 of the Companies Act 2013. Accordingly Paragraph 3(iii) (a) 3 (iii)(b) and 3(iii)(c) of the Order are not applicable to the Company. iv Inour opinion and according to the information and explanations given to us the Companyhas complied with the provisions of Section 185 and 186 of the Companies Act 2013 to theextent applicable in respect of the loans investments guarantees and security. v TheCompany has not accepted any deposits from the public within the meaning of Sections 73 to76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly Paragraph 3(v) of the Order is not applicable to the Company. vi Themaintenance of cost records has been specified by the Central Government under section148(1) of the Companies Act 2013. We have broadly reviewed the cost records maintained bythe Company pursuant to the Companies (Cost Records and Audit) Rules 2014 as amendedprescribed by the Central Government under sub-section (1) of Section 148 of the CompaniesAct 2013 and are of the opinion that prima facie the prescribed cost records have beenmade and maintained. We have however not made a detailed examination of the cost recordswith a view to determine whether they are accurate or complete. vii (a) The Company hasgenerally been regular in depositing undisputed statutory dues including Provident FundEmployees' State Insurance Income-tax Sales Tax Service Tax Customs Duty Excise DutyValue Added Tax Goods and Services Tax Cess Entry Tax and Municipality Tax and othermaterial statutory dues applicable to it to the appropriate authorities except for suchdues aggregating to Rs 18.52 million which are outstanding as at March 31 2021 for aperiod of more than six months from the date they become payable.

(b) According to the information and explanations given to us and the records of theCompany examined by us the disputed statutory dues that have not been deposited onaccount of disputed matters pending before appropriate authorities are as under:

Particulars Financial year to which amount relates Amounts in Million (Rs) Forum where dispute is pending
The Sales Tax Act 2003-2004 2.85 Appellate Tribunal
2005-2006 2006-2007 and 2012-2013 19.16 Appellate Tribunal Kolkata
2007-2008 to 2011-12 39.41 W.B.C.T. Appellate and Revisional Board Kolkata
Finance Act 1994 April 2003 to July 2006 2.54 Custom Excise and Service Tax Appellate Tribunal
October 2009 to September 2010 108.31 (CESTAT)
June 2007 to September 2009 651.88
September 2015 71.52
CGST & SGST Act 2017 September 2018 to March 2019 46.77 The Additional / Joint Commissioner (Appeals)
The Income Tax Act1961 2003-04 to 2007-08 767.47 Hon'ble High Court
2010-11 & 2014-15 to 2016-17 1075.94 Commissioner of Income Tax (Appeals)
2016-17 to 2017–18 27.99 Commissioner of Income Tax (Appeals) TDS
Particulars Financial year to which amount relates Amounts in Million (Rs) Forum where dispute is pending
Provident fund 2008-09 2009-10 & 2010-11 14.35 Hon'ble High Court Shimla Himachal Pradesh
Custom Duty 2011-2012 17.62 CESTAT Chennai
With respect to Independent Branch Patel Engineering Ltd (Real Estate Division)
The Finance Act 1994 November 2009 to June 2012 404.69 Custom Excise and Service Tax Appellate Tribunal
April 2015 to June 2017 54.14 Commissioner of Service Tax
Income Tax Act 1961 2013-14 to 2016-17 202.55 Commissioner of Income Tax (Appeals)
2015-2016 to 2016-17 35.25 The Director Objections Appeals and Dispute Resolutions Dept. Mauritius
Maharashtra Value Added Taxes Act 2005 2015-16 13.50 Branch is in process of filling an appeal against the same

viii There are no loans or borrowings payable to government. The Company has notdefaulted in repayment of loans or borrowings to any financial institution or banks duringthe year with due consideration of the moratorium for repayment granted by the banks andavailed by the Company. ix In our opinion and according to the information andexplanations provided by the management the Company has utilised the monies raised by wayof rights issue and term loans for the purposes for which they were raised. x To the bestof our knowledge and according to the information and explanations given to us no fraudby the Company and no material fraud on the Company by its officers or employees has beennoticed or reported during the year. xi According to the information and explanationsgiven to us the Company has paid / provided for managerial remuneration in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV to the Act. xii In our opinion and according the information and explanation given tous the Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the order is notapplicable to the Company. xiii According to the information and explanation given to usand based on our verification of the records of the Company and on the basis of review andapproval by the Board and Audit Committee the transactions with related parties are incompliance with Section 177 and 188 of the Act where applicable and the details of suchtransactions have been disclosed in the Standalone Financial Statements as required by theapplicable accounting standards. xiv During the year the Company has made preferentialallotment of Optionally Convertible Preference Shares to a promoter entity in lieu ofliability for compensation payable to such entity. In our opinion and based on theinformation and explanations given to us the Company has complied with the requirementsof section 42 of the Act and Rules framed there under in respect of issue of suchOptionally Convertible Preference Shares. xv According to the information and explanationgiven to us and based on our examination of the records of the Company the Company hasnot entered into any non-cash transactions with its directors or persons connected withthem during the year. Accordingly paragraph 3(xv) of the order is not applicable to theCompany. xvi The Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934. Accordingly paragraph 3(xvi) of the order is notapplicable to the Company.

For T. P. Ostwal & Associates LLP

Chartered Accountants

(Registration No. 124444W/W100150)

Anil A. Mehta

Partner

Membership Number: 030529

Place: Mumbai

Date: June 11 2021

UDIN: 21030529AAAAEN1639

ANNEXURE B to Independent Auditors' Report on the Standalone Financial Statements ofPatel Engineering Limited Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Act referred to in paragraph 2(f) under "Reporton Other Legal and Regulatory requirement" section of our report of even date.

We have audited the internal financial controls over financial reporting of PatelEngineering Limited ("the Company") as of March 31 2021 in conjunction with ouraudit of the Standalone Financial Statements of the Company for the year ended on thatdate.

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').

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 Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these Standalone Financial Statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls over Financial Reporting (the "Guidance Note")and the Standards on Auditing issued by ICAI and deemed to be prescribed under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these Standalone Financial Statements 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 with reference to theseStandalone Financial Statements and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting with reference to these StandaloneFinancial Statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.

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 with reference to these Standalone Financial Statements.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting with reference to theseStandalone Financial Statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial control over financial reporting with referenceto these Standalone Financial Statements includes those policies and procedures that

(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting with reference to these Standalone Financial Statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these Standalone Financial Statements to future periods are subject to the risk thatthe internal financial control over financial reporting with reference to these StandaloneFinancial Statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting with reference to these StandaloneFinancial Statements and such internal financial controls over financial reporting withreference to these Standalone Financial Statements were operating effectively as at March31 2021 based on the internal control over financial reporting criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.

For T. P. Ostwal & Associates LLP

Chartered Accountants

(Registration No. 124444W/W100150)

Anil A. Mehta

Partner

Membership Number: 030529

Place: Mumbai

Date: June 11 2021

UDIN: 21030529AAAAEN1639

.