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PSP Projects Ltd.

BSE: 540544 Sector: Infrastructure
NSE: PSPPROJECT ISIN Code: INE488V01015
BSE 00:00 | 08 Feb 694.65 4.95
(0.72%)
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688.05

HIGH

699.10

LOW

688.05

NSE 00:00 | 08 Feb 693.65 4.15
(0.60%)
OPEN

693.85

HIGH

699.20

LOW

690.00

OPEN 688.05
PREVIOUS CLOSE 689.70
VOLUME 10173
52-Week high 775.55
52-Week low 458.90
P/E 17.80
Mkt Cap.(Rs cr) 2,501
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 688.05
CLOSE 689.70
VOLUME 10173
52-Week high 775.55
52-Week low 458.90
P/E 17.80
Mkt Cap.(Rs cr) 2,501
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

PSP Projects Ltd. (PSPPROJECT) - Auditors Report

Company auditors report

To the members of PSP Projects Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of PSP ProjectsLimited (the "Company") which comprise the Balance Sheet as at March 31 2022the Statement of Profit and Loss (including Other Comprehensive Expense) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and notes tothe standalone financial statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as ‘standalonefinancial statements').

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (the "Act") in the manner so required and give atrue and fair view in conformity with the Indian Accounting Standards prescribed undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended ("Ind AS") and other accounting principles generally accepted inIndia of the state of affairs of the Company as at March 31 2022 and its profit totalcomprehensive expense changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

Weconductedourauditofthestandalonefinancialstatements in accordance with the Standardson Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant toour audit of the standalone financial statements under the provisions of the Act and theRules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence obtained by us is sufficient and appropriate to provide a basis for ouraudit opinion on the standalone financial statements.

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 of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

S. No. Key Audit Matter Auditor's Response
Revenue Recognition and Trade Receivables
1. There are significant accounting judgements including estimation of costs to complete determining the stage of completion and the timing of revenue recognition. Our procedures included:
Testing of the design and implementation of controls involved for the determination of the estimates used as well as their operating effectiveness;
The Company recognises revenue and profit/loss on the basis of stage of completion based on the proportion of contract costs incurred at balance sheet date. We selected a sample of contracts to test using a risk based criteria which included individual contracts with:
significant revenue recognised during the year or
significant accrued value of work done balances held at the year-end;
The Indian Accounting Standard requires an entity to select a single measurement method for the relevant performance obligation that depicts the entity's performance in transferring goods or services or if a contract is onerous present obligations are recognised and measured as provisions. Obtained an understanding of management's process for reviewing long term contracts the risk associated with the contract and any key judgments.
Evaluated the design and implementation of key internal controls over the contract revenue and cost estimation process through the combination of procedures involving inquiry and observations reperformance and inspection of evidence in respect of operations of these controls.
We identified contract accounting as a key audit matter because the estimation of the total revenue and total cost to complete the contract prepared based on the prevailing circumstances is inherently subjective complex and requires significant management judgment and forecast of contract revenue and/or contract cost may get subsequently changed due to change in prevailing circumstances assumptions contract variations or any other factor and could result in material variance in the revenue and profit or loss from contract for the reporting period. Verified underlying documents such as original contract and its amendments if any key contract terms and milestones etc. for verifying the estimation of contract revenue and costs and /or any change in such estimation.
Inquired with management on the progress of works and collections from customers to identify specific customers with which the company might have disagreements or disputes.
Tested samples of un-invoiced revenue entries with reference to the reports from the records and costs incurred against the services delivered to confirm the work performed and application of appropriate margin applied for the respective services.
Tested cut-offs for revenue recognised against un-invoiced amounts by matching the revenue accrual against accruals for corresponding cost.
Receivables has been considered a key audit matter due to the significance of the amount (I 31177.92 lakh) and element of judgement involved in overall management assessment of the customers' ability to repay the outstanding balance. Refer to Note No. 2.15 12 and 39 of the Standalone Financial Statements Reviewed the work done and collection history of customers against whose contracts unbilled revenue is recognised; and verification of subsequent receipts post balance sheet date.
Obtained confirmations from customers on sample basis to support existence assertion of trade receivables and assessed the relevant disclosures made in the Standalone Financial Statements; to ensure revenue from contracts with customers are in accordance with the requirements of relevant accounting standards.

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

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to the Board's Report Management Discussion and AnalysisBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the standalone financial statements and our auditors' report thereon. Theother information is expected to be made available to us after the date of this auditors'report.

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 communicate the matter to those charged with governance asrequired under SA 720 ‘The Auditors' responsibilities relating to other Information'.

When we read the annual report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

Management's responsibility for the Standalone Financial Statements

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance including total comprehensive expense changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Ind AS specified under section 133 of the Act and the rules thereunder asamended. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management or Board of Directors either intend to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

The Board of Directors is 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 in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

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

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

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

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

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

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

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

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsfor the financial year ended March 31 2022 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.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor's Report) Order 2020 (‘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 A' 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 based on our audit 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 as at March 31 2022 the Statement of Profit and Loss (includingOther Comprehensive Expense) the Statement of Changes in Equity and the Statement of CashFlows for the year then ended dealt with by this Report are in agreement with the books ofaccount.

(d) In our opinion the standalone financial statements comply with the Ind ASspecified under section 133 of the Act and the Rules thereunder as amended.

(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 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 with reference to the financial statements and the operatingeffectiveness of such controls refer to our separate Report in ‘Annexure B' to thisreport.

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of sub-section (16) of Section 197 of the Act asamended we report that to the best of our information and according to the explanationsgiven to us remuneration paid by the Company to its directors during the year is inaccordance with the provisions of Section 197 of the Act.

(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. Please refer Note No. 38.

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

(iii) The Company was not required to transfer any amount to the Investor Education andProtection Fund during the year.

(iv) (a) The management has represented that to the best of its knowledge and beliefno funds (which are material either individually or in aggregate) have been advanced orloaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other person(s) or entity(ies) includingforeign entities ("Intermediaries") with the understanding whether recorded inwriting or otherwise that the Intermediary shall whether directly or indirectly lendor invest in other persons or entities identified in any manner whatsoever by or on behalfof the Company ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries;

(b) The management has represented that to the best of its knowledge and belief nofunds (which are material either individually or in aggregate) have been received by theCompany from any person(s) or entity(ies) including foreign entities ("Funding

Parties") with the understanding whether recorded in writing or otherwise thatthe Company shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries; and

(c) Based on the audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11 of the

Companies (Audit and Auditors) Rules 2014 as provided in (a) and (b) above containany material misstatement.

(v) The final dividend paid by the Company during the year in respect of the samedeclared for the previous year is in accordance with section 123 of the Act to the extentit applies to payment of dividend. As stated in note 15 to the standalone Ind AS financialstatements the Board of Directors of the Company have proposed final dividend for theyear which is subject to the approval of the members at the ensuing Annual GeneralMeeting. The dividend declared is in accordance with section 123 of the Act to the extentit applies to declaration of dividend.

For Kantilal Patel & Co. For Riddhi P. Sheth & Co.
Chartered Accountants Chartered Accountants
ICAI Firm registration number: 104744W ICAI Firm registration number: 140190W
Jinal A. Patel Riddhi P. Sheth
Partner Proprietor
Membership No.: 153599 Membership No.: 159123
Place: Ahmedabad Place: Ahmedabad
Date: May 27 2022 Date: May 27 2022
UDIN: 22153599AJSFYY5088 UDIN: 22159123AJRYDS1055

Annexure A to the Independent Auditor's Report of even date on the Standalone FinancialStatements of PSP Projects Limited

(Referred to in paragraph 1 under ‘Report on other legal and regulatoryrequirements' section of our report of even date to the members of PSP Projects Limited)

To the best of our information and according to the explanations provided to us by theCompany and the books of accounts and the records examined by us in the normal course ofaudit we state that:

(i) In respect of the Company's Property Plant and Equipment and Intangible Assets:

(a) (A) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.

(B) The Company has maintained proper records showing full particulars of intangibleassets.

(b) The Company has a program of physical verification of Property Plant andEquipment so as to cover all the assets every year which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to theprogram Property Plant and Equipment due for verification during the year werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

(c) Based on our examination of the property tax receipts registered sale deed/transfer deed/ conveyance deed provided to us we report that the title in respect ofself-constructed buildings and title deeds of all other immovable properties disclosed inthe standalone financial statementsincluded under Property Plant and Equipment are heldin the name of the Company as at the balance sheet date.

(d) The Company has not revalued any of its Property Plant and Equipment andintangible assets during the year.

(e) No proceedings have been initiated during the year or are pending against theCompany as at March 31 2022 for holding any benami property under the Benami Transactions(Prohibition) Act 1988 (as amended in 2016) and rules made thereunder.

(ii) (a) Physical verification of inventory has been conducted at reasonable intervalsby the management and in our opinion the coverage and procedure of such verification bythe management is appropriate. No discrepancies of 10% or more in the aggregate for eachclass of inventory were noticed on such verification.

(b) The Company has been sanctioned working capital limits in excess of five crorerupees in aggregate from banks on the basis of security of current assets. The quarterlyreturns/statements filed by the Company with such banks are in agreement with the books ofaccount of the Company.

(iii) (a) During the year the Company has not provided loans advances in the nature ofloans stood guarantee or provided security to companies firms Limited LiabilityPartnerships or any other parties. Accordingly the requirement to report on clause3(iii)(a) of the Order is not applicable to the Company.

(b) During the year the investments made guarantees provided security given and theterms and conditions of the grant of all loans and advances in the nature of loansinvestments and guarantees to companies firms Limited Liability Partnerships or anyother parties are not prejudicial to the Company's interest.

(c) In the case of loans given in our opinion the repayment of principal and paymentof interest has been stipulated and the repayments or receipts have been regular exceptfor the loans reported in clause 3(iii)(f) of this report below. There has been no defaulton the part of the party to whom the money has been lent. The payment of interest has beenregular. Further the Company has not given any advance in the nature of loan to any partyduring the year.

(d) There is no overdue amount for more than ninety days in respect of loans given.Further the Company has not given any advances in the nature of loans to any party duringthe year.

(e) There is no loan or advance in the nature of loan granted falling due during theyear which has been renewed or extended or fresh loans granted to settle the overdues ofexisting loans given to same parties.

(f) The Company has not granted any loans or advances in the nature of loans eitherrepayable on demand or without specifying any terms or period of repayment except for thefollowing loans or advances in the nature of loans to its Promoters and related parties asdefined in Clause (76) of Section 2 of the Act:

(Rs in Lakhs)
All Parties Promoters Related Parties
Aggregate amount of loans/ advances in nature of loans
Repayable on demand (A) 773.54
Agreement does not specify any terms or period of repayment (B) -
Total (A+B) 773.54
Percentage of loans/ advances in nature of loans to the total loans 100%

(iv) The Company has complied with the provisions of sections 185 and 186 of the Act inrespect of grant of loans making investments and providing guarantees and securities asapplicable.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly reporting under clause 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Act and are of the opinion that prima facie the specified accountsand records have been made and maintained. We have not however made a detailedexamination of the same.

(vii) In respect of statutory dues:

(a) In our opinion the Company has generally been regular in depositing the undisputedstatutory dues including Goods and Services Tax provident fund employees' stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax cess and any other material statutory dues as applicable to the appropriateauthorities.

(b) There were no undisputed amounts payable in respect of Goods and Services Taxprovident fund employees' state insurance income-tax sales-tax service tax duty ofcustoms duty of excise value added tax cess and other material statutory dues asapplicable in arrears as at March 31 2022 for a period of more than six months from thedate they became payable.

(c) The details of statutory dues referred to in subclause (a) above which have notbeen deposited as on March 31 2022 on account of disputes are given below:

Name of the Statute Nature of the Dues Amount ( Rs in Lakhs) Period to which the amount relates Forum where dispute is pending Remarks if any
Gujarat Value Added Tax Act 2003 Sales tax liability on the reason being non- production of custom authority endorsed bills of SEZ supply 252.55 2016-17 & 2017-18 Commissioner Appeals -
The Finance Act 1994 Service tax dues in relation to dispute regarding the availing of exemption for services rendered under the erstwhile service tax regime 158.78 2012-13 to 2014-15 CESTAT -

(viii) There were no transactions relating to previously unrecorded income that havebeen surrendered or disclosed as income during the year in the tax assessments under theIncome-tax Act 1961 (43 of 1961).

(ix) (a) The Company is regular in repayment of loans or other borrowings or in paymentof interest thereon to lenders.

(b) The Company has not been declared wilful defaulter by any bank or financialinstitution or government or government authority.

(c) The Company has utilised the money obtained by way of term loans during the yearfor the purpose for which they were obtained.

(d) According to the procedures performed by us and on an overall examination of thestandalone financial statements of the Company we report that no funds raised onshort-term basis have been used for long- term purposes by the Company.

(e) On an overall examination of the financial statements of the Company the Companyhas not taken any funds from any entity or person on account of or to meet the obligationsof its subsidiaries associates or joint ventures.

(f) The Company has not raised loans during the year on the pledge of securities heldin its subsidiaries joint ventures or associate companies.

(x) (a) The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) during the year. Accordingly reporting underclause 3(x)(a) of the Order is not applicable.

(b) During the year the Company has not made any preferential allotment or privateplacement of shares or convertible debentures (fully or partly or optionally) and hencereporting under clause 3(x) (b) of the Order is not applicable.

(xi) (a) No fraud by the Company and no material fraud on the Company has been noticedor reported during the year.

(b) No report under sub-section (12) of Section 143 of the Act has been filed in FormADT-4 as prescribed under Rule 13 of the Companies (Audit and Auditors) Rules 2014 withthe Central Government during the year.

(c) As represented to us by the management of the Company there are no whistle blowercomplaints received by the Company during the year.

(xii) In our opinion the Company is not a Nidhi company. Accordingly reporting underclause 3(xii) of the Order is not applicable to the Company.

(xiii) In our opinion the Company is in compliance with Section 177 and Section 188 ofthe Act with respect to applicable transactions with the related parties and the detailsof related party transactions have been disclosed in the standalone financial statementsas required by the applicable accounting standards.

(xiv) (a) In our opinion the Company has an adequate internal audit systemcommensurate with the size and nature of its business.

(b) We have considered the internal audit reports for the year under audit issued tothe Company during the year and till date in determining the nature timing and extent ofour audit procedures.

(xv) In our opinion during the year the Company has not entered into non-cashtransactions with directors or persons connected with its directors and hence provisionsof section 192 of Act are not applicable to the Company.

(xvi) (a) In our opinion the Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934. Hence reporting under clauses 3(xvi)(a)(b) and (c) of the Order is not applicable to the Company.

(b) In our opinion there is no core investment company within the Group (as defined inthe Core Investment Companies (Reserve Bank) Directions 2016). Hence reporting underclause 3(xvi)(d) of the Order is not applicable to the Company.

(xvii) The Company has not incurred cash losses during the financial year covered byour audit and the immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors of the Company duringthe year.

(xix) On the basis of the financial ratios ageing and expected dates of realisation offinancial assets and payment of financial liabilities other information accompanying thefinancial statements and our knowledge of the board of directors and management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report indicating that the Company is not capable of meeting itsliabilities existing at the date of the balance sheet as and when they fall due within aperiod of one year from the balance sheet date. We however state that this is not anassurance as to the future viability of the Company. We further state that our reportingis based on the facts up to the date of the audit report and we neither give any guaranteenor any assurance that all liabilities falling due within a period of one year from thebalance sheet date will get discharged by the Company as and when they fall due.

(xx) (a) There are no unspent amounts towards Corporate Social Responsibility (CSR) onother than ongoing projects requiring a transfer to a Fund specified in Schedule VII tothe Act in compliance with the second proviso to sub-section (5) of Section 135 of theAct. Accordingly reporting under clause 3(xx) (a) of the Order is not applicable.

(b) There are no unspent amounts towards Corporate Social Responsibility (CSR) onongoing projects requiring a transfer to a Fund specified in Schedule VII to the Act incompliance with sub-section (6) of Section 135 of the Act. Accordingly reporting underclause 3(xx)(a) of the Order is not applicable.

For Kantilal Patel & Co. For Riddhi P. Sheth & Co.
Chartered Accountants Chartered Accountants
ICAI Firm registration number: 104744W ICAI Firm registration number: 140190W
Jinal A. Patel Riddhi P. Sheth
Partner Proprietor
Membership No.: 153599 Membership No.: 159123
Place: Ahmedabad Place: Ahmedabad
Date: May 27 2022 Date: May 27 2022
UDIN: 22153599AJSFYY5088 UDIN: 22159123AJRYDS1055

Annexure B to the Independent Auditor's Report of even date on the Standalone FinancialStatements of PSP Projects Limited

Referred to in paragraph 2(f) under ‘Report on other legal and regulatoryrequirements' section of our report of even date to the members of PSP Projects Limited)

Report on the internal financial controls with reference to the standalone financialstatements under section 143(3)(i) of the Act

We have audited the internal financial controls over financial reporting of the Companyas of March 31 2022 in conjunction with our audit of the standalone financial statementsof the Company for the year ended on that date.

Management's responsibility for internal financial controls

The Company's management and Board of Directors are 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 (‘the Guidance Note') issued by the Institute of CharteredAccountants of India (‘the ICAI'). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to the Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.

Auditor's responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note issued by the ICAI and the SAs prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controls.Those SAs and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols 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 thestandalone 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 the 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 internal financial controls system overfinancial reporting with reference to the standalone financial statements.

Meaning of internal financial controls over financial reporting

Acompany'sinternalfinancialcontroloverfinancialreporting is a process designed toprovide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting with reference to these standalone financial statements includes those policiesand procedures that (i) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany; (ii) provide reasonable assurance that transactions are recorded as necessary topermit preparation of the standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordancewithauthorisationsofmanagementanddirectors of the Company;and (iii) 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 over financial reporting

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

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting with reference to the standalone financial statements andsuch internal financial controls over financial reporting were operating effectively as atMarch 31 2022 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by the ICAI.

For Kantilal Patel & Co. For Riddhi P. Sheth & Co.
Chartered Accountants Chartered Accountants
ICAI Firm registration number: 104744W ICAI Firm registration number: 140190W
Jinal A. Patel Riddhi P. Sheth
Partner Proprietor
Membership No.: 153599 Membership No.: 159123
Place: Ahmedabad Place: Ahmedabad
Date: May 27 2022 Date: May 27 2022
UDIN: 22153599AJSFYY5088 UDIN: 22159123AJRYDS1055

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