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Sadbhav Infrastructure Projects Ltd.

BSE: 539346 Sector: Infrastructure
NSE: SADBHIN ISIN Code: INE764L01010
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VOLUME 23649
52-Week high 14.80
52-Week low 4.95
P/E
Mkt Cap.(Rs cr) 197
Buy Price 5.55
Buy Qty 200.00
Sell Price 5.61
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OPEN 5.35
CLOSE 5.39
VOLUME 23649
52-Week high 14.80
52-Week low 4.95
P/E
Mkt Cap.(Rs cr) 197
Buy Price 5.55
Buy Qty 200.00
Sell Price 5.61
Sell Qty 770.00

Sadbhav Infrastructure Projects Ltd. (SADBHIN) - Auditors Report

Company auditors report

To

The Members of

Sadbhav Infrastructure Project Limited

Report on the Audit of the Standalone Financial Statements QualifiedOpinion

We have audited the accompanying standalone financial statements ofSadbhav Infrastructure Project Limited ("the Company") which comprise theBalance Sheet as at March 31 2022 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Cash Flows and Statement of Changes in Equity forthe year ended on that date and notes to the standalone financial statement including asummary of the significant accounting policies and other explanatory information (hereinafter referred to as 'financial statements').

In our opinion and to the best of our information and according to theexplanations given to us except for the matters described in the "Basis forQualified Opinion" section of our report the aforesaid standalone financialstatements give the information required by the Companies Act 2013 ("the Act")in the manner so required and give a true and fair view in conformity with the IndianAccounting Standards prescribed under section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended ("Ind AS") and otheraccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2022 the loss and total comprehensive income changes in equity and itscash flows for the year ended on that date.

Basis for Qualified Opinion

1. We draw attention to Note 46 and Note 47 to the accompanyingStandalone Financial Statements with respect to investment in and loan & advances toRohtak Hisar Tollway Limited (RHTPL) and Rohtak Panipat Tollway Limited (RPTPL)subsidiaries of the company. Both the subsidiaries have issued notice of termination ofconcession agreement to National Highway Authority of India (NHAI) on account of ForceMajeure Event as per concession agreement. As explained in the said note the company hascarried out impairment assessment of investment in these subsidiaries considering theexpected payment arising out of aforesaid termination and other claims filed with NHAI andbased on the above assessment management has concluded that no impairment/adjustment tothe carrying value of the investment is necessary as at March 31 2022.

We have not been able to corroborate the management's contention ofrealising the carrying value of investments and loans and advances related to bothsubsidiaries aggregating to Rs. 7947.52 million as on the reporting date.

Accordingly we are unable to comment on appropriateness of thecarrying value of such investment and loans and advances and their consequential impact onthe financial statements and financial position of the company as at and for the yearended on March 31 2022.

2. We draw attention to Note 49 of the accompanying standalonefinancial statements with respect to investment in and loan & advances SadbhavBangalore Highway Private Limited (SBGHPL) subsidiary of the company where lenders ofSBGHPL have notified to NHAI about exercise of their right of substitution ofconcessionaire in the month of January 2022. As explained in the said note substitutionproceedings are not over as on the date of balance sheet and also the management hascarried out impairment assessment of investment in this subsidiary duly considering theexpected payment arising out of aforesaid substitution. Based on these aspects themanagement has concluded that no adjustment to the carrying values of the investments inand loans and advances to SBGHPL is necessary as at March 31 2022.

We have not been able to corroborate the management's contention ofrealising the carrying value of investment and loans and advances (including interestaccrued) related to SBGHPL aggregating to Rs. 1724.65 million as the reporting date.

Accordingly we are unable to comment on appropriateness of thecarrying value of such investment and loans and advances and their consequential impact onthe financial statements and financial position of the company as at and for the yearended on March 31 2022.

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for qualified opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. In addition to the report described in the Basis forQualified Opinion section we have determined the matters described below to be key auditmatters to be communicated in our report.

We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the Standalone Financial Statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the Standalone Financial Statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion on the accompanying Standalone Financial Statements

Key audit matters Response to Key Audit Matter
Assessing impairment of investments in assets operated under concession arrangements (Other than RHTPL RPTPL & SBGHPL)(refer note no 3.10 of the Standalone Financial Statements )
As at March 31 2022 the Company had investments (including sub-ordinate debt) in BOT assets and Hybrid Annuity (HAM) assets amounting to Rs 1295.74 million and Rs 9734.93 Million respectively which are operated under concession agreement. Our audit procedures included but were not limited to:
For the purpose of impairment testing recoverable amount has been determined based on discounted future cash flows such as annuity model discount rate and future operating and finance cost based on management's view of future business prospects. - Obtained an understanding of the Company's valuation methodology applied in determining the recoverable amount of its investment in Assets.
Further the recoverable amount is highly sensitive to changes in key assumptions used for forecasting the future cash flows including growth rate discount rate change in traffic and tolls and future operating and finance cost. Thus the determination of the recoverable amount of such investment in projects involves significant management judgement. - Obtained the financial model and understood the key assumptions around the cash flow forecasts like growth rate change in traffic and toll rate/collection/user fees and future operating and finance costs considering the current and estimated future economic conditions.
Accordingly the impairment assessment of investment in asset operated under concession arrangement was determined to be a key audit matter in our audit of the Standalone Financial Statements -Obtained the financial model and understood the key assumptions around the cash flow forecasts like annuity model discount rate and future operating and finance costs
- Assessed the inputs and assumptions around the key drivers of the cash flow forecasts against historical performance economic and industry indicators.
- Performed sensitivity analysis of key assumptions.
- Tested the arithmetical accuracy of the model.
- Reviewed the adequacy of the disclosures made in the standalone financial statements.

Recognition of revenue from construction services (refer note no 3.4 of the StandaloneFinancial Statements)

•Revenue from construction services for the year ended on March 31 2022 amounting to Rs 710.40 million comprised of Construction Contracts Major Maintenance Contracts and Price Escalation Income. Revenue from these contracts are recognized over a period of time in accordance with the requirements of Ind AS 115 Revenue from Contracts with Customers. Our audit procedures included but were not limited to:
Revenue from construction services is recognized over a period as the customer simultaneously receives and consumes the benefits provided by the Company and measure revenue based on input method i.e. revenue recognized on the basis of cost incurred to satisfaction of a performance obligation relative to the total expected cost to the satisfaction of that performance obligation which involves significant judgments relating to estimation of total cost for each contract. - Read the accounting policy for revenue recognition of the Company.
Revenue recognition involves aforesaid significant management judgement and estimation. We therefore determined this to be a key audit matter - Obtained an understanding of the Company's processes and controls for revenue recognition process evaluated the key controls around such process and tested those controls for the operating effectiveness.
- Performed tests of details on a sample basis and inspected the underlying customer contracts and relevant supporting documents. Also on sample basis inspected the relevant underlying documents of actual cost incurred during the year.
- Compared costs incurred with estimated costs to identify significant variations and assessed whether those variations have been considered in estimating the remaining costs to the satisfaction of that performance obligation. We assessed the management's evaluation for the status of completion for projects and total cost estimates.
- Performed analytical audit procedures including analysing material changes in overall contract margin from one period to another for assessing reasonableness of revenues disclosed by type.
- Checked that the risks of delays and cost overruns related to the performance of works were properly taken into account along with estimates of completion costs and reviewed the contingencies included in the budget and the extent to which disputes were covered.
- Review of the relevant disclosures made by the company in accordance with Ind AS 115.

Information Other than the Financial Statements and Auditor's ReportThereon

The Company's Board of Directors is responsible for the preparation ofthe other information. The othe information comprises the information included in theManagement Discussion and Analysis Board's Repor including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance anc Shareholder's Information butdoes not include the standalone financial statements and our auditor's repor thereon. Theother information report is expected to be made available to us after the date of thisauditor1: report.

Our opinion on the standalone financial statements does not cover theother information and we do not expres: any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the othei information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

When we read the other information report if we conclude that there isa material misstatement therein we are required to communicate the matters to thosecharged with governance to initiate actions applicable in the applicable laws andregulations.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134 (5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.

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

In preparing the 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 theCompany's financial reporting process. Auditor's Responsibility for the Audit of theStandalone Financial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We are also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

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

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's 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 Sectionl43(3) of the Act based on our audit wereport that:

(a) We have sought and except for the matter described in the Basis forQualified Opinion paragraph obtained all the information and explanations which to thebest of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion except for the matter described in the Basis forQualified Opinion paragraph proper books of account as required by law have been kept bythe Company so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the statement of Cash Flow and the Statement of Changes in Equitydealt with by this Report are in agreement with the books of account.

(d) In our opinion except for the matter described in the Basis forQualified Opinion paragraph the aforesaid standalone financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014.

(e) In our opinion the matter described in the Basis for QualifiedOpinion paragraph above may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2022 from being appointed as a director in termsof Section 164(2) of the Act

(g) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure - A".

(h) In our opinion the managerial remuneration for the year endedMarch 31 2022 paid / provided by the Company to their directors is in accordance withthe provisions of section 197 read with Schedule V to the Act;

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

i. The Company has disclosed the impact wherever necessary of pendinglitigations on its financial position in its financial statements; Refer note 38 to theStandalone Financial Statements

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended on March 312022.

iv. (a) The Management has represented that to the best of itsknowledge and belief no funds (which are material either individually or in theaggregate) have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the Company to or in any other person orentity including foreign entity ("Intermediaries") with the understandingwhether recorded in writing or otherwise that the Intermediary shall whether directlyor indirectly lend or invest in other persons or entities identified in any mannerwhatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provideany guarantee security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented that to the best of its knowledgeand belief no funds (which are material either individually or in the aggregate) havebeen received by the Company from any person or entity including foreign entity("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11(e) as providedunder (a) and (b) above contain any material misstatement.

v. The company has not declared or paid any dividend in the year underaudit and hence reporting requirement for compliance with section 123 of the Act is notapplicable.

2. As required by the Companies (Auditor's Report) Order 2020("the order") issued by the central government in terms of Section 143(11) ofthe Act we give in "Annexure-B" a statement on matters specified in paragraphs3 and 4 in order to the extent applicable.

ANNEXURE-A

TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under "Report on Other Legal andRegulatory Requirements" section of our report the members of Sadbhav InfrastructureProject Limited of even date)

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

In conjunction with our audit of the standalone financial statements ofSadbhav Infrastructure Project Limited (The Company) as of and for the year ended March31 2022 we have also audited the internal financial controls over financial reporting ofthe Company.

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's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting with reference to these Standalone FinancialStatements.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of Standalone Financial Statement for external purposes inaccordance with generally accepted accounting principles. A company's interna financialcontrol over financial reporting includes those policies and procedures that;

1) Pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect th< transactions and dispositions of the assets of thecompany;

2) Provide reasonable assurance that transactions are recorded asnecessary to permit preparation o Standalone Financial Statements i n accordance withgenerally accepted accounting principles an( that receipts and expenditures of thecompany are being made only in accordance wit! authorizations of management and directorsof the company; and

3) Provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud ma\ occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancia reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting ma\ become inadequate because of changes in conditionsor that the degree of compliance with the policies ot procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2022 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

ANNEXURE-B

TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under "Report on Other Legal andRegulatory Requirements" section of our report the members Sadbhav InfrastructureProject Limited of even date)

Report on the Companies (Auditor' Report) Order 2020 issued in termsof section 143 (11) of the Companies Act 2013 ('the Act') of Sadbhav InfrastructureProject Limited ('the Company')

To the best of our information and according to information andexplanations provided to us by the Company and the books of account and records examinedby us in the normal course of audit we state that:

(i) (a) (I) The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant &equipment.

(II) The Company did not have intangible Assets.

(b) The Company has a program of physical verification of its PropertyPlant and Equipment. In accordance with this program Property Plant and Equipment wereverified during the year and no material discrepancies were noticed on such verification.In our opinion this periodicity of physical verification is reasonable having regard tothe size of the Company and the nature of its assets

(c) The Title deeds of immovable property disclosed in the financialstatements included in investment property are held in the name of the Company as at thebalance sheet date.

(d) The company has not revalued its Property Plant and Equipmentduring the year.

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

(ii) (a) The project inventories were physically verified by themanagement during the year at reasonable intervals. In our opinion and based oninformation and explanations given to us the coverage and procedure of such verificationby the management is appropriate having regard to the size of the Company and the natureof its operations. No discrepancies of 10% or more in the aggregate for each class ofinventories were noticed on such physical verification of inventories when compared withthe books of account

(b) During any point of time of the year the company has not beensanctioned working capital limits in excess of Rs. 5 crores in aggregate from banks orfinancial institutions on the basis of security of current assets. Hence the reportingrequirements of paragraph 3(ii)(b) of the Order is not applicable.

(iii) (a) The Company has provided loans stood guarantee or providedsecurity during the year and details of which are given hereunder:

(Rs. In Million)
Particulars Loans Guarantees Security
A. Aggregate amount granted/provided during the year:
- Subsidiaries 591.91 Nil Nil
- Others Nil Nil 1372.00*
B. Balance outstanding as at balance sheet date in respect of above cases (including opening balances)
- Subsidiaries 953.82 Nil Nil
- Others Nil 4011.95 2564.45*

* The Gross amount of security provided by the Company derives byconsidering the face value of the shares pledged.

(b) In our opinion and according to the information and explanationsgiven to us the investments made guarantees provided security given and the terms andconditions of the grant of all loans are not prejudicial to the Company's interest exceptthat Interest on loan of Rs 567.91 million given to the Sadbhav Hybrid Annuity ProjectLimited (SHAPL) a wholly owned subsidiary is not charged. However attention is invitedto "Basis for Qualified Opinion" in our main audit report.

(c) In respect of loans granted the terms of arrangements do notstipulate any repayment schedule of principal and interest. The loans are repayable ondemand except interest free term loan of Rs 567.91 Million given to SHAPL.

(d) Since the cited loans are repayable on demand reporting under thisclause in respect of overdue balance is not applicable.

(e) The Company has granted Loans amounting to Rs 385.91 Million givento related parties which are repayable on demand.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of sections 185 and 186 of theAct with respect to the loans granted investments made and guarantees and securitiesprovided as applicable.

(v) The Company has not accepted any deposits or deemed deposits withinthe meaning of sections 73 to 76 of the Act and the Companies (Acceptance of deposits)rules 2014 (as amended). Accordingly the provisions of clause 3(v) of the order are notapplicable and hence not commented upon.

(vi) We have broadly reviewed the books of account maintained by thecompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under section 148(1) of the Act related to road and other infrastructure projectsrelated services and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained by the company. We have not however made adetailed examination of the same.

(vii) (a) According to the information and explanations given to us andon the basis of examination of the records of the company provided to us amountdeducted/accrued in the books of account in respect of undisputed statutory duesincluding Goods and Service Tax Provident Fund Employees' State Insurance Income TaxSales Tax Service Tax duty of Customs duty of Excise Value Added Tax Cess and othermaterial statutory dues have not been regularly deposited with the appropriate authoritiesthough the delay in depositing such dues. According to the information and explanationgiven to us there are no dues payable on account of customs duty during the year.

According to the information and explanations given to us noundisputed amounts payable in respect of income tax cess goods and services tax andother material statutory dues were in arrears as at March 31 2022 for a period of morethan six months from the date they became payable except interest on tax deducted atsource amouting to Rs. 13.05 Million

(b) There are no statutory dues referred in sub clause(a) above whichhave not been deposited on account of dispute as on March 312022

(viii) There were no transactions relating to previously unrecordedincome that have been surrendered or disclosed as income during the year in the taxassessments under the Income Tax Act 1961 (43 of 1961).

(ix) (a) We are of the opinion that the company has not defaulted inrepayment of loans or other borrowings or in the payment of interest thereon to anylender.

(b) The company has not been declared willful defaulter by any bank orfinancial institution or other lender

(c) The company has not taken any term loans during the year. Hence thereporting requirement of paragraph 3(ix)(c) of the Order are not applicable.

(d) On an overall examination of the standalone financial statements ofthe Company funds raised on short-term basis have prima facie not been used during theyear for long-term purposes by the Company.

(e) According to the information and explanations given to us and on anoverall examination of the financial statements of the Company we report that the Companyhas not taken any funds from any entity or person on account of or to meet the obligationsof its subsidiaries or associates as defined under the Act. The Company does not hold anyinvestment in any joint venture (as defined under the Act) during the year ended March 312022.

(f) The Company has raised loans during the year on the pledge ofsecurities held in its subsidiary companies as per details below

Nature of loan taken Name of lender amount of loan (Amount in Millions) name of the subsidiary joint venture associate companies Details of security pledged
Non Convertible Debenture Allianz & AMP CAPITAL

5500 (2750 for each lender)

Maharashtra Border Check Post Network Limited 17250 Equity Shares
Ahmedabad Ring Road Infrastructure Limited 4811600 Equity Shares
Nature of loan taken Name of lender amount of loan (Amount in Millions) name of the subsidiary joint venture associate companies Details of security pledged
Sadbhav Una Highway Limited 7325440 Equity Shares
Sadbhav Bhavnagar Highway Limited 9633340 Equity Shares
Sadbhav Rudrapur Highway Limited 489940 Equity Shares
Sadbhav Nainital Highway Limited 489940 Equity Shares
Sadbhav Jodhpur Ring Road Private Limited 5708485 Equity Shares
Sadbhav Udaipur Highway Limited 13213280 Equity Shares
Sadbhav Bangalore Highway Private Limited 15142258 Equity Shares
Sadbhav Vidarbha Highway Limited 12641275 Equity Shares
Sadbhav Kim Expressway Private Limited 49566801 Equity Shares
Rohtak Panipat Tollway Private Limited 1071198 Equity Shares
Rohtak-Hissar Tollway Private Limited 5276170 Equity Shares

(x) (a) The Company has not raised any money by way of initial publicoffer or further public offer during the year. Hence the reporting requirements ofparagraph 3(x)(a) of the order are not applicable.

(b) The Company has not made any preferential allotment or privateplacement of shares or convertible debentures (fully partially or optionally convertible)during the year. Hence the reporting requirements of paragraph 3(x)(b) of the order arenot applicable.

(xi) (a) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and a per the information andexplanations given by the Management we report that no fraud by the Company or on thecompany by officer or employee has been noticed or reported during the year.

(b) No report under sub-section (12) of section 143 of the CompaniesAct has been filed in Form ADT-4 as prescribed under Rule 13 of Companies (Audit andAuditors) Rules 2014 with the Central Government during the year and up to the date ofthis report.

(c) As represented by the management there are no whistle blowercomplaints received by the company during the year.

(xii) In our opinion the Company is not a Nidhi Company. Therefore thereporting requirement of Clause 3(xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanation given to us and onthe basis of our examination of the records of the Company all the transactions withrelated parties are in compliance with Sections 177 and 188 of the Act where applicableand also the details which have been disclosed in the Financial Statements are inaccordance with the applicable Indian Accounting Standards.

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

(b) We have considered the internal audit reports for the year underaudit issued to the company during the year in determining nature timing and extent ofour audit procedure.

(xv) According to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith him. Accordingly reporting requirement of paragraph 3(xv) of the Order are notapplicable to the Company.

(xvi) According to the information and explanations given to us thecompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934. Hence reporting requirement of paragraph 3(xvi) of the Order are not applicableto the Company.

(xvii) The Company has incurred cash losses of Rs 2266.99 Million inthe Financial Year. The company has not incurred any cash loss in the immediatelypreceding financial year.

(xviii) There has been no resignation of the statutory auditors of thecompany during the year.

(xix) On the basis of the financial ratios ageing and expected datesof realization of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors andManagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which cause us to believe that any material uncertaintyexist as on the date of audit report indicating that Company is not capable of meeting itsliabilities existing at the date of balance sheet as and when they fall due within aperiod of one year from the balance sheet date. However we 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 audit report and we neither give any guarantee norany 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) According to information and explanation given to us based onexamination of the financial statement of the company requirement of section 135 is notapplicable to the company. Hence reporting requirement of paragraph 3(xx) (a) and (b) ofthe Order are not applicable to the Company.

For S G D G & Associates LLP
Chartered Accountants
Firm's Registration No. W100188
Place: Ahmedabad (Devansh Gandhi)
Date: May 28 2022 Partner
Membership No. 129255
UDIN: 22129255AJVSGO4370

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