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SPML Infra Ltd.

BSE: 500402 Sector: Infrastructure
NSE: SPMLINFRA ISIN Code: INE937A01023
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VOLUME 15979
52-Week high 75.40
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P/E 62.67
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OPEN 25.90
CLOSE 25.70
VOLUME 15979
52-Week high 75.40
52-Week low 23.70
P/E 62.67
Mkt Cap.(Rs cr) 122
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

SPML Infra Ltd. (SPMLINFRA) - Auditors Report

Company auditors report

To the Members of SPML Infra Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements ofSPML Infra Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2022 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedand notes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us and based on the consideration of the reports of other auditorsin respect of certain joint operations as referred to in the Other Matters section of ourreport below except for the effects/possible effects of the matters described in theBasis for Qualified 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 accountingprinciples generally accepted in India including the Indian Accounting Standards("Ind AS") prescribed under Section 133 of the Act of the state of affairs ofthe Company as at 31st March 2022 its profit including other comprehensive incomechanges in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

As stated in:

a. Note no. 42 to the standalone financial statements interest on YTMbasis amounting to Rs. 6027.24 lakhs (31st March 2021: Rs. 5560.59 lakhs) was notprovided on Optionally Convertible Debentures (‘OCDs') issued to lenders under S4Ascheme which is not in accordance with the requirements of Ind AS 23: Borrowing Costsread with Ind AS 109:Financial Instruments. Had such interest expense been recognized thefinance costs profit before tax profit after tax and total comprehensive income wouldhave been impacted to the extent of the aforesaid amount for the year ended 31st March2022. Further since the issue of OCDs the total liability not provided for in respectof such interest on YTM basis is Rs 23314.53 lakhs as at 31st March 2022 (31st March2021: Rs. 17287.29 lakhs). The Auditor's Report for the year ended 31st March 2021 wasalso qualified in respect of this matter.

b. Note no. 16.8 to the standalone financial statements interestexpense of Rs. 19795.66 lakhs on the Company's borrowings from certain financialcreditors (banks & financial institutions) has not been recognized for the year ended31st March 2022 (31st March 2021: Rs. 18685.60 lakhs). This is not in accordance withthe requirements of Ind AS 23: Borrowing Costs read with Ind AS 109: FinancialInstruments. Had the aforesaid interest expense been recognized the finance costs profitbefore tax profit after tax and total comprehensive income would have been impacted tothe extent of the aforesaid amount for the year ended 31st March 2022. The Auditor'sReport for the year ended 31st March 2021 was also qualified in respect of this matter.Further Rs.463.74 lakhs representing liability upto 31st March 2021 towards interestexpense on the Company's borrowings from financial creditors (other than banks andfinancial institutions) had been written back during the year ended 31st March 2022 andinterest expense of Rs.714.06 lakhs on such borrowings has not been recognized for theyear ended 31st March 2022. This is not in accordance with the requirements of Ind AS 23:Borrowing Costs read with Ind AS 109: Financial Instruments. Had the aforesaid liabilitytowards interest expense not been written back and the aforesaid interest expense beenrecognised the finance costs profit before tax profit after tax and total comprehensiveincome would have been impacted to the extent of the aforesaid amounts for the year ended31st March 2022.

Note no. 43 to the standalone financial statements the Company's tradereceivables (net of ECL) and inventories as at 31st March 2022 include Rs. 8066.17 lakhsand Rs.1042.44 lakhs respectively (31st March 2021: Rs. 8017.29 lacs and Rs. 1120.38Lacs respectively) relating to certain projects where the claims are presently underarbitration/ litigation proceedings. Pending the ultimate outcome of these matters (fateof which is presently unascertainable) we are unable to comment on the recoverabilitythereof. The Auditor's Report for the year ended 31st March 2021 was also qualified inrespect of this matter.

We conducted our audit in accordance with the Standards on Auditing(‘SAs') specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia ("ICAI") together with the ethical requirements that are relevant to ouraudit of the standalone financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our qualified opinion.

Emphasis of Matters

We draw attention to the following notes to the standalone financialstatements:

(i) Note no. 44 regarding uncertainties relating to therecoverability of certain trade & other receivables as at 31st March 2022 andrecognition of interest income thereon arising out of arbitration awards pronounced infavour of the Company.

(ii) Note no. 41 regarding write back of Rs. 727.96 lakhs (31st March2021: Rs. 2118.18 lakhs) in respect of certain credit balances.

(iii) Note no. 48 regarding postponement of recognition of income frominterest on unsecured loans given to certain subsidiaries joint ventures and associateswhich are impaired fully/partially by way of expected credit losses.

(iv) Note no. 47 which describes the effects of uncertaintiesrelating to COVID-19 pandemic outbreak on the Company's operations and management'sevaluation of its impact on the standalone financial statements.

(v) Note no. 16.7 which indicates that the Company has defaulted inpayment of dues to financial creditors is facing working capital constraints and itsborrowing facilities are irregular with certain financial creditors as at 31st March2022. Based on ongoing discussion with such creditors for formulation of a resolution planand other mitigating factors as mentioned in the aforesaid Note no. 16.7 the Company'sBoard of Directors is of the view that going concern basis of accounting is appropriatefor preparation of the standalone financial statements.

Our opinion is not modified in respect of these matters. Key AuditMatters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent year. 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 matters described in the Basis forQualified Opinion section hereinabove we have determined the matters described below tobe the key audit matter to be communicated in our report.

Key Audit Matter How our audit addressed the key audit matter
Correctness of Project Revenue Recognition and related costs - Construction Contracts (refer Note nos. 2(xiv) and 24 to the standalone financial statements ) Our audit approach was a combination of test of internal controls and substantive procedures which included the following:
Revenue from construction contracts is recognized over a period of time in accordance with the requirements of IND AS 115 - Revenue from Contracts with Customers. Revenue recognition involves usage of percentage of completion method which is determined based on proportion of contract costs incurred to date compared to estimated total contract costs which involves significant judgments reliable estimation of total project cost identification of contractual obligations in respect of Company's rights to receive payments for performance completed till date estimation of period of recovery of receivables changes in scope and consequential revised contract price and recognition of liability for loss making contracts/onerous obligations if any. • Evaluating the appropriateness of the Company's accounting policy for revenue recognition;
• Obtaining an understanding of the Company's processes and testing the design and operating effectiveness of key internal financial controls including those related to review and approval of contract estimates;
• Testing 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;
• Testing a sample of contracts for appropriate identification of performance obligations and the appropriateness of contract revenue recognized by evaluating key management judgments inherent in the forecasted contract revenue and costs to complete;
Project revenue recognition is significant to the financial statements based on the quantitative materiality and the degree of management judgment required to apply the percentage of completion method. Changes in these judgements and the related estimates as contracts progress can result in material adjustments to revenue and margins. As a result of the above judgments complexities involved and material impact on the related financial statement elements this area has been considered a key audit matter in the audit of the standalone financial statements. • For costs incurred to date testing samples to appropriate supporting documents and performing cut-off procedures;
• Testing the forecasted cost by obtaining executed purchase orders/agreements and evaluating the reasonableness of managements judgments/estimates; .
• Performing analytical procedures for reasonableness of revenue recognition; and
• Evaluating the appropriateness and adequacy of the disclosures related to contract revenue and costs in the standalone financial statements in accordance with the applicable accounting standards.

Information other than the Standalone Financial Statements andAuditors? Report thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Annual Reportbut does not include the standalone financial statements and our auditor's report thereon.The Annual Report is expected to be made available to us after the date of this auditor'sreport.

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

In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

When we read the other information if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance.

Responsibilities of Management and Those Charged with Governance forthe 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 standalonefinancial statements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statement that give a true andfair view and are free from material misstatement whether due to fraud or error.

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

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor?s Responsibilities for the Audit of the StandaloneFinancial 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 also:

• Identify and assess the risks of material misstatement of thefinancial 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 theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand 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 financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent 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 financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matters

a. We did not audit the financial statements / financial information of3 (three) joint operations included in the standalone financial statements whosefinancial statements / financial information reflect total assets of Rs. 78.79 lakhs as at31st March 2022 total revenues of Rs. 0.64 lakhs and total net loss after tax of Rs.9.04 lakhs for the year ended on that date as considered in the standalone financialstatements. These financial statements / financial information have been audited by otherauditors whose reports have been furnished to us by the Company's management and ouropinion on the standalone financial statements in so far as it relates to the amounts anddisclosures included in respect of these joint operations is based solely on the auditreports of such other auditors and on the procedures performed by us as stated in thesection Auditor's Responsibilities for the Audit of the Standalone Financial Statementshereinabove.

b. We did not audit the financial statements / financial information of7 (seven) joint operations included in the standalone financial statements whosefinancial statements / financial information reflect total assets of Rs. 8791.64 lakhs asat 31st March 2022 total revenues of Rs. 10607.19 lakhs and total net loss after tax ofRs. 12.29 lakhs for the year ended on that date as considered in the standalone financialstatements. These financial statements / financial information are unaudited and have beenfurnished to us by the Company's management and our opinion on the standalone financialstatements in so far as it relates to the amounts and disclosures included in respect ofthese joint operations is based solely on such un-audited financial statements/financialinformation. In our opinion and according to the information and explanations given to usby the Company's management these financial statements / financial information are notmaterial to the Standalone Financial Statements.

c. Owing to non-availability of financial statements/ financialinformation/financial results of 2 (two) joint operations the same were not included inthe standalone financial statements. According to the information and explanations givento us by the Company's management such financial statements/ financialinformation/financial results are not material to the Statement.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in "Annexure - A" a statement on thematters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act based on our audit wereport that:

a) We have sought and except for the possible effect of the mattersdescribed in the Basis for Qualified Opinion section hereinabove obtained all theinformation and explanations which to the best of our knowledge and belief were necessaryfor the purposes of our audit;

b) Except for the possible effects of the matters described in theBasis for Qualified Opinion section hereinabove in our opinion proper books of accountas required by law have been kept by the Company so far as it appears from our examinationof those books;

c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the books of account;

d) Except for the effects of the matters described in the Basis forQualified Opinion section hereinabove in our opinion the aforesaid standalone financialstatements comply with the Indian Accounting Standards specified under Section 133 of theAct read with Companies (Indian Accounting Standards) Rules 2015 as amended ;

e) In view of the matters described in the Basis for Qualified Opinionsection hereinabove we are unable to comment whether these may have an adverse effect onthe functioning of the Company;

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

g) The qualification relating to the maintenance of accounts and othermatters connected therewith are as stated in the Basis for Qualified Opinion sectionhereinabove;

h) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure - B" ;

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 of pending litigations on itsfinancial position in its standalone financial statements - Refer Note no. 31 to thestandalone financial statements;

ii. Except for the possible effects of the matters described in theBasis for Qualified Opinion section hereinabove the Company has made provision asrequired under the applicable law or Ind AS for material foreseeable losses if any onlong-term contracts including derivative contracts;

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

iv. (a) The Management has represented that to the best of itsknowledge and belief no funds have been advanced or loaned or invested (either fromborrowed funds or share premium or any other sources or kind of funds) by the Company toor in any other person or entity including a foreign entity ("Intermediaries")with the understanding whether recorded in writing or otherwise that the Intermediaryshall whether directly or indirectly lend or invest in other persons or entitiesidentified in any manner whatsoever by or on behalf of the Company ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate Beneficiaries;

(b) The Management has represented that to the best of its knowledgeand belief no funds have been received by the Company from any person or entityincluding a foreign entity ("Funding Parties") with the understanding whetherrecorded in writing or otherwise that the Company shall whether directly or indirectlylend or invest in other persons or entities identified in any manner whatsoever by or onbehalf of the Funding Party ("Ultimate Beneficiaries") or provide any guaranteesecurity or the like on behalf of the Ultimate Beneficiaries; and

(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) of theCompanies (Audit and Auditors) Rules 2014 as amended as provided under (a) and (b)above contain any material misstatement.

v. No dividend has been declared or paid during the year by theCompany. Hence compliance with Section 123 of the Act is not applicable.

3. In our opinion according to the information and explanations givento us remuneration paid by the Company to its directors for the year ended 31st March2022 has been in accordance with the provisions of section 197 read with Schedule V to theAct;

Annexure-A to the Independent Auditors? Report

[Referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements? in the Independent Auditors? Report of even date tothe members of SPML Infra Limited on the standalone financial statements for the yearended March 31 2022]

To the best of our information and according to the explanationsprovided to us by the Company and the books of account and records examined by us in thenormal course of audit we state that:

(i) (a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant andEquipment.

(B) The Company has maintained proper records showing full particularsof intangible assets.

(b) The Company has a regular program of physical verification of itsProperty Plant and Equipment under which they are verified in a phased manner over aperiod of three years which in our opinion is reasonable having regard to the size ofthe Company and the nature of its assets. In accordance with this program certainProperty Plant and Equipment were physically verified by the management and no materialdiscrepancies between the book records and the physical inventory have been noticed onsuch verification.

(c) The title deeds of immovable properties (other than propertieswhere the company is the lessee and the lease agreements are duly executed in favour ofthe lessee ) disclosed in the standalone financial statements and included under the head‘Property Plant and Equipment' are held in the name of Company as at the balancesheet date.

(d) The Company has not revalued any of its Property Plant andEquipment (including Right of Use assets) or intangible assets or both during the year.Hence reporting under clause 3(i)(d) of the Order is not applicable.

(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 (45 of 1988) and rules made thereunder

ii. (a) In our opinion the management has conducted physicalverification of inventory at reasonable intervals during the year and the coverage andprocedure of such verification by the management seems to be appropriate; no discrepanciesof 10% or more in the aggregate for each class of inventory were noticed on such physicalverification.

(b) The Company has been sanctioned working capital limits in excess offive crore rupees in aggregate from banks/financial institutions on the basis ofsecurity of current assets of the Company; as explained and represented to us by theCompany the quarterly returns or statements filed by the Company with suchbanks/financial institutions are not in agreement with the books of account of the Companybut the details in respect of the discrepancies have not been made available to us. NoteNo. 16.9 to the standalone financial statements may also be referred to in this respect.

iii. (a) During the year the Company has not provided loans advancesin the nature of loans stood guarantee or provided security to any other entity.Accordingly reporting under clause 3(iii)(a) of the Order is not applicable.

(b) In our opinion the investments made by the Company are prima facienot prejudicial to the Company's interest. The Company has not provided any guarantees orgiven any security; the terms and conditions of grant of certain loans to companies whichare ‘related parties' are prima facie prejudicial to the Company's interest onaccount of the fact that they are unsecured and were granted at rates of interest whichare lower than the cost of funds to the Company.

(c) In respect of loans granted by the Company the schedule ofrepayment of principal and payment of interest has been stipulated but in some cases therepayments of principal and receipts of interest are irregular.

(d) In respect of loans granted by the Company there is no overdue formore than 90 days as at the balance sheet date.

(e) There were no loans or advances in the nature of loan granted toany parties which had fallen due during the year that have been renewed or extended orfresh loans granted to settle the overdues of existing loans given to the same parties.

(f) The Company has not granted any loans or advances in the nature ofloans either repayable on demand or without specifying any terms or period of repaymentduring the year. Hence reporting under clause

3(iii) (f) of the Order is not applicable.

iv. In our opinion Company has complied with the provisions of section185 and 186 of the Act to the extent applicable in respect of loans investmentsguarantees and security.

v. The Company has not accepted any deposits or amounts which aredeemed to be deposits. Hence reporting under clause 3(v) of the Order is not applicable.

vi. The Company is required to maintain cost records under sub-section(1) of section 148 of the Act. We have broadly reviewed the books of account maintained bythe Company pursuant to the Rules made by the Central Government for the maintenance ofcost records u/s 148 of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained.

We have not however made a detailed examination of the same.

vii. (a) Undisputed statutory dues including Goods and Services Taxprovident fund employees' state insurance income-tax sales-tax service tax duty ofcustoms duty of excise value added tax cess and any other statutory dues asapplicable have not been regularly deposited with the appropriate authorities and therehave been significant delays in a large number of cases. Undisputed amounts payable inrespect thereof which were outstanding at the year- end for a period of more than sixmonths from the date they become payable are as follows :

Name of the statute Nature of the dues Amount (Rs In Lakhs) Period to which the amount relates Due date Date of payment
Professional Tax Professional Tax 5.12 June 2016 to August 2020 15th day of the subsequent month Not yet paid
Employee State Insurance1948 Employee State Insurance Dues 21.53 June 2016 to August 2020 15th day of the subsequent month Not yet paid
Gujarat Value Added Tax Act 2003 Works Contract Tax 3.82 Apr 2017 to June 2017 15th day of the subsequent month Not yet paid
Uttar Pradesh Value Added Tax Act 2008 Works Contract Tax 3.17 Mar 2016 to June 2017 15th day of the subsequent month Not yet paid
Delhi Value Added Tax Act 2005 Works Contract Tax 11.94 Apr 2017 to June 2017 15th day of the subsequent month Not yet paid
Jharkhand Value Added Tax Act 2005 Works Contract Tax 4.19 Apr 2017 to June 2017 15th day of the subsequent month Not yet paid
Tripura Value Added Tax Act 2005 Works Contract Tax 1.22 Apr 2017 to June 2017 15th day of the subsequent month Not yet paid
Bihar Value Added Tax Act 2005 Works Contract Tax 124.48 Apr 2015 to August 2016 15th day of the subsequent month Not yet paid
Rajasthan Value Added Tax Act 2003 Works Contract Tax 2.09 Apr 2017 to June 2017 15th day of the subsequent month Not yet paid
The Orissa Value Added Tax Act 2004 Works Contract Tax 1.76 Apr 2015 to June 2017 15th day of the subsequent month Not yet paid

(b) Details of statutory dues referred to in sub-clause (a) above whichhave not been deposited with the appropriate authorities as on March 31 2022 on accountof any dispute are as follows:

Name of the statute Nature of the dues Amount (Rs In Lakhs) Amount paid under Protest (Rs In Lakhs) Period to which the amount relates Forum where dispute is pending
Central Sales Tax Act 1956 Non production of C and E forms 105.10 FY 2005-06 West Bengal Commercial Taxes Appellate and Revisional Board Kolkata
Central Sales Tax Act 1956 Claim exemption u/s 6(2)of Central Sales Tax Act1956 293.97 FY 2007-08 West Bengal Commercial Taxes Appellate and Revisional Board Kolkata
West Bengal Value Added Tax Act 2003 Non production of C and E forms 105.34 FY 2007-08 West Bengal Commercial Taxes Appellate and Revisional Board Kolkata
Central Sales Tax Act 1956 Claim exemption u/s 6(2)of Central Sales Tax Act1956 404.98 FY 2008-09 West Bengal Commercial Taxes Appellate and Revisional Board Kolkata
Name of the statute Nature of the dues Amount (Rs In Lakhs) Amount paid under Protest (Rs In Lakhs) Period to which the amount relates Forum where dispute is pending
Central Sales Tax Act 1956 Non production of C and E forms 285.55 FY 2009-10 West Bengal Commercial Taxes Appellate and Revisional Board Kolkata
West Bengal Value Added Tax Act 2003 Denial of deduction u/s18(2) of the WB VAT Act 335.63 FY 2009-10 West Bengal Commercial Taxes Appellate and Revisional Board Kolkata
West Bengal Value Added Tax Act 2003 Exemption under RGGVY scheme & Denial of deduction u/s18(2) of the WB VAT Act 95.74 FY 2008-09 West Bengal Commercial Taxes Appellate and Revisional Board Kolkata
West Bengal Value Added Tax Act 2003 Disallowance of input tax credit interest charged and demand of purchase and output tax 75.27 FY 2012-13 West Bengal Commercial Taxes Appellate and Revisional Board Kolkata
Bihar VAT Act 2005 Disallowance of labour component 43.13 - FY 2007-08 JCCT Appeals Patna
Bihar VAT Act 2005 Denied the exemption u/s 6(2) of the CST Act on the grounds of pre-determined sales and non-production of statutory forms 234.27 FY 2010-11 JCCT Appeals Patna
Central Sales Tax Act 1956 Our CST Sales u/s 6(2) IS accepted and taxed where Form C and E1 are due to be received and produced interest added 82.12 FY 2011-12 JCCT Appeals Patna
UP VAT Act 2008 Tax Liability on Exempted project RGGVY sales 44.13 8.82 FY 2007-08 Additional Commissioner Agra
Jharkhand VAT Act 2005 Tax Demand on receipts and suppression of turnover 193.41 - FY 2005-06 to 2010-11 JCCT (Appeals) Jamshedpur
Jharkhand VAT Act 2005 Tax Demand on receipts and suppression of turnover 38.24 - FY 2011-12 JCCT (Appeals) Jamshedpur
Central Sales Tax Act 1956 Tax Demand on receipts and suppression of turnover 61.53 - FY 2011-12 JCCT (Appeals) Jamshedpur
Delhi VAT Act 2004 Miscellaneous Demand 26.00 - FY 2012-13 Commissioner DVAT Delhi
Rajasthan VAT Act 2003 Tax liability on interstate Sales 9.37 - FY 2009-10 Deputy Commissioner Appeals-II Jaipur
Rajasthan VAT Act 2003 Tax liability on interstate Sales 110.64 - FY 2011-12 Deputy Commissioner Appeals-II Jaipur
Bihar VAT Act 2005 Denied the exemption u/s 6(2) of the CSTAct on the grounds of pre-determined sales and non-production of statutory forms 163.49 20.00 FY 2013-14 JCCT Appeals Patna
Finance Act 1994 Service Tax 23.13 - FY 2005-06 to 2006-07 Commissioner Service Tax Kolkata
West Bengal Value Added Tax Act 2003 CST 6(2) sales taxed under VAT Act at full rate. 1132.94 FY 2016-17 Sr JCCT Appeals Commercial Taxes Kolkata
Central Sales Tax Act 1956 Non submission of "C" forms and "E" forms 91.44 FY 2014-15 Appeal filed at JCCT - Patna

(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.

(a) As at March 31 2022 the Company is in default in respect ofrepayment of loans/ borrowings and in the payment of interest thereon to the followingbanks and financial institution as detailed below:

Nature of Borrowing Name of lender Amount not paid on due date Rs. lakhs Whether principal or interest No. of days delay or unpaid Remarks if any
Banks
Cash Credit Andhra Bank 1348.38 Principal 821 -
Cash Credit Bank of Baroda 6547.80 Principal 852 -
Cash Credit Canara Bank 26098.68 Principal 807 -
Cash Credit ICICI Bank 4214.67 Principal 821 -
Cash Credit Oriental Bank of Commerce 3065.33 Principal 883 -
Cash Credit Punjab National Bank 13372.29 Principal 883 -
Cash Credit State Bank of India 23445.87 Principal 854 -
Cash Credit Syndicate Bank 8479.62 Principal 807 -
Cash Credit Union Bank of India 2046.87 Principal 821 -
Working Capital Demand Loan ICICI Bank 4759.03 Principal 821 -
Working Capital Demand Loan Oriental Bank of Commerce 761.47 Principal 883 -
Working Capital Demand Loan State Bank of India 10286.53 Principal 854 -
Term Loan Canara Bank 1246.28 Principal 807 -
Term Loan Oriental Bank of Commerce 111.98 Principal 883 -
Term Loan State Bank of India 258.19 Principal 854 -
Term Loan State Bank of India 920.86 Principal 854 -
Term Loan State Bank of India 183.48 Principal 854 -
Term Loan Union Bank of India 67.07 Principal 821 -
Financial Institution
Term Loan IFCI 332.34 Principal 730 -

(b) As represented to us by the management the Company has not beendeclared a wilful defaulter by any bank or financial institution or other lender.

(c) In our opinion prima facie the term loans were applied for thepurpose for which the loans were obtained.

(d) On an overall examination of the financial statements of theCompany prima facie no funds raised on short-term basis have been utilised for long-termpurposes by the Company.

(e) On an overall examination of the financial statements of theCompany the Company has not taken any funds from any entity or person specifically onaccount of or to meet the obligations of its subsidiaries or associates.

(f) The Company has not raised any loans during the year on the pledgeof securities held in its subsidiaries joint ventures or associate companies. Hencereporting under clause 3(ix)(f) of the Order is not applicable.

(x) (a) The Company has not raised moneys by way of initial publicoffer or further public offer (including debt instruments) during the year and hencereporting under clause 3(x)(a) of the Order is not applicable.

(b) During the year the Company has made preferential allotment ofshares towards extinguishment of existing unsecured loans and the requirements of section42 and section 62 of the Companies Act 2013 have been complied with. No private placementof shares or convertible debentures (fully partially or optionally convertible) was madeby the Company during the year.

(xi) (a) As represented to us by the management no fraud by theCompany and no fraud on the Company has been noticed or reported during the year.

(b) No report under sub-section (12) of Section 143 of the CompaniesAct 2013 has been filed by the auditors in Form ADT-4 as prescribed under rule 13 ofCompanies (Audit and Auditors) Rules 2014 with the Central Government during the yearand upto the date of this report.

(c) As represented to us by the management there were nowhistle-blower complaints received by the Company during the year.

(xii) The Company is not a Nidhi Company and hence reporting underclause 3(xii) of the Order is not applicable.

(xiii) In our opinion transactions with the related parties are incompliance with Sections 177 and 188 of the Companies Act 2013 where applicable and thedetails of related party transactions have been disclosed in notes to the standalonefinancial statements as required by the applicable 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 in determining the nature timing and extent of our audit procedures.

(xv) As represented to us by the management during the year theCompany has not entered into any non-cash transactions with its directors or personsconnected with its directors. Hence provisions of Section 192 of the Companies Act 2013are not applicable to the Company.

(xvi) (a) In our opinion the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.

(b) The Company has not conducted any Non-Banking Financial or HousingFinance activities during the year.

(c) The Company is not a Core Investment Company (CIC) as defined inthe regulations made by the Reserve Bank of India.

(d) As represented to us by the management the Group does not have anyCIC as part of the Group.

(xvii) The Company has incurred a cash loss of Rs. 23234.21 lakhs inthe financial year covered by our audit and Rs. 32373.84 lakhs in the immediatelypreceding financial year. The aforesaid figures have been arrived at after considering theeffect of the quantified qualifications in the audit reports for the respective years. Theeffect of the unquantified qualifications has not been taken into consideration for thepurpose of making comments in respect of this clause.

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

(xix) On the basis of the financial ratios ageing and expected datesof realisation of financial assets and payment of financial liabilities other informationaccompanying the financial statements our knowledge of the Board of Directors andmanagement plans and based on our examination of the evidence supporting the assumptionswe believe that as on the date of this audit report there are constraints regarding theCompany's capability to meet its liabilities existing as at the date of balance sheet asand when they fall due within a period of one year from the balance sheet date. In thisregard we draw attention to Note No 16.7 to the standalone financial statements of theCompany which mentions the rationale as to why the Board of Directors of the Companyconsiders it appropriate to prepare the financial results on a going concern basis. Wefurther state that our reporting is based on the facts up to date of this audit report.

(xx) (a) In respect of other than ongoing projects (i) the Company isnot required to spend any sum during the financial year 2021-22 on Corporate SocialResponsibility (‘CSR') as envisaged under Section 135(5) of the Companies Act 2013and hence the question regarding ‘unspent amount' in respect of financial year2021-22 does not arise and (ii) in respect of previous financial years i.e. financialyears prior to the financial year 2021-22 the Company has not transferred the unspentamount to a Fund specified in Schedule VII to the Companies Act 2013 within a period ofsix months of the expiry of the financial year so as to be in compliance with secondproviso to sub-section (5) of section 135 of the said Act. As explained and represented tous by Company it has been facing financial crisis since the last few years and is

in the process of formulating a resolution plan with it's financialcreditors i.e banks which is at an advanced stage of discussions after completion ofvarious processes ( refer Note No.16.7 to the standalone financial statements ). Asfurther explained and represented to us due to the financial stress and mismatch in cashflows the Company was unable to spend the CSR amount. However the Company is in theprocess of transferring the unspent amount to a Fund specified in Schedule VII.

(b) There is no unspent amount towards CSR in respect of ‘ongoingproject' requiring a transfer to a special account in compliance with the provisions ofsub-section (6) of Section 135 of the Companies Act 2013. Accordingly reporting underclause 3(xx)(b) of the Order is not applicable.

Annexure-B to the Independent Auditors? Report of SPML InfraLimited [ Referred to in paragraph 2(h) under "Report on Other Legal and RegulatoryRequirements" section in our Independent Auditors? Report of even date to themembers of SPML Infra Ltd. on the standalone financial statements for the year ended 31stMarch 2022 ]

Report on the Internal Financial Controls with reference to FinancialStatements under Clause (i) of sub-section 3 of Section 143 of the Companies Act 2013("the Act")

We have audited the internal financial controls with reference tofinancial statements of SPML Infra Limited ("the Company") as of 31stMarch 2022in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.

Management?s Responsibility for Internal Financial Controls

The Company's Board of Directors is responsible for establishing andmaintaining internal financial controls based on the internal control with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India ("ICAI"). These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.

Auditors? Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Guidance Note and the Standards on Auditing specifiedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both issued by the ICAI. 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 with reference tofinancial statements were 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 with reference to financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrols based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

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

Meaning of Internal Financial Controls with reference to FinancialStatements

A company's internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial control with reference to financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial Controls with reference toFinancial Statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as at31st March 2022 based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the ICAI.

For Maheshwari & Associates
Chartered Accountants
FRN:311008E
CA. Bijay Murmuria
Partner
Place: Kolkata Membership No.: 055788
Date: 28th May 2022 UDIN: 22055788ANAFXG4429

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