We have audited (he Ind AS financial statements of M/s. Madhucon Projects Limited ("the company"), which comprise (he standalone balance sheet as at 31^t1 March 2024, and the standalone statement of Profit and Loss [including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows for the year ended, and notes to the Ind AS financial statements, including a summary of significant accounting policies and other explanatory information.

tn our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualified opinion section of our report, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act. 2013, as amended ("the Acf') in the manner so requited and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^5t March, 2024, its loss and other comprehensive income, changes in equity and its cash flows for the year then ended.

Basis for Qualified Opinion:

1. We refer to the carrying value of Equity investments of Rs 1,03,662.52 lakhs held in subsidiaries/other companies and other investments of Rs 5624.13 lakhs held in subsidiaries/other companies, some of these have been incurring losses and in case of some of the subsidiaries, net worth was fully or substantially ereded l Gomg Concern is affected. We are unable to comment upon the carrying value of Equity investments and other investments whether any provision for impairment in the value of Equity Investments and other investments is required; the effect of same upon the profitability could not be ascertained in the absence of fair valuation.

In the case of Madhucon infra Limited, a subsidiary, the management basing on the valuation Reports on "Investment in Madhucon Infra Limited" concluded that the value of this Investment is Nil and has written off an amount of Rs. 30,560.66 Lakhs being 25% of the Investment held, instead of writing off complete value of investment. For the balance 75% of the Investment no provision for impairment is made in the books of account as at 31st March, 2024,

In the absence of proper justification, we are not able to ascertain the basis of such partial write off.

2. "The Company" has written off loan given lu Madhucon Infra Limited a subsidiary amounting to Nil/Rs.4,263.07 Lakhs tor the quarter ended/ Year ended 31 St March, 2024 respectively, being partial amount of loan, instead of writing off the total outstanding of Rs. 12,913.41 lakhs.

In the absence of proper justification, we are not able to ascertain the basis of such partial write off.

3. "The company has defaulted in repayment of dues to Banks and financial institution amounting to Rs 33,369.17 lakhs and Rs 3,370.51 lakhs respectively as per books of account and the same were classified as NPA by the lenders. Interest on these loans have not been provided Tor the FY 2618-19 to FY 2023-24, Dues in case of some banks were settled through "One lime settlement" and an amount of Rs. 12,503.97 Laktig, being the benefit of OTS, has boon accounted during tho quarter ended 31 it March, 2024.

Further, in case of other banks except in case of Canara bank, OTS agreements have been entered. Balance confirmation In respect of the loan from Canara Bank has not been obtained.

4. "The Company "has written back Trade Payables amounting to Rs. 6,103.63 Lakhs and Rs.3,542 19 lakhs for tho quarter ended 31^S1 March, 2024 and for tha Year Ended 31^Sl March, 2024 respectively - rotor to note no. 2.16 of financial statements.

5. “The Company "has written back Other Payables (including Interest payable} amounting to Rs 1,921.36 lakhs and Rs 2,089.20 lakhs For the quarter ended 31^SI March, 2024 and tor the Year ended 31^S| March, 2024 respectively.

6. The Company" has written off advances to Other Parties amounting to Nil/Rs. 393.95 Lakhs tar the quarter ended/ Year ended 3T^l March, 2024,

7. The company Is yet ta transfer unpaid dividend of an amount aggregating to Rs. 3,73 Lakhs relating to Financial Years 2009-10 to 2010-11 from unpaid dividend account to Investor Education and Protection Fund (IEPF).

8. Undisputed Statutory dues in case Of following are outstanding:

9, In view of losses incurred by "the company" and in the absence of prior approval from the lender banks and financial Institutions, managerial remuneration of Rs. 133,68 Lakhs paid hy the company during the year Is in excess of the limits specified under section 197 read with schedule V of Companies Act, 2013,

10, The Turnover, Output GST and input GST credits as per the books of account are subject to reconciliation with the GST returns filed.

11. Internal Audit has not been conducted for the period 1^a! April 2023 to 31^s' March 2024.

12, Ihe Company has not produced Title Deeds in respect of certain immovable properties (lands) held.

13. SREl Equipment Finance Limited filed to "The Hon'ble National Company Law Tribunal" (The Fian'ble NCLT) for restoration of application of Corporate Insolvency Resolution process (CIRP) against "The Company", which has been admitted vide its order dated 06,12.23.

Subsequently, The Company" filed an appeal with "The Hon'ble NCLT" and the impugned order dated 06.12,2023 Df The Hon'ble NCLT" was set aside and remanded back to the "The Hon'ble NCLT' for fresh review vide order dated 12.12.2023, Later on. the financial creditor and "the Company" have initiated the process of settlement cm 16.01,2024 hy restructuring the existing loan and submitted a joint memo staling the same to'The Hon'ble NCLT" on 05,02.2024. ' ' ' '

SRE1 Equipment Finance Limited has approved for Restructuring of existing loan dues for a final settlement of Rs. 4,952,00 Lakhs, vide its letter dated 02,02.2024, As per agreed terms & conditions, "the company" has paid upfront payment of 20% of Restructured loan and one instalment, total amounting to Rs. 1565.65 Lakhs as of 31st March, 2024.

On 25,03,2024 the SREl Equipment Finance Limited filed withdrawal memo seeking leave of this "The Hon'ble NCLT" to withdraw the company petition, "The Hon'ble NCLT" by an order dated 28.03.2024 allowed the company petition stands disposed of as withdrawn.

14. In case of "Ranchi Expressways Ltd (REL)", a step-down subsidiary of the company, CBI. has filed FIR against REL. its Promoters and Directors on 12-03-2019 under Prevention of Corruption Act and Indian Penal Code. Subsequently, the Enforcement Dire do rate has raided the premises of "the company" on 11-06-2021 and the Investigation is Still under progress.

15. As per the press release dated 02-07-2022 and 17-10-2022 The Directorate of Enforcement has pro visional ly attached 105 immovable properties and 28 other assets worth Rs.06.21 Crore and Rs.B0.65 Crore respectively belonging to Madhucon Group of companies, its directors and promoters which Included the properties of Msdhucon Projects Limited and group companies in a case against M/s Ranchi Expressway Ltd, under the provisions of PM LA, 2002.

15. In case of Ranchi Expressways Ltd (REL) a s|ep down subsidiary of Madhucon Projects Limited, "The Hon'ble National Company Law Tribunal' (NCLT) by an order dated 22.12,2023 admitted the Corporate (nsotvency resolution process (CRIP), for a petition Tied by State Bank of India, Ranchi Expressways Ltd (REL) has made an appeal to "The Hon'ble NCLAT" and "The Hon'ble NCLAT" has deferred the impugned order given by NCLT and pasted the next hearing on 07,06.2024,

Madhucon Projects Limited has made an Investment of Rs,1,40 lakhs and has Trade Receivables of Rs.8,073.69 lakhs in the above step down subsidiary for which provision has not been made.

17. In case of M/s. Trichy-Thanjavur Expressways Limited ? step dawn subsidiary of Madhucon Projects Limited, "The Hon'ble National Company Law Tribunal" (NCLT) by an order dated 22.03.2023 admitted the Corporate insolvency resolution process (CRIP), against which "The Hon'ble NCLAT has passed an order and directed the COC to defer its proceedings till next hearing on 16.06.2024

Madhucon Projects Limited has made an Investment of Rs.10 lakhs and advances of Rs. 42.82 lakhs in the above step down subsidiary for which provision has not been made.

18. In case of Barasat - Krishnagar Expressways Limited a step down subsidiary of Madhucon Projects Limited, "The Hon'ble Nalianal Company Law Tribunal" (NCLT) by an order dated 28,11.2023 admitted the Corporate Insolvency resolution process (CRIP), against which "The Hon'ble NCLAT has passed an order and directed the COC to defer its procsedings till next hearing on 26,06,2024.

Madhucon Projects Limited has made an Investment of Rs.1,4b lakhs in the above step down subsidiary for which provision has not been made.

19. In the absence of confirmation of some of the Trade payables, Trade Receivables and various advances/laans, we are unable to comment on the extent to which such balances are payable/necoverable. Some of the payables to parties are shown by netting off with the other receivables.

20. Balance confirmation of current accounts, which have become Dormant, are not obtained in case of Bank Branches at various project sites.

We conducted our audit In accordance with the Standards On Auditing (SAs) specified under section 143(10) of the Companies Act, 2Q13. Our responsibilities under those Standards are further described in tire Auditor's Responsibilities for the Audit of the fnd AS financial statements section of our report. We are independent ol the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant 1o our audit of the Ind AS financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with thesE requirements and (he Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Matters Relating to Going Concern

We draw attention to "Note No. 2.45" to Standalone Ind AS financial statements - "The Company's" current liabilities exceeded current assets amounting to Rs. 92,331.50 Lakhs and "The Company" has defaulted in payment of dues to banks and financial institution. All these events indicate a material uncertainty existing that may cast a significant doubt on "The Company's" ability to continue as a going concern. However, the management believes the use of going concern assumption on the preparation of the Ind AS financial statements of "the company" is still appropriate in view of, settlement of dues under OTS in ease of some

banks and having received approvals for restructure of loan for settlement of dues by the financial institution and its continuing discussions with its other lenders to obtain approval for and an appropriate debt resolution plan and also, that "The company" will continue to be in operation in the foreseeable future.

Ksy Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Ind AS financial statements of the current period.

We have determined the matters described below to be the key audit matters to be included In our audit programme.

1) The carrying value of Equity investments held and other investments held in its subsidiaries, which have been Incurring losses and in case of some of these companies, not worth was fully or substantially eroded.

How the matter was addressed in our audit:

We have examined the key controls in place for investments made in subsidiaries. We assessed the neLworth of subsidiaries on the basis of latest available Ind AS financial statements. It is concluded that, we aro unabl| to comment upon the carrying value of Equity investments and other investments, as to whether any provision for impairment In investments is required. In case of subsidiary, Madhucon Infrastructure Limited, the company has obtained a valuation report, based nn which 25% of the investment is written off instead of writing oft complete value of investment. For the balance 75% of the Investment no provision for impairment is made in the books of account as at 31st March, 2024.

2) "The Company” has defaulted in repayment of dues to Banks and financial institution, all the loans outstanding were classified as IMP A by the Banks and Financial Institution. Interest on Lhese loans have not been provided for the financial years 201B-19 to 2023-24.

How the matter was addressed in our audit:

The company has settled the dues in case of SBI, IDBl Bank and Bank of India through OT5 and entries for the same has been passed in the books oT account accordingly.

In case of other banks*, except canara bank, the company has entered into OTS. (Refer Clause 3 of Basis for Qualified Opinion).

‘Other banks includes iCICI Bank, Punjab National Bank and Kotak Mghindra Bank.

In connection with our audit of the Information Other than the Standalone Ind AS Financial Statements and Auditor’s Report Thereon

The Company's Board of Directors is responsible for the preparation of file other information. The other information comprises the information included in the Management Discussion and Analysis. Board's Report including Annexure to Board's Report, Business Responsibility Report, Corporate Governance and Shareholder's Information, bul does not include the standalone ind AS financial statements and our auditor's report thereon.

Our opinion on the standalone Ind AS financial slalements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone Ind AS financial sta tom ants or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report In this regard.

3) Management’s Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in "Hie Act" with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, Financial performance and cash flows of "the Company" in accordance with the Ind AS and other accounting principles generally accepted in India, This responsibility also includes maintenance of adequate accounting records in accordance with tho provisions of Ihe Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting

policies; making judgments and estimates that are reasonable and prudent: and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the hid AS financial statement thal give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Ind AS financial statements, management is responsible for assessing the Company s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either Intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

4) Auditor’s Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion Reasonable assurance is a Irgh level of assurance, hut is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they couid reasonably be expected to influence the economic decisions of users taken on the basis of these standalone tnd AS financial statements.

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

* identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due lo fraud or error, design and perform audil procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement re suiting from fraud Is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Ý Obtain an understanding of internal control relevant to tho audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3}('} of the Act, we are also responsible for expressing our opinion on whether the Company lias adequate internal financial controls system in place and ihe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and Ihe reasonableness of accounting estimates and related disclosures made by management,

* Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related lo events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists: we are required to draw attention in our auditor's report to the related disclosures in the standalone Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone ind AS financial statements, including the disclosures, and whether tho standalone Ind AS financial statements represent the underlying transactions and events in a manner that act if eves fair presentation.

Materiality is Ihe magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial

Statements may ba influenced. We consider quantitative materiality and qualilativa factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (il) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.

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

We also provide (hose charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those malters that were of most significance in the audit of the standalone Ind AS financial statements of the current period and are therefore the key audit matters. We describe those) matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not he communicatee! in our report because the adverse consoquonces of doing so would reasonably bo expected to outweigh the public interest benefits of such communication.

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 [ho ‘Anncxure A’, a statement on the

matters Specified in paragraphs 3 and 4 of the Order

2, As required by section H3(3) of thg Act, wg further report that:

a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) Except for the possible effects of the matter described in the Basis for Qualified Opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

o) Except for the possible effects of the matter described in the Basra for Qualified Opinion the Balance Sheet. Statement of Profit and Loss including Other Comprehensive income, the Statement of Cash Flows and the statement of changes In equity dealt with by this Report are In agreement wilh the books of account; ns per Companies (Audit and Auditors) Rules, 2014 as amended.

d} Except for the possible effects of Ihe matter described in the Basra for Qualified Opinion, the aforesaid Ind AS financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with relevant rules issued there under.

e) On the basis of written representations received from the directors as on 31st March, 2024, and taken on record by the Board of Directors, none of the directors is disqualified as cn 31¹¹ March, 2024, from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in 'Annexure B’.

g) In view of losses incurred by "the company" and in the absence of prior approval from the lender banks and financial Institutions, managerial remuneration of Rs. 133-63 Lakhs paid by the company during the year is in excess of the limits specified under sedion 197 read with schedule V of Companies Act,2013.

h) With respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 as amended. In our opinion and tn ihe best of our information and according to the explanations given to us:

i. The Company has disciosed the pending litigations which would Impact its financial position in its notes to Ind AS financial stataments.

li. The Company does not have long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. The company is yet to transfer unpaid dividend of an amount aggregating to Rs. 3.73 Lakhs relating to Financial Years 20Q9-1D to 2019-11 from unpaid dividend account to Investor Education and Protection Fund (lEPF).

iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually ar in the aggregate) have been advanced nr loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or

in any other person or entity, including foreign entity ("intermediaries"), with the understanding, whether ra corded in writing or otherwise, that I he Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like en behalf of the Ultimate Beneficiaries:

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shafl, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever hy or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalT of the Ultimate Beneficiaries;

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

v. The Company has neither declared nor paid any dividend during the year.

vj, Erased on our examination, which included test checks, the Company has used accounting

softwares for maintaining Its books of account for the financial year ended 31March, 2024, which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded In the softwares. Further, dunng the course of our audit we did not come across any instance of the audit trail feature being tampered wilh.

For P. Murali & Co.,

Chartered Accountants Firm Registration No: C07257S

A, Krishna Rao Partner

Membership No, 020035 UDIN: 24020085BKAUHM9560

Place: Hyderabad Date: 13-05-2024