We have audited the accompanying standalone financial
statements of IL&FS Engineering and Construction Company
Limited ("the Company"), which comprise the Standalone
Balance Sheet as at March 31,2025, the Standalone Statement
of Profit and Loss (including Other Comprehensive Income),
Standalone Statement of Changes in Equity and Standalone
Statement of Cash Flows for the year then ended, and notes
to the standalone financial statements, including a summary
of the material accounting policies and other explanatory
information (hereinafter referred to as "the standalone financial
statements").

In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone
financial statements 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 Indian Accounting
Standards prescribed under section 133 of the Act read with
the Companies (Indian Accounting Standards) Rules, 2015, as
amended, ("Ind AS") and other accounting principles generally
accepted in India, of the state of affairs of the Company as
at March 31, 2025, its loss and total comprehensive loss, its
changes in equity and its cash flows for the year then ended.

Basis for opinion :

We conducted our audit of the standalone financial statements
in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Act. Our responsibilities under
those SAs are further described in the "Auditor’s Responsibilities
for the Audit of the standalone financial statements" section of
our report. We are independent of the Company in accordance
with the Code of Ethics issued by the Institute of Chartered
Accountants of India ("ICAI") together with the ethical
requirements that are relevant to our audit of the standalone
financial statements under the provisions of the Act and the
Rules made thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the
ICAI’s Code of Ethics. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis
for our opinion.

Material uncertainty related to going Concern:

Attention is invited to Note 30 regarding continued losses,
erosion of net-worth as at the year end, and significant
reduction in the Company’s income from operations and other
matters detailed in the said note. These events and conditions
indicate a material uncertainty which cast a significant doubt
on the Company’s ability to continue as a going concern, and
therefore it may not be able to realise its assets and discharge
its liabilities including potential liabilities in the normal course
of business. The ability of the Company to continue as a going
concern is solely dependent on the finalisation and approval of
the resolution process, which is not wholly within the control of
the Company.

The Management of the Company has prepared these
standalone financial statements on a going concern basis
considering status of resolution process and steps taken by the
Reconstituted Board.

Our opinion is not modified in respect of this matter.

Emphasis of Matter:

We draw attention to the following notes to the standalone
financial statements:

a. Note 31(a)(v) regarding ongoing investigations by
Serious Fraud Investigation Office of Ministry of Company
Affairs (SFIO), Enforcement Directorate (ED) and other
regulators / agencies against Infrastructure Leasing
& Financial Services Limited (‘IL&FS’) and some of its
subsidiaries (including the Company). The standalone
financial statements of the Company for the year ended
on March 31, 2025 do not include adjustments, if any,
that may arise on account of the ongoing investigations
by the investigating and other agencies and Regulatory
Authorities.

b. Note 51 regarding non-receipt of confirmation of balances
as at March 31,2025 from some customers and vendors.
In the absence of confirmations, the adjustments, if any,
on account of unsettled transactions, to the carrying
values of assets and liabilities cannot be ascertained.

c. Note 52 relating to non-recognition of interest expense
on borrowings availed by the Company, pursuant to the
Interim Order and the Judgement passed by NCLAT
specifying October 15, 2018 as cut-off date for initiation
of resolution process, of Rs.451.86 Crores (excluding
penal/other interest and charges) for the year ended
March 31, 2025. Aggregate amount of interest expense
not so recognized as at March 31, 2025 is Rs.2619.89
Crores approximately.

The adjustments, if any, arising out of the above matters to
the carrying value of assets or to the amounts disclosed in
standalone financial statements, are not determinable at this
juncture for the reasons stated in respective notes.

Our opinion is not modified in respect of the aforementioned
matters.

Key Audit Matters:

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
standalone financial statements of the current year. These
matters were addressed in the context of our audit of the
standalone financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion
on these matters. In addition to the matter described in the
‘Basis for Opinion’ and ‘Material Uncertainty Related to Going
Concern’ section, we have determined the matters described
below to be the key audit matters to be communicated in our
report. For each matter below, our description of how our audit
addressed the matter is provided in that context.

Information Other than the standalone financial statements and Auditors’ Report Thereon:

The Company’s management and Board of Directors are responsible for the preparation of other information. The other information
comprises the information included in the Director’s Report, Management Discussion and Analysis and Corporate Governance
Report but does not include the standalone financial statements and our Auditor’s Reports there on.

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

In connection with our audit of the standalone 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 financial statements or our knowledge obtained
during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we perform, 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.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Company’s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation
of these standalone financial statements that give a true and fair view of the financial position, financial performance (including other
comprehensive loss), changes in equity and cash flows of the Company in accordance with the accounting principles generally
accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Rules
issued thereunder. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions
of the 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 standalone financial statements that give
a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are 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.

Board of Directors is also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements:

Our objectives are to obtain reasonable assurance about whether the standalone 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 high
level of assurance, but 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 could
reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

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

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error,
design and perform audit 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 resulting 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.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the
Company has adequate internal financial controls with reference to standalone financial statements in place and the operating
effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the 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 to 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 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 financial statements, including the disclosures, and

whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.

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 those 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 matters that were of most significance
in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these
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 be communicated in our report because the adverse consequences of doing
so would reasonably be 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 in terms of sub¬
section (11) of section 143 of the Act, we give in the "Annexure A", a statement on the matters specified in paragraphs 3 and 4
of the Order.

2A. As required by Section 143(3) of the Act, we report that:

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

b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our
examination of those books except for the matters stated in the paragraph 2B(vi)below on reporting under Rule 11(g) of
the Companies (Audit and Auditors) Rules, 2014;

c. the standalone balance sheet, 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 dealt with by this report are in
agreement with the books of account;

d. in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified
under section 133 of the Act, read with relevant rules made thereunder;

e. the matter relating to going concern described under Material Uncertainty Related to Going Concern paragraph above,
and the matters stated under (a), (b) and (c) under Emphasis of Matter paragraph above, in our opinion, may have an
adverse effect on the functioning of the Company;

f. on the basis of the written representations received from the directors as on March 31,2025 taken on record by the Board
of Directors, none of the directors are disqualified as on March 31,2025 from being appointed as a director in terms of
Section 164(2) of the Act; and

g. with respect to the adequacy of the internal financial controls with reference to standalone financial statements of the
Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B".

2B. With respect to the 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 to the best of our information and according to the explanations given to
us:

i. the Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements
(Refer Note - 31 to the standalone financial statements);

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material
foreseeable losses;

iii. there are no amounts which were required to be transferred to the Investor Education and Protection Fund by the
Company during the year ended March 31,2025;

iv. (a) 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 advanced or 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 recorded in writing or otherwise, that the Intermediary
shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on 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
entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company
shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf
of the Ultimate Beneficiaries; and

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

v. The Company has not declared or paid any dividend during the year; and

vi. Based on our examination, which included test checks, the Company has used accounting software for maintaining its
books of account, 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 software except that the feature of recording audit trail (edit log) facility
was not enabled at the database level to log any direct data changes in the accounting software used for maintaining the
books of account. Further, during the course of our audit we did not come across any instance of the audit trail feature
being tampered with and the audit trail has been preserved by the Company as per the statutory requirements for record
retention.

2C. With respect to the matter to be included in the Auditors’ Report under section 197 (16), according to the information and
explanations given to us, the Company has not paid any remuneration to its directors during the current year except sitting fees
paid to the non- executive / independent directors, which is in accordance with the applicable provisions of the Companies Act,
2013.

For M. Bhaskara Rao & Co.

Chartered Accountants

Firm Registration Number: 000459S

Sd/-

M.V. Ramana Murthy

Partner

Place : Mumbai Membership Number: 206439

Date: 28.05.2025 UDIN: 25206439BMKRBG2579