We have audited the accompanying standalone financial
statements of H.G. Infra Engineering Limited (“the
Company”), which comprises the Standalone Balance Sheet
as at March 31, 2026, Standalone Statement of Profit and
Loss (including Other Comprehensive Income), Standalone
Statement of Changes in Equity and the Standalone Statement
of Cash Flows for the year then ended, and notes to the
standalone financial statements, including 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 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, 2026, and its total comprehensive
income (comprising of its profit and other comprehensive
income), its changes in equity and its cash flows for the year
ended on that date.
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 Standards 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 thereunder, and we have fulfilled our other
ethical responsibilities in accordance with these requirements
and the Code of Ethics. We believe that the audit evidence
obtained by us is sufficient and appropriate to provide a basis
for our opinion.
Emphasis of Matter
We draw attention to Note 58 to the standalone financial
statements which describes the uncertainty related to outcome
of search proceedings conducted by the Central Bureau of
Investigation, Anti-Corruption Bureau, Patna. Based on the
recommendation of Audit Committee, the Company has
appointed external firm to review certain aspects related to
the matter. The aforesaid note further states the Company’s
position that there is no impact on these standalone financial
statements, at this stage.
Our opinion is not modified in respect of this matter.
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 for the year ended March
31, 2026. 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. We have determined the
matters described below to be the key audit matters to be
communicated in our report.
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Key Audit Matter
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Our audit procedures in respect of this area included the
following:
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1. Estimation of contract cost and revenue recognition. (Refer
to Note 2(a)(iv), 2(b)(iv), 29 and 53) of the standalone
financial statements)
Revenue from construction contracts is recognised over
a period of time in accordance with the requirements of
Ind AS 115, ‘Revenue from Contracts with Customers’.
The contract revenue amounts to H 55,798.01 million
for engineering, procurement and construction contracts,
which usually extends over a period of 2-3 years, and the
contract prices are fixed and, in few cases, subject to clauses
with price variances and variable consideration.
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i. Evaluated the accounting policy for revenue recognition
and assessed compliance of the policy with the principles
enunciated under Ind AS 115 - ‘Revenue from Contracts
with Customer’.
ii. Understood and evaluated the design and implementation
and tested the operating effectiveness of key internal
financial controls, including those related to review and
approval of estimated costs and review of provision for
foreseeable losses, if any, by the authorised representatives.
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Key Audit Matter
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Our audit procedures in respect of this area included the
following:
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In accordance with Input method prescribed under Ind
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iii.
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We obtained the revenue workings (percentage of
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AS 115, the contract revenue is measured based on the
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completion calculations) from the Company’s management,
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proportion of contract costs incurred for work performed
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for all contracts, containing actual costs incurred, estimated
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to date relative to the estimated total costs. This method
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costs (comprising of actual costs and remaining costs
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requires the Company to perform an initial assessment
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to completion), estimated contract revenue and actual
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of total estimated cost and reassess the total construction
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revenues recognised during the year based on proportion of
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cost at the end of each reporting period to determine the
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actual costs to estimated costs. For sample of contracts, we
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appropriate percentage of completion.
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agreed contract revenue with key contractual terms, agreed
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The estimation of total cost to complete the contract involves
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actual costs with system generated reports and agreed
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significant judgement and estimation throughout the
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estimated costs with costs sheets for individual contracts
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period of contract, as it is subject to revision as the contract
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approved by the authorised representatives.
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progresses - based on latest available information including
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Reperformed the calculation of revenues during the year
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physical work done on the ground, changes in cost estimates
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using proportion of actual costs to estimated costs and
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and need to accrue provision for onerous contracts, if any.
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compared the results with workings provided by the
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Besides recognition of revenues based on actual costs and
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Company.
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estimated costs to complete the work, at the period end, the
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iv.
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For actual costs incurred during FY 2025-26, we tested the
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measurement and recognition of contract assets (unbilled
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samples to appropriate supporting documents.
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revenue) and contract liabilities (unearned revenue) related
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v.
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To validate the remaining costs to completion, for sample
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to each of the contracts is also dependent on cost estimates.
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contracts, we obtained the approved costs sheets (for each
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In view of above, we have considered the estimation of
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of such sample contracts) containing the breakdown of
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construction contract costs as a key audit matter.
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such costs. Evaluated the reasonableness of management’s
judgements and assumptions through comparison of actual
margins during the year with base margins estimated at
the beginning, comparison between financial progress
(proportion of actual costs to estimated costs) and physical
progress certified by the Independent Engineer, past trends
of recovery of price escalation with incremental costs
incurred and comparison of actual costs within similar
contracts.
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vi.
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Assessed the adequacy and appropriateness ofthe disclosures
made in standalone financial statements in compliance
with the requirements of Ind AS 115.
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2. Valuation of accounts receivable and contract assets in view
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i.
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Understood and evaluated the design and tested the
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of risk of credit losses. (Refer Note 2(a)(ix), 40(i), 7, and 11
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operating effectiveness of key internal financial controls in
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— Trade Receivables and Note 16(a) for Contract Asset and
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relation to determination of expected credit loss.
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Note 36 to Standalone Financial Statements)
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ii.
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Obtained confirmation from parties, for sample
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Accounts receivable and Contract assets are significant items
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balances, with respect to outstanding balances. Wherever
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in the Company’s standalone financial statements aggregating
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confirmations are not received for the samples, performed
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to H 36,077.48 million as of March 31, 2026 and provision
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alternate procedures through verification of Company’s
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for impairment of receivables and contract assets amounted to
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invoices approved by the respective customers which
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H 741.31 million as at March 31, 2026. The Company has a
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represents acknowledgement of work delivered.
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concentration of credit exposure on certain customers, which
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iii.
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Performed inquiry procedures with senior management
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include government and private organisations, where there are
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of the Company regarding status of collectability of the
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delays in collections due to various reasons.
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receivable and contract assets.
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The management periodically assess the adequacy of
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iv.
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In respect of material contract balances, corroborated
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provisions recognised, as applicable, on receivables and
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our inquiry procedures with the correspondence between
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contract assets, based on factors such as credit risk of
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the Company and the customers, contracts and other
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the customer, status of the project, discussions with the
customers and underlying contractual terms and conditions.
This involves significant judgement.
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documents.
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Key Audit Matter
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Our audit procedures in respect of this area included the
following:
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Given the relative significance of these receivables and
contract assets to the standalone financial statements and
the nature and extent of audit procedures involved to assess
the recoverability of receivables and contract assets, we
determined this to be a key audit matter.
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v. Assessed the inputs used by the Management to determine
the amount of allowances by considering factors such as
credit risk of the customer, cash collections, past history and
status of the project, and correspondence with customers.
vi. Presented the results of our audit procedures to the audit
committee.
vii. Assessed the adequacy and appropriateness ofthe disclosures
made in the standalone financial statements in this regard.
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Information Other than the standalone financial
statements and Auditor’s Report Thereon
The Company’s Management and Board of Directors are
responsible for the other information. The other information
comprises the information included in the annual report, but
does not include the financial statements and auditor’s report
thereon. The annual report is expected to be made available to
us after the date of this auditor's report.
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
identified above when it becomes available and, in doing
so, consider whether the other information is materially
inconsistent with the standalone financial statements, or our
knowledge obtained in the audit or otherwise appears to be
materially misstated.
When we read the annual report, if we conclude that there is a
material misstatement therein, we are required to communicate
the matter to those charged with governance and describe
actions applicable under the applicable laws and regulations.
Responsibilities of Management and Board of
Directors for the Standalone Financial Statements
The Company’s Management and 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 and other comprehensive
income, 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. 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, the
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 the Board
of Directors either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the
Company’s 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.
We give in “Annexure A” a detailed description of Auditor’s
responsibilities for Audit of the standalone financial statements.
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 B” a statement on the
matters specified in paragraphs 3 and 4 of the Order, to
the extent applicable.
2. A. 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 purposes of our audit of the aforesaid
standalone financial statements;
(b) In our opinion, proper books of account as
required by law relating to preparation of the
aforesaid standalone financial statements have
been kept by the Company so far as it appears
from our examination of those books, except:
i. matter reported in paragraph 2B(f) below
on reporting under Rule 11(g); and
ii. back-up of books of account and other
books and papers maintained in electronic
mode, has not been kept in servers
physically located in India on a daily basis
as the backup server is outside India.
(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 maintained for the
purpose of preparation of the standalone
financial statements.
(d) In our opinion, the aforesaid standalone
financial statements comply with the Indian
Accounting Standards specified under Section
133 of the Act.
(e) On the basis of the written representations
received from the directors as on March 31,
2026 taken on record by the Board of Directors,
none of the directors are disqualified as on
March 31, 2026 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 with reference to standalone
financial statements of the Company and the
operating effectiveness of such controls, refer to
our separate Report in “Annexure C”.
(g) The reservation relating to the maintenance
of accounts and other matters connected
therewith are as stated in paragraph 2A(b)
above on reporting under Section 143(3)
(b) and paragraph 2B(f) below on reporting
under Rule 11(g).
B. 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,
in our opinion and to the best of our information
and according to the explanations given to us:
(a) The Company has disclosed the impact of
pending litigations on its financial position
in its standalone financial statements — Refer
Note 47 to the standalone financial statements;
(b) The Company has made provision as at
March 31, 2026, as required under applicable
standards for material foreseeable losses, if
any, on long term contracts. Refer Note 25 to
the standalone financial statements. Further,
the Company did not have any outstanding
derivative contracts as at March 31, 2026;
(c) There were no amounts which were required
to be transferred to the Investor Education and
Protection Fund by the Company during the
year ended March 31, 2026.
(d) 1. The Management has represented that,
to the best of its knowledge and belief,
no funds 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 persons or entities, including
foreign entities (“Intermediaries”), with
the understanding, whether recorded
in writing or otherwise, that the
Intermediary shall, directly or indirectly
lend or invest in other persons or entities
identified in any manner whatsoever
(“Ultimate Beneficiaries”) by or on
behalf of the Company or provide any
guarantee, security or the like on behalf of
the Ultimate Beneficiaries.
2. The Management has represented that, to
the best of its knowledge and belief, no
funds have been received by the Company
from any persons or entities, including
foreign entities (“Funding Parties”), with
the understanding, whether recorded
in writing or otherwise, as on the date
of this audit report, that the Company
shall, directly or indirectly, lend or invest
in other persons or entities identified
in any manner whatsoever (“Ultimate
Beneficiaries”) by or on behalf of the
Funding Party or provide any guarantee,
security or the like on behalf of the
Ultimate Beneficiaries.
3. Based on the audit procedures performed
that have been considered reasonable
and appropriate in the circumstances,
and according to the information and
explanations provided to us by the
Management in this regard, 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 (1) and (2) above, contain
any material mis-statement.
(e) The dividend declared and paid during the
year by the Company is in compliance with
Section 123 of the Act.
(f) Based on our examination, which includes test
checks, the Company has used a software and
certain SAAS based applications (related to
processing of leave and travel related data of
employees, vendor registration and inviting
quotations for few materials to be procured or
scrapped) for maintaining its books of accounts.
The software has a feature of recording audit
trail (edit log) facility, except that audit trail
feature was not enabled at the database level to
log any direct changes. Also, we were not able
to verify this aspect in SAAS based applications
as no underlying evidence, related to audit
trail (edit log) facility, could be arranged by
the Company from the service providers who
manage these applications.
Further, wherever enabled, the audit
trail feature has operated for the relevant
transactions recorded in the software. Also,
during the course of our audit, we did not
come across any instance of the audit trail
feature being tampered with, in respect of such
software. Additionally, the audit trail feature
of previous years has been preserved by the
Company as per the statutory requirements for
record retention to the extent it was enabled
and recorded in respective years.
C. In our opinion and according to information and
explanations given to us, the remuneration paid and
provided by the Company to its directors during
the current year is within the limits laid prescribed
under Section 197 read with Schedule V of the Act
and the rules thereunder.
For M S K A & Associates LLP For Shridhar & Associates
(Formerly known as M/s MSKA & Associates)
Chartered Accountants Chartered Accountants
ICAI Firm Registration No. 105047W/ W101187 ICAI Firm Registration No. 134427W
Rahul Aggarwal Abhishek Pachlangia
Partner Partner
Membership No. 505676 Membership No. 120593
UDIN: 26505676VRDJFH2046 UDIN: 26120593TVZKDW7031
Place: Jaipur Place: Mumbai
Date: May 28, 2026 Date: May 28, 2026
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