We have audited the accompanying standalone financial
statements of H.G. Infra Engineering Limited which
includes one jointly controlled operation consolidated
on a proportionate basis (herein after referred to as
“the Company”) (Refer Note 52 to standalone financial
statements), which comprises the Standalone Balance
Sheet as at March 31, 2025, 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
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, and based on
the consideration of report of other auditor on separate
audited financial information of jointly controlled
operation, 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, 2025, and its total
comprehensive income (comprising of 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 and by other
auditors referred to in the “Other Matters” paragraph
below is sufficient and appropriate to provide a basis
for our opinion.
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, 2025. 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 1 (iv) (i), 2 (d), 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 59,961.84 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. We obtained the revenue workings (percentage
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AS 115, the contract revenue is measured based on the
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of completion calculations) from the Company’s
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proportion of contract costs incurred for work performed
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management, for all contracts, containing actual costs
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to date relative to the estimated total costs. This method
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incurred, estimated costs (comprising of actual costs
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requires the Company to perform an initial assessment
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and remaining costs to completion), estimated contract
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of total estimated cost and reassess the total construction
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revenue and actual revenues recognised during the year
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cost at the end of each reporting period to determine the
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based on proportion of actual costs to estimated costs.
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appropriate percentage of completion.
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For sample of contracts, we agreed contract revenue
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The estimation of total cost to complete the contract
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with key contractual terms, agreed actual costs with
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involves significant judgement and estimation throughout
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system generated reports and agreed estimated costs
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the period of contract, as it is subject to revision as the
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with costs sheets for individual contracts approved
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contract progresses - based on latest available information
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by the authorised representatives. Reperformed the
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including physical work done on the ground, changes in
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calculation of revenues during the year using proportion
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cost estimates and need to accrue provision for onerous
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of actual costs to estimated costs and compared the
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contracts, if any. Besides recognition of revenues based
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results with workings provided by the Company.
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on actual costs and estimated costs to complete the work,
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iv.
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For actual costs incurred during FY 2024-25,
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at the period end, the measurement and recognition of
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we tested the samples to appropriate supporting
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contract assets (unbilled revenue) and contract liabilities
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documents.
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(unearned revenue) related to each of the contracts is also
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v.
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To validate the remaining costs to completion,
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dependent on cost estimates.
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for sample contracts, we obtained the approved
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In view of above, we have considered the estimation of
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costs sheets (for each of such sample contracts)
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construction contract costs as a key audit matter.
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containing the breakdown of 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 of the
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
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i.
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Understood and evaluated the design and tested the
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in view of risk of credit losses. (Refer Note 1 (ix),
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operating effectiveness of key internal financial
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40(i), 7, and 11 - Trade Receivables and Note 16(a) for
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controls in relation to determination of expected
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Contract Asset to Standalone Financial Statements)
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credit loss.
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Accounts receivable and Contract assets are significant
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ii.
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Obtained confirmation from parties, for sample
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items in the Company’s standalone financial statements
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balances, with respect to outstanding balances.
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aggregating to H 27,868.07 Million as of March 31, 2025
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Wherever confirmations are not received for the
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and provision for impairment of receivables and contract
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samples, performed alternate procedures through
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assets amounted to H 631.98 Millions as at March 31, 2025.
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verification of Company’s invoices approved
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The Company has a concentration of credit exposure on
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by the respective customers which represents
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certain customers, which include government and private
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acknowledgement of work delivered.
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organisations, where there are delays in collections due to
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iii.
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Performed inquiry procedures with senior
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various reasons.
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management of the Company regarding status of
collectability of the receivable and contract assets.
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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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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
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our inquiry procedures with the correspondence
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and contract assets, based on factors such as credit risk
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between the Company and the customers, contracts
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of the customer, status of the project, discussions with
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and other documents.
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the customers and underlying contractual terms and
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v.
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Assessed the inputs used by the Management to
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conditions. This involves significant judgement.
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determine the amount of allowances by considering
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Given the relative significance of these receivables and
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factors such as credit risk of the customer, cash
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contract assets to the standalone financial statements
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collections, past history and status of the project,
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and the nature and extent of audit procedures involved
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and correspondence with customers.
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to assess the recoverability of receivables and contract
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vi.
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Presented the results of our audit procedures to the
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assets, we determined this to be a key audit matter.
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audit committee.
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vii.Assessed the adequacy and appropriateness of
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the 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 statement
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 are 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.
Other Matter
We did not audit the financial information of one jointly
controlled operation (dissolved w.e.f January 9, 2025)
included in the standalone financial statements of the
Company, whose financial statements reflect total
revenues of H 0.04 Million, total net profit/(loss) after
tax of H (0.04) Million and total comprehensive income
of H (0.04) Million for the period ended April 1, 2024
to January 9, 2025 (being its date of dissolution), and
cash flows (net) of H 0.48 Million for the period then
ended. The financial information of this jointly controlled
operation has been audited by other auditor whose report
has been furnished to us by the Management, and our
opinion on the standalone financial statements (including
other information) in so far relates to the amounts and
disclosures included in respect of this jointly controlled
operation, is based solely on the report of other auditor.
Our opinion is not modified in respect of the above matter
with respect to our reliance on the work done and the
reports of the other auditors.
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.
(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
i. in paragraph 2B(f) below on reporting
under Rule 11(g); and
ii. 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
that back-up of the 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 Statement of Changes in Equity and
the Statement of Cash Flow 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.
(e) 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.
(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 long-term contracts for
which there were no material foreseeable
losses as at March 31, 2025. Refer
note 16(a) to the standalone financial
statements. Further, the Company did not
have any outstanding derivative contracts
as at March 31, 2025;
(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, 2025.
(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
included 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 throughout
the year for certain relevant tables and
also, 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)
been preserved by the Company as per the
statutory requirements for record retention
to the extent it was enabled and recorded in
respective years.
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 year has
C. In our opinion, 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 For Shridhar & Associates
Chartered Accountants Chartered Accountants
ICAI Firm Registration No. 105047W ICAI Firm Registration No. 134427W
Rahul Aggarwal Abhishek Pachlangia
Partner Partner
Membership No. 505676 Membership No.: 120593
UDIN: 25505676BMOBKV1917 UDIN: 25120593BMHZKL3824
Place: Jaipur Place: Jaipur
Date: May 21, 2025 Date: May 21, 2025
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