(d) Rights of Shareholders and Repayment of Capital:

(i) The Company has only one class of shares referred to as equity shares having a par value of Re. 1/-.

(ii) Each holder of equity shares is entitled to one vote per share.

(iii) In the event of liquidation of the Company, the holders of equity shares shall be entitled to receive any of the residual assets of the Company, after distribution of all preferential amounts. The amount distributed will be in proportion to the number of equity shares held by the shareholders. There are no preferential amount as on balance sheet date .

The promoter of the company, to whom the company had alloted 6,00,000 warrants on July 31, 2007, did not excercise option to convert the said warrants into equity shares of the company before the due date January 31, 2009, and the right has since lapsed. As per the term of issue of warrants, the application money received at the time of subscribing the said warrants has been forfeited and the same has been transferred to the Capital Reserve. The same can not be used for distribution of profits to the share holders as a dividend.

The Company has issued redeemable non-convertible debentures. In respect thereof, the Companies (Share capital and Debentures) Rules 2014 (as amended), require the Company to create Debenture Redemption Reserve (DRR) out of profit of the company available for payment of dividend. DRR is required to be created to an amount equal to 25% of the value of debentures issued over the life of debenture. Upon redemption of debenture, DRR amount are transferred to general reserve.

As per Companies (Share Capital and Debentures) Amendment Rules, 2019 dated August 16, 2019, issued by the Ministry of Corporate Affairs, listed companies are exempt from creation of DRR. The company has carried forward opening balance of DRR which pertains to earlier reporting period.

Terms of Repayment

NCDs of Udhay Vij Reality Private Ltd, having yearly coupon rate of 12.50% are repayable in yearly unequated installments till June 2023.

NCDs of Centrum Credit Opportunities Trust, having yearly coupon rate of 11.50% are repayable in unequal quarterly installments till September 2024.

Details of Securities

a Mortgage of share in identified immovable property owned by one of the promoters.

b Pledge of 2,76,20,270 Fully Paid up unencumbered, freely transferable equity shares of the Company held by some of the promoters. c Hypothecation of specific machineries and equipments financed by the respective financial institution. d Personal Guarantee of one of the directors and chief executive officer.

Details of Securities

(a) Hypothecation of stock of construction materials lying at sites, books debts and other receivables

(b) First charge by way of mortgage of immovable property (Sadbhav House) and immovable property situated at Village Ognaj along with furnitures, fixtures etc. owned by company and All Fixed Assets (Movable & Immovable) of the company which are not hypothecated / Charged to other lenders. Second charge on machineries owned by the company.

Amount of interest paid by the Company in terms of section 16 of the MSMED Act, along with the amount of the payment made to the supplier beyond the appointed day during the year

Amount of interest due and payable for the year of delay in making payment [which have been paid but beyond the appointed day during the year] but without adding the interest specified under the MSMED Act

As per Section 135 of the Companies Act, 2013, Corporate Social Responsibility (CSR) committee has been formed by the Company. The Company is liable to incur CSR expense as per requirement of Section 135 of Companies Act, 2013. Accordingly, it has incurred expenses of Rs 67.28 (Rs. 269.71 Lakhs) on the activities which are specified in Schedule VII to the Companies Act, 2013.

(a) Gross amount as per the limits of Section 135 of the Companies Act, 2013 : Rs. 65.55 Lakhs ( Rs. 252.97 Lakhs)

The trustees are responsible for the governance of the plan. The day-to-day administration of the scheme is carried out by the trustees. It is the trustees' duty to look after assets on behalf of employees who are entitled to benefit from those assets at some future date. Investment of assets of fund is key responsibility of the trustees. The trustees must review investment performance regularly.

Risk to the Plan

Following are the risk to which the plan exposes the entity :

Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption then the Gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption then the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

Investment Risk:

For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.

Liquidity Risk:

Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign / retire from the company there can be strain on the cash flows.

Market Risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate / government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.

Legislative Risk:

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation / regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognized immediately in the year when any such amendment is effective.

Limitation of method used for sensitivity analysis :

Sensitivity analysis produces the results by varying a single parameter & keeping all the other parameters unchanged. Sensitivity analysis fails to focus on the interrelationship between underlying parameters. Hence, the results may vary if two or more variables are changed. There are no changes from the previous period in the methods and assumptions used in preparing the sensitivity analysis.

Details of Asset- Liability Matching Strategy

There are no minimum funding requirements for a Gratuity benefits plan in India and there is no compulsion on the part of the Company to fully or partially pre-fund the liabilities under the Plan. The trustees of the plan have outsourced the investment management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it may not be possible to explicitly follow an asset-liability matching strategy to manage risk actively in a conventional fund.

As a matter of Prudence, the Company has not recognised deferred tax assets on unused tax credits and carry forward losses.

Deferred tax asset include Rs. 6537.25 lakhs being amount of unused tax credit recognized in earlier years. Based on the projection of future profitability, management believes that the Company will have regular taxable income against which the unused tax credit will be realised.

37.3 Performance obligation

Information about the company's performance obligations are summarised below:

(a) Construction services

The performance obligation is satisfied over time as the assets is under control of customer and they simultaneously receives and consumes the benefits provided by the Company. The Company receives progressive payment towards provision of construction services.

_(b) The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at 31 March are, as follows:

The aggregate value of performance obligations that are completely or partially unsatisfied as at March 31,2023 is Rs. 131265.90 lacs. Out of this the Company expect to recognise revenue around Rs. 74270.43 lacs in next year and remaining thereafter. Remaining performance obligation estimates are subject to change and affected by several factors including terminations , change of scope of contracts, occurrence of same is expected to be remote.

37.4 Reconciliation of the amount of revenue recorded in Standalone statement of Profit and loss is not required as there are no adjustments to the contract price.

b Claims against the company not acknowledged as debt: other than tax matter

(i) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has filed a suit for recovery of Rs.46.42 Lakhs (March 31, 2022: Rs. 46.42 Lakhs ) against the company and its directors and officers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs 46.42 Lakhs (March 31, 2022: Rs. 46.42 Lakhs) balance to be paid and filed Civil Suit at Civil Court, Nagpur. The company has challenged the jurisdiction of the court along with an application for stay of the Impugned Order. The Bombay High Court, Nagpur bench, through its interim order, granted a stay pending the decision of the appeal and directed the company to deposit 50% of the amount of the decree passed by the Civil Judge. The company has paid Rs. 21.020 Lakhs (March 31, 2022: Rs. 21.20 Lakhs ). The matter is pending before the high Court, Nagpur.

(ii) A case before Workmen Compensation Commissioner , Udaipur was filed for compensation of Rs. 11.69 Lakhs (March 31, 2022 : Rs. 11.69 Lakhs ) under Employees Compensation Act, 1923. The matter is currently pending.

(iii) A case before Labour Court at Ahmedabad, was filed for compensation against the company. The labour court has directed to pay compensation of Rs. 3.63 Lakhs (March 31, 2022 : Rs. 3.63 Lakhs). the company has filled appeal before the High court of Gujarat. The matter is currently pending.

(iv) SEL has moved to Nagpur High Court for release of penalty amount Rs. 113.45 Lakhs (March 31, 2022 : Rs. 113.45 Lakhs) against the services provided at Junad Mines of WCL. The case is pending.

(v) Retention of 226 workers at UCIL Site. The Company has received 3 legal notices from Ministry of Labour and Employment, out of which one Notice is from Deputy Labour Commissioner and two Notices are from Asst. labour commissioner regarding non implementation of award by tribunal cum labour court Dhanbad. The Labour Court, dhanbad has given the order in favour of the workers. The company has filed the appeal in Jharkhand High court at Ranchi. The Matter is pending.

(vi) The Directorate of Revenue Intelligence, Lucknow issued a show cause notice to the Company on 22/11/2017, seeking reasons for not demanding Rs. 187.89 Lakhs with respect to the customs duty on importing Electronic Sensor paver Finisher , which was valued at Rs. 726.77 Lakhs by SEL. The DRI contended that the Company wrongly claimed a Nil rate of customs duty as per Notification No. 12 / 2012, pertaining to exemption from payment of custom duty. Company has filed an appeal before the Commissioner of Customs Customs Comminnsinerate - II against the above aforesaid showcause notice and Commissioner had passed order and confirmed the demand and also imposed penalty of Rs. 50.00 lakhs. Company has filed appeal before Customs, Excise & Service Tax Appellate Tribunal, Chennai. The matter is pending.

(vii) Siddharth Infraprojects Private Limited (the “Claimant”) has initiated an arbitration proceeding against the Company in relation to a sub-contract agreement dated October 31, 2007 between the Claimant and Company. Pursuant to the aforesaid sub-contract agreement, Company sub contracted the work under the main contract between Company and MPRDC for rehabilitation and upgradation of package 11 of Seoni Chiraidongri Road. The Claimant has alleged that Comapny had committed breaches of the terms of the sub-contract agreement by unilaterally reducing its scope of work covered under the sub-contract agreement without the permission of the MPRDC. The Claimant has claimed an aggregate amount of Rs. 8160.00 Lakhs (March 31, 2022: Rs. 8160.00 Lakhs ) on account of, inter alia: (i) amount not paid for the work done; (ii) overhead losses suffered by the Claimant; (iii) losses suffered on account of profit not earned at appropriate time; (iv) loss of productivity; (v) opportunity losses; (vi) compensation for interest charges paid to the bank; (vii) loss due to under utilized tools, plants and machineries. SEL has been submitted its statement of defense before the Arbitral Tribunal. The aggregate amount involved is Rs. 8160 Lakhs (March 31, 2022: Rs. 8160.00 Lakhs ). The matter is currently pending.

(viii) Some of the contractors and suppliers have filed cases before NCLT, Civil Courts and MSME Council claiming the payment of outstanding amount, claims and interest. The Company has made representation/submissions to the respective forums. Based on the legal advice and past out come management believes that in addition to be amount provided in the books of accounts no further amount in form of claims and interest will be payable.

Note- It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the above contingent liabilities. Future cash outflows in respect of the above are determinable only on receipt of judgments / decisions pending with various forums / authorities.

The Company does not expect any outflow of economic resources in respect of the above and therefore no provision is made in respect thereof.

c Guarantees:

Company has given corporate guarantee to banks outstanding amount of which as on March 31, 2023 is Rs. 94545.96 Lakhs (March 31, 2022: Rs. 93913.59 Lakhs ) against the financial assistance given by the banks to subsidiary company and step down subsidiaries.

39.2 The Fair value of Investments in Bonds and Debentures, NSCs, Long term Loans and advances, Bank Deposits with more than 12 months maturities and earmarked balances approximate carrying value as the interest rate of the said instruments are at the prevailing market rate of interest.

The Fair value of current financial assets and current trade and other payables measured at amortised cost are considered to be the same as their carrying amount because they are of short term nature.

The carrying amount of financial assets and financial liabilities (other than borrowed funds) measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

The fair value of Borrowed Funds approximate carrying value as the interest rate of the said instruments are at the prevailing market rate of interest.

39.3 Refer Note 43 for information on financial asset pledged as security.

40.2 There are no transfer between level 1 and level 2 during the year.

40.3 The company's policy is to recognize transfers into and transfer out of fair values hierarchy levels as at the end of the reporting period.

40.4 Valuation technique and inputs used to determine fair value in level 2

The cost of investments in equity instruments approximates fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range.

41.1 Financial Instruments Risk management objectives and Policies

The Company’s principal financial liabilities comprise borrowings and trade & other payables. The main purpose of these financial liabilities is to finance the Company’s operations and to support its operations. The Company’s principal financial assets include Investments, trade & other receivables and cash and bank balance that derive directly from its operations.

The Company's activities expose it to market risk, credit risk and liquidity risk. In order to minimize any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign currency option contracts are entered to hedge certain foreign currency exposures and interest rate swaps to hedge certain variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading / speculative instruments.

The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework. Risk management systems are reviewed periodically to reflect changes in market conditions and the Company’s activities. The Board of Directors oversee compliance with the Company’s risk management policies and procedures, and reviews the risk management framework.

41.2 Market Risk

The market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. Financial instruments affected by market risk include borrowings, Investments, other receivables, trade and other payables and derivative financial instruments.

Within the various methodologies to analyse and manage risk, Company has implemented a system based on “sensitivity analysis” on symmetric basis. This tool enables the risk managers to identify the risk position of the entities. Sensitivity analysis provides an approximate quantification of the exposure in the event that certain specified parameters were to be met under a specific set of assumptions. The risk estimates provided here assume:

- a parallel shift of 100-basis points of the interest rate yield curves in all currencies. The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and provisions.

- a simultaneous, parallel foreign exchange rates shift in which the INR appreciates / depreciates against all currencies by 2%

The potential economic impact, due to these assumptions, is based on the occurrence of adverse / inverse market conditions and reflects estimated changes resulting from the sensitivity analysis. Actual results that are included in the Statement of profit & loss may differ materially from these estimates due to actual developments in the global financial markets.

The following assumption has been made in calculating the sensitivity analyses:

- The sensitivity of the relevant statement of profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2023 and March 31, 2022.

41.2.1 Interest Rate Risk

Interest rate risk arises from the sensitivity of financial assets and liabilities to changes in market rates of interest. The Company seeks to mitigate such risk by entering into interest rate derivative financial instruments such as interest rate swaps. Interest rate swap agreements are used to adjust the proportion of total debt, that are subject to variable and fixed interest rates.

Under an interest rate swap agreement, the Company either agrees to pay an amount equal to a specified fixed-rate of interest times a notional principal amount, and to receive in return an amount equal to a specified variable-rate of interest times the same notional principal amount or, vice-versa, to receive a fixed-rate amount and to pay a variable-rate amount. The notional amounts of the contracts are not exchanged. No other cash payments are made unless the agreement is terminated prior to maturity, in which case the amount paid or received in settlement is established by agreement at the time of termination, and usually represents the net present value, at current rates of interest, of the remaining obligations to exchange payments under the terms of the contract.

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company's objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys cash management system. It maintains adequate sources of financing including debt at an optimized cost.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments:

41.4 Credit Risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.

Credit risk encompasses both, the direct risk of default and the risk of deterioration of credit worthiness.

Credit risk arises primarily from financial assets such as trade and other receivables, Loans and advances, cash and cash equivalent and other balances with banks.

Credit risk on cash and cash equivalents is limited as company deposits with the banks.

The company generally gives loans and advances to its subsidiaries and employees. Hence, the management believes that the company is not exposed to any credit risk in respect of such loans and advances.

In respect of trade receivables, credit risk is being managed by the company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the company grants credit terms in the normal course of business. All trade receivables are also reviewed and assessed for default on a regular basis. The Company has reviewed expected credit loss provision (ECL) on its trade receivables as per Ind AS provisions.

The maximum exposure to the credit risk at the reporting date is primarily from trade recievables as on March 31, 2023 Rs. 57269.68 Lakhs (as on March 31, 2022 Rs. 73156.91 Lakhs).

41.5 The Company’s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company’s senior management on a regular basis. The Company’s Board of Directors review and approve all equity investment decisions.

At the reporting date, the exposure to:

unlisted equity in subsidiaries at cost of Rs. 2,403.16 Lakhs (March 31, 2022: Rs. 2,403.16 Lakhs ). listed equity in subsidiaries at cost of Rs. 49,255.72 Lakhs (March 31, 2023: Rs. 49,255.72 Lakhs)

Sensitivity analysis

As at 31 March 2023, the exposure to listed equity securities at fair value was Rs. 7,371.64 Lakhs (31 March 2022: Rs 22,114.91 Lakhs).

Changes in this exposure would not have a material effect on the profit or loss and total equity of the Company.

42 Capital Management

For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other reserves attributable to the equity holders of the Company.

The Company’s objective for capital management is to maximize shareholder value and safeguard business continuity.

The Company determines the capital requirement based on annual operating plans and other strategic plans. The funding requirements are met through equity and operating cash flows generated.

1 Remuneration expenses includes Rs. 53.90 lakhs (Rs. 84.00 lakhs) Paid to Nitin R. Patel,Executive Director & CFO up to up to November 21,2022, Rs. 4.81 lakhs paid to Dwigesh Joshi, Executive Director & CFO of the company , Rs. 24.51 lakhs (Rs. 16.36 lakhs) paid to Hardik Modi, Company Secretary and Compliance Officer.

2 The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions.

3 Terms and conditions of the balance outstanding:

Outstanding balances at the year end are unsecured and interest free except short term loan and settlement occurs in cash as per the terms of agreement

Short term loans (unsecured) given to Sadbhav Infrastructure Projects Ltd (SIPL) carries interest rate @11% p.a. (March 31, 2021 : 11% )

The company has not provided any commitment to the related party As at March 31, 2023 except mentioned at Note No. 38B

Outstanding balances towards rent and reimbursement are unsecured and will be settled as per the terms ofthe agreement.

There is no guarantee given or received except mentioned at Note No. 56

47 The Company has initiated action for monetization of the assets and One Time Settlement (OTS) discussions with the Trade Creditors as a part of the deal, upon insistence of the buyers of assets. The Company has reviewed its outstanding payable and identified those debts that have been outstanding beyond limitation period and not payable. The management has evaluated the balances in all accounts of the creditors and determined to write back the outstanding payables considering factors such as the age of the outstanding and impairment in contract assets against such payables etc. The management is in discussion with the vendors and process of obtaining confirmation is initiated.

Considering the management assessment, the balances of Rs. 11066.47 lakhs in vendor accounts have been written back and included in miscellaneous income under the head other income in the financial results during the year ended March 31, 2023. Having regard to this the management believes that carrying amount of trade payables is fairly valued.

48 The Board of Directors in the meeting held on October 15, 2022 have resolved to withdraw Scheme of Amalgamation filed with Hon’ble National Company Law Tribunal Ahmedabad Bench (NCLT) with regard to amalgamation of Sadbhav Infrastructure Project Limited (Transferor Company) with Sadbhav Engineering Limited (Transferee Company) under sections 230 to 232 of the Companies Act, 2013. Consequently, on application made by the Company, the NCLT vide its order dated October 19, 2022 has allowed the withdrawal of the said application. Accordingly, the Scheme of merger stands cancelled.

49 The Company has outstanding loan and other receivable of Rs. 14865.38 lakhs given to Rohtak Panipat Tollway Private Limited (RPTPL), a step-down subsidiary company which is engaged in construction, operation and maintenance of road projects under concession agreement with National Highways Authorities of India (NHAI). The net worth of RPTPL has fully eroded.

Further, the toll collection by RPTPL was forcefully suspended due to agitation and protest held by farmers and other unions against agri-marketing laws from December 25, 2020. Accordingly, RPTPL could not collect toll user fees from December 25, 2020. RPTPL had sent various communications to NHAI for such forceful suspension oftoll. RPTPL has issued notice for termination of concession agreement on July 27, 2021 considering the above event as Force Majeure Event in terms of concession agreement. RPTPL has filed claim amounting to Rs. 395784.40 lakhs relating to termination payments, O&M cost due to force majeure, Covid claim & demonetization etc. with NHAI in terms of concession agreement. In respect of such claims, NHAI has approached to the RPTPL for settlement of all these claims by way of conciliation proceedings, which has been consented by it.

Considering the management assessment of probability and tenability of receiving above claims from NHAI as per the terms of concession agreement, which is backed by legal opinion and communications from NHAI for conciliation, the management has assessed that there is no impairment in the value of loan given to RPTPL and consequently no provision/adjustment to the carrying value of loan and other receivable as at March 31, 2023 is considered necessary.

The statutory auditors have expressed qualified opinion on financial statments in respect of above as regards

50 As per the consolidated financial statements of the Sadbhav Infrastructure Project Limited (SIPL) and its subsidiaries, there is negative networth of the Group of SIPL and its subsidaries. The Company has investment in and given loan to SIPL, the amount of which is Rs. 89721.04 lakhs as on March 31, 2023. The management has carried out impairement assessement of these assets and based on the assessement it is concluded that no impairement is required to the carrying value of investment in and loan to SIPL.

51 a. There was delay in physical work progress in case of Sadbhav Jodhpur Ring Road Private Limited (SJRRPL), a step-down subsidiary company which is engaged in construction, operation and maintenance of road project under concession agreement with National Highways Authorities of India (NHAI), due to delay in handing over the land from NHAI, delay in approval of Change of scope of work, non-funding by the lenders and nationwide lockdown due to Covid-19. Further the NHAI in the month of January 2022 at the request of the SJRRPL had given in principal approval for harmonious substitution of the concessionaire i.e. SJRRPL subject to various terms and conditions.

Pursuant to this, definitive agreement was entered into between The Company, SJRRPL, Sadbhav Infrastructure Project Limited (The subsidiary company) and Gawar Construction Limited (GCL) as on June 28, 2022 for substitution of the SJRRPL with the new SPV to be nominated by GCL and also executed endorsement agreement between the SJRRPL and JRR Highways Private Limited (new concessionaire) dated July 13, 2022 with the approval of NHAI for implementation of the project by new concessionaire in substitution of the SJRRPL.

Consequently, all the balances outstanding, pertaining to SJRRPL, in books of the Company have been adjusted and net debit balance of Rs. 2606.04 Lakhs has been transferred to statement of profit and loss and included in other expenses in financial statments during the year ended March 31, 2023.

b. In case of Sadbhav Bangalore Highway Private Limited (SBGHPL or concessionaire) which is engaged in construction, operation and maintenance of infrastructure project under concession agreement with National Highways Authorities of India (NHAI), the lenders of SBGHPL have notified to NHAI about exercise of their right of substitution of concessionaire in the month of January, 2022. Subsequently, the lenders have approved the anchor offer received from the Gawar Construction Limited in the month of October 2022 for the purpose of substitution of SBGHPL. Subsequently necessary documents have been executed in the month of February 2023.

Consequently, all the balances outstanding, pertaining to SBGHPL in books of the Company have been adjusted and amount of Rs. 4,082.80 Lakhs has been transferred to statement of profit and loss and included in other expenses and amount of Rs. 1,512.00 lakhs being loan outstanding is transferred to statement of profit and loss and included in exceptional items in financial statments for the year ended March 31, 2023.

c. In case of Sadbhav Bhavnagar Highway Limited (SBHL) and Sadbhav Una Highway Limited (SUHL) which are engaged in construction, operation and maintenance of infrastructure project under concession agreement with National Highways Authorities of India (NHAI), the holding company of SBHL and SUHL i.e. Sadbhav Infrastructure Project Limited (SIPL), subsidiary of the company has executed binding term sheet on January 27, 2023 towards stake sale of equity shares of SBHL and SUHL.

In accordance with term sheet, all the balances outstanding, pertaining to SBHL / Bhavnagar project and SUHL / Una project, in books of the Company have been adjusted during the year ended March 31,2023.

d. Company reviews its outstanding trade receivable, advance to vendor and loans given and identifies those debts that have been outstanding for an extended period and are unlikely to be received. The company applies the prudence concept and decides to write off/provide for the doubtful trade receivable, advance to vendor and loans given as expenses amounting to Rs. 26337.58 lakhs.

52 In terms of Ind AS - 115 - “Revenue from Contracts with the Customers“, the Company recognises contract assets on the basis of actual cost incurred on contract till reporting date and estimated cost to complete (CTC) to the contract as per percentage of completion method. The CTC is reviewed at the balance sheet date and adjustments are affected to the carrying value of contract assets on the basis of such review. The certification of work completion and acceptance of final bill by the customers usually takes significant period of time and this period varies from contract to contract.

During last few years there has been substantial increase in the cost of construction. Further, there were delays in execution of the work due to resource constraints. To overcome this situation since last two year, the Company subcontracted or took exit from some of the works post final measurement of work done by the company. There is no pass through of higher cost over-run as the contracts are fixed price contracts.

In the light of the above situation, the management reviews the carrying value of contract assets as on the balance sheet date. Based on such review, the impairment to the carrying value of the contract assets is made in the financial statements in terms of Ind AS - 115 - “Revenue from Contracts with the Customers“. The management is taking effective steps for realization of these assets.

The contract assets as on March 31, 2023 includes amount of Rs. 35021.63 lakhs in respect of which claim have

53 The Company finds difficulty in meeting obligation of payment to suppliers and statutory dues in normal course of business. There are defaults in repayment of dues to lenders. This is mainly an account of delay in execution of projects and resources constraint.

During the year ended March 31, 2023, the consortium lenders except one lender of the company have signed an Inter Creditor Agreement on December 26, 2022 due to defaults in the repayment of dues. The account of Company has been classified as Non Performing Assets. The Management is in the process of monetizing the existing -6- HAM Projects of group out of which binding term sheet has been signed with the buyer for -2- HAM projects and other -4- HAM Projects are expected to be monetized soon. Further, due to delay in completion of EPC works under execution on account of shortage of working capital, the Company has proactively taken decision to rearrange the EPC contract work. These factors raise concern about going concern assumptions adopted in the preparation of financial statements for the year ended March 31, 2023.

Based on this, the Company has submitted the Resolution Plan to the Consortium of lenders which is under active discussion with the lenders. The ingredients of Resolution Plan covers proceeds from monetization of HAM Assets & other Assets, infusion of funds from the promoters, receipt of claim amount / other receivables and refinance / stake sale of operational projects as well as of restructuring of dues of lenders. These activities will bring reduction of overall liabilities including reduction of debt and will also bring additional liquidity in the company to ramp up its execution.

Considering the above aspect in anticipation of approval from lenders of Resolution Plan, its implementation and infusion of funds from promoters of the Company, the management believes that Company will be able to generate an incremental operational cash flows.

54 Realisability of Non- Current Trade Receivables amounting to Rs. 2830.04 lakhs (Rs. 13236.35 lakhs) along with other incidental balances amounting to Rs. 8312.97 lakhs (Rs. 8312.97 lakhs) pertaining to completed projects as at balance sheet date in respect of which legal proceedings are in process. The management is hopeful that in view of the steps being taken for recovery, the dues will be realised and hence the same are considered as good and recoverable. Reference is invited to Note No. 6 and 8.

1 The Company has made provision for impairment in the carrying value of the trade receivable resulting into decrease in the retained earnings forming part of total equity; hence the debt equity ratio has impaired.

Principal repayment of the long term borrowings include prepayment of the borrowings which has been

2 repaid out of the repayment of loan from the related parties. This has resulted in to decrese in the debt service coverage ratio

3 The Company's net loss was higher in the previous year due to provision for impairment to the carrying value of the contract assets compared to net loss in the current year resulting into increase in ratio.

4 The Company has made provision for impairment in the carrying value of the trade receivable resulting into decrease in the work capital hence the ratio increased.

5 The Company has made provision for impairment in the carrying value of the trade receivable resulting into net loss during the year hence the ratio decreased.

6 The Company's net loss was higher in the previous year due to provision for impairment to the carrying value of the contract assets compared to net loss in the current year resulting into positive ratio.

57 The Company does not hold any benami property as defined under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder. No proceeding has been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

58 The Company is required to provide QIS to Banks on quarterly basis. The quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of accounts.

59 As on March 31, 2023 there is no unutilised amounts in respect of any issue of securities and long term borrowings from banks and financial institutions. The borrowed funds have been utilised for the specific purpose for which the funds were raised.

60 The Company does not have any trasaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 ( Such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

61 The Company has not traded or invested in crypto currency or virtual currency during the financial year.

62 The company does not have any charges or satisfaction, which is yet to be registered with ROC beyond the statutory period except in case of two lenders where charge satisfaction yet to be registered with ROC due to non receipt of no dues certificate.

63 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) 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

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

64 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) 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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

66 The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act read with the Companies ( Restriction on number of Layers) Rules, 2017.

67 The Company is not decalred as wilful defaulter by any Bank or Financial Institution or Other lenders.

68 Figures relating to the previous periods/year have been regrouped / rearranged, wherever necessary, to make them comparable with those of the current periods/year.

69 All amounts in the financial statements are presented in Rupees Lakhs except per share data and as otherwise stated.