We have audited the accompanying Standalone Financial Statements of BGR Energy
Systems Limited (referred to as the “Company”) which comprises the Balance Sheet as
at March 31,2026, the Statement of Profit and Loss (including other comprehensive
income), Statement of Cash Flows and Statement of changes in Equity' for the year then
ended, and notes to the standalone financial statements, including a summary of material
accounting policy information and other explanatory information.
In our opinion and to the best of our infonnation and according to the explanations given
to us the aforesaid standalone financial statements give the information, 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 Companies Act 2013 read with the
Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and
other accounting principles generally accepted in India, of the state of affairs of the
company as at March 31,2026, the loss including other comprehensive income, changes
in equity and its cashflows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Companies Act, 2013. Our responsibilitics-oinder those
Standards are further described in the Auditor's Responsibilities for the Audit of the
Financial Statementssection 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 together with the ethical requirements that are relevant to our audit of the financial
statements under the provisions of the Companies Act, 2013 and the Rules there under,
and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the Code of Ethics. We believe that the audit evidence that we have
obtained is sufficient and appropriate to provide a basis for our opinion. ___
Emphasis of Matter:
1. Attention is invited to Note No. 43 of the Standalone Financial Statements relating
to the NUPPL Ghatampur contract, wherein the Company executed additional
works beyond the original scope of the contract and raised claims of Rs. 1,62,042
lakhs, of which Rs. 33,969 lakhs have been recommended by the Conciliation
Committee and the balance is pending approval.
Pending customer approval and amendment of the work order, related costs
amounting to Rs. 23,455 lakhs during the year and Rs. 39,583 lakhs cumulatively
up to 31st March 2026 have been charged to the Statement of Profit and Loss.
2. Attention is invited to Note No. 44 of the Standalone Financial Statements relating
to the N'lTPS Vijayawada contract, wherein the Company executed additional
works beyond the original scope of the contract. The Management has raised claims
of Rs. 76,980 lakhs, which are pending customer approval and are being pursued
legally.
Pending approval and amendment of the work order, related costs amounting to Rs.
5,307 lakhs have been charged to the Statement of Profit and Loss during the year
ended 31 st March 2026.
3. Attention is invited to Note No. 49 of the Standalone Financial Statements, wherein
nine Public Sector Banks assigned the Company’s outstanding dues to NARCL on
29th September 2025. Only ICICI Bank facilities continue as NPA and are yet to be
assigned to NARCL, while Axis Bank and Kotak Mahindra Bank facilities are non¬
fund based and not classified as NPA.
The Company is in discussion with NARCL for finalisation of dues and
documentation. Interest amounting to Rs. 16,276 lakhs up to June 2025 and Rs.
53,220 lakhs up to March 2026 has been provided in the Statement of Profit and
Loss.
s,
Our opinion is not modified in respect of these matters.
Material Uncertainty Related to Going Concern:
In the prior year's audit report dated 28lh May 2025, an Adverse Opinion was issued
regarding the Company’s ability to continue as a going concern, as immediate
liquidation appeared unavoidable.
During the current financial year, circumstances have improved due to various
corrective measures taken by management. The Company has continued its operations
for more than 12 months since the financial difficulties began, supported by steady
revenue from existing contracts.
Further, the loan accounts classified as NPAs by nine banks have been assigned to/
/v
National Asset Reconstruction Company Limited (NARCL) under the SARFAES1 Acp/
2002. The Company is currently in discussions with NARCL for resolution of its dcbU.l
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including possible debt waivers. Management expects that the proposed resolution may
significantly reduce the Company's debt obligations and improve its net worth,
liquidity, and overall financial position. However, as on the reporting date, the terms of
the proposed settlement with NARCL are yet to be finalized, as disclosed in Note No.
51 to these standalone financial statements.
Accordingly, these conditions indicate the existence of a material uncertainty that may
cast significant doubt on the Company’s ability to continue as a going concern.
Nevertheless, based on management’s assessment of future business prospects,
proposed fund-raising plans, and other mitigating factors, management considers the
going concern basis of accounting to be appropriate for the preparation of these
standalone financial statement.
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. In addition to the matter described in the
Material Uncertainty Relating to Going Concern paragraphs and Emphasis of Matter
paragraphs, we have determined the matters described below' to be the Key Audit matter
to be communicated in our report.
Revenue Recognition in case of Construction Contract— Involving Significant
Judgement and Estimation
The Company recognises revenue from long-term contracts based on the stage of
completion, determined by the proportion of costs incurred up to the reporting date
relative to the total estimated contract costs at completion. This method of revenue
recognition involves significant management judgement and estimation in assessing the
total estimated contract costs, cost to complete, stage of completion, and theHiming of
revenue recognition.
Management’s estimation process also includes determining expected losses on
contracts, recognising such losses when it becomes probable that total contract costs
will exceed the total contract revenue. Further, cost contingencies are incorporated
within these estimates to account for specific project-related risks, uncertainties, and
potential disputed claims. These contingencies are regularly reviewed and reassessed
by management throughout the duration of the contract.
The Company’s revenue may also include variable consideration, such as claims and
variations, which are recognised only when management determines that recovery is
highly probable, based on the available evidence.
• *
Given the significant level of judgement and estimation involved, particularly relating^Af
to total cost forecasts, assessment of contract risks, and recognition of variablfcA
consideration, we considered revenue recognition on long-term contracts to be a key
audit matter.
Response to Key Audit Matter and Conclusion
Our principal audit procedures included, but were not limited to, the following:
• We assessed the appropriateness of the Company's revenue recognition policies,
including those relating to variable consideration, by comparing them with the
applicable requirements of the relevant accounting standards.
• We tested the design and operating effectiveness of key controls over:
o identification and evaluation of distinct performance obligations;
o estimation of costs to complete each performance obligation, including
consideration of contingencies as the work progressed;
o assessment of the impact of change orders on both the costs to complete and
the transaction price; and
o determination and impact of variable consideration on the transaction price.
• For a sample of customer contracts, we performed detailed procedures, which
included:
o Obtaining and reviewing contract documents, related change orders, and other
relevant arrangements;
o Assessing significant contract terms and deliverables to evaluate
management’s judgments regarding:
(i) identification of distinct performance obligations;
(ii) updates to estimated costs to complete arising from ongoing progress and
change orders;
(iii) adjustments to the transaction price resulting from change orders; and
(iv) determination of variable consideration and its effect on tine transaction
price.
o Comparing costs incurred to date with the Company’s estimates to identify
material deviations and evaluating management’s revisions to estimated costs
to complete, if any;
o Testing the reasonableness of estimated costs and efforts to complete,
considering the status of milestone deliveries and evidence of customer
acceptance, to assess the risk of delays that could affect revenue recognition.
• We performed analytical procedures to assess the reasonableness of revenue
recognized and disclosed, analysed by type and nature of services rendered.
Conclusion
Based on the audit procedures performed, we did not identify any material exceptions
with respect to the Company’s adoption of Ind AS 115 or the timing of revenue
recognition.
Information Other than the Standalone Financial Statements and Auditor’s
Report Thereon:
The Company’s Board of Directors is responsible for the other information. The other
information comprises the information included in the Directors’ Report and
Management Discussion and Analysis, but does not include the consolidated financial
statements, standalone financial statements and our auditor’s report thereon.
Our opinion on the standalone financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is
to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the standalone financial statements or our knowledge
obtained during the course of our audit or otherwise appears to be materially misstated.
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.
As on the date of this report, the other information was not made available to us by the
management. Accordingly, we are unable to comment on this matter.
Responsibility of Management for the Standalone Financial Statements:
The Company’s Board of Directors is responsible for the matters stated in section 134(5)
of the Companies Act, 2013 (“the Act”) with respect to the preparation of these
standalone financial statements that give a true and fair view of the financial position,
financial performance including other comprehensive income, cash flows and changes
in equity of the Company in accordance with the accounting principles generally
accepted in India, including the Indian Accounting Standards 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 implementation and maintenance of 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 financial statement that give
a true and fair view and are free from material misstatements, whether due to fraud oi/t
error. /j/*6
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In preparing the Standalone financial statements, management is responsible for
assessing the Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the company’s financial
reporting process.
Auditor’s Responsibility 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 misstatements, whether due to fraud or
error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken
on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
a. Identify and assess the risks of material misstatements of the standalone financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control;
b. Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that arc appropriate in the circumstances. Under sectiort~143(3)(i)
of the Companies Act, 2013, we are also responsible for expressing our opinion on
standalone financial statements
c. Whether the company has adequate internal financial controls system in place and
the operating effectiveness of such controls;
d. Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management;
e. Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material^
uncertainty exists related to events or conditions that may cast significant doubt (mi
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the Company's ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the standalone financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a going concern;
f. Evaluate the overall presentation, structure and content of the standalone financial
statements, including the disclosures, and whether the standalone financial
statements represent the underlying transactions and events in a manner that
achieves fair presentation;
Materiality is the magnitude of misstatements in the standalone financial statements
that, individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the standalone financial statements may be
influenced. We consider quantitative materiality and qualitative factors in (i) planning
the scope of our audit work and in evaluating the results of our work: and (ii) to evaluate
the effect of any identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with
them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the standalone financial
statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) as
amended, issued by the Central Government of India in terms of sub-section (11) of
section 143 of the Companies Act, 2013, we give in the Annexure a statement on ^
the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable ourSv^
• i i /</ ' to
renort thereon is enclosed as “Annexure A”. <1 K“s\
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. 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 and proper adequate
returns have been received from all the regional offices of the company;
c. The Company’s Balance Sheet, the Statement of Profit and Loss (ixicl. Other
Comprehensive income), the Statement of Cash Flows and the Statement of
Changes in Equity dealt with by this report are in agreement with the books of
accounts;
d. The aforesaid standalone financial statements comply with the Indian
Accounting Standards specified under Section 133 of the Act, read with The
Companies (Indian Accounting Standards) Rules, 2015, as amended thereon.
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
is 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 over financial
reporting of the company and the operating effectiveness of such controls, refer
to our separate Report in “Annexure B”. Our report expresses unmodified
opinion on the adequacy and operating effectiveness of the Company’s internal
financial controls over financial reporting;
g. With respect to the other matters to be included in the Auditors’ Report in
accordance with the requirements of section 197(16) of the Act, as amended. In
our opinion and to the best of our information and according to the explanations
given to us, the remuneration paid by the Company to its directors during the
year is in accordance with the provisions of section 197 of the Act.
h. 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:
• • • . . /&
i. The company has disclosed the impact of pending litigations on its finarrefidT)
position in its standalone financial statements; (Refer Note No. 36 tffilh#™'
Standalone Financial Statements) \\ T'
Y-J\ One
ii. The company has made provision, as required under applicable law or
accounting standards, for material foreseeable losses, if any on long-term
contracts including derivative contracts;
iii. There were no amounts which were required to be transferred, to the Investor
Education and Protection Fund by the Company;
iv.
a. The management has represented that, to the best of its knowledge and
belief, other than as disclosed in the notes to the accounts, 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 person(s) or entity(ies), 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
by or on behalf of the company (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of the Ultimate
Beneficiaries;
b. The management has represented, that, to the best of its knowledge and
belief, other than as disclosed in the notes to the accounts, no funds have
been received by the company from any person(s) or entity(ies),
including foreign entities (“Funding Parties”), with the understanding,
whether recorded in writing or otherwise, that the company shall,
directly or indirectly, lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the Funding Party
(“Ultimate Beneficiaries”) or provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries; and
c. Based on such audit procedures as considered reasonable and appropriate
in these circumstances, nothing has come to our notice that has caused
them to believe that the representations under sub-clause (a) and (b)
contain any material mis-statement.
v. In lieu of carried over previous years' and current year losses, the company
has not declared and/or paid any dividend during the year in accordance with
Sec.123 of the Companies Act. 2013.
vi. Based on our examination carried out in accordance with the Implementation
Guidance on Reporting on Audit Trail under Rule 11 (g) of the Companies^
(Audit and Auditors) Rules,2014 (Revised 2023 Edition) issued by tl/cf/i
Institute of Chartered Accountants of India we report that the company hhS\
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used an accounting software ie.,SAP ERP, for maintaining its books of
accounts which has feature of recording audit trail (edit log) facility for all
relevant transactions recorded in the software throughout the year. However,
wc did not come across any instances of audit trial feature being tampered.
Additionally, the audit trail has been preserved by the company as per the
statutory requirements for record retention.
Our examination of the audit trail was in the context of an audit of financial
statements carried out in accordance with the Standard of Auditing and only
to the extent required by Rule 11 (g) of the Companies (Audit and Auditors)
Rules,2014. We have not carried out any audit or examination of the audit
trail beyond the matters required by the aforesaid Rule 11(g) nor have we
carried out any standalone audit or examination of the audit trail.
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