We have audited the accompanying Standalone Financial Statements ofBGR Energy
Systems Limited (referred to as the “Company”) which comprises the Balance Sheet as
at March 31,2025, 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 information and according to the explanations given
to us, except for the effects of the matter described in the “Basis for Adverse Opinion”
section of our report, the aforesaid Standalone financial results 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 31,2025, the Loss including
other comprehensive income, changes in equity and its cash flows for the year ended on
that date.
Basis for Adverse Opinion
Material Uncertainty relating to Going Concern:
The following events and/or transactions occurred during the financial year ended 31st
March,2024, which has created substantial dbubt about the company's ability to
continue as a going concern in the future, typically one year from the date of the
financial statements, mainly:
> Classification of working capital borrowings held with Banks as “non-performing
assets”, by all the lender Banks, despite regular servicing of interest obligation;
*
> Operational cash losses and working capital deficit on account of variable and fixed
overheads (inch finance cost and admin expenses);
>Ý Termination/Short-Closure of material orders of the company other than present
ongoing projects, which are under near completion and invocation of performance
and advance bank guarantees issued thereon;
> The company has an accumulated loss, which resulted in substantial erosion in net
worth.
> Resignation of Company’s Key Managerial Personnel and Non-Executive
Independent Directors of the Company on the Board of the Company.
The Company’s Board of Directors has proposed to overcome the facts and conditions
without elaborating on access to additional capital, infusion of funds by the promoter
group and plans to reduce or delay expenditures, during previous financial year.
However, even after the survival for more than a year, we could not find out any
improvement in the performance of the company in view of the continued existence of
significant losses, accumulated losses exceeding net worth, delay in meeting debt
obligations, difficulty in obtaining financing, loss of major customers, declining sales,
no concreate proposal from the Board of Directors to overcome the adverse situation.
Considering the above matters, we are of the view that the assumption as going concern
of the company made by the management continues to be inappropriate.
As a result of the aforesaid matters and on account of material uncertainties, we could
not readily ascertain the possible material adjustments that may be required to be made
in the value of recorded assets and liabilities and contingent liabilities, as at March
31,2025 and in respect of corresponding possible impact on the statement of profit and
loss account (ie., financial performance) for the period ended on that date, could not be
recorded in this standalone audited financial result.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Companies Act, 2013. Our responsibilities under those
Standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Results 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 together with the ethical requirements that are relevant to our audit of the financial
results 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 adverse opinion on the standalone
financial statements.
Emphasis of Matters:
Attention is drawn to the Note No. 49 of the Standalone financial results, wherein the
company has incurred extra cost for the execution of additional scope of work in the
Balance of Work Package with Neyveli Uttar Pradesh Power Limited (NUPPL), for
which company has sought a claim before the Conciliation Committee, as appointed.
Pending decision from the committee and approval from the customer, the company has
charged off the cost/expenses incurred to the Statement of Profit and Loss Account
amount to Rs. 19,944 Lakhs.
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
31,2025. 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. In addition to the matter described in the
Basis of the Adverse Opinion 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 the timing 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
. • V* ,
highly probable, based on the available evidence.
Given the significant level of judgement and estimation involved, particularly relating
to total cost forecasts, assessment of contract risks, and recognition of variable
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 the 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.
• We also evaluated the adequacy and appropriateness of the Company’s disclosures
in accordance with Ind AS 115.
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.
If, based on the work we performed, we conclude that there is a material misstatement
therein, we are required to communicate the matter to those charged with governance.
However, as discussed in the Basis of Adverse Opinion paragraph above, we are unable
to conclude whether or not the other information is materially misstated with respect to
these matters.
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 or
error.
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 are appropriate in the. circumstances. Under section 143(3)(i)
of the Companies Act, 2013, we are also responsible for expressing our opinion on
whether company has adequate internal financial controls system in place and the
operating effectiveness of such controls;
c. Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management;
d. Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on
the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the standalone financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a going concern;
e. 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.
Other Matters: Nil
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 our
report thereon is enclosed as “Annexure A”.
2. 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
except as stated in Basis of Adverse Opinion.
b. Except for the effect of the matters described in Basis of Adverse Opinion
paragraph above 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 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 (inch 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. Except for the effect of the matters described in Basis of Adverse Opinion
paragraph above in our opinion, 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, 2025 taken on record by the Board of Directors, none of the directors
is 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 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. The matters described in the Basis for Adverse opinion paragraph above, in our
opinion, may have adverse effect on functioning of the company.
h. 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.
i. 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 financial
position in its standalone financial statements; (Refer Note No. 36 to the
Standalone Financial Statements)
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 the
Institute of Chartered Accountants of India we report that the company has
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,
we 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.
For Anand and Ponnappan
Chartered Accountants
FRN000111S
Place: Chennai R. Ponnappan
Date: 28.05.2025 Partner
UDIN: 25021695BM1ACY4531 . Membership No :021695
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