Shristi Infrastructure Development Corporation Limited

Report on the Audit of Standalone Financial Statements

Qualified Opinion

We have audited the accompanying Standalone Financial Statements of SHRISTI INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED (hereinafter referred to as the 'Company') which comprise the Balance Sheet as at 31^st March, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended and notes to standalone financial statements, including a summary of the material accounting policies and other explanatory information (hereinafter referred to as "standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effect of the matters described in the 'Basis for Qualified Opinion' paragraph of our report, 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 accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March, 2024, its loss and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

a) We draw your attention to Note 31(18) to the accompanying standalone financial statements regarding non - provision of interest expense of Rs. 2579.28 lakhs on the borrowings from Srei Equipment Finance Limited for the year ended 31^st March, 2024 (Cumulative non- provisioning of interest w.e.f 1^st April, 2023 to 31^st March, 2024for Rs. 2579.28 lakhs) which is not in accordance with the requirements of Ind AS 23: Borrowing Costs read with Ind AS 109: Financial Instruments.

This has resulted in understatement of finance cost to the extent with consequential impact on other reported financials along with non- provision of Income Tax Deducted at Sources (TDS) liability in this regard of Rs. 143.15 lakhs as on 31^st March, 2024.

Had the aforesaid interest expense been recognized, the finance cost for the year ended 31^st March, 2024 would have been Rs. 5387.78 lakhs instead of Rs. 2808.50 lakhs. The total expenses for the year ended 31^st March, 2024 would have been Rs. 18667.70 lakhs instead of Rs. 16088.42 lakhs. The Net Profit/(loss) after tax for the year ended 31^st March 2024 would have been Rs. (4418.81 lakhs) instead of Rs. (1839.53 lakhs). The comprehensive Profit /(Loss) for the year ended 31^st March 2024 would have been Rs. (4405.79 lakhs) instead of reported amount of Rs. (1826.51 lakhs). Other Equity as on 31^st March, 2024 would have been Rs. (9466.27) lakhs instead of reported amount of Rs. (6886.99) lakhs and Other current financial liability as on 31^st March 2024 would have been Rs. 9149.35 lakhs instead of reported amount of Rs. 6713.22 Lakhs. Other Current Liability as on 31^st March, 2024 would have been Rs. 21371.39 lakhs instead of Rs. 21228.24 lakhs.

b) In the matter of Sarga Udaipur Hotels & Resorts Private Limited, a subsidiary of the company, as stated in Note 31(17) to the standalone financial statements, the Hon'ble National Company Law Tribunal ("NCLT"), Kolkata Bench, admitted the Corporate Insolvency Resolution Process ("CIRP") under the Insolvency and Bankruptcy Code, 2016 (IBC) against Sarga Udaipur Hotels & Resorts Private Limited and CIRP is initiated vide order dated 29^th April, 2022.

In view of the admission of the above subsidiary under CIRP process by the Hon'ble NCLT, we are unable to comment on the extent of realisability of its value of investment of Rs. 195.00 lakhs and interest free loan of Rs. 1,865.79 lakhs receivable from above subsidiary.

Similarly, we are also unable to comment on the extent of realisability of investment of Rs. 300.00 lakhs and loan of Rs. 731.35 lakhs (including interest) receivable from Shristi Urban Infrastructure Development Limited, being subsidiary of the company (which is the holding company of Sarga Udaipur Hotels & Resorts Private Limited, a company undergoing CIRP process as mentioned above), The consequential effect of the above, on the standalone financial statements for the year ended 31^st March, 2024 is not ascertainable.

c) Asian Healthcare Services Limited (erstwhile associate) has not commenced any business operation since its incorporation in the year 2004 and has reported accumulated losses. There is an apparent indication of impairment in value of outstanding balance of loan (given) of Rs. 140.65 lakhs as on 31^st March 2024. Provision for impairment of aforesaid outstanding amount of loan of Rs. 140.65 lakhs has not been made. This might have consequential impact on the reported financials.

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 ICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone Financial Statements.

Material Uncertainty Related to Going Concern

We draw your attention to Note 31(24) of the standalone financial statements regarding preparation of the financial statements on going concern basis, for the reason mentioned therein. The Company has incurred losses for more than three consecutive financial years and net worth as on 31^st March, 2024 has been fully eroded. This indicates the existence of a material uncertainty that may cast significant doubt on the Company's ability to continue as going concern. The appropriateness of assumption of going concern is critically dependent upon the management view and projected future cash flows of the Company.

Our opinion is not modified in respect of this matter.

Emphasis of Matter

a) With reference to Note 31(16) to the standalone financial statements, in the matter of Sarga Hotel Private Limited, a material subsidiary of the company, Corporate Insolvency Resolution Process ('CIRP') was initiated w.e.f. 11^th February 2022 and Resolution Plan was approved vide order dated 04^th January, 2024 pronounced by Hon'ble National Company Law Tribunal (NCLT), Kolkata Bench. An appeal was filed by the Company before National Company Law Appellate Tribunal (NCLAT), New Delhi against the aforesaid order which was disposed -off vide order dated 4^th of April 2024. The Company has further filed a Civil Appeal before the Hon'ble Supreme Court of India, which is presently in admission stage. Accordingly, financial adjustment of balances appearing in books w.r.t. Sarga Hotel Pvt Ltd, has not been made in the standalone financial statements for the year ended 31^st March, 2024 which might have consequential impact on reported financials.

b) Refer Note 31(15) to the standalone financial statements regarding an arbitration w.r.t dispute between Rishima SA Investments LLC, Mauritius ("Claimant") and the Company in respect of which the Arbitration Tribunal has issued a Final award in favour of the Claimant for payment of an amount of Rs.76,100 lakhs with interest calculated till 30.04.2019 amounting to Rs.1,390 lakhs and in case the same cannot be enforced in any Court or Tribunal a sum of Rs. 16,020 lakhs with interest calculated till 30th April, 2019 amounting to Rs. 2,621 lakhs towards the value of their investment in Sarga Hotel Pvt. Ltd, a erstwhile subsidiary of the Company together with aggregate costs, damages, etc. of Rs. 1,808 lakhs. Pending outcome of the enforcement proceedings before Hon'ble High Court of Delhi and based on the legal opinion obtained by the Company, the management does not consider necessary for any provision in this respect.

c) With reference to Note 31(18) to the standalone financial statements, the Company has defaulted in payment of interest on Term Loan amounting to Rs. 4707.94 Lakhs to Financial Institution till 31^st March, 2024. Further non - provisioning of interest of Rs. 2579.28 lakhs (subject to TDS) for the period from 1^st April, 2023 to 31^st March, 2024 is also in default.

d) With reference to Note 31(19) to the standalone financial statements, certain balances of Trade Receivables, Trade payables etc. are subject to confirmation/reconciliation. The reported standalone financials might have consequential impact which remains unascertained.

e) Pursuant to One-Time settlement (OTS) as mentioned in Note no. 31(23) to the standalone financial statements in respect of borrowings from DBS Bank India Limited, an amount of Rs. 3710.13 lakhs have been considered as income and shown under "Exceptional Items" in the Statement of Profit and Loss for the year ended 31^st March, 2024.

f) As stated in Note 31(20) to the standalone financial statements regarding Corporate guarantee of Rs. 72,522.05 lakhs was given by the Company for loan granted by the lenders to its erstwhile Subsidiary Company, Sarga Hotel Private Limited and Rs. 25,355.63 lakhs for its erstwhile associate, Suasth Health Care Foundation. The lenders have filed an application under Sec 7 of IBC for the corporate guarantee extended by the Company for the debt of Sarga Hotel Private Ltd. Subsequent to such application the Resolution Plan in respect of Sarga Hotel Private Limited has already been approved by Hon'ble NCLT, Kolkata. The Hon'ble NCLT, Kolkata has further approved Resolution Plan in respect of Suasth Health Care Foundation vide Order dated 18.12.2023.

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 31^st March, 2024. 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.

The Company's Board of Directors is responsible for other information. The other information comprises the information included in the Board's Report including Annexures to Board's Report, Business Responsibility Report but does not include the 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 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 have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Responsibility of the 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 with respect to the preparation of these financial statements that give a true and fair view of the financial position and financial performance and cash flow 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 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the 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 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.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of the material misstatement 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.

• 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 the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

• 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.

• 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 Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the 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 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"), 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, a Statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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.

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.

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report agree with the books of accounts.

d) Except for the possible effect of the matters described in the "Basis of Qualified opinion "paragraph of our report,

in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) The matter described in the Basis for Qualified Opinion and Emphasis of Matter paragraph to this report, may have an adverse effect on the functioning of the Company.

f) On the basis of the written representations received from the directors as on 31^st March, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2024 from being appointed as a director in terms of Section 164 (2) of the Act.

g) 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 a

qualified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting.

h) In our opinion, the managerial remuneration for the year ended 31^st March, 2024 has been paid / provided by the Company to its directors is in accordance with the provisions of Section 197 read with Schedule V to 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 (as amended), 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 31 (1) to the standalone financial statements.

ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii) There has been no delay in transferring amounts 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, as disclosed in the notes

to the accounts, no funds (which are material either individually or in the aggregate) 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, whether, 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, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds 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, whether, 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

(c) Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our attention that causes us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.

v) The Company has neither declared nor paid dividend during the year, hence compliance of section 123 of the Companies Act, 2013 does not arise.

vi) Based on our examination which included test checks, the company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

As provision to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024

For R. Kothari & Co. LLP

Chartered Accountants

FRN:307069E/E300266 Sd/-

Date: 28^th day of May, 2024 CA. Manoj Kumar Sethia

Place: Kolkata Partner

UDIN: 24064308BKCFAR1979 Membership No.:064308