INDEPENDENT AUDITORS REPORT

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of K&R RAIL
ENGINEERING LIMITED ("the Company"), which comprise the Balance Sheet as
at March 31, 2023, 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 ended on that date and a summary of significant
accounting policies and other explanatory information (hereinafter referred to as
the "standalone financial statements").

In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements give the
information required by the Companies Act, 2013 ("the Act") in the manner so
required and give a true and fair view in conformity with the Indian Accounting
Standards prescribed under Section 133 of the Act read with 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, 2023 and its profit, total comprehensive income,
changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance
with the Standards on Auditing ("SA"s) 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 made 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 obtained by us is sufficient and appropriate to provide a
basis for our audit opinion on the standalone financial statements.

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 of the
current period. 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.

Description of Key Audit Matter

Information Other than the 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 Management
Discussion and Analysis, Board's Report including Annexures to Board's Report,
Business Responsibility Report, Corporate Governance and Shareholder's
Information, 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 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.

Management's Responsibilities for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section
134(5) of the Act with respect to the preparation of these standalone financial
statements that give a true and fair view of the financial position, financial
performance, including other comprehensive income, changes in equity and cash
flows of the Company in accordance with the Ind AS and other accounting
principles generally accepted in India. 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, 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. The Board of
Directors is also responsible for overseeing the Company's financial reporting
process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone
financial statements as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with SAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably

be expected to influence the economic decisions of users taken on the basis of
these standalone financial statements.

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 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 financial control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances. Under section 143(3)(i) of the Act, 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 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 Section 143(3) of the Act, based on our audit 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, Statement of Changes in Equity and the
Statement of Cash Flows dealt with by this Report are in agreement with
the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with
the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors
as on March 31, 2023 taken on record by the Board of Directors, none of
the directors is disqualified as on March 31, 2023 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 A". Our report
expresses an 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 Auditor's 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, 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
No 42 to the Standalone financial statements.

ii. The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long-term contracts including derivative contracts.

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, 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 or entity,
including foreign entity ("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 received by the Company from any
person or entity, including foreign entity ("Funding Parties"), with the
understanding, whether recorded in writing or otherwise, that the
Company shall, whether, 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

(c) Based on the audit procedures that have been considered
reasonable and appropriate in the circumstances, nothing has come
to our notice that has caused us to believe that the representations
under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and
(b) above, contain any material misstatement.

As required by the Companies (Auditor's Report) Order, 2020 (the "Order")
issued by the Central Government in terms of Section 143(11) of the Act, we give
in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of
the Order.

For CHOWDARY AND RAO

Chartered Accountants

Firm Regn.No. 000656S

(MANDAVA SUNIL KUMAR)

Partner

Mem No. 217061

ICAI UDIN: 23217061BGQFNW9016

Date: 15.05.2023

Place: Hyderabad