Report on the Audit of Standalone Financial Statements Qualified Opinion
We have audited the accompanying standalone financial statements of Consolidated Construction Consortium Limited (“the Company”), which comprise the balance sheet as at March 31,2024, the statement of profit and loss (including other comprehensive income), the statement of changes in equity, the statement of cash flows for the year then ended and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations to us, except for the possible effects of the matter described in the ‘Basis for Qualified Opinion' section 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 March 31, 2024, and its profit including other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
a. As stated in Note 1 b to the standalone financial statements, the company has recognized a sum of Rs.10,506 lakhs towards arbitration claim receivable under Vivad se Vishwas II Scheme, notified by the Central Government. In the absence of sufficient and appropriate audit evidence, the recoverability of the aforesaid amount in the near term, in our opinion, is doubtful and hence the recognition of the aforesaid claim along with interest is not appropriate.
b. We have not received the statement of account for 7 accounts aggregating to Rs. 4.80 lakhs, confirmation of balances for 13 current accounts aggregating to Rs.711.00 lakhs with various banks, and for Margin Money Deposits amounting to Rs. 535.05 lakhs as at the Balance sheet date. Accordingly, we are unable to comment on the carrying value of the aforesaid balances and any potential impact arising thereof in these financial statements.
c. We draw attention to Note 45a, regarding balances of sundry debtors, loans and advances, sundry creditors, and other liabilities are subject to the receipt of confirmation from the respective parties, and consequential adjustments thereof. Pending completion of the said exercise, we are unable to comment on the said balances, as also the possible impact arising out ofthe same, in the financial statements.
d. As stated in Note No. 42.1 regarding provision of remuneration to the promoter directors payable for the period 2013-14 to 2023-24 amounting to Rs.4,659.30 lakhs, which is subject to compliance ofthe provisions ofthe Companies Act, 2013 and the regulatory and statutory approvals required thereunder.
e. As stated in Note No.42.1, the remuneration paid to the Wholetime Director, Sri Kaushik Ram, for the period from January 22, 2024 to March 31,2024,amounting to Rs. 11.61 lakhs is subject to the approval of members in the ensuing annual general meeting.
f. We report that the Company has not provided us with sufficient and appropriate audit evidence relating to the identification of micro and small enterprises and the dues thereon. Further the Company does not provide for interest on the dues to the micro and small enterprises as required under the Micro, Small and Medium Enterprises Development Act, 2006. Considering the non-identification ofthe micro and small vendors, we are unable to comment on the completeness of such disclosures made in the standalone financial statements and its impact on the profit for the year.
g. We refer to Note 45b to the standalone financial statements regarding delay in remittance and non-remittance of statutory dues (including GST/Service Tax/VAT/ PF/TDS). The Company has not estimated and provided for the interest and penalty on defaults under the provisions of respective statutes. Accordingly, we are unable to comment on the possible impact arising thereof on the profit for the year and on the carrying value of the respective liabilities as at the year-end.
h. As stated in Note No.45c, the company has not made any provision for liquidated damages in respect of delayed projects as the management is confident that there would not be any adverse impact on completion of projects. Accordingly, we are unable to comment on the consequential impact, if any, in the financial statements ofthe Company as at the year-end.
Material Uncertainty Related to Going Concern
We draw attention to Note 44 in the financial statements, which indicates that the Company has obligations towards fund based and non-fund based liabilities and the Company's current liabilities exceeded its current assets by Rs.12,899.46lakhs. As stated in the said note, these events or conditions, along with other matters as set forth therein, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Emphasis of Matters
As stated in Note 1a to the standalone financial statements, the Company had entered into a Settlement Plan u/s 12A of the Insolvency and Bankruptcy Code, 2016 (IBC) with the lenders for a specified amount and accordingly the liabilities to the Bankers and financial institutions were reversed in the financial statements to the tune of Rs. 122,584.26 lakhs by recognizing the same as one time exceptional item in the Statement of Profit and Loss for the year under audit. The lenders have initiated the process of releasing the charges/ securities as specified in the Settlement Plan. Further, as stated in Note No.4, the registration formalities of the immovable properties sold are pending as at the Balance sheet date pursuant to the above.
Our report is not modified in respect ofthe above matter.
Key Audit Matters
Except for the matters described in the Basis for Qualified Opinion section, we have determined that there are no key audit matters to communicate in our report.
Other Information other than the Ind AS 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 Management Discussion and Analysis, Board's Report including Annexures to Board's Report, Report on Corporate Governance and Shareholder's information, but does not include the standalone financial statements and our auditor's report thereon. These reports are expected to be made available to us after the date of this auditor's report.
Our report 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 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.
When we read the other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate actions.
Responsibilities of Management and Those Charged with Governance forthe IndAS 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 accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed 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 theAct for safeguarding of 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 Ind AS 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 management and the Board of Directors 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 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'sfinancial 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 skepticism 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, orthe 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 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 management.
• Conclude on the appropriateness of management and the Board of Directors 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 Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatement in the standalone 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 misstatement 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”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the said Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and except for the matters described in Basis for Qualified Opinion paragraph above, 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, except for the matters stated in the paragraph (h) (vi) below on reporting under Rule 11(g) 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 the Other Comprehensive Income, the Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account;
(d) In our opinion, except for the possible effects of the matters described in the “Basis for Qualified Opinion”, section of our report,the aforesaid financial statements comply with the Ind AS specified under Section 133 oftheAct;
(e) On the basis of the written representations received from the directors as on March 31, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2024 from being appointed as a director in terms of Section 164(2) oftheAct.
(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 a
Disclaimer of Opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting.
(g) With respect to the matters to be included in the Auditor's Report under Section 197(16) of the Act, in our opinion, and to the best of our information and according to the explanations give to us, except for the matters in para (d) and (e) under “Basis of Qualified Opinion”, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 read with Schedule VoftheAct, and
(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 financial position in its Ind AS financial statements - Refer Note 43 to the Ind AS financial statements;
ii. As represented by the management, the Company does not have any material foreseeable losses from any long-term contracts including derivative contracts for which it requires any provision; and
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 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 persons or entities, including foreign entities (“Intermediaries”), with the understanding,
Place : Chennai Date : May 3, 2024
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 (“Ultimate Beneficiaries”) by or on behalf of the Company, 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 have been received by the Company from any persons or entities, 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.
(c) Based on 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) contain any material misstatement.
v. The Company has neither declared nor paid any dividend during the year.
vi. As stated in Note 59 to the financial statements, the Company is in the process of implementing audit trail (edit log) facility in its accounting software viz., Citrix, and thus not complied with the requirements of Rule 3 (1) of the Companies (Accounts) Rules, 2014, which is applicable from April 1,2023. Hence, we are unable to report on the same under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
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