You are here » Home » Companies » Company Overview » Consolidated Construction Consortium Ltd

Consolidated Construction Consortium Ltd.

BSE: 532902 Sector: Infrastructure
NSE: CCCL ISIN Code: INE429I01024
BSE 00:00 | 12 Aug 1.64 -0.05
(-2.96%)
OPEN

1.63

HIGH

1.68

LOW

1.62

NSE 00:00 | 12 Aug 1.70
(%)
OPEN

1.70

HIGH

1.75

LOW

1.70

OPEN 1.63
PREVIOUS CLOSE 1.69
VOLUME 97512
52-Week high 4.98
52-Week low 0.47
P/E
Mkt Cap.(Rs cr) 65
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1.63
CLOSE 1.69
VOLUME 97512
52-Week high 4.98
52-Week low 0.47
P/E
Mkt Cap.(Rs cr) 65
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Consolidated Construction Consortium Ltd. (CCCL) - Auditors Report

Company auditors report

To The Members of Consolidated Construction Consortium Ltd.

Report on the Audit of the Standalone Financial Statements

Corporate Insolvency Proceedings as per Insolvency and Bankruptcy Code 2016 (IBC)

The Hon'ble National Company Law Tribunal Chennai Bench ("NCLT") admitted aninsolvency and bankruptcy petition filed by a financial creditor against ConsolidatedConstruction Consortium Limited ("the Company") and appointed Mr. KrishnasamyVasudevan to act as Interim Resolution Professional (IRP) vide its Order No. IBA/483/2020dated April 20 2021 with direction to initiate appropriate action contemplated withextent provisions of the Insolvency and Bankruptcy Code 2016 and other related rules.

In view of pendency of the Corporate Insolvency Resolution Process(CIRP) and in viewof suspension of the powers of board of directors and as explained to us the powers ofadoption of the standalone financial statements for the year ended March 31 2021 vestwith the IRP who has been subsequently appointed as the Resolution Professional (RP) bythe Committee of Creditors.

Qualified Opinion

We have audited the accompanying standalone financial statements of ConsolidatedConstruction Consortium Limited("the Company") which comprise the StandaloneBalance Sheet as at March 31 2021 the Standalone Statement of Profit and Loss (includingOther Comprehensive Income) the Standalone Statement of Changes in Equity and theStandalone Statement of Cash Flows for the year then ended on that date and notes toaccounts including summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion section of our report the aforesaid standalone financial statementsgive the information required by the Companies Act 2013 ("the Act") in themanner so required and give a true and fair view in conformity with the Indian AccountingStandards prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended ("Ind AS") and other accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2021 the loss and total comprehensive income changes in equity and its cash flowsfor the year ended on that date.

Basis for Qualified Opinion

1. Material Uncertainty relating to Going Concern:

We draw attention to Note 48 to the standalone financial statements in respect ofpreparation of financial statements of the Company on a going concern basis which statesthat the Company has negative net worth of Rs. 38690.16 lakhs as at 31.03.2021. Furtherthe working capital of the Company continues to be negative. The Company has obligationstowards fund based borrowings aggregating to Rs. 132351.24 lakhs and non-fund basedexposure aggregating to Rs. 10182.56 lakhs and further obligations pertaining tooperations including unpaid creditors and statutory dues as at March 31 2021.SinceCorporate Insolvency Resolution Process (CIRP) is currently in progress as per the Codeit is required that the Company be managed as a going concern during CIRP. Accordinglythe standalone financial statements are continued to be prepared on going concern basisfor the reasons stated in the said note. However there exists a material uncertaintyabout the ability of the Company to continue as a "Going Concern" and thereforethe Company may be unable to realise its assets and discharge its liabilities in thenormal basis. The appropriateness of the preparation of standalone financial statements ongoing concern basis is critically dependent upon CIRP as specified in the Code and theultimate outcome of which is at present not ascertainable. Accordingly we are unable tocomment on the consequential impact if any on the accompanying standalone financialstatements.

2. We have been informed by the RP that certain information including theminutes of the meetings of the Committee of Creditors and the outcome of certainprocedures carried out as a part of the CIRP are confidential in nature and could not beshared with anyone other than the Committee of Creditors and NCLT. Accordingly we areunable to comment on the possible financial impact presentation and disclosures if anythat may arise if we have been provided access to those information.

3. Trade receivables include a sum of Rs. 50118.10 lakhs against which theCompany carries a provision of Rs. 554.11 lakhs that are under arbitration whichaccording to the Management will be awarded fully in Company's favour on the basis of thecontractual tenability progress of arbitration and legal advice and hence no additionalprovision for impairment loss has been considered necessary by the management as disclosedin footnote (a) to Note No 9 of the Standalone Financial Statements. However consideringthe significant time involved in the arbitration process and delays in the realisation ofamounts in the recent years in respect of the claims awarded in favour of the Company weare unable to comment on the carrying value of the above referred claims and theshortfall if any on the amount that would be ultimately realized by the Company.

This matter has been qualified in our audit report for the year ended March 31 2020

4. Trade receivables include overdue amounts outstanding for a period of morethan three years aggregating to Rs. 9732.77 lakhs receivable from certain customers inrespect of completed projects against which the Company carries a provision of Rs.3250.98 lakhs. The Management for the reasons stated in footnote (a) to Note No. 15 feelsthat no additional provisions would be required. Further as stated in footnote (a) toNote No 15a of the standalone Financial Statements the Company has unbilled receivables& claims (contract assets) made to certain clients amounting to Rs. 2036.62 lakhsagainst which the Company carries a provision of Rs.55.95 lakhs which were accounted basedon the terms and conditions implicit in the Construction Contracts in respect of underconstruction projects. The claims are mainly in respect of cost over run arising due tosuspension of work client caused delays changes in the scope of work deviation indesign and other factors for which company is at various stages of negotiation/discussionwith the clients. On the basis of the contractual tenability progress ofnegotiations/discussions the management considers these receivables are recoverable andthat no additional provision would be required. In the absence of sufficient appropriateaudit evidence to corroborate management's assessment of recoverability of these balancesand having regard to the age of these balances we are unable to comment on the carryingvalue of above receivables/contract assets and the shortfall if any on the amount thatwould be ultimately realizable from the said customers.

The similar matter has been qualified in our audit report for the year ended March 312020

5. We refer to Note 49(a) to the standalone financial statements regardingvarious claims submitted by the financial creditors operational creditors othercreditors and employees of the Company as at the Insolvency Commencement Date to theInterim Resolution Professional pursuant to the Insolvency and B a n k r u p t c y C o d e 2 0 1 6 a r e c u r r e n t l y u n d e r consideration/verification/reconciliation. Inaggregate claims submitted by the financial creditors operational creditors othercreditors and employees of the Company exceeded the amount as appearing in the books ofaccount. Pending completion of exercise of verification /reconciliation admission of suchclaims by IRP and final outcome of CIRP we are unable to comment on the consequentialimpact if any on the standalone financial statements.

6. As mentioned in Note 49(b)read with 46(4) the Company had given corporatefinancial guarantees to the lender of Noble Consolidated Glazings Limited and CCCLInfrastructure Limited wholly owned subsidiaries. These subsidiaries have defaulted inrepayment of their loan obligations and the lenders subsequent to the financial year haveinvoked corporate guarantee. The Company has received claims from such lenders on accountof invocation of guarantee. As the Company is currently under CIRP the Company is unableto assess the changes in risk/expected cash shortfall to determine expected credit lossallowance to be recognised in respect of these financial guarantees. Therefore we areunable to comment on the possible impact thereofon the loss for the year ended March 312021 and on the carrying value of provisions and equity as at March 31 2021.

7. As mentioned in Note 46(7) to the standalone financial statements theCompany has not computed and provided for additional and penal interest on defaults underborrowings as per the contractual terms of the underlying agreements. As mentioned in Note49(c) we have neither received bank statements nor have been able to obtain confirmationsfor restructured term loans including working capital loans from banks and financialinstitutions amounting to Rs. 69983.32 lakhs as at March 31 2021. In the absence ofsufficient appropriate audit evidence we are unable to determine the possible impactthereof on the loss for the year ended March 31 2021 and on the carrying value ofborrowings and equity as on that date. Further given the expiry of restructuring packagewith the lenders on account of continuing default we are unable to comment on the statusand carrying value of Optionally Convertible Debentures (OCD) and Non-ConvertibleDebentures (NCD) aggregating to Rs. 58791.00 lakhs and the adequacy of borrowings costrecognised.

This matter has been partly qualified in our audit report for the year ended March 312020

8. As stated in 49(c) we have not received the bank statement and confirmationof balance for the balance lying in current account amounting to Rs. 5.94 lakhs and noconfirmation is available for Margin money accounts amounting to Rs. 331.99 lakhs and noconfirmation of balance is available for balance lying in current account to the tune ofRs. 70.01 lakhs and for the outstanding bank guarantees amounting to Rs. 10182.56 lakhs.In the absence of sufficient appropriate audit evidence we are unable to determine anypossible impact thereof on the loss for the year ended March 31 2021 and on the carryingvalue of cash and cash equivalents / other bank balances and equity and verify theappropriateness of disclosures made for outstanding bank guarantees under contingentliabilities as on that date.

The similar matter has been qualified in our audit report for the year ended March 312020

9. We refer to Note 49(c) to the standalone financial statements regardingbalance confirmations not been received in respect of trade receivables includingretention unbilled receivables trade and other payables and advances to vendors. Pendingreconciliation process we are unable to comment on the consequential impact if any onthe standalone financial statements. Further the Company is in the process of identifyingdues to micro small and medium enterprises (MSME) as specified by the new guidelines.Pending completion of the process the Company has made disclosures to the extent ofdetails available and hence we are unable to comment on the completeness of suchdisclosures made in the standalone financial statements.

10. As stated in Note 49(d) to the standalone Financial Statements the Company has notcarried out physical verification with respect to certain inventories aggregating to Rs.702.98 lakhs which is lying in various sites. Further with respect to certain inventoriesaggregating to Rs 995.31 lakhs the Company has carried out physical verification andreconciliation with the books is said to be in progress. Pending physical verification andreconciliation with books and availability of valuation report to ascertain the netrealisable value of certain inventories we are unable to comment on consequentialimpairment if any that is required to be made in the carrying value of inventories.

11. As mentioned in Note 49(e)of the Standalone Financial

Statements pending final outcome of CIRP and reconciliation of physical verificationreports with books which is currently in progress no impairment assessment of tangibleassets (including capital work-in-progress) as at 31st March 2021 is made. Therefore weare unable to comment on consequential impairment if any that is required to be made incarrying value of property plant and equipment and capital work-in-progress.

12. We refer to Note 49(f)to the standalone financial statements regarding delay inremittance and non-remittance of statutory dues (including GST/Service Tax/ VAT/PF/TDS).The Company has not estimated and provided for interest and penalty on defaultsunder provisions of respective statutes. Therefore we are unable to commenton thepossible impact thereofon the loss for the year ended March 31 2021 and on the carryingvalue of liabilities as at March 31 2021.

13. We refer to Note 49(g) to the standalone financial statements in respect ofinvestments held in subsidiary of Rs. 2767.40 lakhsand loans and advances of Rs.1757.01lakhs in subsidiaries as at March 31 2021 business continuity of suchsubsidiaries is significantly dependent upon the final outcome of the CIRP of the Companyas the tangible assets held by those subsidiaries are provided as security for the loanstaken by the Company. No impairment assessment was carried on the Investments held insubsidiary and loans and advances given to subsidiary. Thereforewe are unable to commentupon the carrying value of these investments and loans and advances.

We conducted our auditof the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Standalone Financial Statements section of our report. We are independent ofthe Company in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our qualified opiniononthe standalone financial statements.

Emphasis of Matters

1. We draw attention to Note 50 of the standalone financial statements which describesmanagement's assessment of the impact of the COVID 19 pandemic on the financial statementsof the Company.

2. As stated in Note no. 49(i) of the standalone financial statements regarding delayedprojects where the management is confident that there would not be any adverse impact incompletion of project in future and that no liquidated damages would be levied by thecustomers.

Our opinion on the standalone financial statements is not modified in respect of theabove matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. In addition to the matter described in the ‘Basisfor Qualified OpinionRs.paragraph we have determined the matter described below to be thekey audit matters to be communicated in our report.

S No Key Audit Matter How our audit addressed the key audit matter
(Other than those given in Basis for Qualified Opinion) Our procedures included:
1 Revenue recognition – Construction contracts • Testing of the design and implementation of controls involved for the determination of the estimates used as well as their operating effectiveness
During the year the Company recognized revenue from its construction contracts ("construction projects") based on the percentage-of-completion("POC") method. The POC on construction projects was measured by reference to the surveys of work performed (output method). • Verification of Company's year-end internal construction progress reports to validate the percentage of construction work completed and compared with the latest certificates issued by the Project owners/project management consultants as the case may be.
We focused on this area because of the significant management judgment required in: • Testing a sample of contracts for appropriate identification of performance obligations.
• the estimation of the physical proportion of the contract work completed for the contracts; and • For the sample selected reviewing for change orders and the management assessment on the estimation of the revenue arising from the variations to the original contract and tested the appropriateness of the timing of recognizing the revenue from the contracts.
• the estimation of revenue for the work done on the contracts with customers that could arise from variations to original contract terms and claims. Variable consideration is recognized when the recovery of such consideration is highly probable. • Evaluated the design of internal controls relating to collation of data required for making disclosures as per Ind AS 115
Further Ind AS 115 mandatesrobust disclosures to be made in the financial statements which involves collation of information in respect of disaggregation of revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balancesheet date. • Tested appropriateness of the disclosures in the financial statements in respect of such construction contracts to ensure compliance with Ind AS 115. Our procedures included:
2 Contingent Liabilities • Obtained understanding of key uncertain tax positions; and
The Company has material uncertain tax positions including matters under dispute (refer Note 46(5) to the Standalone Financial Statements) which involve significant judgment to determine the possible outcome of these disputes. • Discussed with appropriate senior management and evaluated management's underlying key assumptions in estimating the tax provisions;
• Reviewed the external legal opinions for key uncertain tax positions; and
• Assessed management's estimate of the possible outcome of the disputed cases

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditor'sreport thereonwhich is expected to be made availableto us the date of thisauditor'sreport.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.

When we read the Board's Reportincluding Annexure to Board's Report if we concludethat there is a material misstatement therein we are required to communicate the matterto those charged with governance.

Management's Responsibility for the Standalone Financial Statements

The Company has been under the Corporate Insolvency Resolution Process (‘CIRP')and the powers of the Board of Directors stand suspended as per Section 17 of the Code andsuch powers are being exercised by the Interim Resolution Professional (IRP) appointed bythe NCLT under the provisions of the Code. As per Section 20 of the Code the managementand operations of the Company are being managed by the Interim Resolution Professional Mr.Krishnasamy Vasudevan currently the RP.

The Company's Management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation and presentation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance total comprehensive income changes in equity and cash flows of theCompany in accordance with Ind AS and other accounting principles generally accepted inIndia. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management RP and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.

The Management RP and Board of Directors are also responsible for overseeing thecompany'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 standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances.Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Other Matters

The Standalone financial statements include the Company's share of Loss of Rs. 283.77lakhs for the year ended 31st March 2021 in respect of one Joint Ventures whosefinancial statements have been audited by other auditors and whose audit report have beenfurnished to us by the Management and our opinion in so far as it relates to the amountsand disclosures included in respect of the Joint Venture is based solely on the report ofsuch other auditors. The Auditors have expressed a modified opinion in respect of GoingConcern of the Joint Venture.

Our opinion on the standalone financial statements is not modified in respect of theabove matter with respect to our reliance on the work done and the report of the otherauditors.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in Paragraph 3and 4 of the Order.

2. As required by Section 143 (3) of the Act we report that:

(a) we have sought and except for the matters described in the Basis for QualifiedOpinion paragraph above haveobtained all the information and explanations which to thebest 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 theCompany so far as it appears from our examination of those books;

(c) the Standalone Balance Sheet the Standalone Statement of Profit and Loss includingOther Comprehensive Incomethe Standalone Statement of Change in Equity and the StandaloneStatement of Cash Flows dealt with by this Report are in agreement with the relevant booksof account;

(d) Except for the matters described in basis for qualified opinion paragraph abovein our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act;

(e) The matters described in the basis for qualified opinion section may have anadverse effect on the functioning of the Company;

(f) We have not received any written representations from the directors as on March31 2021 with regard to disqualification from being appointed as a director in terms ofSection 164(2) of the Act. However considering the fact that the Company has defaultedin repayment of Optionally convertible debentures and Non-convertible debentures and thedefault is continued for a period of more than one year in our opinion all the directorsare disqualified from being appointed as director in terms of Section 164 (2) of the Act;

(g) The qualifications relating to the maintenance of accounts and other mattersconnected therewith are as stated in the "Basis for qualified opinion" paragraphabove;

(h) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B";Our report expresses a qualified opinionon the adequacy and operating effectiveness of the Company's internal financial controlsover financial reporting;

(i) with respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

According to the information and explanations given to us and based on the examinationof the records of the Company no managerial remuneration is paid / provided by theCompany;

(j) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amendedandin our opinion and to the best of our information and according to the explanationsgiven to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note46 (3) & 46 (5) to thestandalone financial statements;

ii. The Company did not have any material foreseeable losses on any long-term contractsincluding derivative contracts; and

iii. There were no amounts that were due to be transferred to the Investor Educationand Protection Fund by the Company during the year ended March 31 2021.

For Sundar Srini & Sridhar
Chartered Accountants
Firm Registration Number : 004201S
S Sridhar
Partner
Place : Chennai Membership Number : 025504
Date: August 11 2021 UDIN:21025504AAAAGK9841

The Annexure referred to in Independent Auditor's Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2021 we report that:

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of Property plant and equipment.

(b) The Property plant and equipment of the Company have been physically verified bythe management at periodic intervals which in our opinion is reasonable. However asstated in para 5 under "Basis for Qualified Opinion" section of our reportreconciliation with the books of account is said to be in progress. Accordingly we arenot able to comment on the discrepancies if any noticed upon completion of suchreconciliation.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date and theoriginal title deeds are deposited with the lenders as these have been pledged as securityfor borrowings. In respect of building taken on lease and disclosed as right-of-use-assetsin the financial statements the lease agreements are in the name of the Company.

(ii) The inventory has been physically verified by the management at reasonableintervals during the year. In our opinion the frequency of such verification isreasonable. However as stated in para 9 under "Basis for Qualified Opinion"section of our report physical verification of inventories lying at various sites couldnot be carried out and at other sites reconciliation with books of account is said to bein progress. Accordingly we are not able to comment on the discrepancies if any noticedupon completion of such reconciliation.

(iii) According to the information and explanations give to us and on the basis of ourexamination of records the Company has granted unsecured interest free loans tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013. In our opinion the terms andconditions under which the loans were granted to wholly owned subsidiary and fellowsubsidiarywere not prejudicial to the interest of the Company. In the absence of specificschedule for repayment we could not comment on the regularity of repayment of loan.

(iv) The Company has not granted any loans or provided any guarantees or security tothe parties covered under section 185 of the Act. The Company being engaged in thebusiness of providing infrastructural facilities Section 186 of the Act is not applicablein respect of investments made loans given / guarantees provided to other body corporateto by virtue of exemption provided under sub-section (11) of the said section of the Act.

(v) According to the information and explanation given to us the Company has notaccepted any depositduring the year and there are no unclaimed deposits as at March 312021 to which the provisions of sections 73 to 76 of the Act or any other relevantprovisions of the Companies Act 2013 are applicable. Hence paragraph 3(v) of the Order isnot applicable to the Company.

(vi) The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013 for the product produced by the Company. We havebroadly reviewed the cost records maintained by the Company pursuant to the Companies(Cost Records and Audit) Rules 2014 as amended and prescribed by the Central Governmentunder Subsection (1) of Section 148 of the Companies Act 2013 and are of the opinionthat prima facie the prescribed cost records have been made and maintained. However wehave not made a detailed examination of the cost records with a view to determine whetherthey are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company in our opinion the Company is not regularin depositing the undisputed statutory dues in respect of Provident funds Income Taxgoods and services tax cess and other material statutory dues as applicable with theappropriate authorities. There have been significant delays in a large number of cases indepositing these dues with the appropriate authorities. Further there were no undisputedamounts payable in respect of the statutory dues outstanding as on March 31 2021 for aperiod of more than six months from the date they became payable except for thefollowing::

Name of the Statute Nature of the due Period to which relates to ` in Lakhs
The Jammu and Kashmir Value Added Tax 2005 Tax on Sales u/s 13 Jun-17 22.17
Income Tax Act 1961 Tax Deducted at Source Apr-18 to Sep-20 681.38
EmployeesRs.Provident Funds & Miscellaneous Provisions Act 1952 Provident Fund Contribution Jun-19 to Sep-20 294.35
Goods and Services Tax Act 2017 Central State and Integrated Goods And Services Tax Jan-19 to Sep-20 1234.28

(b) According to the information and explanations given to us there are no dues ofsales tax goods and services tax service tax duty of customs value added tax whichhave not been deposited with the appropriate authorities on account of any dispute exceptfor the dues attached in Appendix 1 to this report.

(viii) According to the information and explanations given to us the Company was inbreach of material provisions of long-term restructured loan arrangements and lenders havecalled upon the Company to pay the entire dues as stated in Note Nos 20.3 and 20.4. Theentire amount of borrowing including interest are overdue and continuing default as onMarch 31 2021 therefore we are unable to provide the periods of default.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given to us and based on theexamination of the records of the Company no managerial remuneration is paid / providedby the Company. Accordingly paragraph 3 (xi) of the Order is not applicable to theCompany.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Thus paragraph 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records the Company has not made preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year under reviewand thus paragraph 3(xiv) of the Order is not applicable.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly the Paragraph 3(xvi) of the Order is notapplicable..

For Sundar Srini & Sridhar
Chartered Accountants
Firm Registration Number : 004201S
S Sridhar
Partner
Place : Chennai Membership Number : 025504
Date: August 11 2021 UDIN:21025504AAAAGK9841

Appendix 1

As referred to in para vii(b) of the Annexure-A to the Independent Auditors Report

Disputed statutory liabilities

Name of the Statue Nature of the Dispute Forum where the dispute is pending Period to which relates to
Income Tax Act 1961 Disallowance of Difference in Work in Progress Income Tax Appellate Tribunal Chennai. 2009-10 297.74 (after adjusting refunds pertaining to subsequent years amounting to Rs. 6790.20)
Higher rate of tax applied by the department The High Court 2009-10 168.96 (after adjusting refunds pertaining to subsequent years amounting to Rs. 63.88)
2010-11 656.38
2011-12 308.30
Kerala Value Added Tax 2003 Sales made to SEZ claimed as exempt (Extension of benefit in KGST Sought) Appellate Assistant Commissioner Cochin 2005-06 55.10
Karnataka Value Added Tax 2003 Disallowance of Margin on Sub-contract portion Security Service and repair service Deputy Commissioner of Commercial Taxes Audit 3.5 Bangalore 2009-10 34.22
Tamil Nadu Value Added Tax 2006 Inclusion of turnover of SEZ under Section 6 TNVAT and Stock Transfers Commercial Tax Officer Chennai Jan 2007 to Mar 2008 407.85
Reversal of Input Tax Credit for SEZ projects Stock Transfers Unregistered Purchases and scheduled rate variation in RMC Commercial Tax Officer Chennai Apr 2008 to Mar 2010 552.56
Rajasthan Value Added Tax is already discharged on receipt basis subsequent year but tax is levied based on WCT TDS The Appellate Authority Commercial Taxes 2008-09 9.51
Tax 2006 (Appeal)-1 - Jaipur 2009-10 8.38
West Bengal Value Added Tax 2006 The Sub Contractor expenditure is disallowed The Joint Commissioner Commercial Taxes Alipore Charge Kolkata -700034. Appeal filed with Revision Board. Case was not yet listed for hearing. 2011-12 160.60
The expenditure is added back to turnover Demand Assessment Order received from DCTO-Salt Lake charge. We moved to Tribunal. Tribunal has issued interim injunction against demand notice. Case pending with Tribunal. 2012-13 167.62
Finance Act 1944 (Service Tax) Service Tax on Works Contract Service provided to M/s. Bangalore Metropolitan Transport Corporation Bangalore Commissioner of Service Tax Chennai Sep 2011 to Sep 2012 93.07
Joint Commissioner Service Tax II Commissionerate Chennai. Oct 2012 to June 2014 6.05
Short Payment of Service Tax on Rebate Allowed by the Sub-Contractors Customs Excise and Service Tax Appellate Tribunal (CESTAT) Chennai April 2011 to Sep 2012 41.07
Oct 2012 to Mar 2014 20.20
Assistant Commissioner of Service Tax Chennai. April 2014 to Sep 2015 10.22
Assistant Commissioner of Central Tax Mylapore Oct. 2015 to June 2017 12.91
Division North Commissionerate Chennai
Finance Act 1944 (Service Tax) CENVAT Credit on Capital Goods utilized in discharging Service Tax where Notification No. 1/2006 ST. dated 01/03/2006 is Availed Assistant Commissioner of Central Tax Mylapore Division North Commissionerate Chennai April 2015 to June 2017 3.24
Customs Duty 1962 Short payment of Customs Duty for import of Equipment on High Sea Sale Assistant Commissioner of Customs (Group-V) Mumbai 2008-09 2.93

Annexure - B to the Independent Auditor's Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting ofConsolidated Construction Consortium Limited("the Company") as of 31 March 2021in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India("ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to respective company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") issued by ICAI and the Standards on Auditing prescribedunder section 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

In our opinion according to the information and explanations given to us and based onour audit the following material weaknesses have been identified as at March 31 2021:

(a) The Company did not have an appropriate design in the internal control system formeasuring impairment provision on trade receivables which are under arbitration andunbilled receivables as per Expected Credit loss (ECL) model which could potentiallyresult in the misstatement of its trade receivables;

(b) The Company's internal financial controls with respect to documenting the processfor obtaining customer confirmations and their reconciliation with books of account atregular intervals were not effective which could potentially result in misstatement of itstrade receivables.

(c) The Company's internal financial controls with respect to documenting the processof carrying out Customer acceptance credit evaluation and establishing customer creditlimits for sales and customers in respect of variations in contract work were noteffective which may probably result in the Company recognizing revenue withoutestablishing reasonable certainty of ultimate collection on criteria based on orconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

(d) The Company's internal financial controls with respect to documenting the processof identification of MSME vendors obtaining vendors confirmations and theirreconciliation with books of accounts at regular intervals were not effective which couldpotentially result in misstatement of its trade payables.

(e) The Company's internal financial controls over assessment of impairment in carryingvalue of tangible assets (including capital work-in-progress) and equity investments andloans and advances to subsidiaries were not effective. This could potentially result inthe misstatement of its tangible assets (including capital work-in-progress) and equityinvestments and loans and advances to subsidiaries.

(f) The Company's internal financial controls over physical verification of inventoriesand Property Plant and Equipment (PPE) and consequent reconciliation with books were noteffective this year which could potentially result in the misstatement of inventories andPPE.

A ‘material weaknessRs.is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.

In our opinion except for the possible effects of material weaknesses described aboveon the achievement of the objectives of the control criteria the Company has in allmaterial respects an adequate internal financial controls system over financial reportingand such internal financial controls over financial reporting were operating effectivelyas at March 31 2021 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the standalonefinancial statements of the Company for the year ended March 31 2021 and these materialweaknesses have affected our opinion on the standalone financial statements of the Companyand we have issued a qualified opinion on the standalone financial statements.

For Sundar Srini & Sridhar
Chartered Accountants
Firm Registration Number : 004201S
S Sridhar
Partner
Place : Chennai Membership Number : 025504
Date: August 11 2021 UDIN:21025504AAAAGK9841

.