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 -0.05
(-2.86%)
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) - Director Report

Company director report

#MDStart#

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

To

The Members

The Directors of the Company present to you the 24th Annual Report of the Companytogether with the Audited Balance Sheet as at 31st March 2021 and the Statement of Profitand Loss for the year ended on 31st March 2021.

1. FINANCIAL RESULTS (in ` crores) The Financial Results of the Companyfor the year under review is summarized below for your perusal and consideration.

Particulars 2020-21 2019-20
NET REVENUE 201.22 336.00
PROFIT BEFORE TAX AND DEPRECIATION (101.83) (135.07)
PROFIT /(LOSS) BEFORE TAX (PBT) (106.97) (140.15)
PROVISION FOR CURRENT TAX - -
TAX EXPENSE – DEFERRED TAX (0.57) (0.34)
PROFIT AFTER TAXES/(LOSS) (PAT) (106.40) (139.81)

1.1 Financial Performance

The Company has achieved Net sales of Rs.201.22/- Crores for the year ended 31st March2021 as compared to Rs.336.00/- Crores in the previous year.

The Company has incurred a Net loss of Rs.106.97/-Crores as against a loss after taxesof Rs.140.15/- Crores. The losses are attributable to some extent due to high input costsirregular supply of raw materials unfavourable market conditions and to a large extentdue to high finance cost.

2. DIVIDEND

Your Directors have not recommended any dividend for the financial year 2020-21 in viewof the losses incurred and the need to conserve resources of the Company.

3. MATERIAL EVENTS OCCURRING AFTER BALANCE SHEET

Consolidated Construction Consortium Limited is under Corporate Insolvency ResolutionProcess (CIRP) of the Insolvency and Bankruptcy Code 2016 (IBC) in terms of Order passedby the Hon'ble National Company Law Tribunal (NCLT) Chennai Bench with effect from 20thApril 2021. Mr. Krishnasamy Vasudevan (IP RegistrationNo.IBBI/IPA-001/IP-P00155/2017-18/10324) was appointed as Interim Resolution Professionalby NCLT vide its Order dated 20th April 2021 who has been subsequently appointed as theResolution Professional (RP) by the Committee of Creditors. The Company's affairsbusiness and assets are being managed by the RP since u/s.17 IBC the powers of the Boardhave been suspended and vested with RP

4. MANAGEMENT DISCUSSION AND ANALYSIS Indian economy

The domestic market had its fair share of upheavals in the financial year under review.A combination of deferral of award decisions and the implementation of long term reformscausing short term economic turbulence have led to a muted environment for projectexecution.

Global economic scenario

International markets have witnessed noticeable volatility triggered by geo-politicalevents significant movements in currency and commodities protectionist policiesincluding tariff barriers a prolonged bout of low oil prices and constrained fiscalpositions of oil producing nations. The recent hardening of oil prices is likely to nowgive better leeway to policy makers in GCC countries to allocate increased outlay onessential infrastructure.

Industry Structure and Development:

Global business environment continued to remain challenging during fiscal 2020 led byweak global growth slowdown in China divergent monetary policies and volatilecurrencies.

A strong infrastructure sector is vital to the development of a country's economy.However since last four years the Indian economy has witnessed particularly aninfrastructure sector a severe downturn. Further a year-on-year basis the infrastructuresector in India has been affected primarily due to high interest rates rising inflationdepreciating rupee sluggish pace of orders and the absence of viable big-ticket projects.

Your Company continued to perform with stability and maintained its momentum in thehighly volatile market. The Company focused on cost control measures and product mixenrichment to sustain growth and profitability in the challenging year.

Financial Performance:

The financial performance of the Company for the year 2020-21 is described in theDirectorsRs.Report under the head Financial Result.

Outlook:

The recent passage of the IBC (Insolvency & Bankruptcy Code) has been a majorchange in the environment for the company.

Cautionary Note:

The statements forming part of this Report may contain certain forward looking remarkswithin the meaning of applicable laws and regulations. The actual results performances orachievements of the Company depend on many factors which may cause material deviation fromany future results performances or achievements.

Significant factors which could make a difference to the Company's operations includedomestic and international economic conditions changes in Government regulations taxregime and other statutes.

The Company assumes no responsibility to publicly amend modify or revise any forwardlooking statements on the basis of any subsequent developments information or events.

UNLOCKING INVESTMENTS IN SUBSIDIARIES

Particulars of Loans and Advances in the nature of loans as required under ListingRegulations.

Sl.No. Name of the Company

Balance as on

Maximum outstanding

31.03.2021 31.03.2020 2020-21 2019-20
A. Subsidiaries
Consolidated Interiors Limited 897.91 894.73 897.91 961.71
Noble Consolidated Glazings Limited 3465.61 3225.98 3465.61 3225.98
CCCL Infrastructure Limited 1373.30 1281.95 1373.30 1281.95
CCCL Power Infrastructure Limited 602.40 600.96 602.40 600.96
CCCL Pearl City Food Port SEZ Limited 383.70 242.59 383.70 242.59
Delhi South Extension Car Park Limited (212.35) (213.53) (212.35) (213.53)

CCCL has made total investments of Rs.22.91Crores in its subsidiaries viz. CCCL Infra(Rs. 22.91 Crores). These investments are yet to yield returns. While the investmentdecision is sound the execution of these businesses have faced various bottlenecks in theform of non- availability of working capital un-favourable market conditions othermacroeconomic issues.

These have stressed the cash flows of the parent company CCCL presently we are inadvanced discussions with various investors. Going forward it is proposed to unlock theirvalue by divesting majority equity stake in these companies.

5. SUBSIDIARIES

In accordance with the General Circular issued by the Ministry of Corporate AffairsGovernment of India the Balance Sheet Statement of Profit and Loss and other documentsof the subsidiary companies are not being attached with the Balance Sheet of the Company.However the financial information of the subsidiary companies is disclosed in the AnnualReport in compliance with the said circular.

(a) Consolidated Interiors Ltd:

The focus has been to complete the jobs on hand and wait for the right opportunitiestill the market stabilizes. Due to sluggishness in the environment there is not muchheadway with the progress.

(b) Noble Consolidated Glazings Ltd. (NCGL)

The glazing market being a sub set of the construction industry the various factorsdiscussed above drastically affected the operations of NCGL. Completion of projects onhand and collection of receivables and optimization of costs had been the priority since2015-16. With the much awaited economic stability expected 2021-22 and the resultantmarket improvement better days are foreseen. The Company has streamlined its operationsand expected to perform better in the near future.

(c) CCCL Infrastructure Ltd.

The Company shall disinvest CCCL Infrastructure Ltd

(c)(i) CCCL Pearl city Food port SEZ Ltd.

As this is a subsidiary of CCCL Infrastructure Ltd this Company also shall bedisinvested.

(d) Delhi South Extension Car Park Ltd.

The Concession fee paid to Delhi Municipal Corporation has been refunded in view ofproject cancellation. The company has certain claims against Delhi Municipal Corporationfor the cancellation. The same is under consideration by Delhi Municipal Corporation.

(e) CCCL Power Infrastructure Limited

Though the Power sector has seen a fall in the recent years the Company has strived toperform to its full potential but due to various factors the Company struggled to performto the mark. However electricity demand in the country has increased rapidly and isexpected to rise further in the years to come. In order to meet the increasing demand forelectricity in the country massive addition to the installed generating capacity isrequired. The Government of India's focus on attaining ‘POWER FOR ALLRs.hasaccelerated capacity addition in the country. At the same time the competitive intensityis increasing at both the market and supply sides

The Company is eyeing a positive trend in future and is optimistic of a revival to thissector.

The Company has streamlined its operations and expected to perform better in the nearfuture.

A Statement Pursuant to first proviso to sub-section (3) of section 129 read with rule5 of Companies (Accounts) Rules 2014 containing salient features of the financialstatement of subsidiaries/associate companies/joint ventures in Form AOC-1 is annexed tothis report as "Annexure A".

5. OPPORTUNITIES

In India the infrastructure sector is instrumental in creating wide sources ofemployment. Many ancillary industries are dependent on the Infrastructure developmentindustry. Infrastructure growth is necessary for the growth of the overall economy. Bothare inter-dependent. Considering the importance of sector government policies and budgetsare accordingly drafted to promote infrastructure development.

The Company has more than 25 years of rich experience in the EPC Sector and was one ofthe major players in the industry. It had successfully completed national as well asinternational projects with quality. The Company had in its list of clients major publicand private sector organizations.

The Company is under Corporate Insolvency Resolution Process (CIRP) of the Insolvencyand Bankruptcy Code 2016 (IBC) in terms of Order passed by Hon'ble National Company LawTribunal (NCLT) Chennai Bench with effect from 20th April 2021. Mr.Krishnasamy Vasudevan(IP Registration No.IBBI/IPA-001/IP-P00155/2017-18/10324) was appointed as InterimResolution Professional by NCLT vide its Order dated 20th April 2021. Presently itsaffairs business and assets are being managed by the Resolution Professional. In view ofthe above the ensuing Annual General Meeting is being convened by the ResolutionProfessional

Under Section 17 of the IBC 2016 the powers of the Board are suspended and the same arevested on the Resolution Professional Mr.Krishnasamy Vasudevan. The Moratorium Period asstipulated under Section 14 of the IBC Code 2016 is in force.

7. THREAT PERCEPTION Challenges:

• Despite the prospects the sector continues to face challenges from landacquisition issues adverse political and structural changes shortage of talent designand constructability issues and rising material and labor costs. However the landacquisition and environment related issues are being addressed on war footing basis toease the constraints.

• Policy bottlenecks slow clearance of projects and rising inflation havedampened private sector sentiments and have stifled investments in Capital expenditure. Ahigh level committee has been constituted for speedy clearance of stalled projects andmonitoring the implementation.

• Working capital cycle has been elongated mainly due to stretched receivableswhich has affected the cash flow position of the companies in the sector. Many of thecompanies have been forced to draw their full limits with the Banking system orrestructure the facilities.

• Lengthy dispute resolution mechanism in the sector is yet another major factoraffecting the cash flows of the construction companies

• This coupled with rising interest rates have led to a drop in the PAT margin anddeterioration of debt coverage ratios of construction companies.

• Shortage of labour also has become a threat as the industry depends majorly onlabour for its sustainability.

8. RISK PERCEPTION

Needless to mention with huge money there comes the involvement of big risks.Construction is a high-risk business. Mitigation of risks is the all en-compassingrequirement. Broadly speaking construction projects face the following type of risks:-

• Business Risk

• Market Risk

• Financial Risk

• Legal Risk

• Commodity Risk

• Political Risk

• Exchange Rate Risk.

9. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Internal Control system had been evaluated by the by the Auditor & erstwhileManagement before CIRP commenced. Scope of work of Auditors covers review of controls onaccounting statutory and other compliances and operational areas in addition to reviewsrelating to efficiency and economy in operations.

10. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been prepared on going concern basis inaccordance with accounting principles generally accepted in India. Further theconsolidated financial statements have been prepared on historical cost basis except forcertain financial assets and financial liabilities and share based payments which aremeasured at fair values as explained in relevant accounting policies. Fair valuationsrelated to financial assets and financial liabilities are categorized into level 1 level2 and level 3 based on the degree to which the inputs to the fair value measurements areobservable.

The Consolidated Balance sheet Consolidated Statement of Profit and Loss ConsolidatedStatement of Changes in Equity and disclosure requirements with respect to items in theConsolidated Balance Sheet and Consolidated Statement of Profit and Loss are prepared inthe format prescribed in Division II–Schedule III to the Companies Act 2013 and areadequately presented by way of notes forming part of accounts along with the other notesrequired to be disclosed under the notified Accounting Standards and the ListingAgreement. The Consolidated Cash Flow Statement has been prepared and presented as per therequirements of Indian Accounting Standard (Ind AS) 7 "Statement of Cash Flows".

11. HUMAN RESOURCES

It has been the tradition of the Company to maintain excellent industrial relations atall levels. The Company is hopeful of getting revived upon approval of the Resolution Plansubmitted to Hon'ble NCLT Chennai Bench for its approval.

12. CORPORATE GOVERNANCE

A separate report on the Corporate Governance also forms part of the Annual Report.With regard to the Business Responsibility Report the Company is not covered in the top500 listed entities based on the market capitalization at BSE & NSE as on March 312021. Hence there is no requirement for the Company to comply with Regulation 34 of SEBI(LODR) Regulations 2015.

13. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Board of Directors constituted a Corporate Social Responsibility Committee (CSRCommittee) in compliance with the provisions under the Companies Act 2013. The committeecomprises of Shri.S.Sivaramakrishnan as Chairman Shri. .VG JanarathanamShri.R.Varadharajan and Mrs.Hema Gopal as its other members.

The said Committee had been entrusted with the responsibility of formulating andrecommending to the Board a Corporate Social Responsibility Policy (CSR Policy)indicating the activities to be undertaken by the Company monitoring the implementationof the framework of the CSR Policy and recommending the amount to be spent on CSRactivities.

Since the company is making losses for the past Seven years CSR spend does not applyto the company for the financial year 2020-21. Hence submission of a report on CSRactivities does not apply.

The Committee got dissolved on 20th April 2021 when NCLT Passed order for initiationof CIRP as the power of the board was ceased on appointment of RP.

14. SEXUAL HARASSMENT POLICY

The Company had adopted the prevention of sexual harassment policy and subsequentlyalso formed a committee for the same. Complaints Received - Nil Complaints Disposed off -Nil

15. DEPOSITORY SYSTEM / E-VOTING MECHANISM:

The Company has entered into a Tripartite Agreement with both the Depositories viz.National Securities Depository Limited (NSDL) and Central Depository Services (I) Ltd(CSDL) along with Registrars M/s. KFin Technologies Private. Ltd for providing electronicconnectivity for dematerialization on the Company's shares facilitating the investors tohold the shares in electronic form and trade in those shares. The shares of your Companyare being traded now on the Bombay Stock Exchange and National Stock Exchange undercompulsory demat form. Further in accordance with provisions stipulated under CompaniesAct 2013 the facility of e-voting is also made available to all shareholders of theCompany. The instructions regarding e-voting is enclosed along with this report. Allshareholders are also requested to update their email ids with the Company or our RTA M/s.KFin Technologies Private. Ltd.

16. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Sections 124 and 125 of the Companies Act 2013 relevantamounts which remained unpaid or unclaimed for a period of seven years have beentransferred by the Company from to time to time on due dates to the Investor Educationand Protection Fund. The details of the same are covered under the Corporate GovernanceReport.

17. AUDITORS

STATUTORY AUDITORS

M/s. Sundar Srini & Sridhar Chartered Accountants Chennai (FR No. 004201S)Chennai were appointed as Statutory Auditors of the Company by the shareholders at the20th Annual General Meeting held on September 26 2017 to hold office up to the conclusionof the 25th Annual General Meeting.

AUDITORS REPORT AND MANAGEMENT'S RESPONSE TO AUDITORS OBSERVATIONS

Auditors Observation:

1. 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. The RP informed that certain information including the minutes of the meetings ofthe Committee of Creditors and the outcome of certain procedures carried out as a part ofthe CIRP are confidential in nature and could not be shared with anyone other than theCommittee of Creditors and NCLT. Accordingly we are unable to comment on the possiblefinancial impact presentation and disclosures if any that may arise if we have beenprovided access to those information.

3. Trade receivables include a sum of Rs. 50118.10 lakhs against which the Companycarries a provision of Rs. 554.11 lakhs that are under arbitration which according to theManagement will be awarded fully in Company's favour on the basis of the contractualtenability progress of arbitration and legal advice and hence no additional provision forimpairment loss has been considered necessary by the management as disclosed in footnote(a) to Note No 9 of the Standalone Financial Statements. However considering thesignificant 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. Thismatter 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 more thanthree years aggregating to Rs. 9732.77 lakhs receivable from certain customers in respectof 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 feels that noadditional provisions would be required. Further as stated in footnote (a) to Note No 15aof the standalone Financial Statements the Company has unbilled receivables & claims(contract assets) made to certain clients amounting to Rs.2036.62 lakhs against which theCompany carries a provision of Rs.55.95 lakhs which were accounted based on the terms andconditions implicit in the Construction Contracts in respect of under constructionprojects. The claims are mainly in respect of cost over run arising due to suspension ofwork client caused delays changes in the scope of work deviation in design and otherfactors for which company is at various stages of negotiation/discussion with the clients.On the basis of the contractual tenability progress of negotiations/discussions themanagement considers these receivables are recoverable and that no additional provisionwould be required. In the absence of sufficient appropriate audit evidence to corroboratemanagement's assessment of recoverability of these balances and having regard to the ageof these balances we are unable to comment on the carrying value of abovereceivables/contract assets and the shortfall if any on the amount that would beultimately realizable from the said customers. The similar matter has been qualified inour audit report for the year ended March 31 2020.

5. Various 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 Bankruptcy Code 2016 arecurrently under consideration/verification/reconciliation. In aggregate claims submittedby the financial creditors operational creditors other creditors and employees of theCompany exceeded the amount as appearing in the books of account. Pending completion ofexercise of verification /reconciliation admission of such claims by IRP and finaloutcome of CIRP we are unable to comment on the consequential impact if any on thestandalone financial statements.

6. The Company had given corporate financial guarantees to the lender of NobleConsolidated Glazings Limited and CCCL Infrastructure Limited wholly owned subsidiaries.These subsidiaries have defaulted in repayment of their loan obligations and the lenderssubsequent to the financial year have invoked corporate guarantee. The Company hasreceived claims from such lenders on account of invocation of guarantee. As the Company iscurrently under CIRP the Company is unable to assess the changes in risk/expected cashshortfall to determine expected credit loss allowance to be recognised in respect of thesefinancial guarantees. Therefore we are unable to comment on the possible impact thereofon the loss for the year ended March 31 2021 and on the carrying value of provisions andequity as at March 31 2021.

7. The Company has not computed and provided for additional and penal interest ondefaults under borrowings as per the contractual terms of the underlying agreements. Asmentioned in Note 49(c) we have neither received bank statements nor have been able toobtain confirmations for restructured term loans including working capital loans frombanks and financial institutions amounting to Rs. 69983.32 lakhs as at March 31 2021. Inthe absence of sufficient appropriate audit evidence we are unable to determine thepossible impact thereof on the loss for the year ended March 31 2021 and on the carryingvalue of borrowings and equity as on that date. Further given the expiry of restructuringpackage with the lenders on account of continuing default we are unable to comment on thestatus and 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 endedMarch 31 2020

8. We have not received the bank statement and confirmation of balance for the balancelying in current account amounting to Rs.5.94 lakhs and no confirmation is available forMargin money accounts amounting to Rs.331.99 lakhs and no confirmation of balance isavailable for balance lying in current account to the tune of Rs.70.01 lakhs and for theoutstanding bank guarantees amounting to Rs.10182.56 lakhs. In the absence of sufficientappropriate audit evidence we are unable to determine any possible impact thereof on theloss for the year ended March 31 2021 and on the carrying value of cash and cashequivalents / other bank balances and equity and verify the appropriateness of disclosuresmade for outstanding bank guarantees under contingent liabilities as on that date. Thesimilar matter has been qualified in our audit report for the year ended March 31 2020

9. Balance 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. The Company has not carried out physical verification with respect to certaininventories aggregating to Rs. 702.98 lakhs which is lying in various sites. Further withrespect to certain inventories aggregating to Rs 995.31 lakhs the Company has carried outphysical verification and reconciliation with the books is said to be in progress. Pendingphysical verification and reconciliation with books and availability of valuation reportto ascertain the net realisable value of certain inventories we are unable to comment onconsequential impairment if any that is required to be made in the carrying value ofinventories.

11. The 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. There was delay in 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 comment on thepossible impact thereof on the loss for the year ended March 31 2021 and on the carryingvalue of liabilities as at March 31 2021.

13. In respect of investments held in subsidiary of Rs. 2767.40 lakhs and loans andadvances of Rs. 1757.01 lakhs in subsidiaries as at March 31 2021 business continuityof such subsidiaries is significantly dependent upon the final outcome of the CIRP of theCompany as the tangible assets held by those subsidiaries are provided as security for theloans taken by the Company. No impairment assessment was carried on the Investments heldin subsidiary and loans and advances given to subsidiary. Therefore we are unable tocomment upon the carrying value of these investments and loans and advances.

Management response to Auditor's observation:

1. The Standalone financial statements for the year ended March 31 2021 indicate thatthe Company has negative net worth of Rs. 38690.16 lakhs as at 31.03.2021. Further theworking 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 subject to reconciliation/verification asstated in Note 49(a) below that have been demanded/ recalled by the financial creditorspursuant to CIRP and further obligations pertaining to operations including unpaidcreditors and statutory dues as at March 31 2021. These indicate the existence of amaterial uncertainty that may cast significant doubt on the Company's ability to continueas going concern The Company's ability to continue as going concern is dependent upon manyfactors including continued support from the operational creditors and submission of aviable revival plan by the prospective investor/bidder. Further since CorporateInsolvency Resolution Process (CIRP) is currently in progress as per the Code it isrequired that the Company be managed as going concern during CIRP. In the opinion of themanagement resolution and revival of the company is possible in foreseeable futureaccordingly above financial statements have been prepared on the basis that the Company isa Going Concern.

2. We have been informed by the RP that certain information including the minutes ofthe meetings of the Committee of Creditors and the outcome of certain procedures carriedout as a part of the CIRP are confidential in nature and could not be shared with anyoneother than the Committee of Creditors and NCLT. Pending completion of the process noadjustments could be given.

3. Trade Receivables include a sum of Rs. 50118.10 lakhs for which the Company hassought legal recourse and proceedings are pending in various legal forums which accordingto the Management will be awarded fully in Company's favour on the basis of thecontractual tenability progress of arbitration and legal advice. However the Companycarries a provision of Rs. 554.11 lakhs against these receivables.

4. Trade Receivable include a sum of Rs. . 9732.77 Lakhs outstanding for a period ofmore than two years in respect of unbilled receivables and claims made to client based onthe terms and conditions implicit in the Construction Contracts in respect ofongoing/suspended projects. The said claims are mainly in respect of cost over run arisingdue to suspension of work client caused delays changes in the scope of work deviationin design and other factors for which company is at various stages of negotiation/discussion with the clients. On the basis of the contractual tenability progress ofnegotiations/discussions the management considers these receivables are billable /recoverable. The company carries a provision of Rs. 55.95 Lakhs against these claims. Theprovisions made are periodically reviewed by the company and the management feels that noadditional provision is warranted.

5. Subsequent to the financial year pursuant to the commencement of CorporateInsolvency Resolution Process of the Company (CIRP) under Insolvency and Bankruptcy Code2016 (IBC) public announcement was made calling upon the financial creditors operationalcreditors employee and other creditors of the company to submit their claims with theInterim Resolution Professional (‘IRP) by May 05 2021. As a result there arevarious claims submitted by the operational creditors the financial creditors employeeand other creditors against the Company including the claim on Company's subsidiaries.Some of these claims are under further verification/validation and the same may be updatedas per any additional information which may be received in future. In respect of claimssubmitted by the financial creditors operational creditors employees and othercreditors the same is exceeding amount appearing in the books of accounts. To the extentthe process for submission and reconciliation of claims as on the Insolvency CommencementDate remains an ongoing process no accounting impact in the books of accounts has beenmade in respect of excess short or non-receipts of claims for operational and financialcreditors.

6. The Company had given corporate financial guarantees to the lender of NobleConsolidated Glazings Limited and CCCL Infrastructure Limited wholly owned subsidiaries.These subsidiaries have defaulted in repayment of their loan obligations and lenderssubsequent to the financial year have invoked corporate guarantee. The Company hasreceived claims from such lenders on account of invocation of guarantee. Pendingcompletion of exercise of verification /reconciliation admission of such claims by IRPand final outcome of CIRP the Company is unable to assess the changes in risk/expectedcash shortfall to determine expected credit loss allowance to be recognised in respect ofthese financial guarantees.

7. During the financial year 2017-18 secured lenders had approved the restructuringpackage under "Scheme for Sustainable Structuring of Stressed Assets" (S4A). TheCompany has not been able to generate sufficient cash flows to service the loanrepayments/interest payments which resulted into Company's borrowings from Secured lendersbecoming "Non-Performing Assets" (NPAs). Such defaults entitle the lenders torevoke the S4A package. Upon exit lenders are entitled to exercise rights and remediesavailable under the original loan agreements. The Company has not provided for additionalinterest from S4A cut-off date till March 31 2021 which arises on account of differencesbetween interest rate as approved under S4A package and interest rate approved as per theoriginal sanction letter and penal interest on overdue amount of interest and installment.The additional interest and penal interest if any could not be quantified as on date. Thebalances of secured loans unsecured loans trade receivables including retention moneyunbilled revenue trade payables (including MSME) and certain bank balances includingmargin money accounts and amount disclosed as Bank Guarantees under Contingent Liabilitiesare subject to confirmation/reconciliation. Management believes that no materialadjustments would be required in books of account upon receipt of these confirmations andthat there will not be any material impact on loss for the year and also on state ofaffairs as at 31st March 2021.

8. Management believes that no material adjustments would be required in books ofaccount upon receipt of these confirmations and that there will not be any material impacton loss for the year and also on state of affairs as at 31st March 2021

9. Reconciliation with debtors and creditors is a continues process. We have receivedconfirmation balances from very few vendors and the reconciliation is in process.Management believes that no material adjustments would be required in books of accountupon receipt of these confirmations and that there will not be any material impact on lossfor the year and also on state of affairs as at 31st March 2021. With respect to MSMEcategorization the company has initiated the process of identifying the MSME vendor andbased on the information collected necessary disclosures are made.

10. Physical verification for inventories aggregating to Rs. 702.98 lakhs could not becarried out at certain locations including project site that are having slow progress.Further with respect to certain inventories aggregating to Rs 995.31 lakhs the Companyhas carried out physical verification and reconciliation with the books is currently inprogress. In view of strong internal controls the management doesn't expect any materialdifferences on final reconciliation with books/records. Further management believe thatno item of inventory has a net realizable value in the ordinary course of business whichis less than the amount at which it is included in the inventories. Accordingly noprovision is required in respect of such inventories.

11. Physical Verification of Property Plant and Equipment (PPE) has been conducted andpresently is in process of reconciliation with book records. In view of securityarrangement the management doesn't expect any material differences on finalreconciliation with books/records. Further as the Company is currently under CIRP theCompany has also not made full assessment of impairment as required by Ind AS 36 onImpairment of Assets if any as at 31st March 2021 in the value of tangible assets andCapital work in progress. Further management believe that no item of PPE has a netrealizable value in the ordinary course of business which is less than the amount at whichit is included in the PPE.

12. Certain statutory dues (including GST/ VAT/ PF/ TDS etc.) could not be paid on duedates due to cash flow issues. Delayed payment charges (including penalties amountunascertainable) will be accounted for as and when settled / paid.

13. The Company has investment in subsidiary of Rs. 2767.40 lakhs and loans andadvances of Rs. 1757.01 lakhs in subsidiaries as at March 31 2021. The tangible assetsowned by those subsidiaries are provided as security for the loans taken from thefinancial creditors by the Company. In the opinion of the management resolution andrevival of the Company is possible in foreseeable future and hence the management don'tforesee any threat to the business continuity of such subsidiaries. Further since theCompany is currently in CIRP no impairment assessment was carried on the Investments heldin subsidiary and loans and advances given to subsidiary and accordingly no provision hasbeen considered necessary by the management in respect of impairment in the value ofinvestment / loans and advances beyond what has been recognised in the books.

INTERNAL AUDITOR

The Board has appointed M/s. Gopalaiyer and Subramanian Chartered Accountants as theInternal Auditor of the Company pursuant to Section 138 of Companies Act 2013 and RuleNo. 13 of The Companies (Accounts of Companies) Rules 2014 for the financial year2020-21.

M/s. Gopalaiyer and Subramanian Chartered Accountants are having expertise in financeand Accounts. The Internal Audit would ensure that strong internal control mechanism isput in place in the Company as per the recommendations and guidance of Audit Committee.

COST AUDITOR

The Board of Directors had appointed M/s SS & Associates (Firm Registration No000513) as the Cost Auditors of the Company to audit the cost accounting records of theCompany for the financial year 2020-21.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. N. Balachandran Practicing Company Secretary Chennai to undertake theSecretarial Audit of the Company. The report of the Secretarial Audit Report is annexedherewith as

"Annexure B"

MANAGEMENT'S RESPONSE TO SECRETARIAL AUDITOR'S OBSERVATIONS

a. The Securities and Exchange Board of India (Listing Obligation and DisclosureRequirements) Regulations 2016 except there are few instances require compliance.

The Company has appointed Independent director Mrs Hema Gopal and Mr N S Manion 13th May 2020 and Mr Varadarajan on 18th May 2020. However Mr Mani appointmentrequires prior approval of shareholders which was not complied because of COVID-19pandemic and there is complete lockdown throughout the country. The Company received thepenalty notice from SEBI for Rs 98000 and Mr Mani resigned on 31st August 2020 and againreappointed on 28th October 2020 by the Board and got shareholders approval on AnnualGeneral Meeting on 26th November 2020 and complied the SEBI LODR Regulations.

b. The Secretarial Standards issued by The Institute of Company Secretaries of IndiaHowever there are few instances which require compliance.

The Company has strived to comply with the secretarial standards issued byICSI however efforts are taken to streamline the same.

c) Company web site related compliances in general are yet to be regularized andupdated in a periodical manner.

As the website revamping is in process the website compliances are nowregularized and updated periodically.

d) There has been a non-compliance in repayment of amount outstanding on OptionallyConvertible Debentures and interest thereupon and the current directors are disqualifiedas per Section 164 of the Companies Act 2013.

The company went for Scheme for Sustainable Structuring of StressedAssets" (S4A) with the banks and financial institutions .However the Company has notbeen able to generate sufficient cash flows to service the loan repayments/interestpayments which resulted into Company's borrowings from Secured lenders becoming"Non-Performing Assets" (NPAs) and such defaults entitle the lenders to revokethe S4A package. Subsequent to the financial year Corporate Insolvency Resolution Processof the Company (CIRP) under Insolvency and Bankruptcy Code 2016 (IBC) was commenced on20th April 2021.

e) I Further Report that the company is not regular in depositing the statutory dues /of filing periodical return as relating to and applicable with the appropriateauthorities during the year under audit.

Due to the delay in collection from clients the Company could notdeposit its statutory dues on time. In spite of the crippled situation the Company strivesto comply with the statutory obligations on time. Efforts are being made to comply ontime.

f) I further report that the composition of the Board of Directors of the Company withproper balance of Executive Directors and Non-Executive Directors as also the compositionof various Board Committees required compliance during the year including on the date ofthe Annual General Meeting to the extent in the manner and subject to the reporting madehereinafter.

Shareholders passed the special resolution for appointment of Mr Mani asIndependent Directors on 26th November 2020 and thereafter the Board committees gotreconstituted and complied the SEBI LODR regulations.

g) I further report thatthe following points requires attention and are beyond my scope

1) Erosion of Net worth and ability to continue as a going concern

2) Uncertainty on Recovery of Trade Receivables

3) Order passed by the National Company Law Tribunal (NCLT) bringing the companyunder the Corporate Insolvency Resolution Process of the Insolvency and Bankruptcy Code2016

4) Loans extended requires compliance under section 186(7) of Companies Act2013.

5) Board and Board Committee composition requiring compliance under ApplicableRegulations of The Securities and Exchange Board of India (Listing Obligation andDisclosure Requirements) Regulations 2015 and further the disqualification of the currentdirectors as per Sec 164 of the Companies Act 2013

6) There are overdue payments payable to MSME Enterprises under Micro Small andMedium Enterprises Development Act 2006.

1) The net worth erosion has happened because of the continuous loss made by theCompany. However the Company is hopeful of bringing the net worth positive in the comingyears with the enhanced business opportunities.

2) The Company on day to day basis is closely following it up with the clientsfor the trade receivables. The Company is hopeful in recovering major dues in due courseof time.

3) The company has received order from NCLT on 20th April 2021 and thereafterCompany's affairs business and assets are being managed by the Resolution Professional(RP) since u/s.17 IBC the powers of the Board have been suspended and vested with RP

4) The Company has not charged any interest for the loans extended to itssubsidiary company as the subsidiary company is striving to revive and it becomesresponsibility of the holding company to support the subsidiary companies to the maximumextent possible in its faster revival. Hence given the precarious situation any furtherinterest burden to the Company will lead to greater deterioration of the Company.

5) The Company has appointed a Non-Executive Independent Director on its Boardon October 28 2020 and shareholders has passed special resolution on 26th November 2020.With this appointment the Company has complied with the composition of the Board.

6) These are operational overdues. The Company is striving to clear the MSMEdues on priority.

18. DIRECTORS:

The following changes have occurred in the Board of Directors during the financial year2020-21:

18.1 INDUCTIONS/ CHANGE IN DESIGNATION

Mr Varadarajan – Appointed with effect from 18th May 2020

Mrs Hema Gopal – Appointed with effect from 13th May 2020

Mr Mani – Appointed with effect from 13th May 2020 and re-appointed with effectfrom 28th October 2020. Mr S Sivaramakrishnan – Managing Director and Chief FinancialOfficer with effect from 13th January 2021 There are Changes in designation made duringFinancial Year 2020-21.

18.2 DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and as per theSEBI (LODR) Regulations 2015.

18.3 RESIGNATIONS

The Board accepted and approved the resignation of the following Directors

1. Mr.N.S Mani (DIN:00378947) on August 31 2020

18.4 RE-APPOINTMENTS

In accordance with the provisions of the Companies Act 2013 and in terms of theMemorandum & Articles of Association of the Company At the ensuing 24th AnnualGeneral Meeting Shri. R. Sarabeswar Wholetime Director of the Company is liable toretire by rotation and being eligible offer himself for re-appointment. The Boardrecommends his re-appointment.

The Companies Act 2013 provides for the appointment of Independent Directors. Subsection (10) of Section 149 of the Companies Act 2013 provides that independent directorsshall hold office for a term of up to five consecutive years on the board of a company;and shall be eligible for re-appointment on passing a special resolution by theshareholders of the Company.

Accordingly all Independent Directors were appointed by the shareholders at the GeneralMeeting as required under Section 149(10) of the Companies Act 2013. Further according tosub section (11) of Section 149 of the Companies Act 2013 no Independent Director shallbe eligible for appointment for more than two consecutive terms of five years. Sub section(13) states that the provisions of retirement by rotation as defined in Sub section (6)and (7) of Section 152 of the Act shall not apply to such independent directors.

18.5 BOARD EVALUATION

Pursuant to the Regulation 17(6) (10) of SEBI (LODR) Regulations 2015 the Board shallmonitor and review the Board evaluation framework. The Companies Act 2013 states that aformal annual evaluation needs to be made by the Board of its own performance and that ofits committees and individual directors. Schedule IV of the Companies Act 2013 statesthat the performance evaluation of Independent Directors shall be done by the entire Boardof Directors excluding the director being evaluated. The Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its Audit Nomination & Remuneration and ComplianceCommittees.

18.6 TRAINING OF INDEPENDENT DIRECTORS

Every new Independent Director of the Board attends an orientation program. Tofamiliarize the new inductees with the strategy operations and functions of our Companythe executive directors/senior managerial personnel make presentations to the inducteesabout the Company's strategy operations product and service offerings marketsorganization structure finance human resources technology quality facilities and riskmanagement.

18.7 REMUNERATION POLICY

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report. TheExecutive Directors have deferred their salaries till revival of the Company and all otherremunerations paid to the Directors Key Managerial Personnel and senior managementpersonnel are as per the remuneration policy of the Company.

18.8 DIRECTORSRs.RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134 (3) (c) of the Companies Act 2013:

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

19 CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

A statement containing the particulars relating to conservation of energy research anddevelopment and technology absorption as required under Section 134 (3) (m) of theCompanies Act 2013 and Rule 8 (3) (A) (3) (B) and 3 (A) (C) of The Companies (Accounts)Rules 2014 is annexed to this report as "Annexure C"

20. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT2013

Details of Loan Guarantees and Investments covered under the provisions of Section 186of the Companies Act 2013 are given in the notes to financial statements.

21. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of the employees of the company is annexed to this report as "AnnexureE"

22. DEPOSITS

Your Company has not accepted any deposits from the public during the year underreview.

23. MEETINGS

During the year 6 Board Meetings and 5 Audit Committee Meetings were convened and held.The details of which are given in the Corporate Governance Report. The intervening gapbetween the meetings was within the period prescribed under the Companies Act 2013.

24. COMMITTEES

The Board of Directors of the Company pursuant to the mandatory provisions of CompaniesAct 2013 has the following committees namely:

a) Audit Committee b) Nomination & Remuneration Committee c) StakeholdersRelationship Committee d) Corporate Social Responsibility Committee e) Share TransferCommittee f) Risk Management committee g) Internal Complaints Committee h) ExecutiveCommittee i) Enquiry Committee

A detailed note on the Board and its committees along with the composition of thecommittees and compliances is provided under the Corporate Governance Report section inthis Annual Report.

All these Committees got dissolved on 20th April 2021 when NCLT Passed order forinitiation of CIRP as the power of the board was ceased on appointment of RP.

25 AUDIT COMMITTEE

The Company had an independent and qualified Audit Committee as per the provisions ofSection 177 (8) of the Companies Act 2013 and Rule 7 of The Companies (Meetings of Boardand its Powers) Rules 2014 and Regulation 18 of SEBI (LODR) Regulation 2015 thefollowing is the current composition of Audit Committee:

Name of the Director Status in Committee Nature of Directorship
Mr N S Mani Chairman Non Executive & Independent Director
Mr. R. Varadharajan Member Non Executive & Independent Director
Mr.S. Sivaramakrishnan Member Managing Director
Mrs. Hema Gopal Member Non Executive & Independent Director

The Board has accepted all the recommendations provided by the Audit Committee.

The Committee got dissolved on 20th April 2021 when NCLT Passed order for initiationof CIRP as the power of the board was ceased on appointment of RP.

26 VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has a vigil mechanism/whistle blower Policy to deal with instance of fraudand mismanagement if any. The details of the vigil mechanism Policy is explained in theCorporate Governance Report and also posted on the website of the Company.

25. PARTICULARS OF CONTRACTS OR ARRAGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION188(1) OF

THE COMPANIES ACT 2013:

All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. The Company is in the process of developing aRelated Party Transactions Manual Standard Operating Procedures for purpose ofidentification and monitoring of such transactions. None of the Directors has anypecuniary relationships or transactions vis--vis the Company. Particulars of Contractsor arrangement with related parties referred to in Section 188(1) of the Companies Act2013 in the prescribed Form AOC-2 is appended as Annexure "D" to the Board'sReport.

26. ENHANCING SHAREHOLDER VALUE

Your Company believes that its Members are among its most important stakeholders.Accordingly your company's operations are committed to the pursuit of achieving highlevels of operating performance and cost competitiveness consolidating and building forgrowth enhancing the productive asset and resource base and nurturing overall corporatereputation. Your company is also committed to creating value for its other stakeholders byensuring its corporate actions positively impact the socio-economic and environmentaldimensions and contribute to sustainable growth and development.

29. ANNUAL RETURN

In accordance with in terms of the requirements of Section 134(3)(a) of the Act 2013read with the Companies (Accounts) Rules 2014 the annual return in the prescribed formatis available at www.ccclindia.com.

30. COMPLIANCE OF SECRETARIAL STANDARD

The Company has complied with the Secretarial Standards issued by The Institute ofCompany Secretaries of India and approved by the Central Government as required underSection 118(10) of the Companies Act 2013.

31. GREEN INITIATIVES

During fiscal 2014-15 we started a sustainability initiative with the aim of goinggreen and minimizing our impact on the environment. This year we are publishing only thestatutory disclosures in the print version of the Annual Report. Additional information isavailable on our website www.ccclindia.com.

Electronic copies of the Annual Report 2020-21 and Notice of the 24th Annual GeneralMeeting are sent to all the members whose email addresses are registered with theCompany/Depository Participant(s).

32. ACKNOWLEDGEMENT

The Board of Directors of the Company wishes to express their deep sense ofappreciation and offer their sincere thanks to all the Shareholders of the Company fortheir unstinted support to the Company.

The Board also wishes to express their sincere thanks to all the esteemed Customers fortheir support to the Company's business.

The Board would also like to place on record their deep sense of gratitude to thevarious Central and State Government Departments Organizations and Agencies for thecontinued help and co-operation extended by them.

The Board would also like to place their sincere thanks to Mr. Ravi Siddarth for hiscontribution to the company during his tenure as Chief Financial officer and Companysecretary of the Company.

In the end the Board would like to place on record their deep sense of appreciation toall the executives officers employees staff members and workers at the various sites.

For Consolidated Construction Consortium Limited
(Under Corporate Insolvency Resolution Process)
S.Sivaramakrishnan Mr Krishnasamy Vasudevan
Managing Director & CFO Resolution Professional
(DIN: 00431791) IBBI/IPA-001/IP-P00155/2017-18/10324
Place: Chennai
Date: November 1 2021

#MDEnd#

.