ARSS Infrastructure Projects Ltd Auditor Reports

To

The Members of ARSS Infrastructure Projects Limited CIN:L14103OR2000PLC006230

Report on the Audit of the Standalone Financial Statements Qualified Opinion

We have audited the accompanying standalone financial statements of ARSS Infrastructure Projects Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2026, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity, and the Statement of Cash Flows for the year ended on that date and notes to the financial statements, including a summary of material accounting policies and other explanatory information (hereinafter referred to as the "Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2026, the loss and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

1. Non-compliance with IND AS 115 - Revenue from Contracts with Customers, in the absence of relevant contract- wise records and underlying project documentation, contract-wise surplus/deficit on construction contracts has neither been ascertained nor recognised in compliance with Ind AS 115 ‘Revenue from Contracts with Customers.

2. During the year, the Company has recognised certain arbitration claims as income in the Statement of Profit and Loss and as Claims Receivable under Other Financial Assets in the Balance Sheet. These claims are subject to arbitration proceedings whose outcome is uncertain and the receivability of the same is not established. In our opinion, such recognition is not in accordance with applicable Indian Accounting Standards for the following reasons:

a. Under Ind AS 115, variable consideration including amounts subject to arbitration can be included in transaction price only when it is highly probable that a significant reversal of cumulative revenue recognised will not occur. The recognition of arbitration claims whose outcome is uncertain does not meet this threshold.

b. Under Ind AS 109, recognition of a financial asset requires an unconditional contractual right to receive cash. Most of the arbitration claims that are yet to be adjudicated and where the counterpartys liability is neither admitted nor determined by a competent authority do not qualify for recognition as financial assets.

c. Under Ind AS 37, such claims constitute contingent assets which are not to be recognised in financial statements until the inflow of economic benefits is virtually certain. Recognition of contingent assets is expressly prohibited under Ind AS 37 as it may result in recognition of income that may never be realised.

Consequently, in our opinion, the recognition of these arbitration claims to the tune of 70,831.96 Lakhs has resulted in overstatement of exceptional items in Profit and Loss, other financial assets and net worth of the Company as at 31st March 2026. Had these claims been appropriately disclosed as contingent assets in accordance with Ind AS 37 instead of being recognised, the exceptional items, other financial assets and net worth of the Company would each have been lower to that extent.

3. The Company has classified a loan received from Ocean Capital Market Limited (Successful Resolution Applicant), a related party as at reporting date, as a "Secured Borrowing" in the Balance Sheet as at 31st March 2026 and has accrued interest thereon at 9% per annum. We report the following concerns:

a. No security creation documents have been executed as at the balance sheet date and no charge has been registered with the Registrar of Companies.

b. The approved Resolution Plan sanctioned by the Honble NCLT does not contemplate payment of interest on this loan. Accrual of interest at 9% per annum, although supported by loan sanction letter, creates a financial obligation beyond the scope of the approved Resolution Plan.

c. The requisite approvals for this related party transaction, including prior Audit Committee approval under Section 177 of the Companies Act, 2013 and Regulation 23 of SEBI (LODR) Regulations, 2015, and Board / shareholder approval under Section 188 of the Companies Act, 2013, have not been demonstrated to us.

The above matters have resulted in incorrect classification of borrowings and incorrect recognition of interest expense to the tune of 1,122.76 Lakhs.

Emphasis of Matter

We draw attention to the following matters in the Standalone Financial Statements:

i. Note No. 71 and Note No. 73 to the Standalone Financial Statements, which describe the completion of the Corporate Insolvency Resolution Process ("CIRP") and the implementation of the Resolution Plan approved by the Honble National Company Law Tribunal, Cuttack Bench ("NCLT"), vide order dated 29th August, 2025, in favour of M/s Ocean Capital Market Limited ("OCML" / "Successful Resolution Applicant" / "SRA"). The Resolution Plan has resulted in, inter alia, reconstitution of the Board of Directors, extinguishment of erstwhile promoter equity, settlement/restructuring of financial and operational creditor liabilities, conversion of unsustainable debt into equity, fresh equity infusion by the SRA, and recognition of net loss as Exceptional Items of 3,22,971.31 Lakhs in the Statement of Profit and Loss for the year. These transactions are complex, involve significant management judgement, and have had a material impact on the financial position and results of the Company for the year ended 31st March, 2026. Further, the financial statements for the year ended March 31,2026 have been prepared on going concern considering the implementation of the Approved Resolution Plan. Our opinion is not modified in respect of this matter.

ii. Note No. 72 and Note No. 13 to the Standalone Financial Statements, a search and seizure operation was conducted by the Enforcement Directorate (ED) at the premises of the Company during the financial year 2024-25. The investigation is ongoing. The Management/ new Board of Directors has represented that no additional material development adverse to the Company has occurred during the year ended March 31,2026 in relation to the said investigation. Our opinion is not modified in respect of this matter.

iii. Note No. 76 to the Standalone Financial Statements, the Serious Fraud Investigation Office (SFIO) has initiated investigation into the affairs of the Company during the financial year 2024-25. The investigation is ongoing. The Management/ new Board of Directors has represented that no additional material development adverse to the Company has occurred during the year ended March 31,2026 in relation to the said investigation. Our opinion is not modified in respect of this matter.

iv. Note No. 69 to the Standalone Financial Statements, as a result of the implementation of the approved Resolution Plan, the financial statements for the year ended 31st March 2026 reflect a substantially restructured balance sheet, and recognition and measurement of assets and liabilities on the basis of the approved Resolution Plan and applicable Ind AS. The figures for the comparative period (year ended 31st March 2025) were prepared during the CIRP, when the powers of the Board of Directors were vested with the Resolution Professional. Accordingly, the current years financial statements are not strictly comparable with the previous year. Our opinion is not modified in respect of this matter.

v. Note No. 31 to the Standalone Financial Statements, the company during CIRP period, has written off 11,048.16 Lakhs during the year as the settlement of Arbitration award vide case no. 54/2020 Niraj Cement Structurals Ltd. V/s Jaipur Development Authority (JDA) where the company had counterclaim with Niraj Cement Structurals Ltd. Our opinion is not modified in respect of this matter.

vi. Note No. 32 (d) to the Standalone Financial Statements, the company has written off 91,273.71 Lakhs of arbitration claim to the extent of award/expected realization amount previously stated as Claims Receivable under Other Financial Assets. Our opinion is not modified in respect of this matter.

vii. Note No. 32 (e) to the Standalone Financial Statements, the company has identified certain arbitration claims amounting to 70,831.96 Lakhs which were not booked in the financial statements. During the year, the company has booked those claims in financial statements as Claims Receivable under Other Financial Assets. We have modified opinion in respect of recognizing new arbitration claims as mentioned in qualified opinion.

viii. Note No. 75 to the Standalone Financial Statements, during the course of implementation, the Company has identified certain provisions in the approved Resolution Plan which require amendments, either on account of ambiguity, need for clarification, or inconsistency with the provisions of the Insolvency and Bankruptcy Code, 2016. The Company is in the process of filing necessary applications before the Honble NCLT seeking amendments to the approved Resolution Plan within the stipulated period which is not over at reporting period of financial statements. The outcome of these applications and the consequential impact, if any, on the financial statements of the Company is presently not determinable. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter	How our audit addressed the key audit matter
1. Accounting for and Disclosure of the Resolution Plan approved under the Insolvency and Bankruptcy Code, 2016 The NCLT, Cuttack Bench, approved the Resolution Plan of M/s Ocean Capital Market Limited (OCML) vide order dated August 29, 2025. The Resolution Plan involves complex accounting consequences under Ind AS, including: (a) extinguishment of financial liabilities of creditors (including write-back of liabilities in excess of amounts payable under the Plan) at NIL consideration; (b) cancellation of existing promoter equity at NIL value; (c) conversion of a portion of debt into equity at values specified in the Plan; (d) recognition of plan-related income/gain; and (e) disclosures regarding the effective date, identity of the SRA, and post-CIRP capital structure. Given the complexity, significant management judgement, and the quantum of amounts involved, this was a significant area of our audit focus.	Our audit procedures included: • Obtained and reviewed the NCLT order dated August 29, 2025 and the approved Resolution Plan of OCML. • Verified the accounting treatment for extinguishment of liabilities accordance to applicable accounting standards. • Assessed the appropriateness of the payment made to the financial creditors and other stakeholders as per the approved Resolution Plan. • Verified the accounting treatment for cancellation/ extinguishment of equity shares held by erstwhile promoters and issuance of new equity shares as per the terms of approved Resolution Plan. • Examined board resolutions and other documentation relating to change of management and reconstitution of the Board. • Reviewed the adequacy and completeness of disclosures made in the financial statements in relation to the Resolution Plan and its accounting impact. Based on the above procedures, we considered managements assessment to be reasonable except for the possible effects of the matter described in the Basis for Qualified Opinion & Emphasis of Opinion paragraph above.
2. Claim Receivables under Arbitration amounting to 89,730.74 Lakhs [Refer relevant note 9 Other Financial Assets to financial statements] The Company has significant claim receivables under dispute/arbitration arising out of contractual obligations on infrastructure projects. Given the CIRP process and the ongoing transition post-Resolution Plan, the status, enforceability, and recoverability of such claims are subject to significant uncertainty and management judgement. The quantum and timing of realisation represent a key area of audit focus.	Our audit procedures included: • Evaluated the reasonableness of managements assessment of recoverability of claims, having regard to the sector, post-CIRP position, and ongoing arbitration status. • Assessed individual project-wise and case-wise outstanding claim receivables. • Discussed the status of significant arbitration claims with the Companys in-house/external legal counsel and other senior management personnel. • Verified documentation available in support of claims receivable under arbitration. • Checked arithmetical accuracy of management estimates and judgements. • Reviewed the adequacy of disclosures in the financial statements. • Based on the above procedures, we considered managements assessment of recoverability to be reasonable except for the possible effects of the matter described in the Basis for Qualified Opinion & Emphasis of Opinion paragraph above.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Business Responsibility and Sustainability Report, Corporate Governance and Shareholders Information, but does not include the Standalone Financial Statements and our auditors report thereon.

Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Board of Directors for the Standalone Financial Statements

The Companys Management and Board of Directors (reconstituted pursuant to the Resolution Plan approved by the NCLT, Cuttack Bench, vide order dated August 29, 2025) are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including Ind AS specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, the Board of Directors is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

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

• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to Standalone Financial Statements in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal financial controls that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 (the "Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, based on our audit we report that:

a) We have sought and obtained, except for the matter described in the ‘Basis for Qualified Opinion paragraph above, all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except for the possible effect of the matter described in the ‘Basis for Qualified Opinion paragraph above.

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act, except for the possible effect of the matter described in the ‘Basis for Qualified Opinion paragraph above.

e) On the basis of the written representations received from the directors as on March 31,2026 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2026 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements - Refer Note 9 and Note 57 to the financial statements.

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. (a) The Management/ Board of Directors has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management/ Board of Directors has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

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

v. As per the standalone financial statements: (a) No dividend was proposed in the previous year and declared and paid by the Company during the year; (b) No interim dividend was declared and paid by the Company during the year; (c) The Board of Directors of the Company has not proposed any final dividend for the year ended March 31,2026.

vi. Based on our examination, which included test checks, the Company has used accounting software systems for maintaining its books of account for the financial year ended March 31, 2026 which have the feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software systems. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with and the audit trail has been preserved by the Company as per the statutory requirements for record retention.

With respect to the matter to be included in the Auditors Report under Section 197(16) of the Act: In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

	For A D V AND CO LLP
	Chartered Accountants
	Firm Regn. No. 003467N/N500463
	Sd/-
	CA Vipul Kumar Gupta
	Membership No. 522310
	UDIN: 26522310AKSAJK7726
Dated: May 30th, 2026
Camp: Bhubaneswar

Annexure - A

Annexure - A to the Independent Auditors Report

(Referred to in Paragraph 1 under the Heading of "Report on Other Legal and Regulatory Requirements" of our Report of even date)

To the best of our information and according to the explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, we state that:

i. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment and relevant details of right-of-use assets.

b. The Company has a program of physical verification of Property, Plant and Equipment and right-of-use assets so as to cover all the assets in a phased manner, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain Property, Plant and Equipment were due for verification during the year and were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c. Based on our examination of the property tax receipts and lease agreements for land on which buildings are constructed, registered sale deed/transfer deed/conveyance deed provided to us, we report that the title in respect of self-constructed buildings and title deeds of all other immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), disclosed in the financial statements included under Property, Plant and Equipment are held in the name of the Company as at the balance sheet date.

d. The Company has not revalued any of its Property, Plant and Equipment (including right-of-use assets) and intangible assets during the year.

e. No proceedings have been initiated during the year or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

ii. a. The inventory has been physically verified by the management during the year. In our opinion, the frequency

of such verification is reasonable and the procedures and coverage as followed by management were appropriate. No discrepancies of 10% or more in the aggregate for each class of inventory were noticed on verification between the physical stocks and the book records.

b. The Company has not availed working capital limits in excess of 5 Crore during the year in aggregate from banks or financial institutions on the basis of security of current assets. Accordingly, a monthly statement is not required to be filed. We note that in past years, the Company had availed such limits which were subsequently declared NPA and the financial creditors had moved to the NCLT; however, the CIRP stands concluded during the current year pursuant to the NCLT order dated August 29, 2025.

iii. Based on our audit procedures and as per the information and explanations given by the management, during the year the Company has not made any new investments (though it has existing investments in subsidiaries and associates from prior years), nor provided any guarantee or security, nor granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties (though it has existing advances to subsidiaries from prior years).

Since no new investments, guarantees, or loans/advances were granted during the year, reporting under clause (iii)(a), (iii)(b), (iii)(c), (iii)(d), (iii)(e) and (iii)(f) is not applicable.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits. Accordingly, paragraph 3(v) of the Order is not applicable.

vi. As informed to us, the maintenance of cost records is applicable to the Company under Section 148(1) of the Act in respect of the activities carried on by the Company. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 148(1) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

vii. a. According to information and explanation given to us and on the basis of our examination of the books of account, and records the company has been generally regular in depositing undisputed statutory dues with the appropriate authority including provident fund, Employees state insurance, income-tax, sales tax, services tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, there are no delays by the company with appropriate authorities.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of excise, duty of customs, value added tax, goods and service tax, cess and other material statutory dues were in arrears as at 31 March 2026 for a period of more than six months from the date they became payable.

c. In our opinion there is no amounts payable in respect of income tax, wealth tax, service tax, custom duty, excise duty, value added tax and cess which has not been accepted as demand in dispute. However, the disputed dues for the period prior to the effective date to the approved Resolution Plan are shown outstanding as per relevant authorities website. As per the NCLT order dated August 29, 2025 approving the Resolution Plan, all past tax and statutory liabilities relating to the period prior to the effective date of the Resolution Plan stand extinguished at NIL value as per the terms of the Plan. The Company, in consultation with its legal counsel and tax advisors, is in the process of obtaining appropriate confirmations/orders from the relevant statutory authorities to give effect of the order passed by the Honble NCLT, Cuttack Bench.

viii. There were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

ix. (a) Pursuant to the NCLT order dated August 29, 2025 approving the Resolution Plan, the financial liabilities of the Company to its financial creditors stood settled/ extinguished as per the terms of the Plan. Prior to the effective date of the Resolution Plan, the Company had been under CIRP and the loans were classified as NPA. Post-implementation of the Plan, the Company does not have any overdue outstanding loan obligations to financial institutions/banks existing as at March 31,2026.

(b) The Company has not been declared a wilful defaulter by any bank or financial institution during the year. We note that in previous years the Company had been declared a wilful defaulter by certain banks; documentation for the same was not available for audit. Post-approval of the Resolution Plan, we have noted that the new management/SRA is in the process of seeking reversal of wilful defaulter declarations as may be applicable.

(c) As informed to us, term loans were applied for the purpose for which they were obtained.

(d) The Company has not raised any short-term funds during the year.

(e) On an overall examination of the financial statements, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

(f) The Company has not raised any loans during the year by pledging securities held in subsidiaries, joint ventures or associate companies.

x. (a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year.

(b) During the year, pursuant to the implementation of the Resolution Plan approved by the Honble NCLT, Cuttack Bench, the Company has made preferential allotment of equity shares to the Successful Resolution Applicant (M/s Ocean Capital Market Limited), AIF assigned by SRA and to assenting financial creditors, as detailed in Note No. 70 to the Standalone Financial Statements. No other preferential allotment or private placement of shares or convertible debentures has been made during the year.

xi. (a) Based on our audit procedures, we have observed that the Company has recognised arbitration claims as revenue and financial assets in the financial statements without adequate certainty of realisation as required under Ind AS 115, Ind AS 109 and Ind AS 37. This has resulted in overstatement of revenue, other financial assets and net worth of the Company. We are unable to characterise this as a fraud; however the same has been reported in our main audit report by way of a qualified opinion. Other than this observation, no fraud by the Company or no material fraud on the Company by its officers or employees has been noticed or reported during the year.

(b) No report under sub-section (12) of Section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under Rule 13 of the Companies (Audit and Auditors) Rules, 2014 with the Central Government during the year and up to the date of this report.

(c) According to the information and explanations given to us by the management, no whistleblower complaints have been received by the Company.

xii. The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination the records of the company, transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 wherever applicable, and the details have been disclosed in the financial statements except the transaction with Ocean Capital Market Limited (Successful Resolution Applicant), a related party as at reporting date. The requisite prior approvals of the Audit Committee under Section 177 and Board / shareholders under Section 188 of the Companies Act, 2013 have not been demonstrated to us.

xiv. (a) In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business.

(b) We have considered the internal audit reports for the year under audit, issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with them, except to the extent, if any, arising out of the implementation of the Resolution Plan as disclosed in the relevant note to the financial statements. Accordingly, paragraph 3(xv) of the Order is not applicable for other transactions.

xvi. (a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

Hence, reporting under clause 3(xvi)(a), (b) and (c) of the Order is not applicable.

(b) There is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under clause 3(xvi)(d) of the Order is not applicable.

xvii. The Company has incurred cash losses amounting to 687.29 Lakhs during the financial year and 737.86 Lakhs in the immediately preceding financial year.

xviii. There has been a resignation of the statutory auditors during the year due to merger of erstwhile firm M A R S & Associates with A D V AND CO LLP and we have taken into consideration the issues, objections or concerns raised by the outgoing auditors.

xix. On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements, and our knowledge of the Board of Directors/Management plans and based on our examination of the evidence supporting the assumptions, and having regard to the approved Resolution Plan under IBC, nothing has come to our attention that causes us to believe that any material uncertainty exists as on the date of the audit report indicating that the Company is not capable of meeting its liabilities existing at the date of the balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xxi. The provisions of Section 135 of the Companies Act, 2013 with respect to Corporate Social Responsibility are not applicable to the Company for the year ended 31st March, 2026, since the Company did not fulfil any of the eligibility criteria specified under Section 135(1) of the Act in the immediately preceding financial year. Hence, reporting under this clause is not applicable.

xxii. The reporting under clause 3(xxi) of the Order is not applicable in respect of audit of standalone financial statements of the Company.

	For A D V AND CO LLP
	Chartered Accountants
	Firm Regn. No. 003467N/N500463
	Sd/-
	CA Vipul Kumar Gupta
	Membership No. 522310
	UDIN: 26522310AKSAJK7726
Dated: May 30th, 2026
Camp: Bhubaneswar

Annexure - B

Annexure - B to the Independent Auditors Report

(Referred to in paragraph 2(f) under ‘Report on Other Legal and Regulatory Requirements section of our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of ARSS Infrastructure Projects Limited ("the Company") as of March 31,2026 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements/ Board of Directors Responsibilities for Internal Financial Controls

The Companys Management and the Board of Directors (reconstituted pursuant to the approved Resolution Plan) are responsible for establishing and maintaining internal financial controls with reference to standalone financial statements based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the "ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the ICAI and the Standards on Auditing prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls included obtaining an understanding of such controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Meaning of Internal Financial Controls with Reference to Standalone Financial Statements

A companys internal financial control with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control with reference to standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Standalone Financial Statements

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

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system with reference to standalone financial statements and such internal financial controls were operating effectively as at March 31,2026, based on the criteria for internal financial controls established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

	For A D V AND CO LLP
	Chartered Accountants
	Firm Regn. No. 003467N/N500463
	Sd/-
	CA Vipul Kumar Gupta
	Membership No. 522310
	UDIN: 26522310AKSAJK7726
Dated: May 30th, 2026
Camp: Bhubaneswar