ARSS Infrastructure Projects Limited has submitted a clarification to the National Stock Exchange of India Limited (NSE) in response to an observation that the Statement of Impact of Audit Qualifications, submitted along with its annual audited standalone financial results for the financial year ended 31 March 2026, was not in the format prescribed by SEBI.

Inadvertent Omission and Corrective Action

The company acknowledged that while submitting the outcome of the Board Meeting along with the financial results on 30 May 2026 (Exchange acknowledgement time: 19:38:07), the Statement of Impact of Audit Qualifications was inadvertently submitted without the signature of the Chairman of the Audit Committee. The company clarified that this omission was purely inadvertent and unintentional and was not deliberate in any manner.

Upon noticing the omission, the company submitted a revised disclosure containing the duly signed Statement of Impact of Audit Qualifications through the General Update filing path on the Exchange portal on the same day, i.e., 30 May 2026 (Exchange acknowledgement time: 22:02:06). The revised disclosure is available on the NSE archives portal.

Auditors' Qualified Opinion — Key Findings

The statutory auditors, ADV and Co LLP, Chartered Accountants, issued a qualified opinion on the standalone financial results for the quarter and year ended 31 March 2026. The audit report highlighted three primary bases for the qualified opinion, as summarised below:

Qualification 1: Non-Compliance with Ind AS 115

The auditors noted that in the absence of relevant contract-wise records and underlying project documentation, contract-wise surplus or deficit on construction contracts has neither been ascertained nor recognised in compliance with Ind AS 115 — Revenue from Contracts with Customers. This qualification has been raised continuously since Financial Year 2013-14. Management acknowledged that the compliance of Ind AS 115 could not be completed due to the absence of certain material information relating to contracts from the period of the erstwhile management, and that unpredictable variations in reliable estimation of revenue and cost further precluded quantification.

Qualification 2: Recognition of Arbitration Claims

The auditors flagged that the company recognised arbitration claims amounting to Rs. 70,831.96 Lakhs as income in the Statement of Profit and Loss and as Claims Receivable under Other Financial Assets in the Balance Sheet. The auditors held that such recognition was not in accordance with applicable Indian Accounting Standards, as:

• Under Ind AS 115, variable consideration subject to arbitration can be included in the transaction price only when it is highly probable that a significant reversal of cumulative revenue recognised will not occur — a threshold not met for claims with uncertain outcomes.
• Under Ind AS 109, recognition of a financial asset requires an unconditional contractual right to receive cash, which most unadjudicated arbitration claims do not satisfy.
• Under Ind AS 37, such claims constitute contingent assets, the recognition of which is expressly prohibited until the inflow of economic benefits is virtually certain.

Management, in its response, stated that the new management reviewed the company's books alongside ongoing arbitration proceedings and that the company has received favourable orders in a significant portion of these proceedings, with legal consultants providing a high probability assessment of successful collection.

Qualification 3: Loan Classification and Interest Accrual

The auditors raised concerns regarding the classification of a loan received from Ocean Capital Market Limited (Successful Resolution Applicant), a related party, as a "Secured Borrowing" in the Balance Sheet as at 31 March 2026, with interest accrued at 9% per annum. The specific concerns were:

• No security creation documents had been executed as at the balance sheet date, and no charge had been registered with the Registrar of Companies.
• The approved Resolution Plan sanctioned by the Hon'ble NCLT does not contemplate payment of interest on this loan.
• Requisite approvals for this related party transaction under Section 177 and Section 188 of the Companies Act, 2013, and Regulation 23 of SEBI (LODR) Regulations, 2015, had not been demonstrated.

These matters resulted in incorrect classification of borrowings and incorrect recognition of interest expense to the tune of Rs. 1,122.76 Lakhs. Management clarified that the charge will be filed at the earliest and that the Audit Committee and Board of Directors duly considered and approved the transaction before finalisation of the financial statements for FY 2025-26.

Key Financial Metrics — Impact of Audit Qualifications

The Statement on Impact of Audit Qualifications presents the following comparison between audited figures as reported and adjusted figures after accounting for qualifications:

Emphasis of Matter — Resolution Plan Implementation

The auditors also drew attention to several significant matters, without modifying their opinion on these points. The Resolution Plan submitted by Ocean Capital Market Limited was approved by the Hon'ble National Company Law Tribunal, Cuttack Bench, vide order dated 29 August 2025. Key outcomes of the Resolution Plan included reconstitution of the Board of Directors, extinguishment of erstwhile promoter equity, settlement and restructuring of financial and operational creditor liabilities, conversion of unsustainable debt into equity, fresh equity infusion by the Successful Resolution Applicant, and recognition of net loss as Exceptional Items of ₹3,22,971.31 Lakhs in the Statement of Profit and Loss for the year.

The auditors further noted that the financial statements for the year ended 31 March 2026 are not strictly comparable with the previous year, as the figures for the comparative period (year ended 31 March 2025) were prepared during the Corporate Insolvency Resolution Process, when the powers of the Board of Directors were vested with the Resolution Professional. Additionally, the company wrote off Rs. 91,273.71 Lakhs of arbitration claims previously stated as Claims Receivable under Other Financial Assets.

The clarification letter was signed by Gopal Krishna Dash, Managing Director (DIN: 10776309), on 17 July 2026.

ARSS Infrastructure Projects Ltd will consider raising funds through the issuance of securities during its board meeting scheduled for July 23, 2026. The board intends to evaluate a proposal to raise capital by way of a private placement of Non-Convertible, Non-Cumulative redeemable preference shares.

The meeting is being convened pursuant to Regulation 29 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has informed the exchanges that the trading window is currently closed for directors, promoters, designated persons, connected persons, and their immediate relatives.

Key Meeting Details

The intimation was submitted to the Bombay Stock Exchange and the National Stock Exchange of India Limited on July 20, 2026. Gopal Krishna Dash, Managing Director of ARSS Infrastructure Projects Limited, signed the disclosure.