Capacit’e Infraprojects Limited
Report on the Audit of the Standalone Financial Statements
Qualified Opinion
We have audited the accompanying standalone financial statements of Capacit'e Infraprojects Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2026, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including 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 matters described in the ‘Basis for Qualified Opinion' section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with 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, and its profit (including other comprehensive income), its cash flows and changes in equity for the year ended on that date.
Basis for Qualified Opinion
As described in Note 53 to the standalone financial statements, trade receivables include INR 1,155.93 lakhs (Previous Periods - INR 1,155.93 lakhs) in respect of one party which was earlier considered as Bad Debts/Provided as Expected Credit Loss Allowance, the Management had recorded recovery of the said receivable by giving effect in Other Income/Expected Credit Loss Allowance during the year ended March 31, 2024, based on future recoverability projections. In the absence of sufficient appropriate evidence about the recoverability of the said receivable, we are unable to comment on the recoverability and loss allowance, if any, required on such receivable. The predecessor auditor had modified their opinion in respect of this matter for the financial year ended March 31, 2025.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the “Auditor's Responsibilities for the Audit of the Standalone 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 (“ICAI”) together with the ethical requirements that are relevant to our audit of the standalone 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 ICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the standalone financial statements.
Emphasis of Matter
We draw attention to the Note 54 to the standalone financial statements in respect of long outstanding trade receivables, contract assets and other exposures amounting to INR 5,492.76 lakhs as at March 31, 2026. The Company has taken legal action against respective parties, including enforcement of available security for recovery. Pending outcome of legal action at various forums, the management, based on the advice of external legal counsel, and as explained in the aforesaid note is confident of recoverability, accordingly, no further adjustments are considered necessary by the Management in the standalone financial statements.
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 standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone 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.
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Key Audit Matters
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How the Key Audit Matters was addressed in our audit
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Revenue recognition for long terms construction contracts (Refer Note 3(c), 26 and 46 to the standalone financial statements)
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The Company's derives its revenue from Engineering Procurement and Construction (EPC) contracts, which are complex in nature and span over a number of reporting periods, disclosed under Note 3 (c), 27 and 46 “Revenue from contracts with customers” as construction contract revenue,whicharerecognizedover a periodoftimeinaccordancewith the requirements of Ind AS 115, “Revenue from Contracts with Customers”. Due to the nature of the contracts, revenue is recognized based on percentage of completion method which is determined based on proportion of contract costs incurred to date compared to estimated total contract costs, which involves significant judgments including estimate of future costs, revision to original estimates based on new knowledge such as delay in timelines, changes in scope and consequential revised contract price and recognition of the liability for loss making contracts/ onerous obligations. Accuracy of revenues, onerous obligations and profits may deviate significantly during project execution on account of change in judgements and estimates. We identified revenue recognition from long term contracts as a key audit matter because the estimation of total revenue and total cost to complete the contract is inherently subjective, complex and require significant judgment. The same may get subsequently changed due to change in prevailing circumstances, assumptions, contract variations, etc., and could result in significant variance in the revenue and profit or loss from contract for the reporting period.
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Our audit procedures include the following:
a) Read the Company's revenue recognition accounting policies and assessed compliance of the policies with Ind AS 115.
b) Tested the design, implementation and operating effectiveness of key internal financial controls over the contract revenue, cost estimation process and review and approval thereof through the combination of procedures involving inquiry, observations, reperformance and inspection of evidence.
c) For selected sample of contracts with customers, performed the following procedures:
i) Selected a sample of contracts to test, using a risk based criteria's which included individual contracts with significant revenue recognized during the year, significant accrued value of work done balances held at the year-end, or low profit margins/no profit margins.
ii) Verified underlying documents such as original contract, and its amendments, key contract terms and milestones, etc. for verifying the estimation of contract revenue and costs and/or any change in such estimation.
iii) Tested the calculation of percentage of completion as per input method adopted by the Management including the testing of costs incurred and recorded against the contracts.
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iv)
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We assessed management's estimates by comparing estimated cost with actual costs and discussion on the project specific considerations with the relevant project managers including on our project site visits.
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v)
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We assessed that, fluctuations in commodity, delays, cost overruns related to the performance of work are appropriately taken into consideration while estimating costs to come and also assessed the accounting treatment of expected loss on projects including variable consideration which is recognized in accordance with the Company's accounting policy of revenue recognition.
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vi)
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Discussed progress to date with project teams to determine whether the remaining costs to complete appear sufficient for the residual risks identified for those projects.
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vii)
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We assessed that the disclosure of revenue in accordance with Ind AS 115 ‘Revenue from contracts with customers' are appropriately presented and disclosed in Note 3(c), 26 and 46 to the standalone financial statements.
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Key Audit Matters
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How the Key Audit Matters was addressed in our audit
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Recoverability of trade receivables and contract assets (Refer Note 3(c), 8 and 11 to the standalone financial statements)
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As at March 31, 2026, Trade receivables and contract assets (net of
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a)
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We evaluated the Management's assessment of the financial
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expected credit loss) amounting to INR 1,08,153.18 lakhs and INR
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circumstances and ability to pay of relevant entities with trade
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1,26,836.18 lakhs respectively constitutes approximately 63.02% of
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receivables and contract assets balances. These considerations include
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total assets of the Company (to the extent, related to trade receivables
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whether there are regular receipts from the customers, past collection
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and contract assets, not covered under Basis for Qualified Opinion
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history as well as an assessment of the customers' credit ability to
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and Emphasis of Matter). The Company is required to regularly
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make payments, including any project disputes which may result in
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assess the recoverability of its Trade receivables and contract assets.
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future claims against the Company.
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Recoverability of Trade receivables and contract assets was significant to our audit due to the value of amounts which also represents significant portion of the Company's working capital.
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b)
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Performed test of details and tested relevant contracts and documents with focus on measurement of work completed during the period for material unbilled revenue balances included in contract asset.
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In assessing the recoverability of the aforesaid balances and determination of allowance for expected credit loss, management's judgement involves consideration of aging status, historical payment records, evaluation of litigations, the likelihood of collection based on
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c)
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Performed additional procedures which include, on test check basis, reading the communications to / from customer, physical site visits, verification of last bills certified and subsequent client certifications.
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the terms of the contract and the credit information of its customer.
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d)
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Tes ted the ageing of trade receivables at year end.
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Company has taken legal course against certain Trade receivables and contract assets including enforcement of available security to recover those assets and secure its commercial interest. The
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e)
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W e assessed the Company's Expected Credit Loss model applied in determining the recoverable amount.
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outcome of such legal action is not ascertainable at present.
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f)
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Fo r aged contract asset balances, held discussions with management
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We considered this as key audit matter due to the materiality of the
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on timing and expectation of recoverability, historical payment records,
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amounts and significant estimates and judgements as stated above.
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status of certified dues and other relevant correspondence with
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Accordingly, the recoverability of Trade receivables and contract assets
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customers to challenge adequacy of impairment allowance considered.
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is a key audit matter in our audit of the standalone financial statements due to the materiality of the amounts and significant estimates and judgements as stated above.
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g)
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We assessed that the disclosures of trade receivables and contract assets in accordance with Ind AS 109 'Financial Instruments' are appropriately presented and disclosed in Note 3(c), 8 and 11 to the standalone financial statements.
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Information Other than the Standalone Financial Statements and Auditor's Report Thereon (‘other information')
The Company's Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board's Report including annexures to Board's Report, Business Responsibility & Sustainability Report, Corporate Governance and Shareholder's Information, but does not include the standalone financial statements and our auditor's 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 in the 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. As described in the “Basis for Qualified Opinion” section above, we were unable to obtain
sufficient appropriate audit evidence about the recoverability of the said Receivable as at March 31,2026. Accordingly, we are unable to conclude whether or not the other information is materially misstated with respect to this matter.
Responsibilities of Management and Board of Directors for the Standalone Financial Statements
The Company's Management and Board of Directors 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, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 statement 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, Management and Board of Directors of the Company are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Company's management and Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
We give in “Annexure A” a detailed description of Auditor's responsibilities for Audit of the Standalone Financial Statements.
Other Matter
The standalone financial statements of the Company for the year ended March 31, 2025, were audited by predecessor auditor whose report dated May 26, 2025 expressed a modified opinion on those standalone financial statements.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in “Annexure B” 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, we report that:
(a) We have sought and except for the matter described in the “Basis for Qualified Opinion” section above, obtained all the information and explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit of the aforesaid standalone financial statements.
(b) Except for the possible effects of the matters described in the “Basis for Qualified Opinion” section above, in our opinion, proper books of account as required by law relating to preparation of the aforesaid standalone financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the standalone financial statements.
(d) Except for the possible effects of the matters described in “Basis for Qualified Opinion” section above, in our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
(e) The matter described in “Basis of Qualified Opinion” and “Emphasis of matter” section of our report, we are unable to assess whether there could be an adverse effect on the functioning of the Company.
(f) 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 are disqualified as on March 31, 2026 from being appointed as a director in terms of Section 164 (2) of the Act.
(g) 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 C”.
(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. Except for the possible effects of the matters described in “Basis for Qualified Opinion” section above, the Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 40 to the standalone financial statements.
report, the audit trail feature at the application and database levels of the said software was enabled and operated effectively throughout the aforesaid period for all transactions. However, in the absence of a SOC 1 Type 2 report or other equivalent independent assurance covering the period from January 01, 2026 to March 31, 2026, we are unable to comment on whether the audit trail feature at the application and database level of the said software continued to be enabled and operated effectively throughout that period or whether there were any instances of audit trail feature being tampered with, as stated in Note 51 to the standalone financial statements.
3. Except for the possible effects of the matter described in “Basis for Qualified Opinion” section above, in our
i i. Except for the possible effects of the matter
described in “Basis for Qualified Opinion” section above, the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts Refer Note 21 to the standalone financial statements. Further, the company did not have any derivative contracts for which there were any material foreseeable losses;
iii. There are no amounts which are required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2026.
iv. a) The Management has represented
that, to the best of our knowledge and belief, as disclosed in the Note 55 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever 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 has represented
that, to the best of our knowledge and belief, as disclosed in the Note 55 to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company
shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) contain any material misstatement.
v. No dividend has been declared or paid during the year by the Company.
vi. Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software (refer Note 51 to the standalone financial statements). Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with. Additionally, the audit trail of relevant prior year has been preserved by the Company as per the statutory requirements for record retention, to the extent it was enabled and recorded in those respective years, as stated in Note 51 to the standalone financial statements
The accounting software used for maintenance of payroll records of the Company is operated by a third-party software service provider. We have obtained and reviewed the Independent Service Auditor's Assurance Report on the Description of Controls, their Design and Operating Effectiveness (SOC 1 Type 2 report issued in accordance with SAE 3402) for the period from the date of implementation i.e. July 01, 2025 to December 31, 2025. Based on the
opinion, according to information, explanations given to us, the remuneration paid or provided by the Company to its directors is within the limits laid prescribed under Section 197 read with Schedule V of the Act.
For M S K A & Associates LLP
(Formerly known as M S K A & Associates) Chartered Accountants ICAI Firm Registration No. 105047W/W101187
Vishit Jhaveri
Partner
Membership No.: 105562 UDIN: 26105562ASWQTO7407 Place: Mumbai Date: May 20, 2026
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