Myra Developers Ltd. ('MDL') is a prominent, publicly listed conglomerate primarily engaged in the development of "Smart City" infrastructure and…

Myra Developers Ltd. ('MDL') is a prominent, publicly listed conglomerate primarily engaged in the development of "Smart City" infrastructure and large-scale urban transit systems. The Company currently manages several high-value projects under the Service Concession Arrangement (SCA) model. Effective Financial Year 2025-26, M/s. MS & Associates, Chartered Accountants were re-appointed as the statutory auditors, for a period of five years, with CA Raja as the Engagement Partner. To comply with the firm's quality control policies for high-risk listed clients, CA Puja was designated as the Engagement Quality Control Reviewer (EQCR). The audit environment became increasingly complex during the final quarter of the year. A primary area of concern involved the valuation of Service Concession Assets, which are valued based on discounted future cash flows from projected toll collections and government subsidies. Due to the high degree of estimation uncertainty and specialized mathematical models involved, CA Raja determined this to be a "significant risk" area. To address this, the firm engaged a third-party valuation specialist. CA Raja verified the expert's professional membership and checked two previous project reports the expert had completed for other firms. However, he chose not to delve into the specific discount rates or growth assumptions used in the current model, citing that his decade-long experience in construction auditing provided him with enough "intuitive comfort" to accept the expert's final figures without further technical challenge. As the audit progressed into April 2026, the engagement team flagged a transaction involving an unsecured, interest-free loan of 15 crores extended to Emerald Ventures Private Ltd. Investigation revealed that the spouse of MDL's Managing Director holds a 30% equity stake in Emerald Ventures. The Board was just informed about this transaction without any specific details and the board approvals were entirely bypassed. When confronted, the CFO argued that the loan was a 'temporary bridge' for a sub-contractor and that the amount was negligible, representing less than 1% of MDL's total asset base and thus did not warrant any disclosure. Concurrent with the financial review, the team evaluated MDL's compliance with broader regulatory frameworks. It was discovered that the Environmental Management Authority had issued a 'Show Cause Notice' to MDL for failing to renew the mandatory operating licenses for three major project sites. These licenses are fundamental to the Company's legal right to operate, while these projects continued to generate revenue and no financial penalties had been crystallized by the balance sheet date. CA Raja noted the non-compliance in the working papers but concluded that since it had no 'direct effect' on the calculation of the current year's depreciation or revenue, it did not require specific procedures beyond a standard management representation letter. The audit report was formally signed dated May 15, 2026. However, a week later, on May 22, 2026, before the Company had printed and dispatched the annual reports to the shareholders, a catastrophic fire occurred at the Company's central logistics hub. The fire decimated specialized equipment and inventory worth 40 crores. Since the insurance policy for that specific hub had lapsed two months prior, the loss was total. When CA Raja requested management to adjust the financial statements or at least include a detailed note for the subsequent event, the Board refused, claiming that auditor's responsibility for FY 2025-26 accounts ended the moment the audit report was signed off. Based on the above facts, answer the following Q. Nos. 1 to 5 by choosing the most appropriate option: