Key Financial Results (Standalone - ₹ in Lakhs)

Income Statement Highlights:

  • Total Income: ₹0.03 lakhs for FY26 (compared to ₹114 lakhs in FY25)
  • Total Expenses: ₹2,005.59 lakhs for FY26 (compared to ₹1,993.34 lakhs in FY25)
  • Net Loss before tax: ₹(2,005.57) lakhs for FY26 (compared to ₹(1,993.34) lakhs in FY25)
  • Net Loss after tax: ₹(2,005.57) lakhs for FY26 (compared to ₹(1,993.34) lakhs in FY25)
  • Earnings Per Share (Basic): ₹(1.04) for FY26 (compared to ₹(1.37) for FY25)

Balance Sheet Position (Standalone as at March 31, 2026):

  • Total Assets: ₹5,542.82 lakhs
  • Equity Share Capital: ₹3,839.14 lakhs
  • Other Equity: ₹(83,631.41) lakhs (negative reserves)
  • Total Liabilities: ₹85,335.09 lakhs
  • Net Worth: ₹(79,792.27) lakhs (negative)

Key Financial Results (Consolidated - ₹ in Lakhs)

Income Statement Highlights:

  • Total Income: ₹791.28 lakhs for FY26
  • Net Loss after tax: ₹(1,435.66) lakhs for FY26
  • Earnings Per Share (Basic): ₹(0.75) for FY26

Balance Sheet Position (Consolidated as at March 31, 2026):

  • Total Assets: ₹2,476.11 lakhs
  • Net Worth: ₹(86,015.51) lakhs (negative)

Audit Qualifications and Critical Matters

The statutory auditors, Vivekanand Chaturve & Co., issued a qualified opinion with multiple significant reservations:

Going Concern Uncertainty:

Due to negative net worth of ₹(79,792.27) lakhs (standalone) and numerous pending cases, there is significant uncertainty about the company's ability to continue as a going concern. The auditors believe the company should not prepare accounts on a going concern basis, though management remains hopeful for recovery.

Non-Provision of Interest and Liabilities:

The company has not provided interest on several major liabilities:

  • FCCB Liability: ₹29,085.00 lakhs (42 million Euros) overdue since April 2011
  • Had interest been provided: FY26 loss would be higher by ₹2,197.44 lakhs
  • Exchange fluctuation impact: ₹7,085.24 lakhs additional loss
  • UPS Capital Loan: ₹696.37 lakhs overdue since April 2014
  • Had interest been provided: FY26 loss would be higher by ₹56.89 lakhs
  • Exchange fluctuation impact: ₹256.52 lakhs additional loss
  • Bank of India Loans: ₹39,006.21 lakhs treated as NPA since 2009
  • Had interest been provided: FY26 loss would be higher by ₹5,298.68 lakhs

Expected Credit Loss Provisions:

The company has not provided expected credit loss on:

  • Receivables from US subsidiary: ₹1,399.24 lakhs
  • Investments: ₹3,215.88 lakhs
  • Loans & Advances: ₹902.16 lakhs (standalone), ₹603.92 lakhs (consolidated)

Had ECL been provided, losses would be significantly higher.

Investment Valuation Issues:

The company values investments at cost price rather than fair value as required by accounting policy, due to non-availability of current market values. The auditors cannot comment on quantum of fair value adjustments required.

Statutory Compliance Issues:

  • The company has not accounted for or paid various statutory dues (PF, ESI, Income Tax, GST, etc.)
  • Non-compliance with RBI guidelines since March 2011
  • Earnings in foreign exchange not realized within FEMA stipulated periods

Legal and Regulatory Challenges

Legal Proceedings:

  • Bank of India Cases: Multiple recovery proceedings in DRT/Courts for ₹39,006.21 lakhs
  • CBI Chargesheet: Filed in October 2023 against company and directors (CC No.26840/2023)
  • High Court of Karnataka granted interim stay on proceedings in November 2023
  • Negotiable Instruments Act: Proceedings u/s 138 initiated by Bank of India
  • Wilful Defaulter: Company and promoters declared wilful defaulters by Bank of India
  • Winding Up Petition: Filed by Bank of India before Karnataka High Court

Shareholding Pattern (as of March 31, 2026)

  • Public Shareholding: 14,49,04,525 shares (75.49%)
  • Promoter & Promoter Group: 4,70,52,700 shares (24.51%)
  • Pledged/Encumbered: 10,00,000 shares (2.13% of total capital)
  • Non-encumbered: 4,60,52,700 shares (23.99% of total capital)

Cash Flow Statements

Standalone Cash Flows (FY26):

  • Net cash from operating activities: ₹(1,147.79) lakhs
  • Net cash used in investing activities: ₹1,828.00 lakhs
  • Net cash from financing activities: ₹(685.00) lakhs
  • Net decrease in cash: ₹(4.79) lakhs

Consolidated Cash Flows (FY26):

  • Net cash from operating activities: ₹(145.06) lakhs
  • Net cash used in investing activities: ₹(168.13) lakhs
  • Net cash from financing activities: ₹172.56 lakhs
  • Net decrease in cash: ₹(22.36) lakhs

Subsidiaries Information

The consolidated results include 7 subsidiaries:

  • 5 Indian subsidiaries with total assets of ₹2,889.85 lakhs, revenue of ₹699.10 lakhs, net loss of ₹53.05 lakhs
  • 2 foreign subsidiaries with total assets of ₹907.16 lakhs, revenue of ₹55.19 lakhs, net profit of ₹1,759.26 lakhs

Related Party Transactions

Disclosed transactions with:

  • Manjunath H (CFO) - Employee remuneration
  • Apeksha Nagori (Company Secretary) - Employee remuneration

Impact of Audit Qualifications

Management provided estimated impact of audit qualifications:

  • Standalone Net Loss: Would increase from ₹(2,005.57) lakhs to ₹(22,417.31) lakhs
  • Consolidated Net Loss: Would increase from ₹(1,435.66) lakhs to ₹(15,201.90) lakhs
  • EPS: Would worsen from ₹(1.04) to ₹(11.68) (standalone) and from ₹(0.75) to ₹(7.92) (consolidated)

Management's Response

Management states they are:

  • Actively engaged in settlement negotiations with FCCB holders and lenders
  • Defending legal positions in various cases
  • Reviewing RBI compliance filings
  • Hopeful of favorable resolutions to address liabilities and ensure business continuity

Auditor's Response to Management

Auditors maintain their qualified opinion, stating that management's responses do not alter the fundamental accounting issues and uncertainties identified in their audit.