Shree Rajiv Lochan Audit Qualification Impact Statement

Board Meeting Outcomes (29/05/2026)

The Board of Directors meeting held on Friday, 29/05/2026 from 2:30 PM to 4:30 PM approved:

1. Audited financial results for quarter ended 31st March 2026, submitted under Regulation 33 of Listing Regulations

2. Appointment of Samantrai Prashant & Co., Company Secretaries, Raipur as secretarial auditor for financial year 2025-2026

3. Appointment of Goel & Goyal, Chartered Accountants, Raipur as internal auditors for financial year 2026-2027

Financial Results Summary (Standalone Audited)

(All amounts in ₹ Lakhs)

Quarterly Performance:

Q4 FY26 (31/03/2026): Total Income ₹2.62, Net Profit ₹0.61, EPS ₹0.01 (basic and diluted)
Q3 FY26 (31/12/2025): Total Income ₹7.49, Net Profit ₹1.59, EPS ₹0.04 (basic and diluted)
Q4 FY25 (31/03/2025): Total Income ₹9.25, Net Profit ₹6.84, EPS ₹0.17 (basic and diluted)

Annual Performance:

FY26 (Year ended 31/03/2026): Total Income ₹25.83, Net Profit ₹6.87, EPS ₹0.17 (basic and diluted)
FY25 (Year ended 31/03/2025): Total Income ₹35.36, Net Loss ₹12.68, EPS -₹0.30 (basic and diluted)

Revenue Breakdown:

Revenue From Operations: Zero across all periods
Other Income: Primary source of income (₹25.83 lakhs in FY26, ₹35.36 lakhs in FY25)

Expense Analysis:

Employee benefits expense: ₹5.86 lakhs (FY26) vs ₹2.78 lakhs (FY25)
Other Expenses: ₹10.79 lakhs (FY26) vs ₹45.26 lakhs (FY25)
Total Expenses: ₹16.65 lakhs (FY26) vs ₹48.04 lakhs (FY25)

Balance Sheet Position (Standalone)

(As at 31/03/2026, amounts in ₹ Lakhs)

Assets:

Non-current assets: ₹132.93 (Investments: ₹132.87, Property Plant & Equipment: ₹0.06)
Current assets: ₹402.78 (Loans: ₹184.12, Bank balances: ₹170.81, Trade receivables: ₹44.73, Cash: ₹0.03, Others: ₹3.09)
Total Assets: ₹535.71 (vs ₹546.55 previous year)

Key Changes:

Bank balances increased significantly from ₹3.13 to ₹170.81 lakhs
Loans decreased from ₹362.50 to ₹184.12 lakhs
Investments remained constant at ₹132.87 lakhs

Cash Flow Statement (FY26)

Net cash from operating activities: ₹167.54 lakhs (vs outflow of ₹72.13 lakhs in FY25)
Primary drivers: Increase in short-term provisions (₹8.93 lakhs), Decrease in short-term loans & advances (₹178.38 lakhs)
Cash & cash equivalents at end: ₹170.84 lakhs (vs ₹3.30 lakhs opening)

Auditor's Report Critical Findings

Auditor: Milind Nyati & Co. LLP, Chartered Accountants

Report Date: 29/05/2026

Disclaimer of Opinion:

Auditors issued a disclaimer of opinion due to inability to obtain sufficient appropriate audit evidence regarding management's use of going concern basis of accounting.

Basis for Disclaimer:

Company disposed of its principal manufacturing plant (primary operating asset)
No significant operating activities conducted post-disposal
Management failed to provide formal assessment of company's ability to continue as going concern
No supporting documentation provided for future business plans, projected cash flows, or relevant assumptions for 12-month period
Auditors unable to determine whether adjustments might be necessary to carrying amounts, classification of assets/liabilities, or reported income/expenses

Statement of Impact of Audit Qualifications

Management's Assessment:

Estimates immediate quantifiable financial impact of qualification as NIL
States company maintains positive net worth and sufficient financial resilience
Attributes qualification to "limitation of scope due to absence of formalized, long-term projection document"
Claims qualification relates to verificability of future plans rather than actual breakdown of asset values

Management's Reasons for Inability to Quantify Future Impact:

1. Strategic Business Transition: Legacy operations ceased to be commercially lucrative due to shifting market dynamics

2. Fluidity of Future Cash Flows: New business models and strategic pivots under evaluation and negotiation

3. Premature Documentation: Formal 12-month assessment would be speculative until commercial contracts or new business frameworks are finalized

Auditor's Response to Management:

Notes management's estimation of NIL impact but cannot verify
Reiterates inability to obtain sufficient appropriate audit evidence for going concern assessment
Unable to comment on appropriateness of management's estimation
Unable to evaluate adequacy of management's reasons or comment on possible financial impact