Talwalkars Auditor Disclaims Q2 FY20 Financial Results

Key Quantitative Figures

Profit and Loss (Quarter ended September 30, 2020):

Revenue from Operations: ₹0.00
Other Income: ₹0.00
Total Expenses: ₹843.85 lakhs
Depreciation and Amortization Expenses: ₹843.85 lakhs
Loss before tax: (₹843.85) lakhs
Tax Expenses: ₹0.00
Net Loss for the period: (₹843.85) lakhs
Earnings per share (Basic and Diluted): (₹2.72)

Balance Sheet (as at September 30, 2020):

Total Assets: ₹44,630.34 lakhs
Non-Current Assets: ₹40,369.48 lakhs
Property, Plant and Equipment: ₹22,706.10 lakhs
Capital work-in-progress: ₹2,268.10 lakhs
Investments: ₹7,553.00 lakhs
Loans: ₹7,038.98 lakhs
Other non-current assets: ₹803.30 lakhs
Current Assets: ₹4,260.86 lakhs
Inventories: ₹27.90 lakhs
Trade receivables: ₹556.00 lakhs
Cash and cash equivalents: ₹3,041.90 lakhs
Other current assets: ₹635.06 lakhs
Total Equity and Liabilities: ₹44,630.34 lakhs
Equity: ₹16,238.74 lakhs
Equity Share capital: ₹3,100.49 lakhs (Face Value: ₹10.00)
Other Equity: ₹13,138.25 lakhs
Non-current liabilities: ₹25,254.20 lakhs
Borrowings: ₹22,028.20 lakhs
Deferred tax liabilities: ₹3,226.00 lakhs
Current liabilities: ₹3,137.40 lakhs
Trade payables (other than micro/small enterprises): ₹1,386.00 lakhs
Other current liabilities: ₹1,434.00 lakhs
Current Tax Liabilities: ₹317.40 lakhs

Dates of Action

Quarter End Date: September 30, 2020
Company acquired by Successful Bidder: November 7, 2024 (Transfer Date)
Sale Certificate issued: January 23, 2025
NCLT Relief Order: February 26, 2026
Report Date: May 30, 2026

Parties Involved

Auditor: S K Bhavsar & Co. (Firm Registration No.: 145880W)
Resolution Professional: Mr. Saurabh Kumar Tikmani
Liquidator: Mr. Gajesh Labhchand Jain
Managing Director: Arvind Pradhan Bhanushali (DIN:00134211)

Purpose and Rationale

The financial results for the historical period (including Q2 FY20) were reconstructed on a "best-effort basis" by the new management as they did not have access to the complete books of accounts, original vouchers, and underlying servers from the period when the company was under the control of the erstwhile management, Resolution Professional, and Liquidator.

Financial and Operational Impact

Auditor's Disclaimer: The auditor was unable to obtain sufficient appropriate evidence to provide a basis for a review conclusion due to pervasive scope limitations, including:

Complete non-availability of primary books of accounts, original vouchers, and underlying IT servers
Inability to conduct physical verification of fixed assets and inventories
Inability to ascertain potential impairment under Ind AS 36
Inability to verify historical balances of trade receivables, cash and bank balances, loans and advances, trade payables, borrowings, and statutory dues
Inability to evaluate the financial impact of shifting bases of accounting during CIRP and Liquidation phases
Inability to ascertain completeness of provisions for taxation (Ind AS 12), employee benefits (Ind AS 19), contingent liabilities, related party transactions, and prior-period comparatives

NCLT Order Impact: Pursuant to the Hon'ble NCLT Order dated February 26, 2026:

All pre-transfer dues and liabilities have been permanently extinguished
The existing equity share capital stands cancelled
The Company has adopted Fresh Start Accounting effective the Transfer Date of November 7, 2024

Capital Structure Impact

The equity share capital of ₹3,100.49 lakhs (as shown in the financials) has been cancelled/extinguished without any payment pursuant to the Sale Certificate dated January 23, 2025 and the NCLT Relief Order dated February 26, 2026.

Additional Context

The Company underwent Corporate Insolvency Resolution Process (CIRP) initiated on January 11, 2021
Liquidation proceedings began on April 28, 2022
The Company was sold as a going concern via e-auction on August 16, 2024
The NCLT Relief Order dated February 26, 2026 provides that the Successful Bidder shall not be held liable for statutory/regulatory non-compliances occurring prior to the Transfer Date