TCI Finance Limited
Quaified Opinion
1. We have audited the accompanying statement of Audited financial results of TCI Finance Limited ("the Company") for the Quarter and year ended 31st March, 2025 ("the statement") attached herewith, being submitted by the company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("the Listing Regulations").
2. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects in the respect of the matters described in paragraph 3 under basis for qualified opinion below, the Statement:
i) is presented in accordance with the requirements of Regulation 33 of the Listing Regulations in this regard; and
ii) give a true and fair view in conformity with the recognition and measurement principles laid down in the Indian Accounting Standards("IND-AS") and other accounting principles generally accepted in India, of the net loss and other comprehensive loss and other financial information of the company for the Quarter and year ended March 31, 2025.
Basis for Qualified Opinion:
3. We draw attention to following notes to financial results:
a. Note no 3 regarding claims on the Company by the lenders ofAmrit Jal Ventures Private Limited and Gati Infrastructure Bhasmey Power Private Limited aggregating to Rs. 25,619.80 Lakhs due to the invocation of corporate guarantee given by the Company. Against the said liability, the company during the year 2019-20, considering the disputed nature of the claim and unlawful invocation of the corporate guarantee made a provision of Rs. 7,798.91 Lakhs. As at March 31,2025 The Company has disclosed the balance amount of liability Rs.17,820.89 Lakhs as contingent liability in its financial statements. In the absence of adequate basis for recognition of partial liability, in our opinion the Company ought to have recognized the liability in its books. Had the liability been recognized, the loss for the year and accordingly the other equity (negative balance) will be higher by Rs.17,820.89 Lakhs.
b. Note no 4 (a) regarding the invocation of Company's investment in equity shares of Gati Limited pledged as security for the credit facilities availed by Godavari Commercial Services Private Limited (Godavari), one of the lenders to the Company. However, the Company continued to present the said equity shares as investment at fair value till March 31,2024 despite invocation for the reasons stated in the said note. Further in view of the uncertainty relating to recoverability of the said investment, During the Current year i.e. March 2025 the company has decided to write off the investments due to prolonged legal proceedings. Hence an amount of Rs 930.25 Lakhs has been debited to Profit and Loss account as investment written off.
c. Note no 4 (b) regarding the investments in equity shares of the Company held in Gati Limited pledged for the facilities availed by Amrit Jal Ventures Private Limited (AJVPL). The lenders of AJVPL invoked the pledge and realized their dues. However, the Company continued to treat the said equity shares as investment at fair value till March 31,2024 despite invocation for the reasons stated in the said note. Considering that investments have been sold, further in view of the uncertainty relating to recoverability of the said investment During the Current year i.e. March 2025 the company has decided to write off the investments due to prolonged legal proceedings. Hence an amount of Rs 774.41 Lakhs has been debited to Profit and Loss account as investment written off.
d. Note no 6 regarding preparation of the financial statements by the management on a going concern basis for the reasons stated therein. In the absence of sufficient and appropriate evidence and the liabilities devolved on the
Company upon invocation of guarantees by the lenders of other entities, in our opinion, preparation of financial statements on a going concern is not appropriate. Hence, we are unable to comment on the effect on carrying value of assets and liabilities had the financial statements been prepared not as a going concern.
In view of the matters reported at para (a) to (d) above and considering cumulative effect of these matters on the carrying values of assets and liabilities as at end of the year, we are unable to comment on the effect on the loss for the year ended and the retained earnings, had these matters been given effect in the financial results and financial information for the current year.
Qualified Conclusion:
Based on our audit conducted and procedures performed, except for the matter, mentioned in the Basis for Qualified Conclusion section of this report, nothing has come to our attention that causes us to believe that the accompanying statement of audited financial results prepared by the management of the Company, in accordance with the applicable accounting standards and other recognized accounting practices and policies has not disclosed the information required to be disclosed in terms of Regulation 33 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 including the manner in which it is to be disclosed, or that it contains any material misstatement.
4. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013 (the Act). Our responsibilities under those Standards are further described in the "Auditor's Responsibilities for the Audit of the Financial Results" 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 together with the ethical requirements that are relevant to our audit of the financial results for the quarter ended and year ended March31,2025 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 Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Emphasis of Matter:
5. We draw attention to following notes to the financial results:
a. Note no 7 regarding the receipt of communication from Reserve Bank of India regarding the non-compliance with the maintenance of minimum Net Owned Funds as required under RBI Act 1934 advising the Company for surrender of Certificate of Registration.
b. Note no 8 regarding non-recognition of interest expense of Rs.83.25 Lakhs for the year ended March 31,2025 for the reasons stated in the said note. The interest expense not recognised, upto March 31,2025 aggregates to Rs.419.12 Lakhs. Consequently, loss for the year is lower by Rs.83.25 Lakhs and Other Equity (negative balance) and borrowings are lower by Rs.419.12 Lakhs.
c. Our opinion is not modified in respect of matters at para 5 above.
Management's Responsibilities for the annual Financial Results
6. The statements which includes the financial results is the responsibility of the Company's Board of Directors, and has been approved for the issuance. The Company's Board of Directors are responsible for the preparation and presentation of these annual financial results that give a true and fair view of the net loss and other comprehensive loss of the Company and other financial information in accordance with the applicable Accounting Standards prescribed under Section 133 of the Act read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with the Listing Regulations. 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 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 annual financial results that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the annual financial results, the Board of Directors 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 intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the annual Financial Results
7. Our objectives are to obtain reasonable assurance about whether the annual financial results 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 annual financial results.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
♦ Identify and assess the risks of material misstatement of the annual financial results, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
♦ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion through a separate report on the complete set of financial statements in place and the operating effectiveness of such controls.
♦ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.
♦ Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the annual financial results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
♦ Evaluate the overall presentation, structure and content of the annual financial results, including the disclosures, and whether the annual financial results represent the underlying transactions and events in a manner that achieves fair presentation.
♦ Obtain sufficient appropriate audit evidence regarding the financial results of the company to express as opinion on the financial results.
Materiality is the magnitude of misstatement in the Financial results that, individually or in the aggregate, makes it
probable that the economic decisions of a reasonably knowledgeable user of the Financial results may be influenced.
We consider quantitative materiality and qualitative factors in
(i) Planning the scope of our audit work and in evaluating the results of our work and
(ii) to evaluate the effect of any identified misstatements in the Financial results.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Other Matters
The annual financial results include the results for the quarter ended March 31,2025 and March 31,2024 being the balancing figures between the audited figures in respect of the financial year ended March 31,2025 and March 31,2024 and the published unaudited year-to-date figures up to December 31,2024 and December 31,2023, which were subjected to a limited review by us, as required under the Listing Regulation.
for G D Upadhyay & Co.,
C h a rte red Acco u nta nts Firm Registration No. 005834S
Inderjeet Upadhyay
Partner
Membership No. 220791 UDIN: 25220791BMMBPS2439
Place: Hyderabad Date: May 14, 2025
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