Madhucon Projects Board approves Q2 FY26 results; Independent Director resigns; Auditors issue highly qualified opinion.
Madhucon Projects' board approved Q2 FY26 results and an independent director resigned. Auditors issued a highly qualified opinion due to significant financial irregularities, non-compliance, legal issues, and ongoing insolvency proceedings for subsidiaries.
The auditor's highly qualified opinion on both standalone and consolidated financial results, coupled with multiple regulatory, legal, and insolvency issues for key subsidiaries, suggests significant financial instability and operational risks for the company, likely impacting investor confidence and future performance.
The extensive list of qualified opinions from the auditor, including concerns about investment impairment, unjustified write-offs, NPA classification, non-recognition of OTS benefits, outstanding statutory dues, and ongoing corporate insolvency proceedings against multiple subsidiaries, indicates severe financial and operational distress.
* Madhucon Projects Limited's Board of Directors met on 8 November 2025 and approved the un-audited standalone and consolidated financial results for the quarter and half year ended 30 September 2025. * Mrs. Ch. Lakshimi Kumari resigned as an Independent Director, effective 8 November 2025. * The Statutory Auditors issued a Limited Review Report with significant qualified conclusions, highlighting numerous concerns: * Inability to comment on the carrying value of equity investments of ₹53,408.43 lakhs and other investments of ₹6,426.85 lakhs in subsidiaries/other companies due to losses, eroded net worth, and lack of fair valuation for impairment. * Unjustified partial write-off of investments in Madhucon Infra Limited (₹7,637.67 lakhs for the quarter, ₹15,275.34 lakhs for the half-year) and Madurai Tuticorin Expressways Limited (₹738.01 lakhs for the quarter, ₹1,476.02 lakhs for the half-year). * Default in repayment to Punjab National Bank (PNB), classified as NPA, with interest not provided. One-Time Settlement (OTS) benefits not recognized despite full settlement due to non-receipt of No Objection Certificate (NOC). * Unjustified partial recognition of operational income (₹2,707.20 lakhs for the quarter, ₹7,105.77 lakhs for the half-year) from an advance of ₹15,252.71 lakhs from a step-down subsidiary. * Outstanding unpaid dividend of ₹4.46 lakhs for Financial Years 2009-10 to 2010-11 yet to be transferred to the Investor Education and Protection Fund (IEPF). * Unreconciled Turnover, Output GST, and Input GST credits. * Internal Audit not conducted for the period 1 April 2025 to 30 September 2025. * Non-production of title deeds for certain immovable properties. * Managerial remuneration of ₹35.76 lakhs provided without prior lender bank approval. * Outstanding undisputed statutory dues including Income Tax Act (₹139.93 lakhs for FY 2011-12 to 2016-17) and Employees Provident Funds Act (₹63.95 lakhs for FY 2013-14 to 2020-21). * Ongoing legal issues: CBI filed FIR against Ranchi Expressways Ltd (REL) in 2019, Enforcement Directorate (ED) raided in 2021, filed charge sheet in December 2023, with the next hearing scheduled for 21 November 2025. * The Directorate of Enforcement provisionally attached assets worth ₹96.21 crore and ₹80.65 crore belonging to Madhucon Group companies. * Corporate Insolvency Resolution Process (CIRP) admitted by NCLT for Ranchi Expressways Ltd (REL) on 22 December 2023, Trichy-Thanjavur Expressways Limited on 22 August 2023, and Barasat - Krishnagar Expressways Limited on 28 November 2023. NCLAT has deferred proceedings for these, with next hearings for Trichy-Thanjavur Expressways Limited on 14 November 2025 and Barasat - Krishnagar Expressways Limited on 7 November 2025. * No provision made for impairment of investments and trade receivables in REL (₹1.40 lakhs investment, ₹8,093.58 lakhs trade receivables), Trichy-Thanjavur Expressways Limited (₹10 lakhs investment, ₹42.82 lakhs advances), and Barasat - Krishnagar Expressways Limited (₹1.40 lakhs investment). * Standalone Financial Performance for the quarter ended 30 September 2025: Revenue from Operations was ₹10,765.01 lakhs, Total Income was ₹16,111.98 lakhs, and Profit for the period was ₹469.40 lakhs, with Basic and Diluted EPS at ₹0.64.
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