Madhucon Projects clarifies FY26 financial results, addresses audit qualifications

Madhucon Projects Limited has provided clarifications to the National Stock Exchange of India regarding its audited financial results for the year ended March 31, 2026. The company submitted revised standalone and consolidated financial results on July 20, 2026, after addressing deficiencies identified by the exchange. These included resubmitting the "Statement of Impact of Audit Qualifications" in the SEBI format, signed by key management personnel. The company also resubmitted its revised standalone "Audit Report" for the year ended March 31, 2026, rectifying a typographical error. Discrepancies related to "Consolidated Net cash flows from (used in) financing activities" in XBRL and PDF formats were also addressed with revised submissions on July 18 and July 20, 2026.

The original board meeting to approve the financial results was held on May 28, 2026. The independent auditor's report highlighted several qualifications, including concerns about the carrying value of investments in subsidiaries where net worth was eroded and going concern was affected. Specific write-offs were noted for investments in Madhucon Infra Limited and Madurai Tuticorin Expressways Limited. The report also pointed out a default in payment to Punjab National Bank (PNB) and non-recognition of OTS benefits due to pending NOC, and issues with revenue recognition for advances received.

Further qualifications related to the write-back of trade payables, write-off of advances to other parties, unpaid dividend transfers, reconciliation of GST returns, lack of internal audit for the period, non-production of title deeds for certain properties, managerial remuneration without lender approval, and outstanding statutory dues. The report also detailed ongoing legal proceedings involving step-down subsidiaries Ranchi Expressways Ltd (REL) and Trichy-Thanjavur Expressways Limited, including FIRs, charge sheets, provisional attachments by the Directorate of Enforcement, and Corporate Insolvency Resolution Process (CIRIP) admissions. The auditor noted that the company's current liabilities exceeded current assets, indicating a material uncertainty regarding its ability to continue as a going concern, although management believes the going concern assumption remains appropriate.