Toyam Sports Ltd has filed a disclosure of the impact of audit qualifications for its standalone and consolidated financial results for the quarter and year ended March 31, 2026, pursuant to SEBI Circular No. CIR/CFD/CMD/56/2016 dated May 27, 2016, and Regulation 33/52 of the SEBI (LODR) (Amendment) Regulations, 2016. The disclosure was submitted to the Bombay Stock Exchange and The Metropolitan Stock Exchange of India Ltd on July 27, 2026, and was signed by Company Secretary Nayan Sablok.

Standalone Financial Performance

The standalone financial results for the year ended March 31, 2026, reflect a company under significant financial stress. The audit figures and adjusted figures remain identical across all parameters, indicating that no adjustments were made for the audit qualifications raised. The key standalone metrics are presented below:

Consolidated Financial Performance

The consolidated financial results for the year ended March 31, 2026, present a materially larger net loss compared to the standalone figures, primarily reflecting the performance of the company's subsidiaries. As with the standalone results, audit figures and adjusted figures are identical, with no adjustments recorded against the qualifications. The consolidated metrics are as follows:

Audit Qualifications: Key Concerns

Auditors from A S G R & Co., Chartered Accountants (ICAI Firm Reg. No. 148769W), issued a qualified opinion on both the standalone and consolidated financial results. The qualification is classified as repetitive, having been raised in prior periods as well. The specific audit concerns raised cover six areas:

• ECL Impairment (Ind AS 109): The company has not provided for impairment of financial assets using the Expected Credit Loss approach. Since financial activities account for over 50% of the company's funds, auditors stated they are unable to assess and quantify the effect on financial results.
• Impairment of Loans and Advances (Ind AS 36): No impairment analysis has been carried out on loans and advances extended to various companies, despite indications of impairment. Auditors are unable to opine on the materiality or recoverability of these amounts.
• Potential NBFC Registration Requirement: During the previous year ended March 31, 2025, and the year ended March 31, 2026, financial assets exceeded 50% of total assets and income from financial assets exceeded 50% of total revenue. Auditors noted that this may require compliance with Section 45-IA of the RBI Act, 1934, and Section 186 of the Companies Act, but relevant compliance information was not provided.
• SEBI Investigation and Share Freezing: The company received notices from SEBI during the period. The Enforcement Directorate has also frozen certain shares. The financial impact of these proceedings for the quarter and year ended March 31, 2026, is currently not ascertainable, and management has not disclosed whether other proceedings are ongoing.
• Merchandising Agreements: The company has not assessed the economic benefits realizable under its Merchandising Agreements, and auditors are unable to express an opinion on the outcome.
• Statutory Non-Compliance: The company has not complied with statutory obligations including Professional Tax and TDS payments. Auditors were not provided with relevant compliance information and are unable to comment on the financial and legal implications.

Management's Response to Qualifications

Management provided responses to the unquantified audit qualifications. On the ECL and impairment matters, management stated that it does not foresee any potential credit loss on the financial instruments, asserting that the instruments are secure and the counterparties are creditworthy. Management also noted that loans and advances previously identified as non-recoverable have already been written off. Regarding the SEBI investigation, management confirmed that the company is fully cooperating with SEBI and has responded to all notices received, adding that no other proceedings related to the share freezing are known to it. On the merchandising agreements, management noted that the counterparty has agreed to pay interest as the economic benefit from the advances. With respect to the statutory non-compliance on TDS and professional tax, management attributed the shortfall to a shortage of funds resulting from losses incurred in the LLC T20 Cricket League. Auditors offered no further comments on management's responses. The disclosure was signed on behalf of the company by Shahnawaz Sayed, Chief Financial Officer, and by Ghanshyam Sharma (Membership No. 621739), Engagement Partner of A S G R & Co.

Toyam Sports Limited reported a consolidated net loss of ₹1,866.36 lakh for the financial year ended March 31, 2026, narrowing from a loss of ₹4,795.50 lakh in the prior year. Revenue from operations for the year stood at ₹91.74 lakh, down from ₹694.37 lakh in FY25. The board approved the audited standalone and consolidated financial results for the quarter and year ended March 31, 2026, during a meeting held on July 17, 2026.

Statutory auditors ASGR & Co. issued a qualified opinion on the standalone and consolidated annual financial results. The auditors noted that the company did not provide for impairment of financial assets using the expected credit loss approach as required by Ind AS 109. Given that financing activities constitute over 50% of the company's funds, the auditors stated they could not assess the potential future impact of unrecognized impairment.

The audit report further highlighted that the company failed to carry out an impairment analysis of loans and advances to various companies, despite indications of impairment under Ind AS 36. Additionally, the management did not provide a detailed assessment regarding the applicability of Section 45-IA of the RBI Act, 1934. Consequently, auditors could not determine if the company requires registration as a non-banking financial company and the consequential impact on the financial results.

During the quarter, the company received notices from the Securities and Exchange Board of India (SEBI). The auditors noted that pending the completion of investigations, the impact on the financial results is not ascertainable. The report also mentioned that the Enforcement Directorate has frozen some shares, and management did not disclose information on other ongoing proceedings. The company also did not deliberate on the economic benefits realizable from merchandising agreements.

The company reported a standalone net loss of ₹29.78 lakh for FY26, compared to a loss of ₹4,210.58 lakh in the previous year. Total equity stood at ₹28,840.07 lakh as of March 31, 2026, while total assets were ₹29,552.19 lakh. Cash and cash equivalents decreased to ₹6.72 lakh from ₹18.30 lakh in the prior year.

Financial Performance

The board adopted the related party transaction statement as of March 31, 2026, under Regulation 23(9) of SEBI LODR Regulations. Key related party transactions included the return of advances amounting to ₹21.50 lakh to Managing Director Mohamed Ali Rajabali Budhwani.