Vardhan Capital & Finance Limited reported a net loss of ₹3.14 lakh for the quarter ended June 30, 2026, widening from the ₹2.20 lakh loss recorded in the full year ended March 31, 2026. The Board of Directors approved the unaudited standalone financial results during a meeting held on August 11, 2026. While the company generated minimal income of ₹0.37 lakh primarily from dividends, it faced significant scrutiny from its statutory auditors regarding liquidity constraints and the recoverability of related-party loans.

The financial results were filed pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. JMT & Associates, the statutory auditors, issued a limited review report with an unmodified opinion but included a critical "Emphasis of Matter" paragraph. This section highlighted that the company has not paid statutory dues of approximately ₹2.23 crore, outstanding for periods exceeding six months across financial years 2021-22 to 2024-25. Additionally, auditors noted outstanding loans and advances of approximately ₹6.43 crore granted to related parties and others, on which interest accrual has been discontinued without any impairment or Expected Credit Loss (ECL) provision.

Financial Performance Overview

The company’s revenue stream remains negligible, with interest income dropping to zero in Q1FY26 compared to ₹4.63 lakh in the corresponding period of FY25. Total income for the quarter stood at ₹0.37 lakh, derived entirely from dividend income. Operating expenses remained low at ₹3.51 lakh, driven by other expenses, as employee benefits and finance costs were nil for the period. Consequently, the loss before tax was ₹3.14 lakh, translating to an earnings per share (EPS) of -₹0.07, down from -₹0.05 in the previous year.

Auditor Concerns and Liquidity Risks

The most material aspect of the filing is the auditor’s emphasis on ongoing liquidity issues. JMT & Associates stated that the company is facing temporary liquidity challenges, which have led to delays in paying statutory dues. Management claims these issues will be resolved soon, asserting that all loans and advances are "good and recoverable in full" and that there is no going concern issue. However, the auditors noted that the recoverability of the ₹6.43 crore in outstanding loans remains subject to uncertainty, as management has not recognized any impairment losses despite discontinuing interest accruals.

Furthermore, the company is in the process of regularizing its returns with the Reserve Bank of India (RBI) and complying with NBFC Master Directions. The auditors noted that in the absence of current status documentation, they could not quantify potential interest, penalties, or other dues dependent on final demand notices from regulatory authorities. Despite these caveats, the audit report was not modified.

What the Numbers Show

The divergence between management’s assertion of full recoverability and the auditors’ explicit warning about uncertainty highlights a significant governance risk. With total assets standing at ₹11.49 crore and borrowings at ₹1.83 crore, the company’s balance sheet appears leveraged against illiquid assets. The cessation of interest income suggests a halt in active lending operations or a freeze in portfolio performance. Investors should monitor the regularization of RBI compliance and the settlement plan for related-party loans, as these factors directly impact the validity of the current asset valuations.

Vardhan Capital & Finance reported a net loss of ₹2.20 lakh for the financial year ended March 31, 2026, narrowing from a loss of ₹11.16 lakh in the previous year. The Board of Directors approved the audited standalone financial results for the quarter and year ended March 31, 2026, at a meeting held on May 26, 2026. The statutory auditors, JMT & Associates, issued an unmodified opinion on the results but highlighted significant liquidity constraints and compliance issues.

Financial Performance

Total income for FY26 stood at ₹33.54 lakh, a decrease from ₹40.11 lakh in FY25. Total expenses reduced to ₹35.75 lakh from ₹48.82 lakh in the prior year. For the quarter ended March 31, 2026, the company reported a profit of ₹1.11 lakh compared to a loss of ₹12.90 lakh in the same period last year.

Auditor Observations

JMT & Associates drew attention to several material matters in their report. The company faces liquidity constraints resulting in non-payment of statutory dues amounting to approximately ₹2.23 crore, which remain outstanding for more than six months. Provisions towards potential non-compliance liabilities have not been accounted for due to inadequate information regarding assessed demands.

The auditors also noted that the company is in the process of regularizing its filings with the Reserve Bank of India (RBI) concerning NBFC compliances, with certain returns pending as of the signing date. Management represented that all loans and advances are considered good and fully recoverable, and that no material uncertainty exists regarding the company's ability to continue as a going concern.

Board Decisions

In addition to the financial results, the board appointed Priti J Sheth & Associates as the Secretarial Auditor for FY26. The meeting commenced at 11:00 a.m. and concluded at 5:30 p.m.