Zicom Electronic Security Systems Limited (NSE: ZICOM) reported a net loss of ₹18.92 lakh for the financial year ended March 31, 2025, marking a decline from the ₹35.38 lakh loss recorded in FY24. The company generated zero revenue from operations, continuing its operational hiatus amid ongoing Corporate Insolvency Resolution Process (CIRP) proceedings initiated in July 2022.

Total income for the year stood at ₹34.98 lakh, derived solely from other income sources, primarily rent received (₹28.25 lakh). This represents a decrease from the ₹45.51 lakh total income reported in the preceding year. Total expenses amounted to ₹53.90 lakh, driven largely by other expenses of ₹50.49 lakh, which include legal and professional fees, resolution professional fees, and housekeeping services necessary to maintain the company as a going concern during the insolvency process.

Financial Performance Overview

The reduction in net loss is primarily attributed to a significant drop in total expenses, which fell from ₹80.89 lakh in FY24 to ₹53.90 lakh in FY25. Depreciation charges remained relatively stable at ₹3.39 lakh, while finance costs were minimal at ₹0.05 lakh. The company incurred no employee benefit expenses, reflecting its status with no active employees.

What the Numbers Show

A critical divergence exists between the company's reported assets and its ability to verify them. While the balance sheet reports total assets of ₹1,741.66 lakh, including property, plant, and equipment valued at ₹1,307.65 lakh, the auditors highlighted that discrepancies noticed during physical verification by the erstwhile Resolution Professional have not been reconciled or adjusted in the books. Furthermore, the impact of asset revaluations conducted during the CIRP process remains unrecognized, leaving the carrying value of tangible assets potentially misstated.

Balance Sheet and Liquidity Signals

As of March 31, 2025, Zicom’s total liabilities stood at ₹1,741.66 lakh, matching total assets. Current borrowings dominated the liability structure at ₹1,18,246.34 lakh, comprising secured bank loans and invoked corporate guarantees. Notably, the company holds cash and cash equivalents of only ₹20.05 lakh, alongside other bank balances of ₹80.27 lakh. This liquidity position is insufficient to meet current liabilities, underscoring the material uncertainty related to the company’s going concern status.

Trade receivables stood at ₹312.31 lakh, but the auditors noted that these amounts are subject to confirmation from respective parties, with the realizable value unascertainable. No impairment allowance has been recognized for these receivables, despite assessments by registered valuers under the IBC framework.

Auditor’s Adverse Opinion

Shah & Jhalawadia, Chartered Accountants, issued an adverse opinion on the financial statements. Key factors included:

• Failure to account for discrepancies in physical verification of tangible assets and inventories.
• Non-recognition of impairment allowances for trade receivables and advances to suppliers based on valuer assessments.
• Absence of actuarial valuation for gratuity liabilities due to unavailable employee data.
• Unresolved impacts of asset revaluations conducted during the CIRP period.

The auditors emphasized that while the financial statements are prepared on a going concern basis as required by the Insolvency and Bankruptcy Code, there exists a material uncertainty regarding the company’s ability to continue as a going concern. The outcome depends entirely on the approval of a resolution plan by the Committee of Creditors and the National Company Law Tribunal.

Zicom Electronic Security Systems Limited reported a net loss of ₹2,076.00 lakh for the financial year ended March 31, 2026 (FY26), widening sharply from the ₹18.92 lakh loss recorded in FY25. The deterioration in profitability was driven entirely by non-operational factors, as the company generated zero revenue from operations during the period.

The primary driver of the loss was an exceptional item of ₹2,069.96 lakh, representing the write-off of a corporate guarantee claim. This amount relates to a claim admitted by the National Skill Development Corporation following an order from the National Company Law Tribunal (NCLT), Mumbai Bench, dated February 16, 2026. The guarantee was invoked due to the default by ASTM Skills Private Limited, which has since entered liquidation under the Insolvency and Bankruptcy Code (IBC). Consequently, the Resolution Professional (RP) determined that no recovery was possible and opted to write off the amount.

Financial Performance

The company’s total income for FY26 stood at ₹43.89 lakh, derived solely from other income sources such as rent received (₹39.88 lakh). Total expenses amounted to ₹49.93 lakh, comprising other expenses of ₹46.55 lakh, depreciation of ₹3.39 lakh, and nominal finance costs of ₹0.01 lakh. Before accounting for the exceptional write-off, the company incurred a loss of ₹6.05 lakh.

Balance Sheet and Liquidity

As of March 31, 2026, total assets declined to ₹1,706.18 lakh from ₹1,741.66 lakh in the previous year. Cash and cash equivalents increased marginally to ₹24.42 lakh from ₹20.05 lakh, while other bank balances fell significantly to ₹28.97 lakh from ₹80.27 lakh. The company’s equity stands at a negative ₹(137,068.59 lakh), reflecting accumulated losses that have fully eroded the net worth. Current borrowings rose to ₹120,320.89 lakh, primarily due to invoked corporate guarantees totaling ₹81,797.04 lakh and secured bank loans of ₹38,019.08 lakh.

Audit Opinion and Going Concern

Independent auditors Shah & Jhalawadia issued an adverse opinion on the financial statements. The basis for this opinion includes multiple material discrepancies, such as unverified tangible assets, unconfirmed trade receivables, and the failure to recognize impairment allowances on trade receivables despite assessments by registered valuers. Additionally, the auditors noted discrepancies between GST returns and book records regarding rent income.

A material uncertainty related to going concern was highlighted. The company has not carried out business operations for five years, has no employees, and possesses no existing contracts for future revenue generation. The CIRP process initiated on July 29, 2022, is nearing its maximum statutory period, with the outcome dependent on the approval of a resolution plan or potential liquidation.

What the Numbers Show

The financial results reveal a complete cessation of core business activities, with rent income constituting the entirety of the company’s revenue stream. The divergence between the modest operational loss of ₹6.05 lakh and the final net loss of ₹2,076.00 lakh underscores that the current financial deterioration is driven by historical contingent liabilities—specifically invoked corporate guarantees—rather than ongoing operational inefficiencies. The balance sheet reflects a frozen state, with assets largely unverifiable and liabilities dominated by statutory and financial creditor claims admitted during the insolvency process.