NewsEarningsRCI Industries Reports Rs 922.01 Crore Loss for FY24 Amid Ongoing Insolvency ResolutionRCI Industries Reports Rs 922.01 Crore Loss for FY24 Amid Ongoing Insolvency Resolution
RCI Industries and Technologies Limited, under Corporate Insolvency Resolution Process (CIRP), reported a net loss of Rs 922.01 crores for FY24, an improvement from Rs 1,719.34 crores loss in FY23. Revenue dropped to Rs 229.50 crores from Rs 2,301.89 crores. The company's net worth is negative Rs 14,779.55 crores. A resolution plan by JTL Industries Limited awaits NCLT approval. Auditors raised concerns over asset discrepancies and fraudulent transactions. The company faces ongoing investigations by SFIO, ED, and Income Tax Department, including allegations of fraudulent Input Tax Credit claims worth Rs 214 crores.
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RCI Industries and Technologies Limited , currently undergoing Corporate Insolvency Resolution Process (CIRP), has reported a significant net loss of Rs 922.01 crores for the financial year ended March 31, 2024. This loss, while substantial, marks an improvement from the previous year's loss of Rs 1,719.34 crores.
Financial Performance
The company's financial results, signed by Resolution Professional Brijesh Singh Bhadauriya, reveal a sharp decline in revenue from operations. For FY24, RCI Industries recorded a revenue of Rs 229.50 crores, a substantial drop from Rs 2,301.89 crores in FY23.
| Particulars | FY 2024 (Rs Crores) | FY 2023 (Rs Crores) |
|---|---|---|
| Revenue from Operations | 229.50 | 2,301.89 |
| Net Loss | 922.01 | 1,719.34 |
| Net Worth | -14,779.55 | Not Provided |
Insolvency Proceedings and Resolution Plan
RCI Industries has been under CIRP since November 2022, following an application filed by Standard Chartered Bank (Singapore) Limited. The company's net worth remains fully eroded, standing at negative Rs 14,779.55 crores.
A resolution plan submitted by JTL Industries Limited has been approved by the Committee of Creditors and is currently awaiting approval from the National Company Law Tribunal (NCLT).
Audit Concerns and Investigations
The auditors have issued a qualified opinion on the financial results, citing multiple concerns:
- Asset verification issues and discrepancies in the Fixed Asset Register.
- Forensic audit findings revealing fraudulent transactions worth Rs 369.71 crores.
- Ongoing regulatory investigations by various authorities including the Serious Fraud Investigation Office (SFIO), Enforcement Directorate (ED), and Income Tax Department.
Of particular note is an allegation of fraudulent Input Tax Credit (ITC) claims amounting to approximately Rs 214 crores, currently under investigation by the Directorate General of GST Intelligence.
Legal and Regulatory Challenges
The company faces multiple legal challenges, including:
- An FIR registered by the Economic Offence Wing, New Delhi, related to an equipment finance term loan.
- Another FIR filed in Madhya Pradesh concerning alleged misappropriation of job work material worth Rs 10.72 crores.
- Income Tax Department notices indicating substantial outstanding tax demands across several assessment years.
Outlook
Despite the significant challenges, the financial statements have been prepared on a going concern basis, considering the ongoing resolution process and the potential for revival through the CIRP. The approval of the resolution plan by NCLT remains a critical factor for the company's future.
As RCI Industries navigates through this complex insolvency process, stakeholders await the NCLT's decision on the proposed resolution plan, which could determine the company's path forward.
