Sword-Edge Commercials Limited has filed its Statement on Impact of Audit Qualifications for the financial year ended March 31, 2025, revealing multiple concerns raised by its statutory auditor regarding various aspects of the company's financial reporting and compliance. The statement, submitted under Regulations 33 and 52 of SEBI (LODR) Regulations 2015, outlines six distinct audit qualifications that highlight significant documentation and compliance issues.

Financial Performance Overview

Despite the audit qualifications, the company's financial figures remained unchanged between the audited and adjusted amounts, indicating that the qualifications did not result in numerical adjustments to the financial statements.

Major Audit Qualifications

Documentation Issues with Financial Assets: The auditor expressed concerns over inadequate documentation for current financial assets' loans and advances worth ₹1369.81 lakhs. The qualification states there were no proper documents or supporting evidence to form an opinion on these loans and advances and their relevant impact on the profit and loss account.

Investment Documentation Concerns: A separate qualification addressed non-current financial assets' investments valued at ₹1960.26 lakhs, where the auditor noted insufficient supporting evidence to draw conclusions about these investments and their impact on financial statements.

Trade Balances Confirmation Issues: The auditor highlighted that some trade payables, trade receivables, and other financial liabilities were subject to confirmation, with their relevant impact on the profit and loss account and balance sheet being unascertainable.

Compliance and Regulatory Issues

Outstanding Statutory Dues: The company faces a material concern regarding non-payment of statutory obligations. As of March 31, 2025, Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) payments worth ₹1.02 lakhs remained outstanding, creating potential legal and financial repercussions.

Trading Suspension: The auditor drew attention to the suspension of the company's equity shares trading on BSE and NSE with effect from February 13, 2025, which continued as of the audit report date. Management attributed this suspension to non-compliance with SEBI (LODR) Regulations 2015 and non-payment of annual listing fees to BSE Limited.

Accounting Software Non-Compliance: The company was found non-compliant with Rule 3(1) of the Companies (Accounts) Rules, 2014, as it was not maintaining books of accounts in software with Edit Log feature, limiting the auditor's ability to independently verify changes to financial records.

Management Response

The company's management provided explanations for each qualification, stating that loans and advances were made under proper board authority as per Section 186 of the Companies Act, 2013. For the outstanding statutory dues, management assured imminent compliance and payment. Regarding the trading suspension, the company indicated it was in the process of addressing the compliance issues. For the accounting software matter, management stated that software development was underway to ensure future compliance.

The statement was signed by key officials including Chhayaben Parmar (Chairman and Director of Audit Committee), CA Rajendra Desai (Statutory Auditor), Karamjeet Sidhu (Managing Director), and Sakshi Jhala (CFO), and was dated August 14, 2025, from Mumbai.

Sword-Edge Commercials Limited has filed an updated standalone cash flow statement for the half year ended September 30, 2025, with BSE Limited. The submission, dated February 21, 2026, was made in response to a stock exchange communication received on February 11, 2026.

Financial Performance Overview

The company's cash flow statement reveals mixed financial performance for the reporting period. While the company reported a loss before tax, its cash generation capabilities showed marked improvement.

Operating Activities Analysis

The company demonstrated substantial improvement in cash generation from operating activities, reporting net cash inflow of ₹1,035.83 lakhs compared to ₹133.47 lakhs in the previous year. This improvement was primarily driven by favorable working capital changes.

Key working capital movements included:

• Decrease in loans and advances: ₹56.01 lakhs
• Decrease in other financial assets: ₹860.38 lakhs
• Increase in trade and other payables: ₹204.77 lakhs
• Decrease in other current liabilities: ₹23.69 lakhs

Investment and Financing Activities

The company reported no cash flows from investing activities during the current period, contrasting with ₹239.41 lakhs generated in the previous year through term loan advances and partnership firm transactions.

Financing activities showed net cash outflow of ₹576.44 lakhs, primarily due to decrease in borrowings, compared to ₹106.00 lakhs outflow in the previous year from long-term borrowing repayments.

Cash Position Strengthening

Despite operational challenges, the company's cash position improved significantly. Cash and cash equivalents increased from an opening balance of ₹0.48 lakhs to ₹459.87 lakhs at the end of the period.

The updated cash flow statement was signed by Managing Director Karamjeet Kaur Sidhu and submitted for BSE's information, record, and appropriate dissemination to market participants.