Jhandewalas Foods gets qualified review over unresolved items

Jhandewalas Foods Limited received a qualified limited-review conclusion for the half year ended 30 September 2026 after auditors identified unprovided interest on NPA-linked debt, Rs 5.76 crore of properties without company title deeds, Rs 5.62 lakh of untransferred CSR funds and balances that remained unverified. The financial effects of these matters were not quantified.

Why did Jhandewalas Foods receive a qualified conclusion?

Jhandewalas Foods received a qualified conclusion because Jain Chowdhary & Co. could not determine the effects of identified matters on finance cost, half-year results, liabilities, provisions and asset carrying values as at 30 September 2026. The firm issued its limited-review report on 12 November 2026 under Regulation 33 of the Securities and Exchange Board of India listing regulations.

The review firm said that, except for the effects of these matters, nothing had come to its attention suggesting that the unaudited statement failed to make required disclosures or contained a material misstatement. The engagement was conducted under Standard on Review Engagements 2410, which provides a review rather than an audit, so the auditor did not express an audit opinion.

The four main issues were the conditional waiver of NPA, or non-performing asset, debt, property title deeds not held in Jhandewalas Foods’ name, the unspent corporate social responsibility, or CSR, balance from FY 2025-26, and balance-sheet accounts awaiting confirmation and reconciliation. The Annexure also recorded limits on verification of income-tax compliance during the insolvency process.

What remains unresolved in the NPA settlement?

Jhandewalas Foods reported an overdue book balance of Rs 1.18 crore to Acme Resource Limited at 30 September 2026. That balance excluded interest, penal interest and other charges because the lender’s statement was unavailable at the reporting date, preventing independent verification of the debt and related liabilities.

The company entered settlement arrangements with financial creditors through Interim Resolution Professional, or IRP, proceedings, with two instalments due on 15 November 2026 and 15 January 2027. The waiver of residual dues, including interest and other charges, depends on timely payment of those instalments; until then, the auditors said Jhandewalas Foods remains liable for the full outstanding dues and applicable future interest.

Jhandewalas Foods had made no provision for interest, penal interest or other charges at 30 September 2026. The auditor consequently could not ascertain the financial effect of their non-recognition, including any impact on finance cost, liabilities and the reported half-year loss.

The filing also disclosed claims lodged during the Corporate Insolvency Resolution Process, or CIRP. Six creditors claimed Rs 13.15 crore in aggregate, while the IRP admitted Rs 7.47 crore, leaving a Rs 5.68 crore difference between claimed and admitted amounts.

Management represented that creditors agreed to the IRP-admitted amounts and that a director had provided an undertaking to repay them. Differences between admitted sums and book balances are to be adjusted after payments and receipt of no-objection certificates, and the auditor said its conclusion was not further modified for this CIRP claims matter.

Which Jhandewalas Foods properties lack company title deeds?

Jhandewalas Foods reported fixed assets of Rs 8.81 crore, comprising immovable assets of Rs 5.92 crore and movable assets of Rs 2.89 crore. Of the immovable assets, Rs 5.76 crore was not supported by title deeds in the company’s name, so the auditor said legal title to those properties was not vested in Jhandewalas Foods.

The three identified properties were a residential house at Kailashpuri valued at Rs 1.29 crore, land at Govindgarh valued at Rs 3.74 crore and a plot at Sindhu Nagar valued at Rs 73.36 lakh. Their combined reported value was Rs 5.76 crore, leaving only Rs 16 lakh of immovable assets with title in Jhandewalas Foods’ name.

The auditor said it could not comment on recoverability of the carrying value of the properties whose deeds were not in the company’s name. The filing asks Jhandewalas Foods to resolve the position promptly so ownership is accurately represented, but it does not disclose a timetable, transfer agreement or transaction for changing the title deeds.

What was the Jhandewalas Foods CSR compliance issue?

Jhandewalas Foods had Rs 5.62 lakh unspent from its CSR provision for the year ended 31 March 2026, according to the limited-review annexure. Its books carried a provision of Rs 7.12 lakh, of which Rs 1.50 lakh was paid to EKAL Vidyalaya Foundation of India on 17 March 2026.

For an ongoing project, the unspent amount was required to be moved to the Unspent CSR Account by 30 April 2026; for other CSR spending, it was required to be transferred to a Schedule VII fund by 30 September 2026. The auditors said they had not been given evidence of either transfer for the Rs 5.62 lakh balance as at the 12 November 2026 review date.

The auditor said Jhandewalas Foods therefore appeared to be in default under Section 135 of the Companies Act, 2013, and that the default would continue until the transfer was made. No provision had been recorded for a related penalty, and the auditor did not specify a penalty amount or quantify the possible effect on provisions and liabilities.

How did Jhandewalas Foods’ half-year results change?

Jhandewalas Foods reported revenue from operations of Rs 50.54 crore for the half year ended 30 September 2026, down from Rs 74.94 crore in the half year ended 30 September 2025. Total income declined to Rs 50.55 crore from Rs 76.42 crore across the two comparable half-year periods.

The company recorded a loss before tax of Rs 4.99 crore for the half year ended 30 September 2026, compared with profit before tax of Rs 3.25 crore a year earlier. Total expenses were Rs 55.54 crore, down from Rs 73.17 crore, but remained above the current period’s Rs 50.55 crore total income.

Finance cost was Rs 2.16 crore in the September 2026 half year, compared with Rs 32.06 lakh in the September 2025 half year. This reported comparison does not include any unprovided interest, penal interest or other charges associated with the Acme Resource Limited balance, whose impact auditors said could not be ascertained.

What other records could the auditor not verify?

Jhandewalas Foods’ income-tax portal was inaccessible to management because of restrictions arising during the IRP proceedings, according to management’s representation. The tax audit filing for the relevant financial year was also pending on the portal as at the 12 November 2026 limited-review report.

The restriction meant the auditor could not independently verify income-tax returns, statutory compliance, outstanding demands or income-tax liabilities at 30 September 2026. It therefore could not comment on the completeness and accuracy of income-tax-related statutory liabilities and compliance recorded by Jhandewalas Foods.

Separately, balances of loans, sundry debtors, loans and advances, and current liabilities remained subject to confirmation and reconciliation. This unresolved verification issue was included among the matters for which effects on the September 2026 statement, including carrying values and provisions, could not be determined.

Conclusion

Jhandewalas Foods’ qualified limited review identifies several unresolved financial-reporting matters rather than a single measured adjustment. The largest identified item is Rs 5.76 crore of immovable properties without title deeds in the company’s name, while the NPA settlement exposure includes Rs 1.18 crore overdue to Acme Resource Limited before interest, penal interest and other charges.

The next disclosed milestones are the settlement instalment dates of 15 November 2026 and 15 January 2027, because waiver of the remaining debt depends on timely payment. Investors can also watch for evidence of the Rs 5.62 lakh CSR transfer, restoration of tax-portal access, creditor reconciliations and a plan to bring property title deeds into Jhandewalas Foods’ name.