Khyati Multimedia auditors flag Rs 2.09 crore land advance

Khyati Multimedia Entertainment Limited’s limited review for the quarter ended 30 September 2026 flagged a Rs 2.09 crore unsecured advance against land without registered agreements or party confirmations. The review also raised unresolved evidence issues over Polo Championship revenue in financial years 2024-25 and 2025-26, and Rs 10 lakh that remained deemed deposits.

What did the auditors flag about Khyati Multimedia’s land advance?

The auditors flagged Rs 2.09 crore paid over several years as advances against land because registration had not been completed and they had not received registered agreements or confirmations from the parties. Khyati Multimedia classified the unsecured advance as considered good in its accounts.

The Rs 2.09 crore balance was included in other non-current assets of Rs 2.09 crore at 30 September 2026, unchanged from 31 March 2026. Total assets rose to Rs 3.56 crore from Rs 3.49 crore over that period, but the filing does not disclose the land’s location, the dates of individual advances or a timetable for registration.

Management said the qualification had no impact on reported profit or loss because it considered the advances recoverable and the counterparties available and approachable. It said it was pursuing recovery and sending reminders, but also stated that a failure to recover the amount would make the advance doubtful and require a write-off or adjustment, increasing the loss by the amount written off.

Why is Polo Championship revenue under qualification?

The auditors said they could not ascertain whether Khyati Multimedia recognised Polo Championship revenue accurately or in the correct reporting periods for financial years 2024-25 and 2025-26. They said they had not received sufficient appropriate audit evidence, including contracts or agreements with sponsors, franchisees, broadcasters and other stakeholders.

The review cited Indian Accounting Standard 115, or Ind AS 115, which governs revenue from contracts with customers. The auditors said the recorded revenue did not demonstrate alignment with the standard’s requirements on enforceable rights and obligations, performance-obligation timing and allocation of transaction prices; related event expenses incurred in the current period were recorded as prepaid expenses.

The auditors also said Khyati Multimedia’s memorandum of association, or MoA, primarily covered advertising and had not been amended specifically to include event-management or sports-related activity. They therefore said they could not comment on whether the Polo Championship activity complied with the company’s stated objects.

Management disputed that MoA interpretation, saying sports entertainment fell within clauses 1 and 4 of its MoA and that a franchisee model was a mode of conducting sports-entertainment business. It nevertheless acknowledged that no written franchisee agreement existed for the first such event, and said revenue was recognised on cash receipts and expenses because parties’ rights, obligations and final terms had not been reduced to writing.

What remains unresolved in the deemed-deposit matter?

Rs 10 lakh remained outstanding at the end of the 30 September 2026 quarter and continued to be deemed deposits under the auditors’ interpretation. The auditors said the customer advances had been outstanding for more than 365 days without adjustment against supplies or refund within the period specified under the Companies (Acceptance of Deposits) Rules, 2014.

The issue had originally covered Rs 51 lakh reported in the audit of the year ended 31 March 2026. During the current quarter, management supplied explanations and documents supporting the reclassification of Rs 41 lakh as inter-corporate deposits; the auditors said their conclusion was not modified in respect of that reclassification.

The auditors said Khyati Multimedia had not complied with provisions governing acceptance of deposits, including associated compliance and reporting requirements. They said management had not determined the effect on the unaudited results, including possible interest, penalties or other consequences.

Management said the Rs 51 lakh had initially been received as advances for advertising, media coverage and Polo event-management services in financial years 2024-25 and 2025-26. It said invoices could not be raised because the customers did not accept available service options, and it planned to refund the remaining Rs 10 lakh as soon as funds permitted or adjust it when possible.

How do the qualifications relate to the September 2026 results?

Khyati Multimedia reported no revenue from operations and a net loss of Rs 10.52 lakh for the six months ended 30 September 2026. Its current liabilities exceeded current assets by Rs 18.91 lakh, although management said the Managing Director had confirmed continuing financial support and the results were prepared on a going-concern basis.

The quarter impact statement showed total income of Rs 0.96 lakh, total expenditure of Rs 9.32 lakh and a loss of Rs 6.30 lakh, with the same figures before and after adjustment for the qualifications. It did not quantify a financial adjustment for the land advance, the Polo revenue-recognition matter or the deemed-deposit issue.

Non-current borrowings increased to Rs 1.51 crore at 30 September 2026 from Rs 1.32 crore at 31 March 2026. Cash and cash equivalents fell to Rs 41,000 from Rs 45,000, while the cash-flow statement reported a Rs 29.22 lakh operating cash outflow for the six months, compared with a Rs 10.84 lakh inflow in the six months ended 30 September 2025.

Financing activities generated Rs 19.18 lakh during the six months ended 30 September 2026, described as unsecured loans taken, compared with a Rs 12 lakh outflow in the comparable prior-year period. The board approved the results on 5 November 2026, the same date shown on the limited review report.

Conclusion

The 30 September 2026 limited review identifies three continuing reporting matters: Rs 2.09 crore of land advances without registration documents or confirmations, Polo-event revenue in financial years 2024-25 and 2025-26 lacking written stakeholder evidence, and Rs 10 lakh still deemed deposits. These matters were not quantified as adjustments in the quarter impact statement, which retained a Rs 6.30 lakh quarterly loss.

The next disclosed matters to watch are whether Khyati Multimedia obtains documentation or recovers the Rs 2.09 crore land advance, formalises terms supporting Polo-event revenue recognition, and refunds or adjusts the Rs 10 lakh balance subject to available funds. Management has stated that repayment of the customer advance depends on the company’s financial capacity, while the auditors said possible interest, penalties and other effects remain undetermined.