RSC International auditor flags Rs 47.61 lakh negative net worth

RSC International Limited received a qualified review conclusion for the half year ended September 30, 2026, after its auditor cited Rs 47.61 lakh negative net worth, continuous cash losses and a Rs 34.34 lakh net loss. The auditor said the financial results did not adequately disclose the resulting material uncertainty over RSC International's ability to continue as a going concern.

Why did RSC International receive a qualified review conclusion?

RSC International received a qualified conclusion because Kanu Doshi Associates LLP identified significant erosion of net worth, continuous cash losses over several years and inadequate disclosure of the related going-concern uncertainty. In its report dated November 5, 2026, the auditor said these events and conditions may cast significant doubt on RSC International's ability to continue as a going concern.

The auditor did not state that RSC International's September 2026 financial results were wholly misstated. It said that, for certain matters, it could not obtain sufficient appropriate evidence to determine the possible effect on the results, and that the possible effects were material but not pervasive. The firm therefore issued a qualified conclusion following its review under Standard on Review Engagement 2410, rather than an audit opinion.

RSC International prepared its unaudited standalone results for the quarter and half year ended September 30, 2026 on a going-concern basis. The auditor's stated objection was that the accompanying results did not adequately disclose the material uncertainty related to this basis, as required by Indian Accounting Standard 1, Presentation of Financial Statements, or Ind AS 1.

How large were RSC International's losses and net-worth deficit?

RSC International reported a Rs 23.15 lakh net loss for the quarter ended September 30, 2026 and a Rs 34.34 lakh net loss for the half year ended on that date. The auditor reported negative net worth of Rs 47.61 lakh at September 30, 2026, which it described as significant erosion in the company's net worth.

The half-year loss comprised the Rs 23.15 lakh September-quarter loss and a Rs 11.19 lakh loss in the quarter ended June 30, 2026. The September-quarter loss was therefore more than double the preceding quarter's loss. RSC International's results show total income of Rs 0 for both the September 2026 quarter and the half year ended September 30, 2026.

RSC International reported paid-up equity share capital of Rs 5.75 crore, with a face value of Rs 10 per share, in its September 2026 results. The auditor separately identified the Rs 47.61 lakh negative net worth and the company's continuing cash losses as conditions underpinning its qualified conclusion.

What does RSC International's cash-flow statement show?

RSC International recorded Rs 10 lakh of borrowings during the half year ended September 30, 2026, while cash and cash equivalents increased by Rs 6.84 lakh to Rs 6.89 lakh at the end of the period. The cash-flow statement also records an investing outflow of Rs 26,870 during the six months.

Net cash used in operating activities was Rs 2.89 lakh for the half year ended September 30, 2026, under the indirect method prescribed by Indian Accounting Standard 7 on cash-flow statements. The company reported a Rs 34.34 lakh loss before tax in that period, while movements in trade payables, other liabilities, trade receivables and other current assets affected operating cash flow.

For the comparable half year ended September 30, 2025, RSC International reported a Rs 26,710 decrease in cash and cash equivalents. The Rs 6.84 lakh increase in the latest half year therefore marks a change from the prior-period cash decline, with the Rs 10 lakh financing inflow from borrowings disclosed in the latest period.

What funding action has RSC International disclosed?

RSC International disclosed that it applied for in-principle approval to issue and allot 80,70,008 equity shares and 1 crore convertible warrants on a preferential basis. The financial-results notes refer to Regulation 28(1) of the Securities and Exchange Board of India, or SEBI, Listing Obligations and Disclosure Requirements Regulations, 2015 in connection with the application.

The November 5, 2026 filing does not disclose an issue price, proposed allottees, expected proceeds, timing of allotment or whether the in-principle approval had been received. The disclosure therefore identifies a proposed route for issuing securities but does not quantify the capital that RSC International could raise through the proposed shares and warrants.

RSC International also stated that it operates in one business and therefore did not provide segment information under Ind AS 108, Operating Segments. Its board approved the unaudited standalone results at a meeting held on November 5, 2026, which commenced at 4:30 p.m. and concluded at 5:00 p.m.

Conclusion

RSC International's September 2026 filing links a Rs 34.34 lakh half-year loss, Rs 47.61 lakh negative net worth and a qualified auditor's conclusion over inadequate going-concern disclosure. The auditor said continuous cash losses and erosion of net worth created a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern.

The next disclosed matter to watch is RSC International's application for in-principle approval to issue 80,70,008 equity shares and 1 crore convertible warrants on a preferential basis. Future financial results will also show whether RSC International adds the Ind AS 1 disclosure that the auditor found inadequate for the period ended September 30, 2026, and whether it reports progress on the proposed securities issue.