Tarmat Limited auditor cannot quantify excluded venture impact

Tarmat Limited’s auditor said unavailable financial information from Backbone Tarmat Alfaraa was excluded from the September 30, 2026 consolidation, so it could not quantify the effect on Tarmat’s reported Rs 2.81 crore quarterly profit, earnings per share, joint-venture investment or other equity.

Why did the auditor flag Backbone Tarmat Alfaraa?

The auditor flagged Backbone Tarmat Alfaraa because its financial information was unavailable and was therefore not considered in Tarmat’s consolidated statement for the quarter ended September 30, 2026. Hegde & Associates said this was non-compliance with Indian Accounting Standard, or Ind AS, 7 and the Listing Regulations in its November 14, 2026 limited-review report.

The report identifies Backbone Tarmat Alfaraa as a joint venture within the group. It also lists MSKEL Tarmat Sangli, NG Tarmat Goa, NG Tarmat Gujarat and Tarmat MSKEL Raipur as joint ventures, while Tarmat (PMB) Engineering Works Private Limited is identified as a 100% subsidiary.

The auditor did not provide Backbone Tarmat Alfaraa’s revenue, expenses, assets, liabilities or cash-flow amounts for September 30, 2026. Instead, it said it could not determine the impact of the non-compliance on quarterly profit and earnings per share, or on the investment in the joint venture and other equity at that reporting date.

Tarmat’s board approved the consolidated unaudited results on November 14, 2026, after review by the audit committee. The company operates in one segment, according to the results notes, so the filing provides no separate segment result that could isolate the possible effect of the unavailable joint-venture information.

Which reported Tarmat results could be affected?

The reported measures that could be affected are Tarmat’s Rs 2.81 crore quarterly profit and Rs 1.09 basic and diluted earnings per share for the quarter ended September 30, 2026. The auditor did not calculate an adjusted profit or earnings-per-share figure that includes Backbone Tarmat Alfaraa.

Tarmat reported revenue from operations of Rs 37.49 crore for the September 2026 quarter, compared with Rs 35.81 crore in the June 2026 quarter and Rs 22.67 crore in the September 2025 quarter. Reported profit rose from Rs 1.53 crore sequentially and Rs 1.46 crore a year earlier, but the filing does not establish how much, if any, of those changes would differ after consolidation of the unavailable joint venture.

Revenue increased by Rs 1.68 crore from the June 2026 quarter and by Rs 14.82 crore from the September 2025 quarter. Profit increased by Rs 1.28 crore sequentially and Rs 1.35 crore year on year, while basic earnings per share, or EPS, increased from Rs 0.62 and Rs 0.61 respectively; all are reported consolidated figures subject to the auditor’s stated limitation.

For the half year ended September 30, 2026, Tarmat reported revenue from operations of Rs 73.30 crore, against Rs 47.60 crore in the corresponding prior-year half year. Reported half-year profit was Rs 4.35 crore versus Rs 2.16 crore, and EPS was Rs 1.71 versus Rs 0.91, but the review report leaves the omitted venture’s effect on those reported measures unresolved.

What balance-sheet amounts are subject to uncertainty?

The balance-sheet amounts specifically subject to uncertainty are Tarmat’s investment in the joint venture and other equity at September 30, 2026. The auditor did not say that a particular asset or equity line was misstated, but said the effect of the unavailable financial information on those two measures could not be determined.

Tarmat reported consolidated other equity of Rs 165.93 crore at September 30, 2026, compared with Rs 135.70 crore at September 30, 2025. Consolidated equity was Rs 190.99 crore, including paid-up equity share capital of Rs 25.06 crore, compared with total equity of Rs 175.46 crore a year earlier.

Consolidated total assets increased by Rs 34.43 crore year on year to Rs 269.84 crore, while current liabilities rose by Rs 14.93 crore to Rs 66.81 crore. Trade payables within current liabilities were Rs 36.71 crore at September 30, 2026, versus Rs 30.63 crore a year earlier, although the filing provides no separate carrying value for Backbone Tarmat Alfaraa.

Tarmat’s consolidated cash and cash equivalents were Rs 22.40 crore at September 30, 2026, compared with Rs 21.28 crore at March 31, 2026. Its cash-flow statement records Rs 30.35 lakh of net cash from operating activities and Rs 4.07 crore of net cash used in investing activities for the period ended September 2026.

Did the auditor modify its limited-review conclusion?

The auditor said its limited-review conclusion was not modified in respect of the matter described in the report, despite the inability to quantify the effects of Backbone Tarmat Alfaraa’s exclusion. The report uses an emphasis-of-matter paragraph and states that its conclusion is subject to the possible effects of the disclosed matter.

Hegde & Associates performed the work under Standard on Review Engagement 2410, which the report describes as providing moderate assurance through inquiries and analytical procedures rather than an audit. The auditor said it did not perform an audit and therefore did not express an audit opinion on the September 2026 results.

The report also said it did not review interim financial information for four joint ventures included in the statement. Based on information furnished by management, those joint ventures recorded nil total revenue, nil net profit, nil total comprehensive income and nil net cash flows for the quarter ended September 30, 2026.

Except for the possible effects described in the emphasis-of-matter section, the auditor said nothing had come to its attention to indicate that the statement did not make disclosures required under Regulation 33 of the Securities and Exchange Board of India, or SEBI, Listing Obligations and Disclosure Requirements Regulations, 2015. That statement does not quantify the unreported Backbone Tarmat Alfaraa figures or replace them with a revised consolidated result.

Conclusion

Tarmat reported higher September 2026 quarterly revenue of Rs 37.49 crore and profit of Rs 2.81 crore than in both the June 2026 and September 2025 quarters, but the auditor could not determine the effect of excluded Backbone Tarmat Alfaraa data on profit, EPS, joint-venture investment or other equity. The reported rise in other equity to Rs 165.93 crore is therefore accompanied by an unresolved consolidation limitation.

The next disclosure to watch is whether Tarmat obtains Backbone Tarmat Alfaraa’s financial information and includes it in a subsequent consolidated filing. The November 14, 2026 review leaves the impact on the September 30, 2026 figures unmeasured, including the reported Rs 1.09 quarterly EPS and the investment in the joint venture.