Ushdev auditor disclaims opinion on FY26 liquidation accounts

Ushdev International Limited’s auditor disclaimed an opinion on its FY26 standalone financial statements because it could not obtain sufficient appropriate audit evidence for liquidation-basis asset values, liabilities and claims. At 31 March 2026, Ushdev reported Rs 219.758 crore of total assets, Rs 12,489.696 crore of current liabilities and Rs 12,269.938 crore of negative net worth.

Why did Ushdev’s auditor disclaim an FY26 opinion?

Ushdev’s auditor disclaimed an opinion because the FY26 financial statements covered accounts prepared on two different bases: a going-concern basis until 15 October 2025 and a liquidation basis from 16 October 2025. The auditor said the significance of the matters identified meant it could not obtain sufficient appropriate audit evidence to form an opinion on the standalone financial statements.

Ushdev entered liquidation on 16 October 2025 under an order of the Mumbai Bench of the National Company Law Tribunal, or NCLT. The financial statements therefore include a balance sheet at 15 October 2025, an opening Statement of Affairs at 16 October 2025, a closing Statement of Affairs at 31 March 2026, and profit-and-loss statements for the 16 October 2025 to 31 March 2026 period and the full year.

Before 16 October 2025, Ushdev remained in the Corporate Insolvency Resolution Process, or CIRP, and prepared its accounts on a going-concern basis. From the liquidation date, management restated assets and liabilities using estimated realisable values and settlement amounts, a change that made the liquidation Statements of Affairs central to the audit evidence limitation.

What could Ushdev’s auditor not verify?

Ushdev’s auditor could not independently verify the completeness and accuracy of the underlying books, records and claim data used for the Statements of Affairs at 16 October 2025 and 31 March 2026. It also lacked sufficient evidence on the competence, scope, valuation dates, methodologies, assumptions and inputs behind the asset valuation report used by management.

The auditor said it could not establish the legal ownership, encumbrances, recoverability or ultimate realisability of assets. For liabilities and claims, it could not verify completeness, validity, security, priority or eventual settlement. Management based the estimated settlement amounts, classification and presentation of claims on the Stakeholders Consulting Committee List dated 9 June 2026 and related records provided by the liquidator.

The auditor said its use of the valuation report and claim list was limited to identifying the basis adopted by management. It did not represent an independent validation of the values, claims or assumptions. As a result, the auditor could not determine whether adjustments were needed to the opening and closing Statements of Affairs, the liquidation restatement, the reported deficit or related disclosures.

How did Ushdev’s reported position change in liquidation?

Ushdev reported a net loss of Rs 15.7331 crore for the period up to 15 October 2025, alongside negative net worth of Rs 3,223.3314 crore and net current liabilities of Rs 3,281.3334 crore. These figures were prepared immediately before liquidation under the going-concern basis, rather than the liquidation basis used from 16 October 2025.

The reported negative-net-worth figure was Rs 9,046.6066 crore higher at 31 March 2026 than at 15 October 2025, but the amounts are not directly comparable without qualification because the accounting basis changed on 16 October 2025. The closing Statement of Affairs also reflected subsequent realisations, recoveries, claim admissions or revisions, accruals, payments and settlements.

The auditor warned that the amounts ultimately realised from assets and ultimately admitted, settled or discharged for liabilities could differ materially from those shown at 16 October 2025 and 31 March 2026. It was unable to quantify the potential effect of those differences, including on the Rs 12,269.938 crore reported negative net worth at 31 March 2026.

What led Ushdev into liquidation?

Ushdev was admitted to CIRP under an NCLT order dated 14 May 2018. The Committee of Creditors voted for a resolution plan on 24 June 2021; the NCLT approved it on 3 February 2022, and the National Company Law Appellate Tribunal approved it on 11 March 2022. The plan remained subject to conditions precedent and regulatory approvals.

The NCLT granted additional time for implementation on 8 December 2023, but successful resolution applicant Taguda Pte. Ltd. did not implement the plan. Secured financial creditors then invoked bid bond and performance security of Rs 18.1346 crore, including interest of Rs 1.6074 crore, after which the NCLT ordered liquidation effective 16 October 2025.

During the liquidation period from 16 October 2025 to 31 March 2026, Ushdev continued to record income from asset operation, preservation, management and realisation, receivable recoveries and incidental sources. It also incurred operating, administrative and liquidation-related expenses for asset preservation, statutory compliance and the liquidation process.

Which other matters did Ushdev’s auditor report?

Ushdev’s auditor said independent confirmations, reconciliations, supporting documents and alternative evidence were inadequate for balances including trade receivables, trade payables, micro, small and medium enterprise dues, borrowings, loans and advances, customer advances, other deposits, taxes recoverable and claims in the insolvency and liquidation proceedings. It could not comment on the existence, completeness, accuracy, classification, recoverability or settlement of those balances.

An emphasis-of-matter paragraph also referred to searches at Ushdev’s corporate office by the Central Bureau of Investigation on 7 July 2022 and the Enforcement Directorate on 2 February 2023. The searches concerned transactions by former promoters before CIRP, and the Central Bureau of Investigation seized a server containing the accounting system through FY18. The auditor said the matter was not concluded and did not modify its disclaimer in respect of that matter.

Ushdev was required to transfer Rs 9.78 lakh to the Investor Education and Protection Fund, and the amount remained outstanding at 31 March 2026. The auditor also reported that erstwhile directors were disqualified from appointment as directors under Section 164(2) of the Companies Act, 2013, while the company had disclosed the impact of pending litigation in its financial statements.

Conclusion

Ushdev’s FY26 accounts set out a liquidation-era financial position, but the auditor could not give an opinion on them. The Rs 219.758 crore of assets, Rs 12,489.696 crore of current liabilities and Rs 12,269.938 crore of negative net worth reported at 31 March 2026 rely on valuation reports and claim records that could not be independently substantiated to the required audit standard.

The liquidation process will determine subsequent asset realisations, receivable recoveries, claim admissions or revisions, payments and settlements, all of which may change the Statements of Affairs after 31 March 2026. The source also leaves unresolved the auditor’s evidence limitations, the Rs 9.78 lakh transfer to the Investor Education and Protection Fund and the matters arising from the 2022 and 2023 searches.