Dividend proposal could consume 93 pc of FY19 profit
MUMBAI: The auditors have qualified the 2018-19 accounts of IL&FS Investment Managers Ltd, in view of the on-going investigation against its holding company, IL&FS and its subsidiaries.
Auditors expressing a ‘qualified opinion’ about a company’s account is viewed seriously and this is necessitated either when the information provided by the company is limited in scope and/or the company being audited has not maintained the accounting principles properly.
However, the company board has recommended giving out 93 per cent of the profit earned during the year as dividend to shareholders. The 15 per cent divided proposed on the company’s paid-up capital of Rs62.81 crore works out Rs9.42 crore as against the net profit of Rs10.17 crore the company earned for the year.
IL&FS Investment Managers has reported net profit of Rs1.10 crore for the fourth quarter ending March 31, 2019 compared with a loss of Rs7.26 crore for the same period last year.
For the full year under review, the IL&FS subsidiary has posted Rs10.17 crore net profit against Rs5.31 crore the company turned in for the previous year.
While the revenue for the full year was to the tune of Rs49.03 crore, that recorded for the previous was Rs55.36 crore.
Explaining the basis for the ‘qualified opinion’, the auditors of IL&FS Investment Managers, BSR & Associates, cited the notes to the company’s financials that acknowledged the on-going investigation against IL&FS, the holding company and its subsidiaries, including IL&FS Investment Managers, carried out by Serious Fraud Investigation Office (SFIO) of Ministry of Company Affairs.
The National Company Law Tribunal (NCLT) has ordered re-opening of books of accounts of IL&FS and its two subsidiaries (other than this company) for the past financial years, according to the notes to the financials. “However, the Supreme Court has stayed NCLT order to reopen past books of IL&FS and its two subsidiaries,” the note has explained.
The auditors said in view of the said on-going investigations of the entire IL&FS Group and re-opening of books of accounts of the Holding Company and its two subsidiaries mentioned earlier by the NCLT, they are unable to comment on the consequential impact thereof on the standalone annual financials of IL&FS Investment Managers.
The company in its notes has also explained that it has not been able to determine the accurate and complete list of related parties for the period from April 1 2017 to March 31, 2019, as defined under Ind AS 24, Related Party Disclosures.
The IL&FS subsidiary has also warned of a significant reduction in its future fee revenue and company’s ability to even meet its obligations out of its earnings and liquid assets over the next 12 months.