Shivom Investment & Consultancy Ltd reported a steep 95.27% drop in revenue for FY24 to ₹0.1655 crore, while its net loss narrowed to ₹0.4862 crore. The company is undergoing insolvency resolution and has surrendered its NBFC license.

Shivom Investment & Consultancy Ltd.

Shivom Investment & Consultancy Ltd's revenue from operations for the financial year 2023-24 (FY24) plummeted by 95.27% to ₹0.1655 crore (₹16.55 lakh) from ₹3.5018 crore in the previous fiscal year.

The company reported a net loss of ₹0.4862 crore (₹48.62 lakh) for FY24, a significant improvement compared to the net loss of ₹49.007 crore in FY23. The loss has narrowed substantially.

Reader Takeaway: Revenue collapse due to insolvency; loss narrowed but auditor flags major control issues.

What just happened

Shivom Investment & Consultancy Ltd has released its financial results for FY24, revealing a drastic decline in revenue. The company is currently undergoing Corporate Insolvency Resolution Process (CIRP) under the NCLT. It has also surrendered its Non-Banking Financial Company (NBFC) registration, ceasing its previous business operations.

Why this matters

The sharp revenue drop highlights the severe impact of the ongoing insolvency proceedings on the company's business activities. The surrender of the NBFC license signifies a complete shift in its operational focus. While the reduced net loss is a positive signal, significant auditor qualifications cast a shadow over the reliability of the financial statements and the company's internal controls.

The backstory

Shivom Investment & Consultancy Ltd has been facing financial difficulties, leading to the initiation of CIRP by the NCLT. The company's previous operations as an NBFC are now being dismantled as part of the resolution process.

What changes now

The company is in the implementation phase of an approved resolution plan, with new management taking charge. This transition involves surrendering its NBFC registration and potentially redefining its business model. The focus is on stabilizing operations under the new management.

Risks to watch

Auditor remarks highlight material weaknesses in internal financial controls and the current management's lack of complete access to historical accounting records. This raises concerns about the accuracy and completeness of the reported financial data. The preparation of financial statements under Accounting Standards (AS) instead of Ind AS is also noted as a departure from the prescribed framework.

Peer comparison

As Shivom Investment & Consultancy Ltd is undergoing insolvency and has ceased its NBFC operations, direct peer comparison based on current financial performance is not applicable. Its financial health is intrinsically tied to the success of its CIRP.

Context metrics (time-bound)

As of March 31, 2024:

• Long-term Borrowings: ₹30.025 crore.
• Cash & Cash Equivalents: ₹0.0013 crore (a sharp decrease from ₹5.1459 crore in the previous year).
• Share Capital: ₹69.9513 crore.

What to track next

Investors should closely monitor regulatory filings for updates on the implementation of the resolution plan, the stabilization of the company's new business model, and any progress made in addressing the auditor's concerns regarding internal controls and financial record access.