Total income (standalone) of the company also fell to Rs 277 crore in the April-June period of 2020-21 from Rs 363 crore in same period of 2019-20, Reliance Capital (RCap) said in a regulatory filing.
Interest income remained nearly stable at Rs 268 crore from Rs 270 crore a year ago. Expenses rose by 39 per cent from a year ago to Rs 665 crore in Q1 FY21.
The company, which is engaged in finance and investment activities, did not provide the consolidated results.
RCap said it has defaulted in repayment of obligation of lenders and debenture holders and has incurred losses during the period, which indicate that material uncertainty exists that may cast a significant doubt on the company's ability to continue as a going concern.
"The company is in the process of meeting its obligations by way of time bound monetisation of its assets in cognisance with debenture trustee and debenture holders and accordingly the financial results of the company has been prepared on going concern basis," it added.
The company's chartered accountants Pathak HD & Associates LLP, in its review of results to the board of directors, said, "Our conclusion on the statement (on default in repayment obligations) is not modified in respect of this matter."
Further, the company said it has exposure by way of loans, investments and guarantees in Reliance Commercial Finance and Reliance Home Finance aggregating to Rs 4,954 crore outstanding as on June 30, 2020.
"The lenders of these companies have entered into Inter-Creditor Agreement (ICA) for the resolution of their exposure...on Prudential Framework for Resolution of Stressed Assets. Both the entities are progressing on implementing their resolution plans under ICA, which is valid till September 30, 2020," it said.
Pending finalisation of the resolution plans, the company has made an adequate impairment provision of Rs 745 crore against these exposures in the books of account, it said.
Besides, the company said it had pledged its entire equity holding in Reliance General Insurance Co Ltd (RGIC) in favour of IDBI Trusteeship Services Ltd (trustee) against dues guaranteed by the company.
"The trustee, on November 19, 2019 invoked the pledge and presently holds the shares of RGIC in their custody. Vide orders dated December 4, 2019 and December 27, 2019, Insurance Regulatory and Development Authority of India, has informed the company that the shares are being held by the trustee in the capacity as trustee and the shares have not been transferred," it said.
RCap said it had challenged the order in the Securities Appellate Tribunal (SAT), Mumbai. The SAT, in its order in February this year, also confirmed that the trustee will not exercise any control over RGIC and cannot exercise any voting rights on the shares, it added.
"Accordingly, RGIC continues to be a wholly owned subsidiary of the company," it said.
Further, the company had pledged 3.35 per cent stake (2,04,97,423 equity shares) of Nippon Life India Asset Management (NLAML) in favour of IndusInd Bank Ltd (IBL) and the bank invoked the pledge which was challenged by RCap before the Bombay High Court. The court has referred the matter for arbitration.
As per the interim order passed by sole arbitrator on April 23, 2020, a status quo will continue and the NLAML shares will remain in a separate demat account, where they are lying currently.
"Accordingly, the company continues to consider its rights on these referred shares (of NLAML)," it said.
In another note, it said the trustee to the debenture holders of the company has initiated proceedings against the firm before the Debt Recovery Tribunal, Mumbai.
The application of the trustee will be listed after DRT starts functioning post lifting of lockdown on account of COVID-19. The company is also considering to file an appeal before Debt Recovery Appellate Tribunal against such proceedings, it added.
Stock of RCap closed 2.87 per cent down at Rs 9.49 apiece on BSE.
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