Hindustan Composites Limited (NSE:HINDCOMPOS) filed a clarification with the National Stock Exchange on 5 August 2026, responding to an NSE query dated 31 July 2026 regarding the format of its unaudited financial results for the quarter ended 30 June 2026.
Key Highlights
- NSE queried whether the financial results submitted on 23 July 2026 conformed to Schedule III of the Companies Act, 2013, noting identical figures in standalone and consolidated profit and loss statements.
- The company clarified that its share of losses in joint venture Compo Advics (India) Private Limited has exceeded its investment value, requiring discontinuation of further loss recognition under IND AS 28 from FY2021-22.
- The consolidated results include line item number 4, "Share of Joint Venture," recorded as nil, with an explanatory footnote as note number 3 in the consolidated financial results document.
- Hindustan Composites confirmed that segment assets and segment liabilities differ between standalone and consolidated results, affirming compliance with the prescribed accounting format.
About the Company
Hindustan Composites Limited (NSE:HINDCOMPOS), headquartered in Mumbai, Maharashtra, is engaged in the manufacture of friction materials, including brake linings, clutch facings, and disc pads used in automotive and industrial applications. The company operates manufacturing facilities in India and holds interests in joint ventures serving the automotive components sector.
Announcement in Detail
On 31 July 2026, NSE issued an email to Hindustan Composites observing that the financial results submitted on 23 July 2026 for Q1 FY27 appeared not to conform to the Schedule III format under the Companies Act, 2013, citing identical figures in the standalone and consolidated profit and loss statements.
In its response filed on 5 August 2026 and signed by Company Secretary and Compliance Officer Arvind Purohit (Membership No. A33624), the company explained that losses in joint venture Compo Advics (India) Private Limited had exceeded the carrying value of its investment. Accordingly, under IND AS 28, recognition of further losses in the consolidated results was discontinued from financial year 2021-22, resulting in a nil entry for the joint venture line item.
Impact on Investors
Investors will note that this filing is a procedural clarification and does not revise any previously disclosed financial figure. The filing shows the accounting treatment adopted is based on IND AS 28, a recognised Indian accounting standard governing investments in associates and joint ventures, and the company has asserted full conformity with Schedule III of the Companies Act, 2013.
Shareholders will observe that the nil contribution from Compo Advics (India) Private Limited to consolidated results has been in effect since FY2021-22, meaning this is not a new development for the current quarter. The disclosed terms indicate no restatement of results has been triggered by this exchange query.
Sector / Market Context
India's automotive components industry, which includes friction material manufacturers such as Hindustan Composites, is governed by accounting and disclosure standards administered by SEBI and the Ministry of Corporate Affairs. The mandatory adoption of Indian Accounting Standards (IND AS) for listed companies requires specific treatment for joint venture losses under IND AS 28, making exchange queries of this nature a standard part of the regulatory review process for companies with joint venture exposures on their balance sheets.