Twenty First Century Management Services presents a record shaped by five consecutive years of qualified audit opinions through FY2024, a recurring NBFC registration gap, and a ₹22.13 lakh group-company loan that drove the qualifications. The audit turned unqualified in FY2025 and FY2026, and the company has settled four older tax years. The core of the story sits in three places: the ₹22.13 lakh group-company loan that drove the qualifications, the investment activity conducted without an RBI licence, and the promoter-family board that sets its own pay.
Key findings
- Audit opinions were qualified for five years over unrecovered group-company loans
Major- The statutory auditor qualified the standalone and consolidated opinions from FY2020 through FY2024. In FY2020 and FY2021, the standalone qualification cited larger doubtful loans of ₹31.26 crore and ₹30.23 crore to a subsidiary/group company, while from FY2022 onward the standalone qualification cited only a ₹22.13 lakh group-company loan. The qualification was described as “Repetitive and since FY 2011-12” in the company’s own impact statements. The auditor issued unqualified opinions for FY2025 and FY2026 after the loan was apparently resolved. - The company has operated without an RBI NBFC licence for six years
Major- The secretarial auditor has reported every year from FY2020-21 through FY2025-26 that the company engages in investment and trading with its own surplus funds without the registration required under RBI NBFC Rules. Management has replied annually that it is “arranging to apply to RBI for NBFC License and the work is in progress,” with no indication the licence was ever obtained. - Related-party transactions recur annually with promoter-linked entities
Major- The company obtained shareholder approval every year from FY20 through FY26 for broking services with SI Investment and Broking Private Limited, where promoter and CEO Sundar Iyer is a shareholder; actual brokerage paid rose from ₹18.39 lakhs in FY20 to 1.16 crore in FY26. From FY23 onward, shareholder approval was sought to borrow up to ₹10 crore from Sundar Iyer and up to ₹20 crore from Managing Director Karthik Sundar Iyer. - A wholly owned subsidiary with negative net worth has not been impaired
Major- The equity investment in Twentyfirst Century Shares & Securities Ltd required impairment as of FY2020-21 due to the subsidiary’s negative net worth; management called the erosion temporary and recognised no impairment. The same trigger and the same management position were disclosed in FY2019-20. - A decade-old ₹75 lakh provision sits alongside ₹3.7+ crore of unprovided tax demands
Minor- The company has carried a ₹75 lakh provision since FY2014-15 for a contingent liability payable to Gujarat Industrial Investment Corporation, with the auditor issuing an Emphasis of Matter annually through FY2025-26. Disputed income tax liabilities not provided for total ₹3.71 crore across three assessment years as of FY2025-26. The company settled four older tax years under the Vivad se Vishwas Scheme in FY2024-25, depositing 2.49 crore for AY 2007-08. - Promoter-family pay doubled to ₹1.20 crore despite a ₹24 crore net loss
Minor- Sundar Iyer received ₹60 lakhs and Karthik Sundar Iyer received ₹30 lakhs in FY26, totalling ₹90 lakhs. The board recommended on 23 July 2026 to raise Karthik Sundar Iyer’s remuneration to ₹60 lakhs, bringing combined annual pay to ₹1.20 crore. Both resolutions carry a minimum-remuneration clause that insulates pay from losses under Schedule V of the Companies Act, while the company reported a consolidated net loss of ₹24.05 crore in FY26.
What to watch
- Shareholder vote on promoter pay. The board recommended on 23 July 2026 to raise Karthik Sundar Iyer’s remuneration to ₹60 lakhs and continue Sundar Iyer’s at ₹60 lakhs, with a shareholder vote at the 40th AGM on 3 September 2026.
- NBFC licence application. The FY2025-26 annual report states the company is still “arranging to apply” for the RBI NBFC licence, with no timeline provided.
- Subsidiary impairment. The “temporary” erosion of Twentyfirst Century Shares & Securities Ltd’s net worth has persisted since at least FY2019-20; watch whether net worth recovers or an impairment charge is recorded.
Bottom line: This is a disclosed record where the audit turned unqualified after five years and four older tax disputes were settled. The character of the risk is persistence: the NBFC licence gap, the unimpaired subsidiary investment, and the decade-old ₹75 lakh provision have all been flagged for years without resolution. Watch the AGM votes on promoter pay and related-party terms, and whether the company moves from “arranging to apply” to actually filing for the NBFC licence.