Samtex Fashions FY26 Results with Qualified Audit Opinion

Board Meeting Details

The Meeting of the Board of Directors commenced at 04:00 P.M and concluded at 05:45 P.M on 28th May, 2026.

Key Board Approvals

Standalone Audited Financial Results for Q4 and financial year ended 31 March, 2026
Consolidated Audited Financial Results for Q4 and financial year ended 31 March, 2026
No dividend recommended for the year ended 31 March, 2026
Reviewed and updated the existing Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information

Financial Results - Standalone (INR in Lakhs)

Income Statement

| Revenue from Operations | 0.00 | 0.00 | 0.07 | 0.14 | 0.22 |

| Other Income | 0.14 | 0.00 | 0.00 | 0.14 | 0.22 |

| Total Income | 0.14 | 0.00 | 0.07 | 0.28 | 0.44 |

| Employee Benefit Expenses | 3.05 | 2.39 | 3.35 | 10.79 | 10.79 |

| Finance Cost | 0.00 | 0.01 | 0.02 | 0.02 | 0.03 |

| Other expenses | 4.26 | 5.46 | 3.70 | 20.22 | 18.97 |

| Total Expenses | 7.32 | 7.86 | 7.08 | 31.96 | 29.79 |

| Profit before taxes | -1.18 | -8.36 | -7.01 | -31.82 | -29.57 |

| Total Tax Expense | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |

| Other comprehensive income | 0.54 | 0.43 | 0.02 | 0.64 | 0.34 |

| Total Comprehensive income | -0.64 | -8.32 | -6.99 | -31.18 | -29.23 |

Key Metrics

Paid up equity share capital: ₹1,490.00 lakhs (1,490,000 shares of ₹10 face value)
Basic EPS: ₹-0.04 for FY26; ₹-0.04 for FY25
Diluted EPS: ₹-0.04 for FY26; ₹-0.04 for FY25

Financial Results - Consolidated (INR in Lakhs)

Income Statement

| Particulars | Year ended 31.03.2026 | Year ended 31.03.2025 |

| Total Income | 7.69 | 7.13 |

| Total Expenses | 44.77 | 42.69 |

| Profit before taxes | -37.08 | -39.56 |

| Total Tax Expense | 0.00 | 0.00 |

| Other comprehensive income | 41.27 | 11.47 |

| Total Comprehensive income | 4.19 | -28.09 |

Key Metrics

Basic EPS: ₹-0.01 for FY26; ₹-0.04 for FY25
Diluted EPS: ₹-0.01 for FY26; ₹-0.04 for FY25

Balance Sheet Highlights - Standalone (as at 31.03.2026)

Total Assets: ₹1,390.00 lakhs
Total Equity: ₹-29.95 lakhs (negative net worth)
Non-current liabilities: ₹642.40 lakhs
Current liabilities: ₹777.55 lakhs
Trade receivables: ₹587.34 lakhs (long outstanding)
Inventories: ₹25.32 lakhs
Deferred tax assets: ₹132.28 lakhs

Balance Sheet Highlights - Consolidated (as at 31.03.2026)

Total Assets: ₹35,898.50 lakhs
Property, Plant and Equipment: ₹6,083.32 lakhs
Trade receivables: ₹28,477.48 lakhs (long outstanding)
Total Equity: ₹-23,959.59 lakhs (negative net worth)
Borrowings: ₹56,325.97 lakhs (non-current ₹690.06 lakhs + current ₹55,635.91 lakhs)

Auditor's Qualified Opinion - Key Issues

Basis for Qualified Opinion

1. Non-Recognition of Impairment and Non-Charge of Depreciation: Company shifted plant from NSEZ Noida during FY 2017-18 and changed business premises multiple times since March 2019 with no manufacturing activity carried on. No impairment testing done for fixed assets as per Ind AS 36. No depreciation charged on PPE during the year.

2. Unconfirmed and Long-Outstanding Trade Receivables: Trade receivables of ₹587.34 lakhs (standalone) and ₹28,477.48 lakhs (consolidated) are long overdue and not provided for. No expected credit loss recognition. Balances subject to confirmation and recoverability uncertain.

3. Subsidiary Interest Expense Non-Recognition: Wholly owned subsidiary SSA International Ltd defaulted in repayment obligations to banking institutions. Management not in position to estimate interest payable as no account statements received from bankers. Following RBI prudential norms for NPA accounts, interest expenses not recognized.

4. Asset Sale by Banks Not Recorded: Consortium member banks executed auction of subsidiary's assets at Samalkha plant, but company has not recorded the transaction due to lack of details on assets sold, sale value, and bank-wise utilization of proceeds.

Material Uncertainty Related to Going Concern

Company has accumulated losses and negative net worth
Current liabilities exceed current assets
No business activity undertaken throughout the year and earlier years
Liquidity position substantially affected
Financial statements prepared on going concern basis despite significant doubts

Emphasis of Matter

1. Corporate Guarantee: Company provided corporate guarantee of ₹807.46 crores for secured loans taken by SSA International Limited (classified as NPA by banks). Received notice u/s 13(2) of SARFAESI Act 2002 from consortium of banks. IDBI Bank declared company and its subsidiary as wilful defaulters. Debt Recovery Tribunal case OA 530/18 dated 24/05/2018 ongoing.

2. Physical Verification: No sufficient audit evidence provided for physical verification/availability of fixed assets and inventory.

3. Loans and Advances: Loans and advances outstanding from long time without recovery and confirmation.

4. Inventory Obsolescence: Inventory of ₹25.32 lakhs not used for long period, no provision for damage/obsolescence.

5. Deferred Tax Assets: Continued recognition of deferred tax assets of ₹132.28 lakhs despite absence of probable certainty for future taxable income.

6. Statutory Dues: Company regular in payments of PF, TDS but input tax credit balances not confirmed with online portal.

7. Bank Accounts: Bank accounts put on debit freeze by EPF department. Several litigations with Income Tax Department with ₹118.68 lakhs deposited under protest.

8. MSME Classification: Identification of trade payable dues to MSME based on management's knowledge.

9. Balance Confirmations: Confirmation of balances not available for trade payables, security deposits, government authorities, bank balances, FDRs.

Impact of Audit Qualifications

Management unable to estimate impact of audit qualifications due to:

Impairment testing requires hiring independent professional firm
Management trying to recover debts hence no provision required
Matter under litigation with banks
Lack of detailed information from bankers

Auditors state quantification not possible based on information provided by management.

Code of Practices and Procedures Update

Board reviewed and updated the existing Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information as required under Regulation 8(1) of SEBI (Prohibition of Insider Trading) Regulations, 2015. The policy covers:

Objective and background of fair disclosure
Definition of UPSI
Principles of fair disclosure
Determining legitimate purpose
Maintenance of structured digital database
Dealing with rumors