Shree Narmada Aluminium reports FY26 loss, auditors flag risk
Shree Narmada Aluminium Industries Limited reported a net loss of ₹68.39 lakh for FY26, reversing its profit of ₹27.82 lakh in the previous year. The company's statutory auditors flagged material uncertainty regarding its ability to continue as a going concern due to fully eroded net worth and ongoing legal disputes, despite the Board's optimism following a Supreme Court order confirming a Scheme of Arrangement.
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Shree Narmada Aluminium Industries Limited reported a net loss of ₹68.39 lakh for the financial year ended March 31, 2026, reversing its profit of ₹27.82 lakh in the previous year. The company's statutory auditors have flagged material uncertainty regarding its ability to continue as a going concern due to fully eroded net worth and ongoing legal disputes. Despite these challenges, the Board of Directors maintains that the going concern assumption is sustainable, citing a recent Supreme Court order confirming a Scheme of Arrangement and the recovery of factory premises possession in Bharuch.
The Board of Directors approved the audited financial results for the quarter and year ended March 31, 2026, at a meeting held on May 28, 2026. The filing was made pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Statutory auditors SVH & Associates issued a qualified opinion, noting that the financial results do not adequately disclose the material uncertainty surrounding the company's status as a sick entity under the Sick Industrial Companies Act, 1985.
Financial performance for the year was characterized by a complete absence of revenue from operations. The company reported total income of ₹61.84 lakh in FY25, which dropped to zero in FY26. Other income also ceased, contributing to the swing from profitability to a loss. Total expenses for the year increased to ₹68.39 lakh from ₹34.02 lakh in the previous year, driven primarily by finance costs of ₹43.10 lakh and other expenses amounting to ₹22.62 lakh.
Financial Results for FY26
The following table outlines the company's financial performance for the quarter and year ended March 31, 2026:
| Particulars | Year Ended 31.03.2026 (Audited) | Year Ended 31.03.2025 (Audited) |
|---|---|---|
| Revenue from operations | - | - |
| Other Income | - | 61.84 |
| Total Income | - | 61.84 |
| Total Expenses | 68.39 | 34.02 |
| Profit/(Loss) before Tax | (68.39) | 27.82 |
| Profit for the period | (68.39) | 27.82 |
The Statement of Assets and Liabilities as of March 31, 2026, reflects a negative equity of ₹792.55 lakh, a deterioration from the negative equity of ₹724.16 lakh in the prior year. Total assets stood at ₹21.51 lakh, bolstered by cash and cash equivalents of ₹1.24 lakh. Liabilities are dominated by borrowings, which amounted to ₹610.38 lakh, up from ₹536.72 lakh in the previous year.
Auditor's Qualification and Legal Matters
SVH & Associates, the statutory auditors, qualified their opinion due to the company's status as a sick industrial company and the consequential material uncertainty regarding its survival. The auditors noted that the Hon'ble High Court of Gujarat passed an order on March 10, 2025, in favor of the company, and the Supreme Court subsequently passed an order on August 4, 2025, confirming the Scheme of Arrangement originally passed in 2008. Consequently, the company has obtained possession of its factory premises at Bharuch.
However, the auditors emphasized that the financial results do not adequately disclose the risks associated with this situation. Additionally, the company disclosed that it is considering terminating an Agreement for Sale dated September 6, 2014, with Samrat Assets Allied Industries Pvt. Ltd. due to differences in interpretation. This termination may give rise to liabilities, the amount of which is not currently ascertainable. No provision for income tax has been made in light of the accumulated losses.
What is the timeline for resuming operations at the Bharuch factory following the recovery of possession?
How will the company address the potential financial liabilities arising from the termination of the Agreement for Sale with Samrat Assets Allied Industries Pvt. Ltd.?
What specific capital infusion or restructuring measures are planned to restore the eroded net worth and satisfy the auditors' going concern qualifications?
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