SK International Export reports FY26 loss, auditor flags going concern risk
SK International Export Limited reported a net loss of ₹29.67 crore for FY26, a reversal from the ₹216.53 crore profit recorded in FY25, with total revenue falling to ₹226.90 lakh. The statutory auditor, SDA & Associates, flagged material uncertainty regarding the company's status as a going concern, citing a lack of substantial operational business and reliance on speculative trading activities. Significant audit findings included the write-off of assets and inventory worth over ₹1 crore, unsupported loans and advances, and non-compliance with accrual accounting for interest income.
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SK International Export Limited reported a net loss of ₹29.67 crore for the year ended March 31, 2026, compared to a profit of ₹216.53 crore in the previous year. The company's Board of Directors approved the audited financial results for the year and half-year ended March 31, 2026, on May 28, 2026. The statutory auditor, SDA & Associates, highlighted material uncertainty regarding the company's ability to continue as a going concern due to the absence of substantial operational business activities and dependency on speculative trading in equity, F&O, and commodity markets.
Financial Performance
Total revenue for FY26 stood at ₹226.90 lakh, a significant decline from ₹528.02 lakh in FY25. The company recorded a loss before tax of ₹17.19 lakh for the full year, contrasting with a profit before tax of ₹216.94 lakh in the prior year. For the half-year ended March 31, 2026, the company reported a net loss of ₹12.16 lakh. Basic earnings per share (EPS) for FY26 were reported at (0.40), down from 2.95 in the previous year.
| Particulars | Year Ended March 31, 2026 (₹ In Lakhs) | Year Ended March 31, 2025 (₹ In Lakhs) |
|---|---|---|
| Total Revenue | 226.90 | 528.02 |
| Total Expenses | 244.10 | 311.07 |
| Profit/(Loss) for the period | (29.67) | 216.53 |
Auditor's Observations
The auditor's report identified several key issues impacting the financial statements. The company wrote off assets aggregating to ₹13.14 lakh and inventory aggregating to ₹95.31 lakh during the year. Additionally, the auditor noted that loans and advances aggregating to ₹160.75 lakh were granted without adequate supporting documentation, making it difficult to assess recoverability. The auditor also pointed out that interest income was recognized only on a receipt basis rather than on an accrual basis, which is not in consonance with the Companies Act, 2013.
Asset Position
As of March 31, 2026, the company's total assets stood at ₹671.96 lakh, down from ₹713.89 lakh in the previous year. Cash and cash equivalents increased to ₹361.01 lakh from ₹231.14 lakh, while inventories decreased sharply to ₹8.65 lakh from ₹105.53 lakh. The company's reserves and surplus turned negative at ₹67.65 lakh compared to a negative balance of ₹37.98 lakh in the prior year.
Historical Stock Returns for SK International Export
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| 0.0% | 0.0% | 0.0% | +7.86% | +79.99% | +113.03% |
What specific strategic changes will management implement to address the auditor's concerns regarding the company's status as a going concern?
How does the company plan to shift its dependency from speculative trading to substantial operational business activities?
Will the company restate its financials to recognize interest income on an accrual basis to comply with the Companies Act, 2013?
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