Auditor flags material uncertainty on going concern for Sri Lakshmi Saraswathi Textiles
Sri Lakshmi Saraswathi Textiles (Arni) Limited reported a narrowed net loss of ₹1574.43 lakh for FY26, down from ₹2132.31 lakh in the previous year, with total income from operations declining to ₹8814.10 lakh. The statutory auditor, M/s. S. Viswanathan LLP, highlighted a material uncertainty regarding the company's ability to continue as a going concern due to complete erosion of net worth and accumulated losses of ₹10514.05 lakh. The auditor also noted significant defaults in statutory dues, including EPF and TDS, and an inability to obtain balance confirmations for significant outstanding balances.
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Sri Lakshmi Saraswathi Textiles (Arni) Limited reported a narrowed net loss of ₹1574.43 lakh for the financial year ended March 31, 2026, compared to a loss of ₹2132.31 lakh in the previous year. Total income from operations for the year declined to ₹8814.10 lakh from ₹10022.80 lakh in FY25. The statutory auditor, M/s. S. Viswanathan LLP, has highlighted a material uncertainty regarding the company's ability to continue as a going concern due to the complete erosion of net worth and accumulated losses of ₹10514.05 lakh.
Financial Performance
For the quarter ended March 31, 2026, the company reported a net loss of ₹378.63 lakh, narrowing from a loss of ₹438.72 lakh in the same period of the previous year. Total income for the quarter stood at ₹2103.31 lakh, down from ₹2644.18 lakh in the corresponding quarter last year. The basic and diluted earnings per share for the year were reported at a loss of ₹47.24, compared to a loss of ₹62.13 in the prior year.
| Metric | FY26 (₹ in Lakhs) | FY25 (₹ in Lakhs) |
|---|---|---|
| Total Income from Operations | 8814.10 | 10022.80 |
| Total Expenses | 10468.11 | 12136.64 |
| Net Profit/Loss for the period | (1574.43) | (2132.31) |
| Equity Share Capital | 333.28 | 333.28 |
Auditor Observations
The auditor noted significant defaults in the remittance of statutory dues, including Employees' Provident Fund (EPF) dues of ₹124.78 lakh and Tax Deducted at Source (TDS) of ₹24.47 lakh. Additionally, the auditor reported an inability to obtain balance confirmations for significant outstanding balances, including trade receivables and payables. The company has also not been regular in depositing undisputed statutory dues, with outstanding ESI contributions of ₹10.42 lakh and an excess Input Tax Credit (ITC) of ₹6.75 lakh under IGST pending reversal.
Board Appointments
Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the board approved the re-appointment of M/s. A K Jain & Associates as Secretarial Auditors for the financial year 2026-27. The board also appointed M/s G Natesan and Co and M/s RVK & CO. as Internal Auditors, and M/s. SVM Associates as Cost Auditor for the same period.
Historical Stock Returns for Sri Lakshmi Saraswathi Textiles
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| 0.0% | +9.42% | +11.89% | -24.93% | -40.78% | +294.89% |
What specific capital infusion or restructuring strategy does management plan to implement to address the auditor's concerns regarding the company's status as a going concern?
How does the company intend to clear the outstanding statutory dues, including EPF and TDS, to prevent further regulatory penalties?
Will the decline in total income from operations continue into FY27, and what demand recovery measures are being considered?
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