Advance Syntex Limited Receives Adverse Audit Opinion for Q3FY26 Quarter
Advance Syntex Limited received an adverse audit opinion for Q3FY26 from VRAJM & Associates due to closed business operations, loan defaults leading to NPA classification, and non-compliance with Indian Accounting Standards. The company reported other income of ₹0.18 lakhs and net loss of ₹2.22 lakhs for the quarter. Key concerns include zero fixed assets after bank sales under SARFAESI Act, incomplete trade receivable provisions, and pending dividend transfer of ₹20,265 to government fund.
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Advance Syntex Limited has received an adverse audit opinion from chartered accountants VRAJM & Associates for the quarter ended December 31, 2025, highlighting significant concerns about the company's financial position and compliance with accounting standards.
Adverse Opinion and Key Concerns
The auditors issued an adverse opinion citing multiple critical issues that prevent the financial statements from presenting a true and fair view. The primary concern centers on the company's closed business activities, making the "Going Concern" principle unsustainable and leading to non-compliance with Indian Accounting Standards (Ind AS).
| Key Issues: | Details |
|---|---|
| Business Status: | Activities closed, Going Concern not sustainable |
| Loan Classification: | Defaulted loans categorized as Non-performing Assets |
| Fixed Assets: | Block reduced to zero after bank asset sales |
| Dividend Transfer: | ₹20,265 pending transfer to IEPF since August 3, 2025 |
Financial Performance Overview
The company's financial results for Q3FY26 show minimal activity reflecting its closed operations status:
| Financial Metrics: | Q3FY26 | Q2FY26 | Q3FY25 |
|---|---|---|---|
| Other Income: | ₹0.18 lakhs | ₹13.05 lakhs | - |
| Total Revenue: | ₹0.18 lakhs | ₹13.05 lakhs | - |
| Net Loss: | ₹2.22 lakhs | ₹56.70 lakhs | ₹30.00 lakhs |
| Basic EPS: | ₹(0.02) | ₹(0.51) | ₹(0.27) |
Asset Disposal and Bank Actions
A significant development involved the disposal of company assets by Axis Bank under the SARFAESI Act, 2002. The bank sold all fixed assets and stock, resulting in the complete elimination of the fixed assets block.
Asset Sale Details:
- Land & Buildings: Sold for ₹4.54 crores against book value of ₹1.23 crores
- Plant, Equipment & Inventory: Sold for ₹6.60 crores against book value of ₹21.86 crores
This disposal has left the company with zero fixed assets, further emphasizing its non-operational status.
Compliance and Regulatory Issues
The auditors highlighted several compliance failures that contributed to the adverse opinion:
- Loan Interest: The company has not recognized interest expenses on borrowings from banks and financial institutions that have classified its dues as NPAs
- Trade Receivables: Incomplete provision for expected credit losses under Ind AS 109, with management providing only partial provisions
- Unpaid Dividend: ₹20,265 required to be transferred to Government Investor Protection fund, with only email communication made to the bank
Current Financial Position
The company continues to face severe financial constraints with negative net worth and liquidity issues. Banks and financial institutions have recalled their loans, and the company's operational activities remain closed. The auditors emphasized that trade receivables, trade payables, and advances require reconciliation and confirmation, with management not initiating legal action against outstanding receivables.
The adverse audit opinion reflects the company's challenging financial position and highlights the need for immediate attention to compliance and regulatory requirements.
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