Vashishtha Luxury Fashion Limited (VLFL) has announced the resignation of Kumbhat Co. LLP as the statutory auditor for its material subsidiary, Vashishtha Embroideries Private Limited. The resignation, effective November 5, 2025, comes amid a disagreement over audit fees for the upcoming financial year.

Key Details of the Resignation

Circumstances Leading to Resignation

Kumbhat Co. LLP cited their inability to undertake the audit at a reduced fee as the primary reason for their resignation. The auditing firm stated that the company had requested a reduction in fees for the statutory audit of financial statements for the year ending March 31, 2026.

In their resignation letter, Kumbhat Co. LLP explained:

"We have reassessed our ability to continue as auditor in terms of Standards on Auditing and Standards on Quality Control issued by the Institute of Chartered Accountants of India basis which we would not be able to undertake the audit at the reduced fee considering our estimate of time and effort involved."

Implications and Next Steps

The resignation of the statutory auditor for a material subsidiary may raise questions among investors and regulatory bodies. It's worth noting that the auditor's resignation comes just before the company's scheduled board meeting on November 14, 2025, where the unaudited financial results for the half-year ended September 30, 2025, are to be considered and approved.

VLFL will now need to appoint a new statutory auditor for its material subsidiary. The company's board and audit committee will likely address this issue promptly to ensure compliance with regulatory requirements and maintain transparency with stakeholders.

This development underscores the importance of maintaining strong relationships between companies and their auditors, as well as the need for transparent communication regarding financial matters. Investors and market watchers will be keen to see how VLFL handles this transition and what impact, if any, it may have on the company's financial reporting process.

Vashishtha Luxury Fashion Limited (VLFL) has announced significant changes to its auditing structure following a board meeting held on October 13, 2025. The company, known for its high-fashion hand embroideries and accessories, has made several key appointments and set a date for an Extraordinary General Meeting (EGM).

Statutory Auditor Transition

The board acknowledged the resignation of M/s. Kumbhat & Co. LLP, Chartered Accountants, from their position as Statutory Auditors, effective October 8, 2025. To fill this vacancy, the board has recommended the appointment of M/s. SMNK & Co, Chartered Accountants (FRN: 134153W), subject to shareholder approval at the upcoming EGM.

New Internal Auditor Appointment

VLFL has appointed M/s. R G G R & Associates LLP (FRN: W100854) as the company's Internal Auditor for the 2025-2026 financial year. This appointment is in line with Section 138 of the Companies Act, 2013.

Extraordinary General Meeting Scheduled

The board has set November 10, 2025, as the date for the EGM, which will be held virtually at 11:30 AM through video conferencing or other audio-visual means. During this meeting, shareholders will vote on the appointment of the new Statutory Auditors.

Key Details of the New Auditors

Statutory Auditor: M/s. SMNK & Co

Internal Auditor: M/s. R G G R & Associates LLP

These changes in Vashishtha Luxury Fashion's auditing structure reflect the company's commitment to maintaining robust financial oversight and transparency. The appointment of new auditors with diverse expertise and geographical presence could bring fresh perspectives to the company's financial processes and reporting.

Shareholders and investors will be watching the upcoming EGM, where the appointment of the new Statutory Auditors will be put to vote. This transition in auditing firms marks a significant corporate action for VLFL and could have implications for the company's financial reporting and compliance processes going forward.