Auditor Disclaims Opinion on AIFL Q3 FY23 Results Amid Fraud Allegations & Liquidation Sale
AIFL's Q3 FY23 results received a "Disclaimer of Opinion" from auditors citing suspected fraud, non-compliance, and lack of evidence. The company is under liquidation, having been sold via e-auction to Grow House Agro Limited in December 2024, with a new board nominated in March 2025.
The announcement reveals severe corporate governance issues, suspected fraud, significant financial non-compliance, and the company's sale under liquidation. These factors collectively have a high impact on the company's future viability and investor confidence.
The auditor's disclaimer of opinion, citing numerous irregularities, suspected fraudulent transactions, non-compliance with statutory dues, and the company's ongoing liquidation process, indicates a highly negative financial and operational outlook.
* The Independent Auditor's Review Report for Ashapura Intimates Fashion Limited's (AIFL) unaudited standalone financial results for the quarter ended December 31, 2022, includes a "Disclaimer of Opinion". * The auditor, N.K. Sarraf & Associates, cited several reasons for this disclaimer, including: * Inability to obtain sufficient audit evidence for opening balances as of April 1, 2022, due to unavailable supporting documents. * Multiple irregularities and suspected fraudulent transactions noted during the year ended March 31, 2018, based on preliminary assessment by the Liquidator/RP. * Inability to comment on the consequential impact of any investigations/enquiry by law enforcement agencies and related litigation. * Lack of necessary documentation and satisfactory explanations, preventing comment on adjustments/disclosures for items like reconciliation of trade payables, other receivables, statutory liabilities, and inventory. * Failure to deposit various statutory dues (PF, ESIC, GST, TDS, Income Tax) and comply with filing requirements for financial years 2017-18 to 2022-23, with no provision for interest and penalties. * Various trade receivables and advances to suppliers appear fraudulent, and balance confirmations were not received. * Interest-free loans extended to subsidiaries and directors in previous financial years contravened Sections 185 and 186 of the Companies Act, 2013. * Share application money of ₹2.70 crore (₹270 Lakh) received in FY2017-18 is pending allotment, contravening Section 73 of the Companies Act, 2013. * Absence of actuarial valuation for defined benefit obligations and long-term employee benefit liabilities as required under Indian Accounting Standard (IND AS) 19. * Incomplete details or documentation regarding pending litigations, claims, or proceedings. * Non-availability of key financial documents, including bank statements, loan account statements, and fixed deposit schedules. * The Hon'ble National Company Law Tribunal (NCLT) initiated the Corporate Insolvency Resolution Process (CIRP) against the company on June 28, 2019, and subsequently ordered its liquidation on October 5, 2020. * An e-auction was conducted on December 21, 2024, to sell the company "as is where is basis". M/s. Grow House Agro Limited was declared the successful bidder for Asset Category 1 (NSE & BSE Listed Company) on December 23, 2024, with an Earnest Money Deposit of ₹2.13 crore (₹2,13,00,000). * A sale certificate was issued on March 1, 2025, after receipt of the entire consideration, and the successful bidder nominated a new Board of Directors on the same date. * Despite the ongoing liquidation process, the financial statements for the quarter ended December 31, 2022, have been prepared on a going concern basis. * Standalone Unaudited Financial Results for the quarter ended December 31, 2022: * Total Income: ₹0.64 Lakh * Total Expenses: ₹146.63 Lakh * Net Loss for the period: ₹145.99 Lakh * Basic Earnings Per Share (EPS): (₹0.58)
What to do with a filing like this
Ashapura Intimates Fashion Limited filed this with the NSE as a statutory disclosure, categorised under quarterly results. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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See the model portfoliosA plain-language summary of a public exchange filing by Ashapura Intimates Fashion Limited. Read the original for the full detail.