Auditor Issues Disclaimer of Opinion on Q1 FY23 Results Amid Liquidation and Irregularities
Auditor issued a disclaimer of opinion on AIFL's Q1 FY23 results due to widespread irregularities, non-compliance, and suspected fraudulent transactions, while the company is under liquidation and has been sold.
The impact is high because the auditor's disclaimer signifies a complete inability to rely on the financial statements, indicating severe governance and financial control failures. The company's status in liquidation and recent sale further underscores the critical situation, rendering its financial reporting highly unreliable.
The sentiment is negative due to the auditor's disclaimer of opinion, citing numerous severe accounting irregularities, suspected fraudulent transactions, non-compliance with statutory obligations, and the company's ongoing liquidation and past sale.
N.K. Sarraf & Associates, the Chartered Accountants, have issued a disclaimer of opinion on Ashapura Intimates Fashion Limited's (AIFL) unaudited standalone financial results for the quarter ended June 30, 2022. The disclaimer is due to significant issues, including: * Inability to obtain sufficient audit evidence for opening balances and lack of relevant supporting documents. * Multiple irregularities and suspected fraudulent transactions noted during the year ended March 31, 2018, based on preliminary assessment by the Liquidator/RP. * Non-reconciliation of trade payables, other payables, and various receivables. * Failure to deposit statutory dues (PF, ESIC, GST, TDS, Income Tax) and comply with filing requirements for financial years 2017-18 to 2022-23. * Suspected fraudulent nature of various trade receivables and advances to suppliers. * Non-availability of supporting data or records for closing inventory, fixed assets register, and details of additions/deletions to fixed assets. * Contravening Sections 185, 186, 177, 188, and 73 of the Companies Act, 2013, regarding loans to subsidiaries/directors, related party transactions, and unallotted share application money of ₹2.70 crore. * Lack of actuarial valuation for employee benefits, incomplete details on litigations, and inability to ascertain deferred tax liability/assets.
The company has been undergoing a Corporate Insolvency Resolution Process (CIRP) since June 28, 2019, and was ordered into liquidation on October 5, 2020. An e-auction was conducted on December 21, 2024, where M/s. Grow House Agro Limited was declared the successful bidder on December 23, 2024, with an Earnest Money Deposit of ₹2.13 crore. A sale certificate was issued on March 1, 2025, and a new Board of Directors was nominated on the same date. The financial statements indicate a net loss of ₹163.12 Lakh for the quarter ended June 30, 2022, with total income of ₹0.95 Lakh and total expenses of ₹164.07 Lakh. The auditor highlighted significant doubts about the company's ability to continue as a going concern.
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.