MODTHREAD Board Approves Q2 & H1 FY2025 Unaudited Results with Qualified Audit Opinion
Modern Threads board approved Q2 and H1 FY2025 unaudited financial results on November 14, 2025. Despite increased profits, auditors issued a qualified opinion due to unprovided preference share interest and unconfirmed trade balances.
The announcement includes the approval of financial results showing improved performance, which is important for investors. However, the recurring qualified audit opinion, specifically concerning the substantial unprovided interest on preference shares and unconfirmed trade balances, represents a material financial and governance concern that can significantly affect investor perception and valuation.
The company reported significant increases in total income, profit before tax, and net profit for the half-year ended September 30, 2025. However, the auditor issued a qualified opinion due to the non-provisioning of ₹1065.85 lakhs in cumulative interest on redeemable preference shares and unconfirmed trade payables/receivables, which are repetitive qualifications, indicating unresolved material issues.
* The Board of Directors of Modern Threads (India) Limited, in their meeting held on November 14, 2025, approved the unaudited financial results for the quarter and half-year ended September 30, 2025. * The results are accompanied by a Limited Review Report from the Statutory Auditors, S.S. SURANA & COMPANY, which includes a qualified conclusion. * Auditor's Qualified Conclusion Details: * The company has not provided for interest (dividend) on cumulative redeemable preference shares: ₹9.10 lakhs for the quarter ended September 30, 2025, and ₹18.11 lakhs for the half-year ended September 30, 2025. The cumulative unprovided interest stands at ₹1065.85 lakhs up to September 30, 2025. Management states that the company is in the process of settling remaining redeemable preference share capital. * Balances of trade payables and trade receivables are subject to confirmation and consequential adjustments. The impact of this is not ascertained by management, as the company is in the process of identifying these liabilities. * These qualifications are repetitive, similar to those in previous audit reports. * Financial Highlights for Half Year Ended September 30, 2025 (Unaudited, compared to September 30, 2024): * Total Income increased to ₹15,165.53 lakhs from ₹12,404.14 lakhs. * Profit before tax increased significantly to ₹374.47 lakhs from ₹105.44 lakhs. * Net Profit after tax rose to ₹262.74 lakhs from ₹50.28 lakhs. * Basic/Diluted Earnings Per Share improved to ₹0.7555 from ₹0.1446. * Balance Sheet as at September 30, 2025 (Unaudited, compared to March 31, 2025): * Total Assets decreased to ₹22,562.95 lakhs from ₹23,531.63 lakhs. * Total Equity increased to ₹13,543.66 lakhs from ₹13,272.07 lakhs. * Total Liabilities decreased to ₹9,019.29 lakhs from ₹10,259.56 lakhs. * A wholly-owned subsidiary, Modern Woollens UK Ltd, incorporated on November 18, 2024, is yet to commence business, hence consolidated financial results were not prepared. * Deferred tax assets of ₹176.75 lakhs as of September 30, 2025, have not been recognized due to the improbability of future taxable profits for utilization.
What to do with a filing like this
Modern Threads (India) 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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