Samtex Fashions Ltd

Samtex Fashions Ltd - Closure of Trading Window

Dematerialisation status

• Dematerialisation requests received in the quarter were processed and listed on the exchanges.
• Physical certificates received for dematerialisation were mutilated and cancelled after verification.
• Depository name substituted as registered owner in the records within 15 days.

Financial Performance 📊

• Consolidated Q3 FY26 revenue was INR 115 lakh with total expenses of INR 6.5 lakh and PBT of INR 8.5 lakh.
• Consolidated nine-month FY26 total comprehensive income was INR 3.08 lakh; basic EPS was zero.
• Standalone Q3 FY26 revenue was INR 0.06 lakh with total expenses of INR 8.46 lakh; standalone PBT was INR 8.46 lakh.
• Standalone basic EPS for Q3 FY26 stood at INR 0.001.

Risks & Uncertainties ⚠️

• Corporate guarantee of INR 807.46 crore given for subsidiary SSA International Ltd’s secured loans, now classified as NPA.
• Notices received under SARFAESI Act and wilful defaulter declarations issued against company and SSA International Ltd.
• Bank accounts frozen by EPF department; ongoing litigations with Income Tax Department with deposits under protest.
• Group reported losses, net worth fully eroded, current liabilities exceed current assets, raising going concern doubts.
• Trade receivables and loans/advances outstanding long-term, not confirmed or impaired; recoverability uncertain.
• Auction of subsidiary’s assets by banks not accounted for; impact on financials and tax unascertainable.

Audit & Compliance 🗒️

• Auditor’s review is qualified due to uncertainties and lack of sufficient audit evidence.
• Confirmation of balances for loans, payables, deposits, and bank accounts unavailable; reconciliation incomplete.
• Deferred tax assets recognized but utilization uncertain due to lack of probable future taxable income.
• Employee benefit costs not recognized/re-measured per Ind AS 19.
• Inventory not used for long; no provision for obsolescence or decline in selling price made.

Operations & Assets

• No manufacturing activity since FY18; assets not shifted to new premises as per rent agreement since Jan 2021.
• Fixed assets impairment testing not performed; impact on financials unascertainable.

Business Model & Segments

• Consolidated results include subsidiaries SSA International Ltd, Lina Global Inc, and Arlin Foods Ltd; Lina Global’s results unaudited.

Financial Results

• Approved unaudited standalone and consolidated financial results for Q3 ended December 31, 2025, with limited review reports.
• Consolidated results include unaudited financials of wholly owned subsidiary Lina Global Inc based on management data.

Auditor Remarks ️

• Auditor qualified opinion due to no impairment testing on fixed assets and non-recognition of expected credit loss on overdue receivables.
• Auditor highlighted non-compliance with Ind AS 19 on employee benefit cost recognition and measurement.
• Auditor emphasized material uncertainty on going concern due to losses, eroded net worth, and current liabilities exceeding current assets.

Corporate Guarantees and Defaults

• Holding company gave corporate guarantee of Rs 807.46 crores for subsidiary’s secured loans classified as NPA; received SARFAESI notices and wilful defaulter declarations.
• Subsidiary SSA International Ltd defaulted on bank repayments; interest expenses not recognized per RBI prudential norms, contrary to Ind AS.
• Auction of subsidiary’s assets by banks occurred but not accounted for; impact on profit/loss and liabilities unascertainable.

Asset and Liability Concerns ️

• No manufacturing activity since March 2019; impairment testing not performed despite inability to shift operations.
• Long outstanding loans, advances, trade payables, and other balances lack confirmations; recoverability and impact unascertainable.
• Inventories unused for long periods; no provision made for obsolescence or decline in value.
• Deferred tax assets recognized but utilization uncertain due to lack of probable future taxable income.

Regulatory and Legal Matters ️

• Bank accounts frozen by EPF department; ongoing Income Tax litigations with Rs 118.67 lakhs deposited under protest.
• No business activity undertaken during the year by the group, further impacting going concern assumptions.