Announcement under regulation 30 (LODR) - change of management
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Ace Men Engg Works' board (meeting on June 1, 2026) approved its FY26 audited results — consolidated revenue of ₹1,097.68 lakhs and net profit of ₹16.40 lakhs (EPS ₹0.25), while standalone revenue was just ₹7.73 lakhs with a marginal profit of ₹0.13 lakhs. The subsidiary, Manibhadra Industries Private Limited, attracted a qualified audit opinion with three serious flags: unsecured loans of ₹1.87 crore taken in breach of Section 73, total borrowings of ₹12.64 crore exceeding Section 180 limits without shareholder approval, and loans/advances of ₹5.73 crore (including to directors and their relatives) breaching Sections 185 and 186 — raising concerns about recoverability and arm's-length pricing. The board also accepted the resignation of Independent Director Mr. Sourabh Gopichand Gaikwad (DIN: 10692920) effective June 1, 2026, citing 'preoccupation'. Management claims these are first-time qualifications and the issues will be regularized.
Shareholders should flag this as a significant governance red flag — the subsidiary has multiple Companies Act violations around borrowings and related-party lending (including loans to directors and their relatives) with auditors unable to confirm recoverability or quantify the impact. Combined with the negative operating cash flow (₹599 lakhs consolidated) and the departure of an Independent Director, this is a negative signal for investor confidence.