We hereby submits the statement of Impact of Auditors Qualification for the F.Y. ended March 2025
Awaiting price reaction for this filing.
Modern Denim Ltd submitted the impact statement of its auditor's qualified opinion for FY25. The company reported a turnover of Rs. 2,237.16 lacs and a net loss of Rs. 637.39 lacs as reported (which would widen to Rs. 805.61 lacs if adjusted for qualifications). Net worth is deeply negative at Rs. (6,639.80) lacs as reported and Rs. (12,778.45) lacs adjusted, against total assets of Rs. 3,638.74 lacs. The auditor flagged three repetitive qualifications: non-recognition of Rs. 110.75 lacs interest on cumulative redeemable preference shares, non-provisioning of Rs. 57.47 lacs interest on secured/unsecured borrowings, and non-measurement of Rs. 6,984 lacs non-current borrowings at fair value. Cumulative unprovided interest on financial liabilities stands at Rs. 3,780.86 lacs and on borrowings at Rs. 2,357.79 lacs. Management is awaiting waiver/relief under the BIFR rehabilitation scheme and a proposed Scheme of Compromise, Arrangement and Amalgamation u/s 230-232 of the Companies Act, 2013.
Shareholders face severe financial weakness with negative net worth, repeated audit qualifications, and a pending resolution only via debt waiver or amalgamation approval. The stock carries significant going-concern risk and is highly speculative until the proposed scheme is approved.