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Laxmi Cotspin Q3 FY26 Results Flagged by Auditors Over Unauthorized ₹5.51 Cr Loan and Inventory
Laxmi Cotspin's Board approved Q3 FY26 results, but the statutory auditors issued a severe 'Qualified Conclusion' highlighting multiple financial irregularities. Key concerns include an unauthorized ₹5.51 crore loan to a subsidiary, inadequate inventory records valued on estimates, and unverified land sale transactions. Additionally, Executive Directors have waived their remuneration for Q4 FY26, and the company is addressing a SEBI SCORES complaint while considering the closure of a non-operational subsidiary.
Key Highlights
Auditors flagged inadequate inventory records and valuation based on management estimates rather than physical verification.
Unauthorized loan of ₹5.51 crore extended to subsidiary Laxmi Spintex without requisite Board approval or statutory compliance.
Executive Directors' remuneration revised to nil for the period January 1, 2026, to March 31, 2026.
Legal title for land sold to a subsidiary remains un-transferred despite being recorded as a sale in the previous financial year.
Non-Executive Director Mrs. Prafullata Sanjaykumar Rathi resigned effective February 7, 2026, citing health issues.
💼 Action for Investors
Investors should exercise extreme caution as the auditor's qualifications suggest significant lapses in internal controls, financial reporting, and corporate governance. The lack of transparent inventory valuation and unauthorized related-party transactions are major red flags.