Laxmi Cotspin Limited Announces Quarterly Financial Results; Audit Qualification Concerns Highlighted

Laxmi Cotspin Limited Announces Quarterly Financial Results; Audit Qualification Concerns Highlighted​

Laxmi Cotspin Limited announced its unaudited standalone and consolidated financial results for the quarter ended June 30, 2026, following a Board meeting held on August 11, 2026. The company's Board reviewed and approved these results along with the corresponding Limited Review Report issued by Statutory Auditors.

The board also addressed several operational matters, including appointing new auditors and reviewing ongoing compliance issues identified by regulatory bodies.

Financial Performance Overview (Q1 FY2026-27)​

The financial statements reflect the company's operations across its single reportable segment in the cotton business. Key figures from both standalone and consolidated results for the quarter ended June 30, 2026 are summarized below:

Laxmi Cotspin Limited - Standalone Financial Results (Q1 FY 2026-27)

Laxmi Cotspin Limited - Consolidated Financial Results (Q1 FY 2026-27)

Operational and Compliance Updates​

The Board meeting covered several governance matters:

• Auditor Appointments: The company appointed M/s Darshan Gattani & Associates as the Internal Auditor for FY 2026-27, and M/s Cheena & Associates as the Cost Auditor for FY 2026-27.
• Related Party Transactions: A resolution was approved for the omnibus approval of Related party Transactions for FY 2026-27, following recommendations from the Audit Committee.
• Regulatory Fine: The Board was informed that the National Stock Exchange of India Limited (NSE) had identified a non-compliance issue by the company relating to the quarter ended March 31, 2026. NSE levied a fine totaling Rs 1,47,500, calculated at Rs 5,000 per day for 25 days, along with GST of Rs 22,500.

Independent Auditor's Qualified Opinions​

The independent auditor's review reports provided qualified opinions on several material aspects of the financial statements. The key qualifications noted were:

1. Inventory: Qualification was raised regarding the quantity, condition, and valuation of inventories. Auditors stated that proper documented physical verification or supporting working papers were not provided for inventory, resulting in an inability to determine if any adjustment to cost of materials consumed and loss for the quarter is necessary.
2. Advance to Subsidiary: The audit found no evidence of Board/committee approvals and compliance with relevant provisions of the Companies Act, 2013 (including Sections 185, 186, and 188) concerning an advance of approximately Rs 731.40 lakh given to its wholly owned subsidiary, Laxmi Spintex Private Limited.
3. Advance to Creditor: Auditors were unable to determine whether any adjustment was necessary for a significant advance to a creditor, noting that indicators of financial stress at the counterparty and uncertainty over recoverability had been reported by the predecessor auditor. No party-wise ageing and recoverability assessment was provided to the auditors.
4. Land Transfer: The audit noted that as of June 30, 2026, the legal formalities for the registration of the sale deed concerning land transferred to its wholly owned subsidiary were incomplete.

Management's Response to Audit Concerns​

The management responded to these observations by noting that:

• The inventory has been valued in accordance with applicable accounting standards and company policies, and they are compiling supporting documents.
• The advance to the wholly owned subsidiary is an intra-group balance that has been appropriately eliminated in preparing the Consolidated Financial Statements. The management is currently reconciling ledgers and preparing necessary documentation.
• Regarding the advance to a creditor, the management is undertaking a party-wise reconciliation and ageing/recoverability assessment of advances to suppliers and service providers.
• The land transferred to the wholly owned subsidiary continues to form part of the Group's assets, and the management is compiling consolidation workings related to the land transfer and registration.

LAXMICOT Stock Price Movement​

Today, shares of Laxmi Cotspin Limited slipped by 1.65% in the post-market session, settling at ₹14.41 after shedding ₹0.24. The equity saw a trading volume of 25,558 shares during the day.