Nilachal Refractories Ltd. Approves FY 2026 Financial Results; Audit Issues Qualified Opinion

Nilachal Refractories Ltd. Approves FY 2026 Financial Results; Audit Issues Qualified Opinion​

Nilachal Refractories Ltd. announced the approval of its audited financial results for the quarter and financial year ended March 31, 2026, following its Board of Directors meeting on April 18, 2026. However, the company's statutory auditors issued a qualified opinion on the financial statements.

The audit report noted several qualifications that materially impact the reported figures.

Basis for Qualified Opinion​

The auditors highlighted two primary areas for qualification. Firstly, the company has not obtained an actuarial valuation for its employee benefit obligations, which are deemed unfunded. Consequently, the auditors were unable to determine and quantify the full impact of these liabilities on the year's loss.

Secondly, the qualified opinion relates to the company's 11% Redeemable Cumulative Preference Shares, which were due for redemption on or before September 2000. The company has not made a provision for cumulative dividends totaling ₹ 73.38 lakhs up to March 31, 2025, and an additional ₹ 1.65 lakhs for the year ended March 31, 2026. These omissions consequently understate the loss for the year and overstate the reserves and surplus by ₹ 75.03 lakhs.

Going Concern Concerns and Operational Update​

Furthermore, the audit report issued an Emphasis of Matter regarding the company's ability to continue as a going concern. The report noted that the company continues to incur losses and there is a considerable decline in the level of operations. As of the reporting date, the company’s net worth stands at (₹ 3279.16 Lakhs), and its current liabilities exceed its current assets by ₹ 1365.17 Lakhs.

In response to these financial factors, the existing promoters have entered into a Share Purchase Agreement (SPA) with an incoming investor. This agreement pertains to the transfer of their entire shareholding, resulting in a proposed change in control of the company, subject to various pre-conditions and applicable regulatory approvals.

Financial Overview​

The audited financial results for the period show the following figures for Total Income (net), Total Expenses, and Profit/ (Loss) for the period.


The company's Statement of Assets and Liabilities as of March 31, 2026, reported total assets of ₹ 1,462.38 Lakh, against total liabilities of ₹ 4714.54 Lakh, resulting in a total equity of (₹ 8279.16 Lakh).

The Cash Flow Statement indicates that the net cash from operating activities for the year ended March 31, 2026, was (₹ 140.30 Lakh), compared to (₹ 115.19 Lakh) for the previous year.

Stock Price Movement​

Nilachal Refractories Ltd settled at ₹44.55 on Friday, edging higher for the day by 4.95%. Throughout the session, the shares ranged from a low of ₹40.33 up to a high of ₹44.56.

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