Financial Results Summary

Income Statement (Year Ended 31st March, 2026)

  • Revenue from Operations: ₹2,78,58,894 (compared to ₹5,11,97,570 in previous year)
  • Other Income: ₹84,44,819 (compared to ₹24,44,669 in previous year)
  • Total Income: ₹3,63,03,713 (compared to ₹5,36,42,239 in previous year)
  • Cost of Materials Consumed: ₹1,87,28,969 (compared to ₹4,59,11,600 in previous year)
  • Employee Benefits Expense: ₹23,16,132 (compared to ₹23,01,774 in previous year)
  • Finance Costs: ₹38,66,244 (compared to ₹33,52,965 in previous year)
  • Depreciation and Amortization: ₹1,30,65,446 (compared to ₹1,30,97,867 in previous year)
  • Total Expenses: ₹5,20,40,019 (compared to ₹7,37,93,349 in previous year)
  • Loss Before Tax: ₹(1,57,36,306) (compared to ₹(2,01,55,110) in previous year)
  • Tax Expense: ₹59,07,000 (Deferred tax only, compared to ₹(28,51,000) in previous year)
  • Net Loss for the Year: ₹(2,16,43,306) (compared to ₹(1,73,04,110) in previous year)
  • Earnings Per Share (Basic): ₹(7.59) (compared to ₹(6.07) in previous year)

Balance Sheet (As at 31st March, 2026)

  • Equity Share Capital: ₹2,85,00,000 (unchanged from previous year)
  • Other Equity: ₹1,10,84,06,309 (compared to ₹1,13,00,96,615 in previous year)
  • Total Equity: ₹1,13,69,06,309 (compared to ₹1,15,85,49,615 in previous year)
  • Non-current Liabilities: ₹90,39,260 (including Deferred Tax Liability of ₹78,87,000, compared to ₹38,62,080 in previous year)
  • Current Liabilities: ₹4,14,75,641 (including Short-term Borrowings of ₹4,03,67,710, compared to ₹4,45,33,485 in previous year)
  • Total Liabilities: ₹5,05,14,901
  • Total Assets: ₹1,18,74,21,210 (compared to ₹1,20,69,45,180 in previous year)
  • Net Worth: ₹56,27,313

Auditor's Qualified Opinion

G M Pawle & Associates, Chartered Accountants (FRN: 160253W) issued a qualified opinion citing:

Basis for Qualified Opinion

1. Non-operational Spinning Division: The company's spinning division has remained substantially non-operational for a prolonged period, with continuous net losses including ₹2,16,43,306 for year ended March 31, 2026.

2. Deferred Tax Liability Concerns: Company carries Net Deferred Tax Liability of ₹78,87,000 as of March 31, 2026 (increased from ₹19,80,000 as of March 31, 2025). Management has not recognized Deferred Tax Assets relating to carried forward financial losses and unabsorbed depreciation due to absence of virtual certainty regarding future taxable income.

3. Lack of Impairment Testing: Company has not completed comprehensive impairment testing of Property, Plant and Equipment under Ind AS 36 despite prolonged non-operational status. Auditors unable to comment on potential adjustments needed for Net Deferred Tax balances and their impact on Retained Earnings and Net Loss.

Material Uncertainty Related to Going Concern

Auditors highlight material uncertainty regarding company's ability to continue as going concern due to:

  • Spinning division not carrying substantial manufacturing operations during the year
  • Net loss of ₹2,16,43,306 for financial year ended March 31, 2026
  • Accumulated losses
  • Prolonged non-operational status of manufacturing activities

Management has prepared financial statements on going concern basis considering estimated realizable value of assets, expected revival measures, restructuring efforts and assessment regarding business continuation.

Internal Financial Controls - Adverse Opinion

Auditors issued adverse opinion on internal financial controls citing material weaknesses as of March 31, 2026:

1. Asset Impairment Assessment Process: Lack of effective control to evaluate and test long-term impairment indicators under Ind AS 36

2. Long-Term Business Evaluation & Deferred Tax Balances: Ineffective financial reporting risk-assessment process for evaluating timing differences and deferred tax liability balances

3. Operational Manufacturing Controls: Non-functional controls for inventory and production machinery monitoring due to sustained closure of spinning facility

Segment-wise Performance

Company operates in two business segments:

Cotton Yarn Manufacturing Segment

  • Revenue: ₹230.69 lakhs for year ended March 31, 2026 (compared to ₹460.01 lakhs previous year)
  • Segment Loss: ₹(101.94) lakhs before tax and interest
  • Capital Employed: ₹10,881.39 lakhs

Solar Power Generation Segment

  • Revenue: ₹47.90 lakhs for year ended March 31, 2026 (compared to ₹91.97 lakhs previous year)
  • Segment Loss: ₹(16.76) lakhs before tax and interest
  • Capital Employed: ₹487.67 lakhs

Key Audit Matters

Auditors identified and addressed four key audit matters:

1. Going Concern Assessment

2. Deferred Tax Asset recognition

3. Possible Impairment of Plant and Machinery

4. Fixed Assets Verification and Ownership

Cash Flow Position

  • Cash and Cash Equivalents: ₹0.10 lakhs (including Cash in hand ₹0.10, Bank Balance ₹0.00)
  • Bank Deposits: ₹7.90 lakhs
  • Total Cash and Cash Equivalents: ₹8.00 lakhs (compared to ₹7.55 lakhs previous year)

Management Signatories

  • Kishore Katare, Managing Director (DIN: 00645013)
  • Sou V K Katare, Director (DIN: 1443784)
  • Kamal Katare, CFO
  • Yadgiri Konda, Audit Committee Chairman

Auditor Signatory

  • CA Ganesh Mallikarjun Pawle, Proprietor (Membership No.: 032561, UDIN: 26032561RACKEQ1249)