Company Overview

Sambandam Spinning Mills Limited (Scrip Code: 521240) is a listed textile manufacturing company with three manufacturing units around Salem, Tamil Nadu, and renewable energy assets including 12.35 MW wind energy converters and 9MW solar plants. The company submitted its 52nd Annual Report for FY 2025-26 to BSE, including notice of AGM scheduled for September 18, 2026.

Financial Performance

Standalone Results (₹ crore):

  • Revenue from Operations: ₹263.66 (FY25: ₹268.48)
  • Total Income: ₹265.01 (FY25: ₹269.55)
  • Net Loss: ₹5.74 (FY25: ₹7.43) - 22.75% improvement
  • Basic EPS: ₹(13.29) (FY25: ₹(17.23))

Operational Metrics:

  • Production Volume: 87.39 lakh kgs (FY25: 86.82 lakh kgs)
  • Sales Volume: 90.92 lakh kgs (FY25: 88.89 lakh kgs)
  • Capacity Utilization: ~90%
  • Green Energy Generation: 322.98 lakh kWh

Capital Structure & Debt Position

  • Net Debt: ₹138.58 crore (FY25: ₹118.96 crore)
  • Debt-to-Equity Ratio: 1.73 (FY25: 1.39)
  • Total Borrowings: ₹138.76 crore
  • Term Loans: ₹26.19 crore
  • Cash Credit: ₹52.11 crore
  • Fixed Deposits from Members: ₹10.90 crore
  • Unsecured Loans from Directors: ₹7.32 crore
  • Total Equity: ₹80.39 crore

Key Financial Ratios Improvement

  • Current Ratio: 1.20 (1.05) +14%
  • Return on Net Worth: (6.92)% ((8.40)%) +18%
  • Debt Service Coverage: 0.62x (0.49x) +27%
  • Return on Capital Employed: 1.83% (0.63%) +190%
  • Trade Receivables Turnover: 13.26x (10.55x) +26%

AGM & Corporate Governance

52nd AGM Details: September 18, 2026 via VC/OAVM

Key Agenda Items:

  • Adoption of FY26 financial statements
  • Ratification of statutory auditor fees (₹8 lakh + GST)
  • Reappointment of Mr. J. Sakthivel as director
  • Continuation of Mr. S. Dinakaran as Joint MD beyond age 70
  • Reappointment of independent directors
  • Authorization to accept fixed deposits from members

Board Composition: 12 directors including 6 independent directors

Promoter Holding: 50.24%

Auditor Report & Compliance

Auditor: P.N. Raghavendra Rao & Co. issued unmodified opinion

Key Audit Matter: Revenue recognition - assessed accounting policy alignment with Ind AS 115, tested controls and substantive procedures

Regulatory Compliance: Full compliance with SEBI LODR Regulations, no qualifications in Secretarial Audit Report

Related Party Transactions

Material transactions at arm's length basis:

  • Sale of wind power to Sambandam Siva Textiles: ₹1.21 crore
  • Corporate guarantee from Sambandam Fabrics: ₹24.35 crore
  • Rent paid: ₹0.06 crore
  • Hospital services availed: ₹0.32 crore

Contingent Liabilities & Risks

Total Contingent Liabilities: ₹8.95 crore under various disputes including:

  • TNEB Peak Hour penalty: ₹1.30 crore
  • Various tax demands: ₹5.86 crore
  • Electricity related disputes: ₹1.79 crore

Risk Management:

  • Interest rate risk: 25bps change impacts profit by ₹2.26 lakh
  • No foreign currency exposure
  • Maintains sufficient liquidity through working capital lines

Subsequent Events & Outlook

No significant events between March 31, 2026 and auditor's report date (May 23, 2026). Company continues to operate as going concern despite losses, focusing on operational efficiency and debt management in challenging textile market conditions.