Key Event - Insolvency Proceedings

The Hon'ble National Company Law Tribunal (NCLT), Amravati Bench, admitted petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the Company vide order dated April 06, 2026. Corporate Insolvency Resolution Process (CIRP) has been initiated.

Consequent upon commencement of CIRP, the powers of the Board of Directors stand suspended and are being exercised by the Resolution Professional (Mr. Chillale Rajesh) in accordance with IBC provisions.

Subsequently, the National Company Law Appellate Tribunal (NCLAT), Chennai Bench, vide order dated 18th June 2026, stayed further CIRP proceedings pending consideration of restructuring proposal submitted by petitioners before Committee of Creditors (CoC).

Financial Results Summary (Year Ended 31st March 2026)

(All figures in ₹ lakhs)

Income:

  • Revenue from Operations: ₹20,19,225
  • Other Operating Income: ₹92,281
  • Total Revenue from Operations: ₹24,13,506
  • Other Income: ₹24,827
  • Total Income: ₹24,38,333

Expenses:

  • Cost of Material Consumed: ₹18,30,427
  • Changes in Inventories: ₹29,102
  • Employee Benefits Expenses: ₹1,67,703
  • Depreciation and Amortisation: ₹1,45,406
  • Finance Costs: ₹4,44,840
  • Other Expenses: ₹4,46,552
  • Total Expenses: ₹33,24,030

Profit/Loss:

  • Loss before Tax and Exceptional Items: ₹(8,856.07)
  • Exceptional Items: ₹0.00
  • Loss before Tax: ₹(8,856.97)
  • Tax Expense: Deferred Tax Credit ₹(1,740.9)
  • Net Loss for the Year: ₹(7,116.88)

Other Comprehensive Income: ₹(68.92)

Total Comprehensive Loss: ₹(8,751.80)

Per Share Data:

  • Paid-up Equity Share Capital: ₹10,562.10 lakhs (Face Value ₹2 per share)
  • Basic and Diluted EPS: ₹(16.44)

Balance Sheet Position as at 31st March 2026

(All figures in ₹ lakhs)

Assets:

  • Property, Plant and Equipment: ₹33,058.31
  • Capital Work-in-progress: ₹753
  • Investments: ₹2,986
  • Other Financial Assets: ₹3,210
  • Deferred Tax Assets (Net): ₹37,026
  • Total Non-Current Assets: ₹37,026
  • Inventories: ₹28,900
  • Trade Receivables: ₹4,451
  • Cash and Cash Equivalents: ₹7
  • Other Bank Balances: ₹3
  • Other Financial Assets: ₹3,190
  • Other Current Assets: ₹6,585
  • Total Current Assets: ₹43,611
  • Total Assets: ₹43,611

Liabilities and Equity:

  • Equity Share Capital: ₹10,562.10
  • Other Equity: ₹(8,476.16)
  • Total Equity: ₹2,088
  • Long-term Borrowings: ₹0
  • Other Financial Liabilities: ₹0
  • Provisions: ₹224
  • Deferred Tax Liabilities: ₹0
  • Other Non-current Liabilities: ₹588
  • Total Non-current Liabilities: ₹812
  • Short-term Borrowings: ₹38,875
  • Trade Payables: ₹212
  • Other Financial Liabilities: ₹593
  • Other Current Liabilities: ₹199
  • Provisions: ₹31
  • Current Tax Liabilities: ₹0
  • Total Current Liabilities: ₹39,911
  • Total Liabilities: ₹40,723

Auditor's Disclaimer of Opinion

Brahmayya & Co, Chartered Accountants, issued disclaimer opinion due to inability to obtain sufficient appropriate audit evidence for several material matters:

a. Deferred Tax Asset Recognition:

  • Company recognized Deferred Tax Asset of ₹5,124.54 lakhs on carried forward business losses and unabsorbed depreciation
  • Auditors unable to determine appropriateness given ongoing CIRP, accumulated losses, and uncertainty regarding future taxable profits

b. MAT Credit Recognition:

  • Company recognized MAT credit of ₹1,968.75 lakhs under section 115JAA of Income-tax Act, 1961
  • Finance Act 2026 amendments may cause lapse of credit unless company opts for new tax regime
  • Unable to determine recoverability and future utilization

c. Impairment Assessment:

  • Management did not perform impairment assessment of Property, Plant and Equipment (carrying value ₹33,058.31 lakhs)
  • Indicators of impairment existed including recurring losses, adverse market conditions, and insolvency proceedings
  • Unable to determine required impairment loss

d. Leave Encashment Provision:

  • Company not recognized provision for earned leave payable as per new labour code effective November 2025
  • No actuarial valuation obtained
  • Unable to quantify understatement of employee benefit expenses and liabilities

e. Creditor Claims Reconciliation:

  • Secured financial creditors claimed amounts exceeding book values:
  • Union Bank of India: Claimed ₹23,193.84 lakhs vs Book ₹21,200 lakhs (Difference ₹1,993.84 lakhs)
  • Indian Bank: Claimed ₹19,639.13 lakhs vs Book ₹17,356.65 lakhs (Difference ₹2,282.49 lakhs)
  • Total difference: ₹4,276.33 lakhs
  • Unable to reconcile differences or determine necessary adjustments

f. Lower Finished Goods Yield:

  • Significant reduction in yield of finished goods from raw material consumption compared to previous year
  • Management attributed to deterioration in raw material quality
  • Unable to verify appropriate recording of raw material consumption and inventory values

Material Uncertainty Related to Going Concern

Company's accumulated losses, erosion of net worth, defaults in borrowings repayment, and CIRP initiation indicate material uncertainty regarding going concern assumption. However, financial statements prepared on going concern basis considering:

  • Company continues operations during CIRP
  • CIRP framework contemplates resolution and revival
  • Resolution Professional pursuing process in accordance with IBC
  • Expectation of liability restructuring and business continuation

Other Significant Notes

1. Interest Provision: Interest liability on term loans and working capital loans provided based on statements received through mail from banks

2. Subsidiaries: No subsidiaries/associates/JV as on 31.3.2026

3. Figure Preparation: Figures for quarters are balancing figures between audited full-year and unaudited nine-month results

4. RP Disclaimer: Resolution Professional signed results based on accounts from suspended management period, with disclaimer of responsibility for pre-CIRP affairs