According to the latest audited financial results, Pasari Spinning Mills reported a net profit of ₹0.28 crore for the financial year ended March 31, 2026, representing a decline of 22.22% from the net profit of ₹0.36 crore achieved in the previous financial year ended March 2025. The company's total income dropped to ₹53.25 lakh in FY26 from ₹68.66 lakh in FY25, primarily due to reduced rental income following a court order. The basic earnings per share (EPS) for the year stood at ₹0.20, down from ₹0.26 in the prior year, as reported by the company's audited standalone financial results.
The primary driver of the profit decline was a reduction in rental income, which was recognized only up to January 2026 following the vacation of premises pursuant to an order by the Hon'ble Commercial Court, Mysuru. The company faces a significant legal challenge with Cotton Corporation of India Limited (CCI) regarding cotton purchases and related claims, with execution proceedings initiated before the Hon'ble Commercial Court, Mysuru, and a Proclamation of Sale issued for an immovable property to recover alleged dues amounting to ₹703.12 lakh. However, the Hon'ble High Court of Karnataka has granted an interim stay on the execution proceedings as of January 06, 2026, providing some relief to the company. The company has fully provided for security deposits amounting to ₹63.90 lakh given to CCI in earlier years, while the balance disputed amount of ₹639.23 lakh has been disclosed as a contingent liability pending the final outcome of legal proceedings.
Despite the revenue challenges, Pasari Spinning Mills demonstrated effective cost management with total expenses for the year totaling ₹25.31 lakh, lower than the ₹34.29 lakh reported in the previous year. The company's expenses for the year totaled ₹25.31 lakh, compared to ₹34.29 lakh reported in the previous year, contributing to the overall improvement in cost efficiency. The Board of Directors approved the financial results at a meeting held on May 29, 2026, with the results reviewed by the Audit Committee and accompanied by an Independent Audit Report from statutory auditors Rao & Emmar, Chartered Accountants.
The Independent Audit Report highlighted several material concerns, including a material uncertainty related to the ongoing legal dispute with Cotton Corporation of India Limited and the absence of revaluation for investment properties. The auditors noted that investment properties have not been revalued during the current financial year, with the last revaluation conducted on March 31, 2022. Additionally, the Chief Financial Officer has not signed the Financial Statements, as required under Section 134 of the Companies Act, 2013. Despite these observations, the audit report remains unqualified, reflecting the company's overall compliance with financial reporting standards despite the challenging operational environment.
