Modern Denim Limited appointed Jatin Kothari as an independent director and Subodh Krishan Dutt Paliwal as an executive director on September 21, 2026. Both appointments are effective immediately but remain subject to shareholder approval.

The Board of Directors approved the moves during a meeting held on Monday, September 21, 2026, following recommendations from the Nomination and Remuneration Committee. The company notified BSE Ltd regarding the outcome in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Appointment Details

Jatin Kothari joins as an Additional Director designated as a Non-executive Independent Director. His term is set for five years starting from the effective date of appointment. Kothari holds a B.Sc. degree and a Diploma in Materials Management. He brings experience in purchase, materials management, and administration, with specific expertise in procurement, vendor coordination, material planning, and administrative activities.

Subodh Krishan Dutt Paliwal is appointed as an Additional Director designated as an Executive Director. Like Kothari, his term is for five years commencing on September 21, 2026. Paliwal holds a Three-Year Diploma in Electronics & Communication Engineering. He possesses over 30 years of experience in the textile industry, specializing in engineering management, project execution, plant operations, utilities, and maintenance.

Paliwal’s background includes extensive work on greenfield projects, quality management systems, energy efficiency, and liaison with government authorities. Both appointees have disclosed no relationships with existing directors of the company.

Regulatory Compliance

The appointments were formalized pursuant to Regulation 30 (read with Part A of Schedule III) of the SEBI Listing Regulations, 2015. The Board meeting commenced at 3:30 pm and concluded at 4:00 pm. Deepak Jain, Company Secretary (Mem. No. A30074), signed off on the disclosure.

Modern Denim Limited reported a narrowed standalone loss of ₹158.94 lakh for the quarter ended June 30, 2026 (Q1FY26), down from a loss of ₹180.44 lakh in the corresponding period of FY25. The improvement was primarily driven by a significant reduction in operating expenses, which offset a steep decline in top-line growth.

Revenue from operations fell 39% year-on-year to ₹332.22 lakh, compared to ₹546.47 lakh in Q1FY25. Total revenue stood at ₹332.66 lakh, including other income of ₹0.44 lakh. For context, the company reported total revenue of ₹2,289.67 lakh from operations for the full year ended March 31, 2026.

Operational Performance

The company’s cost structure saw notable changes in the quarter. Cost of materials consumed dropped to ₹121.17 lakh from ₹296.25 lakh in Q1FY25. Employee benefits expense remained relatively stable at ₹133.43 lakh, slightly lower than the ₹136.49 lakh recorded in the prior year period. Other expenses decreased significantly to ₹105.56 lakh from ₹158.95 lakh.

Depreciation and amortisation expense was ₹12.89 lakh, down from ₹21.04 lakh in Q1FY25. Finance costs were negligible, reported at nil for the quarter, compared to nil in the previous year as well, though auditors noted specific accounting treatments regarding interest provisions.

Auditor Qualifications and Going Concern Risks

Statutory auditor J T Shah & Company issued a limited review report with qualifications based on Ind AS 109 "Financial Instruments". The firm noted that the company did not recognise interest on financial liabilities using the effective interest method. Specifically, provisions for interest amounting to ₹27.61 lakh on cumulative redeemable preference shares and ₹15.31 lakh on certain secured and unsecured borrowings were not made. The company expects waiver or relief under a rehabilitation scheme submitted to the Board for Industrial and Financial Reconstruction (BIFR) and subsequent compromise schemes under Sections 230-232 of the Companies Act, 2013.

Additionally, amortisation of pre-received income corresponding to the unwinding of financial liability under finance cost, amounting to ₹122.97 lakh, was not provided as non-current borrowings were not fair-valued.

What the Numbers Show

The financial results highlight a critical divergence between operational activity and balance sheet stability. While the company managed to reduce its quarterly loss by cutting costs alongside revenue, the statutory auditor explicitly flagged material uncertainties related to the company’s ability to continue as a going concern. Note 7 of the financial results discloses that the company has a negative net worth of ₹7,688.65 lakh. This substantial erosion of equity underscores that the narrowed operational loss is insufficient to address the underlying structural financial distress, making the approval of the pending NCLT scheme vital for continuity.

Regulatory Status

The National Company Law Tribunal (NCLT) disposed of the company’s petition for a scheme of compromise, arrangement, and amalgamation on January 22, 2026, citing the lack of prior stock exchange approval. Modern Denim Limited has since re-submitted an application to the Bombay Stock Exchange (BSE) for the requisite approval. Upon completion of these regulatory requirements, the company plans to re-approach the NCLT for final approval of the scheme. The Board of Directors approved these unaudited financial results in a meeting held on August 12, 2026.