Pasari Spinning Mills has closed its trading window for dealing in the company's securities from July 1, 2026, until 48 hours after the declaration of the unaudited financial results for the quarter ending June 30, 2026. This measure is implemented to ensure compliance with regulatory standards regarding insider trading during the period leading up to financial announcements.

The decision follows the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015, as well as the company's internal Code of Conduct for Prevention of Insider Trading. Consequently, all designated persons and their immediate relatives have been advised to refrain from trading in the securities of the company during this specified closure period.

The company has stated that the specific date for the Board Meeting, convened to approve the unaudited financial results for the quarter, will be communicated in due course. The trading window will remain shut until the stipulated time following the result declaration to prevent any potential misuse of unpublished price-sensitive information.

Pasari Spinning Mills Limited reported a net profit of ₹27.96 lakh for the financial year ended March 31, 2026, a decrease from ₹36.05 lakh in the previous year, as per its audited standalone financial results. The decline in profitability is primarily attributable to 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's total income for the year stood at ₹53.25 lakh, compared to ₹68.66 lakh in FY25.

The Board of Directors approved the financial results at a meeting held on May 29, 2026. The results were reviewed by the Audit Committee and are accompanied by an Independent Audit Report from the statutory auditors, Rao & Emmar, Chartered Accountants. The report notes that the financial statements have been prepared on a going concern basis, despite a material uncertainty highlighted by the auditors regarding ongoing legal disputes.

Key Financial Metrics

The company's expenses for the year totaled ₹25.31 lakh, lower than the ₹34.29 lakh reported in the previous year. Other operating income decreased to ₹53.25 lakh in FY26 from ₹68.66 lakh in FY25. The basic earnings per share (EPS) for the year stood at ₹0.20, down from ₹0.26 in the prior year.

Legal Disputes and Contingent Liabilities

The auditors have drawn attention to an ongoing legal dispute between the company and Cotton Corporation of India Limited (CCI) regarding cotton purchases and related claims. Execution proceedings were initiated before the Hon'ble Commercial Court, Mysuru, and a Proclamation of Sale was issued for an immovable property of the company to recover alleged dues amounting to ₹703.12 lakh. The Hon'ble High Court of Karnataka has granted an interim stay on the execution proceedings as of January 06, 2026.

Security deposits amounting to ₹63.90 lakh given to CCI have been fully provided for in earlier years. The balance disputed amount of ₹639.23 lakh has been disclosed as a contingent liability pending the final outcome of the legal proceedings. Additionally, the company has not paid property tax since FY 2019-20, though an estimated provision of ₹18.87 lakh has been made in the financial statements.

Auditor Observations

The Independent Audit Report included an emphasis of matter paragraph regarding the company's investment properties, which have not been revalued during the current financial year, with the last revaluation conducted on March 31, 2022. The auditors also noted that 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.