Sri Nachammai Cotton Mills Limited reported its audited standalone financial results for the quarter and year ended March 31, 2026, revealing a continued loss-making position amid persistent weakness in yarn demand and a disparity between cotton and yarn prices. The results were reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on May 19, 2026. Statutory auditors M/S. Gopalaiyer and Subramanian, Chartered Accountants (Firm Registration No. 000960S), issued an unmodified audit opinion on the financial statements.

Annual Financial Performance

For the full year ended March 31, 2026, the company's revenue from operations declined to ₹6,452.91 lakhs from ₹6,917.34 lakhs in the previous year. Other income also fell sharply to ₹24.38 lakhs from ₹137.48 lakhs, bringing total revenue to ₹6,477.29 lakhs compared to ₹7,054.82 lakhs in FY25. Total expenses for the year stood at ₹7,170.83 lakhs against ₹7,457.73 lakhs in the prior year, resulting in a pre-exceptional loss of ₹693.54 lakhs. An exceptional item of ₹658.88 lakhs—arising from the modification of redeemable preference share terms—narrowed the pre-tax loss to ₹34.66 lakhs for FY26, compared to ₹402.91 lakhs in FY25. After accounting for tax adjustments, the net loss for the year stood at ₹379.75 lakhs versus ₹320.50 lakhs in the prior year.

Quarterly Financial Performance

For the quarter ended March 31, 2026, revenue from operations stood at ₹1,488.15 lakhs, compared to ₹1,831.36 lakhs in the corresponding quarter of the previous year. Total revenue for the quarter was ₹1,496.03 lakhs against ₹1,861.58 lakhs in Q4 FY25. The net loss for the quarter widened to ₹506.76 lakhs from ₹60.69 lakhs in the same period last year, primarily due to deferred tax adjustments. Total comprehensive loss for the quarter was ₹508.54 lakhs compared to ₹62.12 lakhs in Q4 FY25.

Balance Sheet Highlights

As at March 31, 2026, the company's total assets stood at ₹9,374.43 lakhs, marginally lower than ₹9,389.53 lakhs as at March 31, 2025. Total equity declined to ₹1,228.68 lakhs from ₹1,611.03 lakhs, reflecting the accumulated losses during the year. Non-current borrowings reduced to ₹2,582.03 lakhs from ₹3,142.00 lakhs, while current borrowings increased to ₹2,310.94 lakhs from ₹1,421.12 lakhs. Property, plant and equipment increased to ₹4,952.76 lakhs from ₹3,888.35 lakhs, reflecting capital expenditure during the year.

Key Operational and Accounting Developments

Several notable developments shaped the company's financial performance during the year:

• Exceptional Item: The company had issued redeemable preference shares to its promoters on April 26, 2012, amounting to ₹15,00,00,000 (Rupees Fifteen Crores), with an original maturity of 13 years. Following approval at an Extraordinary General Meeting of preference shareholders on September 13, 2024, and a special resolution passed at an EGM on December 3, 2024, the redemption period was extended by an additional 7 years. In accordance with Ind AS 109, the modification was assessed as a substantial modification, resulting in derecognition of the existing liability and recognition of a new financial liability at its present value of ₹8,41,12,213/-. The difference of ₹6,58,87,787/- was recognised as income and reported as an exceptional item, resulting in a one-time income recognition of ₹6.58 crores for the year ended March 31, 2026.
• Power and Fuel Cost Reduction: Power and fuel costs declined significantly to ₹82.83 lakhs in Q4 FY26 from ₹190.46 lakhs in Q4 FY25. For the full year, power and fuel costs reduced to ₹455.39 lakhs from ₹740.60 lakhs in FY25, primarily attributable to captive use of electricity generated from the 4 MW Solar power plant commissioned during FY2024–25.
• Operational Constraints: The current quarter continued to witness poor demand for yarn, with a continued disparity in cotton prices compared to yarn prices. As a result, the company operated only one unit for 3 shifts, with depreciation provided accordingly.
• Deferred Tax Asset: During the year ended March 31, 2026, the company recognised a deferred tax asset on unabsorbed business losses and unabsorbed depreciation, based on the probability of sufficient taxable profits from continuing operations, improved market conditions, operational restructuring, and planned sale of unproductive assets.
• Labour Codes: The Government of India notified four Labour Codes on November 21, 2025, consolidating 29 existing labour laws. The company assessed that no material incremental liability arises for employees and is in the process of evaluating the impact for contract workforce.

Cash Flow Summary

Net cash from operating activities improved significantly to ₹1,349.01 lakhs for the year ended March 31, 2026, compared to ₹38.71 lakhs in the prior year. Net cash used in investing activities was ₹(1,323.84) lakhs, primarily on account of purchase of property, plant and equipment of ₹(1,310.61) lakhs. Net cash used in financing activities was ₹(25.47) lakhs. Cash and cash equivalents at the end of the year stood at ₹2.14 lakhs compared to ₹2.44 lakhs at the beginning of the year.

The paid-up equity share capital of the company remained unchanged at ₹428.64 lakhs with a face value of ₹10.00 per share. Other equity (reserves excluding revaluation reserves) stood at ₹800.04 lakhs as at March 31, 2026, compared to ₹1,182.39 lakhs as at March 31, 2025. The company's main business is the manufacture and sale of yarn and related products, with no separate reportable segments as per Ind AS 108.

Sri Nachammai Cotton Mills has intimated BSE Limited of its upcoming 76th Board of Directors meeting, scheduled for Tuesday, May 19, 2026, at 11:30 A.M., to be held at the company's registered office at Door No. 181, 'VASANTHAM', 4th Cross Street, New Fairlands, Salem – 636 016. The intimation, dated May 7, 2026, was filed in accordance with Regulation 29 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Board Meeting Agenda

The primary agenda of the 76th Board Meeting is to consider and take on record the Audited Standalone Financial Results of the company for the quarter and year ended March 31, 2026, along with the Auditors' Report carrying an unmodified opinion. The company has also stated that a copy of the Auditors' Report with unmodified opinion for the quarter and year ended March 31, 2026 will be submitted on or before May 19, 2026. Required particulars will be communicated to the exchange by mail upon conclusion of the board meeting.

Key details of the scheduled board meeting are summarised below:

Trading Window Closure

In line with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015, the company has announced the closure of the trading window for dealing in its securities. The trading window will remain closed for all specified persons as defined under the company's Code of Conduct during the following period:

• Trading Window Closed From: April 1, 2026
• Trading Window Closed Until: May 21, 2026
• Both days inclusive

This restriction applies to all specified persons mentioned in the company's Code of Conduct formulated in accordance with the applicable SEBI regulations.

Public Notice

The notice of the board meeting date has also been published in English and Tamil (Regional Language) newspapers, as required. The English-language notice was published in Trinity Mirror and the Tamil-language notice in MakkalKural, both on or before May 8, 2026. The filing was signed by P. Umayal, Chairman cum Managing Director (DIN: 00110260), on behalf of Sri Nachammai Cotton Mills.