Winsome Yarns Board Approves Borrowing Limit Hike, Auditor Flags Financial Concerns
Winsome Yarns' Board approved a ₹500 crore borrowing limit hike and redesignated Vipan Kumar as Managing Director. Financial results show losses for Q1 FY26 and mixed results for Q2 FY26. Auditors flagged concerns over accumulated losses, non-provisioned interest, and pending balance confirmations, while noting the NCLT-approved resolution plan.
The approval of a significant borrowing limit increase, management changes, and the presentation of quarterly results, coupled with critical auditor remarks, have a substantial impact on the company's financial standing and future operations.
The company is reporting losses, and the auditor's report highlights significant financial concerns and a lack of provisions for interest and receivables, despite the NCLT-approved resolution plan.
Winsome Yarns Limited announced the outcome of its Board Meeting held on August 29, 2026. The Board approved an increase in the company's overall borrowing limit to ₹500 crore. This increase also applies to the limits for selling, mortgaging, or charging assets, and for making investments, granting loans, or providing guarantees, all subject to member approval.
The Board also approved the appointment of M/s Ashok Chhajed & Associates as the Internal Auditor for the financial year 2026-27. Furthermore, Mrs. Pooja Garg was appointed to an office or place of profit with a monthly remuneration not exceeding ₹2 lakh. Mr. Vipan Kumar was redesignated from Additional Executive Director to Managing Director of the Company.
The Board approved the draft notice for the 36th Annual General Meeting, including fixing the date, time, and place, and appointing a scrutinizer. The company also noted the shifting of its registered office from Chandigarh to Dera Bassi, subject to shareholder and regulatory approval.
Financial results for the quarter ended June 30, 2025, and the quarter and half-year ended September 30, 2025, were presented. The company's unaudited standalone financial results for the quarter ended June 30, 2025, showed a net loss of ₹328 lakh on total revenue of ₹48 lakh. For the quarter and half-year ended September 30, 2025, the company reported a net profit of ₹157.26 lakh and a net loss of ₹328.10 lakh, respectively.
The Independent Auditor's Review Report highlighted significant concerns, including accumulated losses exceeding net worth, continuous losses, negative cash flows, and default in repayment of principal and interest. The auditors noted non-provisioning of interest expenses amounting to ₹7226.5 lakh for the quarter ended June 30, 2025, and ₹7610.97 lakh for the quarter ended September 30, 2025. They also pointed out non-provisioning against long-outstanding receivables and pending confirmation of balances. The financial results have been prepared on a going concern basis, considering the approved Resolution Plan by the NCLT, but the consequential accounting impact is still under evaluation.
Additionally, a theft of a transformer valued at approximately ₹59.20 lakh was reported at the spinning mill complex. The company's registered office has been vacated, and operations are currently being conducted from the Mohali unit.
A plain-language summary of a public exchange filing by Winsome Yarns Limited. Read the original for the full detail.