Mountain Spinning Mills Unlisted Share Price

BALANCE SHEET AS AT 31st MARCH 2025 OF MOUNTAIN SPINNING MILLS LIMITED

PROFIT & LOSS STATEMENT FOR THE YEAR ENDED 31st MARCH, 2025 OF MOUNTAIN SPINNING MILLS LIMITED

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2025 OF MOUNTAIN SPINNING MILLS LIMITED

Cash Flow Analysis

Mountain Spinning Mills Limited
(Amount in ₹)

The Cash Flow Statement reflects the Company’s liquidity position and cash movement across Operating, Investing, and Financing activities for FY 2024-25 as compared to FY 2023-24

1.Cash Flow from Operating Activities

During FY 2024-25, the Company reported a net cash outflow of ₹3,51,62,784 from operating activities as against an inflow of ₹77,26,634 in the previous year.

Key Highlights:

• * The Company incurred a loss before taxation of ₹1,87,10,537, compared to a profit of ₹65,96,499 in FY 2023-24.

• * Significant non-cash adjustments included:

  •       Impairment loss of ₹79,72,559

  •       Interest expense of ₹57,88,788

  •     Depreciation of ₹13,477

• * Working capital movements had a substantial impact:

  •      Increase in Inventory (₹1,99,90,561)

  •      Increase in Short-term loans and advances (₹1,62,80,889)

  •      Increase in Other current liabilities (₹88,77,070)

The negative operating cash flow primarily reflects higher working capital deployment and the impact of impairment during the year. This indicates temporary liquidity pressure arising from operational restructuring and inventory build-up.

2.Cash Flow from Investing Activities

Net cash used in investing activities stood at ₹18,29,604, compared to an inflow of ₹46,09,993 in the previous year.

Major components:

•      Purchase of fixed assets: ₹48,45,000

•      Sale of investments: ₹2,46,000

•      Interest received: ₹27,69,396

The investing outflow indicates capital expenditure undertaken for strengthening operational capacity. The previous year’s inflow was largely driven by sale of investments.

3.Cash Flow from Financing Activities

The Company generated a strong net cash inflow of ₹4,77,78,576 from financing activities during FY 2024-25, compared to an outflow of ₹1,23,73,867 in FY 2023-24.

Key financing movements:

•      Allotment of shares: ₹1,50,00,000

•      Proceeds from long-term borrowings: ₹3,85,67,364

•      Interest payments: ₹57,88,788

The substantial inflow reflects strategic capital infusion and long-term borrowings undertaken to support working capital requirements and operational stabilization.

4.Net Cash Position

• * Net increase in cash and cash equivalents: ₹1,07,86,188

• * Closing cash balance (31 March 2025): ₹1,18,59,870

• * Previous year closing balance: ₹10,73,682

The significant improvement in year-end cash balance demonstrates strengthened liquidity through financing support despite operating losses.

Overall Assessment

While FY 2024-25 reflects operating challenges driven by impairment losses and increased working capital investment, the Company has successfully strengthened its liquidity through equity infusion and long-term borrowings. The improved closing cash position enhances short-term solvency and provides operational stability going forward.

The management remains focused on improving operational efficiency, optimizing working capital, and restoring positive operating cash flows in subsequent periods.

Key Financial Ratios Of MOUNTAIN SPINNING MILLS LIMITED

1.Current Ratio

FY 2025: 5.63 | FY 2024: 1.83

The Current Ratio improved significantly to 5.63 in FY 2025 from 1.83 in the previous year.

This substantial increase indicates a strong short-term liquidity position, with current assets comfortably exceeding current liabilities. The rise may be attributable to higher inventory levels, increased advances, and enhanced cash balances during the year. While a strong liquidity position enhances solvency and creditor confidence, an excessively high ratio may also suggest temporary capital lock-in in working capital components.

Overall, the Company maintains a robust short-term financial cushion.

2.Debt Service Coverage Ratio (DSCR)

FY 2025: Not Available | FY 2024: 1.35

The DSCR was 1.35 in FY 2024, indicating adequate capacity to service debt obligations from operating profits.

However, the ratio is reported as Not Available (NA) for FY 2025, primarily due to operating losses during the year, which impacted earnings available for debt servicing. Despite this, the Company strengthened its liquidity position through capital infusion and long-term borrowings, ensuring continued financial support.

Management remains focused on restoring operational profitability to improve debt servicing metrics in subsequent periods.

3.Return on Equity (ROE)

FY 2025: 14.24% | FY 2024: 10.79%

Return on Equity improved to 14.24% in FY 2025 from 10.79% in FY 2024.

The increase suggests improved returns generated on shareholders’ funds. This improvement may be influenced by capital restructuring, equity infusion, and financial adjustments during the year. A higher ROE reflects enhanced value generation for shareholders, although sustainability will depend on consistent profitability and operational performance in future periods.

4.Trade Receivables Turnover Ratio

FY 2025: 820 times | FY 2024: 40 times

The Trade Receivables Turnover Ratio increased sharply to 820 times compared to 40 times in the previous year.

This indicates extremely efficient receivables collection and minimal credit exposure at year-end. The significant rise suggests tighter credit control policies, faster realization of dues, or a substantial reduction in outstanding receivables. While this enhances liquidity and reduces credit risk, it may also reflect changes in business structure or accounting presentation during the year.

Overall Financial Interpretation

The Company demonstrates:

• * Strong liquidity position

• * Improved shareholder returns

• * Highly efficient receivables management

• * Temporary pressure on debt servicing due to operational losses

While FY 2025 reflects operational challenges, the financial structure remains stable with strengthened liquidity and improved equity returns. The management’s focus remains on operational recovery, sustainable profitability, and balanced capital management to enhance long-term stakeholder value.