Richa Industries Limited is an **ISO 9001:2008** certified manufacturing entity that has transitioned from a diversified industrial player into a distressed asset currently undergoing formal **Liquidation**. Following the failure of the **Corporate Insolvency Resolution Process (CIRP)**, the company’s operations are severely curtailed, and its financial position is characterized by total net worth erosion and significant legal encumbrances. --- ### **Current Legal and Insolvency Status** The company is no longer under the control of its promoters or Board of Directors. Its legal status is defined by the following: * **Liquidation Order:** The **Hon'ble NCLT, Chandigarh Bench**, officially ordered the liquidation of the company on **June 11, 2025**. * **Suspension of Governance:** The powers of the Board of Directors have been **suspended** since **December 21, 2018**. All management powers are currently vested in the **Liquidator** (formerly the Resolution Professional). * **Resolution Failure:** Despite significant market interest during the CIRP—including **86 Expressions of Interest** and **12 formal resolution plans** submitted in the **2023-24** cycle—the Committee of Creditors (**CoC**) did not approve any plan, leading to the liquidation mandate. * **Regulatory Non-compliance:** The company lacks a functional Board, Independent Directors, and a Women Director. Statutory committees (Audit, CSR, Stakeholders Relationship) are not properly constituted, and there is no **Internal Auditor** appointed under **Section 138** of the Companies Act, 2013. --- ### **Operational Segment Analysis** Historically a multi-disciplinary firm, the company’s current operations are fragmented and largely inactive: | Segment | Status | Operational Details | |:---|:---|:---| | **Textile Division** | **Partially Operational** | Located in **Faridabad, Haryana**. Focuses on the textile value chain (fiber, yarn, fabric, apparel). The **Dyeing and Finishing** sections are active; however, the **Knitting** section operates at only **20% capacity**. | | **Construction & Engineering (PEB)** | **Non-operational** | Located in **Kashipur, Uttarakhand**. This unit has been closed since **January 2019** due to a total lack of working capital. | | **EPC (Engineering & Procurement)** | **Completed** | All legacy projects have been executed. There is currently **no new contract pipeline** or bidding activity. | **Operational Constraints:** The remaining textile operations utilize machinery that is over **15 years old**, resulting in frequent breakdowns, high maintenance costs, and uneconomic production cycles. --- ### **Financial Performance and Distress Metrics** The company has experienced a terminal decline in revenue and persistent losses, leading to a complete erosion of shareholder value. #### **Consolidated Financial Summary** | Metric | FY 2023-24 | FY 2022-23 | FY 2021-22 | | :--- | :--- | :--- | :--- | | **Total Turnover** | **₹11.48 Crore** | **₹27.83 Crore** | **₹37.01 Crore** | | **Loss Before Tax** | **₹(1,765.33) Lakhs** | **₹(2,209.56) Lakhs** | **₹(3,425.76) Lakhs** | | **Earnings Per Share (EPS)** | **₹(7.15)** | **₹(8.41)** | **₹(11.88)** | #### **Key Balance Sheet Risks** * **Accumulated Losses:** As of March 31, 2024, standalone accumulated losses reached **₹334.73 Crore** (Consolidated: **₹336.39 Crore**). * **Debt Profile:** Total fund-based borrowings aggregate to approximately **₹306.04 Crore**. All credit facilities from primary partners (**Yes Bank, Kotak Mahindra Bank, Indian Overseas Bank**) are classified as **Non-Performing Assets (NPA)**. * **Asset Valuation Uncertainty:** Statutory auditors have issued **Qualified Opinions** because **Inventory (₹4.19 Crore)** and **Net Fixed Assets (₹85.83 Crore)** have not been physically verified or independently valued. * **Receivables Risk:** Approximately **₹50.55 Crore** in trade receivables and security deposits are past due, with their realizability considered highly uncertain. --- ### **Critical Risk Factors** #### **1. Legal and Fraud Investigations** A **CBI FIR** was registered on **December 25, 2020**, following a forensic audit by **Indian Overseas Bank**. The audit revealed evidence of fraudulent transactions, adding significant criminal litigation risk to the liquidation process. #### **2. Going Concern Uncertainty** Auditors continue to highlight material uncertainties regarding the company's ability to continue as a **Going Concern**. The transition to liquidation implies that assets may not be realized, nor liabilities discharged, in the normal course of business. #### **3. Statutory Defaults** The company is chronically irregular in depositing statutory dues, including **Provident Fund (PF), ESI, Income Tax, and GST**. As of March 2024, outstanding **TDS** stood at **₹22.65 Lakhs**. #### **4. Macro-Economic Pressures** External factors including the **Russia-Ukraine war**, the **Red Sea crisis**, and the **Israel-Hamas conflict** have further pressured international trade margins and supply chains, complicating the disposal of textile inventory. #### **5. Reporting and Transparency Issues** There are significant delays in financial reporting. For instance, the **June 2025** quarter results were approved by the Liquidator only on **September 30, 2025**, without the mandatory prior intimation to stock exchanges, reflecting a breakdown in standard corporate governance. --- ### **Subsidiaries and Workforce** * **Subsidiary:** The company maintains one subsidiary, **Richa Krishna Constructions Private Limited**, whose financials are currently incorporated based on **unaudited accounts**. * **Human Capital:** Despite the liquidation status, the company still employs over **290 people**, primarily within the partially active textile unit in Faridabad.