XIII. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event and
it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows
to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of
money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognised in the Statement of
Profit and Loss as a finance cost. Provisions are reviewed at each reporting date and are adjusted to reflect the current best
estimate.
A present obligation that arises from past events where it is either not probable that an outflow of resources will be required
to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are
also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by
the occurrence or non -occurrence of one or more uncertain future events not wholly within the control of the Company.
Claims against the Company where the possibility of any outflow of resources in settlement is remote, are not disclosed as
contingent liabilities.
Contingent assets are not recognised in financial statements.
XIV. Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale.
Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets
is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they
are incurred.
XV. Segment Reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenues
and incur expenses, whose operating results are regularly reviewed by the company’s chief operating decision maker (CODM)
to make decisions for which discrete financial information is available Based on the management approach as defined in Ind
AS 108, the chief operating decision maker evaluates the Company’s performance and allocates resources based on an
analysis of various performance indicators by geographic segments.
XVI. Government Grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be
received and the Company will comply with all attached conditions. Government grants relating to income are deferred and
recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate
and presented within other income.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred
income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented
within other income.
Government grants relating to an expense item are recognised in the Statement of Profit and Loss by way of a deduction to
the related expense on a systematic basis over the periods that the related costs, for which it is intended to compensate, are
expensed.
XVII. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing:
- the profit attributable to owners of the company
- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in
equity shares issued during the year
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
- the after-income tax effect of interest and other financing costs associated with dilutive potential equity
- the weighted average number of additional equity shares that would have been outstanding assuming the conversion
of all dilutive potential equity shares.
XVIII. Cash and cash equivalents
Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value. Cash and cash equivalents in the Balance Sheet comprise cash at
bank and in hand and short-term deposits with banks having original maturity of three months or less which are subject to
insignificant risk of changes in value.
XIX. Cash Flow Statement
Cash Flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of
a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or
expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities
of the Company are segregated based on the available information.
Significant accounting judgements, estimates and assumptions
The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS
requires the management of the Company to make estimates and assumptions that affect the reported balances of assets
and liabilities, disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts
of income and expense for the periods presented.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimates are revised and future periods are affected.
Key sources of estimation of uncertainty at the date of the financial statements, which may cause a material adjustment to
the carrying amounts of assets and liabilities within the next financial year, are in respect of impairment of non-current assets,
useful lives of property, plant and equipment, valuation of deferred tax assets, provisions and contingent liabilities and fair
value measurement.
a) Impairment of financial assets
Trade receivables are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable
amounts. Individual trade receivables are written off when management deems them not collectable. Impairment is
made on the expected credit loss model, which is the present value of the cash shortfall over the expected life of the
financial assets. The impairment provisions for financial assets are based on assumption about the risk of default and
expected loss rates. Judgement in making these assumptions and selecting the inputs to the impairment calculation are
based on past history, existing market condition as well as forward looking estimates at the end of each reporting period.
b) Impairment of non - financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which
is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation
is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable
market prices less incremental costs for disposing of the asset. The value in use calculation is based on a Discounted
Cash Flow (‘DCF’) model. The cash flows are derived from the budget for the next five years and do not include
restructuring activities that the Company is not yet committed to or significant future investments that will enhance
the asset’s performance of the Cash Generating unit (‘CGU’) being tested. The recoverable amount is sensitive to
the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for
extrapolation purposes. These estimates are most relevant to disclosure of fair value of investment property recorded
by the Company.
c) Useful lives of property, plant and equipment and intangible assets
The Company reviews the useful life of property, plant and equipment and intangible assets at the end of each reporting
period. This reassessment may result in change in depreciation/ amortisation expense in future periods.
d) Valuation of deferred tax assets
The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. The policy for the
same has been explained under Note (xii) above.
e) Defined benefit plans
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial
valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the
future. These include the determination of the discount rate; future salary increases and mortality rates. Due to the
complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes
in these assumptions. All assumptions are reviewed at each reporting date.
f) Claims, Provisions & Contingent Liabilities
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of
funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of
recognition and quantification of the liability require the application of judgement to existing facts and circumstances,
which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts
of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
g) Fair value measurement
Management uses valuation techniques to determine the fair value of financial instruments (where active market quotes
are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how
market participants would price the instrument. Management bases its assumptions on observable data as far as
possible but this is not always available. In that case management uses the best information available. Estimated fair
values may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.
XX. Standard issued but not yet effective
There are no standards that are issued but not yet effective on March 31,2026
The company has adopted Ind AS 116 “Leases” and applied the standard to all lease contracts existing on the date of initial application
date, i.e. 1st April, 2019. The company has used the modified retrospective approach for transitioning to Ind AS 116 with right of use asset
recognized at an amount equal to the lease liability adjusted for any prepayments/accruals recognized in the balance sheet immediately
before the date of initial application. Accordingly, comparatives for the year ended 31st March, 2019 have not been retrospectively
adjusted.
The operating leases recorded in the balance sheet following implementation of Ind AS 116 are principally in respect of leasehold land
representing right to use as per contracts excluding low value assets and short term leases of 12 months or less.
(ii) Terms/Rights Attached to Equity Shares
The company has only one class of equity shares having a par value of ' 10 per share. Each holder of equity share is entitled to
one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing
Annual General Meeting.
In the event of liquidation of the company , the holders of equity shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the
shareholders.
(g) The average expected future working life of members of the defined benefit obligation as at March 31, 2026 is 19.00 years
(as at March 31,2025: 20.00 years)
(h) Best Estimate of Contribution during the next year
The Best Estimate Contribution for the Company during the next year would be ' 89.56 Lakhs
1) The Company has a defined benefit gratuity plan in India. The company’s defined benefit gratuity plan is a final salary plan for
employees. Gratuity is paid from company as and when it becomes due and is paid as company’s scheme for Gratuity.
2) Gratuity is a defined benefit plan and company is exposed to the following risks:
Interest Risk Interest rate risk: A fall in the discount rate which is linked to the Government Securities Rate will increase the present
value of the liability requiring higher provision.
Salary Risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As
such, an increase in the salary of the members more than assumed level will increase the plan’s liability
Investment Risk The present value of defined benefit plan liability calculated using a discount rate which is determined by reference
to marker yields as at the end of the reporting period on government bonds. If the return on plant assets is below this rate, it will
create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and
other debt instruments.
Assets Liability Matching Risk The plan faces the ALM risk as to the matching cash flow. Company has to manage pay-out based
on pay as you go basis from own funds.
Mortality Risk Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have
any longevity risk.
Concentration Risk Plan is having a concentration risk as all the assets are invested with the insurance company and a default will
wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
36. Disclosure in respect of Operating Segments as per Ind AS 108
The company is engaged in manufacturing (in house and outsourced) fabrics, ready to wear garments, considering the overall
nature, the management is of the opinion that the entire operation of the company falls under one segment i.e. Textiles and as such
there is no separate reportable segment for the purpose of disclosure as required under Indian Accounting Standards (Ind AS 108)
- Operating Segments.
The management assessed that the fair value of cash and cash equivalent, trade receivables, trade payables, and other current financial
assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable
approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from
the values that would eventually be received or settled.
Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2 - The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which
maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to
fair value an instrument are observable, the instrument is included in level 2.
Level 3 - If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3.
iii. Valuation technique used to determine fair value
Specific Valuation techniques used to value financial instruments include:
- the use of quoted market prices or dealer quotes for similar instruments
- the fair value of the remaining financial instruments is determined using discounted cash flow analysis
iv. Valuation processes
The accounts and finance department of the company includes a team that performs the valuations of financial assets and liabilities
required for financial reporting purposes, including level 3 fair values. This team reports directly to the chief financial officer (CFO) and
the audit committee. Discussions of valuation processes and results are held between the CFO, AC and the valuation team regularly in
line with the company’s reporting requirements.
40. Financial Risk Management
Risk Management Framework
The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s financial
risk management policy is set by the managing board.
40.1 Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial
instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates
and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial
instruments including loans and borrowings, foreign currency receivables and payables.
The Company manages market risk through treasury department, which evaluates and exercises independent control over the entire
process of market risk management. The treasury department recommends risk management objectives and policies, which are approved
by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing
hedging strategies for foreign currency exposures and borrowing strategies.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. The Company is not exposed to significant interest rate risk as at the respective reporting dates.
Sensitivity
Variable interest rate loans are exposed to Interest rate risk, the impact on profit or loss before tax may be as follows:
40.1.2 Foreign Currency Risk
The Company’s exposure to exchange fluctuation risk is very limited for its purchase from overseas suppliers in various foreign currencies.
Foreign Currency Risk is risk that fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchanges rates.
The Company entered into forward exchanges contract average maturity of 90-180 days to hedge against its foreign currency exposures
relating to underlying liabilities firm commitments. The Company has not entered into any Derivatives instruments for trading and
speculative purposes.
There is no foreign currency exposure during the year (P.Y. NIL).
40.2 Credit Risk
Credit risk refers to the risk of default on its obligation by the counter party resulting in a financial loss. The maximum exposure to the
credit risk at the reporting date is primarily from trade receivables amounting to ' 2060.97 lakhs and ' 2521.33 lakhs as of March 31,
2026 and March 31,2025 respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers.
Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the
credit worthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind
AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to
compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal
credit risk factors and the Company’s historical experience for customers.
The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The
Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.
As of 31st March 2026, The Company had a working capital of ' 2,054.36 Lakhs including cash and cash equivalent of ' 5.43 Lakhs.
As of 31st March 2025, The Company had a working capital of ' 1,692.08 Lakhs including cash and cash equivalent of ' 5.29 Lakhs.
40.3.1 Maturities of Financial Liabilities
The table below analyse the Company’s financial liabilities into relevant maturity grouping based on their contractual maturities. The
amount disclosed in the tables are contractual undisclosed cash flow.
40.4 Capital Management
The Company manages its capital to ensure that Company will be able to continue as going concern while maximizing the return to
shareholders by striking a balance between debt and equity. The capital structure of the Company consists of net debts (offset by cash
and bank balances) and equity of the Company (Comprising issued capital, reserves, retained earnings). The Company is not subject to
any externally imposed capital requirements except financial covenants agreed with lenders.
In order to optimize capital allocation, the review of capital employed is done considering the amount of capital required to fund capacity
expansion, increased working capital commensurate with increase in size of business and also fund investments in new ventures which
will drive future growth. The Chief Financial Officer (“CFO”) reviews the capital structure of the Company on a regular basis. As part of
this review, the CFO considers the cost of capital and the risks associated with each class of capital.
Notes :
a. The decrease in current assets and current liabilities aligns with the reduced level of business activities during the year.
b. During the year, the company’s situation has deteriorated, resulting in reduced cash flows and profitability compared to the previous
year. Consequently, all ratios related to cash flows, revenue, and profitability have declined compared to the previous year.
42. Other statutory information
i) The Company does not have any benami property where any proceedings have been initiated or are pending against the
Company for holding any such property.
ii) There were borrowings by the Company from banks or financial institutions on the basis of security of current assets. The
quarterly returns or statements filed by the Company with such banks or financial institutions are in agreement with the books
of account and the financial statements of the Company.
iii) The Company has not been declared a wilful defaulter by any bank or financial institution or other lender in accordance with
the guidelines on wilful defaulters issued by the Reserve Bank of India.
iv) The Company does not fall under the eligibility criteria specified under Section 135 of the Companies Act, 2013 relating to
Corporate Social Responsibility (CSR).
v) There were no transactions which were not recorded in the books of account that were surrendered or disclosed as income
during the year in the tax assessments under the Income-tax Act, 1961, such as during search or survey proceedings or any
other relevant provisions of the Income-tax Act, 1961.
vi) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
vii) There are no charges or satisfaction of charges which are yet to be registered with the Registrar of Companies beyond the
statutory period.
viii) The Company has not advanced, loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(“Intermediaries”), with the understanding that the Intermediary shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Company (“Ultimate Beneficiaries”); or
b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
ix) The Company has not received any funds from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with
the understanding that the Company shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (“Ultimate Beneficiaries”); or
b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
x) There were no transactions during the year with companies struck off under Section 248 of the Companies Act, 2013 or
Section 560 of the Companies Act, 1956.
xi) The previous year’s figures have been regrouped/rearranged wherever necessary to conform to the current year’s classification.
43. Audit Trail
Enhancing Accountability and Transparency: Implementation of Audit Trail
The company had implemented an audit trail system within our company’s software which has impact on books of accounts with
effect from FY 2023. This implementation underscores our commitment to transparency, accountability, and data integrity. Audit
trail has been implemented for all transactions recorded in the software throughout the year.
By capturing and documenting critical events and activities within our systems, we ensure a comprehensive record that enhances
security, facilitates compliance, and supports effective decision-making.
In addition, audit trail data is preserved in the system as per statutory requirement for record retention. The company’s dedication to
maintain a robust audit trail reflects ongoing efforts to uphold the highest standards of governance and security across all aspects
of business operations.
Backup Schedule and Data Preservation:
The company is following a backup schedule and data preservation protocol within the organization The company’s backup
schedule entails frequent and systematic backups of critical data assets to safeguard against potential data loss or corruption. This
proactive approach ensures that valuable information remains protected and accessible in the event of unforeseen circumstances.
The Backup for the accounting software Tally ERP is done on a daily basis and preserved at Disaster Recovery (DR) site located
at HO Mumbai.
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