O. Provision and contingent liabilities
The Company sets up a provision when there is a
present legal or constructive obligation as a result of
a past event and it will probably requires an outflow
of resources to settle the obligation and a reliable
estimate can be made. If the effect of the time value
of money is material, provisions are determined by
discounting the expected future cash flows at a pre¬
tax rate that reflects current market assessments of
the time value of money and the risks specific to the
liability. When discounting is used, the increase in the
provision due to the passage of time is recognized as
a finance cost.
The amount recognized as a provision is the best
estimate of the consideration required to settle
the present obligation at reporting date, taking into
account the risks and uncertainties surrounding the
obligation.
A disclosure for a contingent liability is made where
there is a possible obligation that arises from past
events and the existence of which will be confirmed only
by the occurrence or non-occurrence of one or more
uncertain future events not within the control of the
Company or a present obligation that arises from past
events where it is either not probable that an outflow
of resources will be required to settle the obligation
or where reliable estimate of the obligation cannot be
made. Contingent liabilities are disclosed on the basis
of judgment of the management/independent experts.
These are reviewed at each balance sheet date and are
adjusted to reflect the current management estimate.
In case of Onerous Contracts the Company is
recognizing impairment loss if any occurred on assets
used in fulfilling the contract.
P. Contingent Assets
Contingent Assets are not recognised in the financial
statements. However, these are disclosed in the
Director's report.
Q. Revenue recognition
(i) REVENUE FROM OPERATIONS
Revenue from contracts with customers is
recognised when control of the goods or services
are transferred to the customer at an amount that
reflects the consideration the company is entitled
in exchange for those goods or services.
Revenue towards satisfaction of a performance
obligation is measured at the amount of
transaction price (Net of variable consideration)
allocated to that performance obligation. The
transaction price of goods sold and services
rendered is net of variable consideration on
account of discounts, rebates, credits, price
incentives or similar terms.
A. Sale of goods
Generally, control is transferred upon
shipment of goods to the customer or when
the goods is made available to the customer,
provided transfer of title to the customer
occurs and the Company has not retained
any significant risks of ownership or future
obligations with respect to the goods
shipped.
Consideration is generally due upon
satisfaction of performance obligations and
a receivable is recognized when it becomes
unconditional.
In case of discounts, rebates, credits, price
incentives or similar terms, consideration
are determined based on its most likely
amount, which is assessed at each reporting
period.
B. Rendering of services
Revenue from rendering of services is
recognised over time by measuring the
progress towards complete satisfaction of
performance obligations at the reporting
period.
Revenue is measured at the amount of
consideration which the company expects
to be entitled to in exchange for transferring
distinct goods or services to a customer
as specified in the contract, excluding
amounts collected on behalf of third parties
(for example taxes and duties collected on
behalf of the government). Consideration
is generally due upon satisfaction of
performance obligations and a receivable is
recognized when it becomes unconditional.
In case of discounts, rebates, credits, price
incentives or similar terms, consideration
are determined based on its most likely
amount, which is assessed at each reporting
period.
C. Other operational revenue
Other operational revenue represents
income earned from the activities incidental
to the business and is recognised when the
right to receive the income is established as
per the terms of the contract.
(ii) OTHER INCOME
A. Interest income is accrued on a time basis
by reference to the principal outstanding and
the effective interest rate.
B. Dividend income is accounted in the period
in which the right to receive the same is
established.
C. Other items of income are accounted as and
when the right to receive such income arises
and it is probable that the economic benefits
will flow to the company and the amount of
income can be measured reliably.
R. Exceptional items
An item of income or expense which by its size, type
or incidence requires disclosure in order to improve
an understanding of the performance of the company
is treated as an exceptional item and the same is
disclosed in the notes to accounts.
S. Government grants
Grants from government are recognised at their fair
value where there is 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 statement of profit and loss
account 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.
T. 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, including revenues
and expenses that relate to transactions with any
of the Company's other components, and for which
discrete financial information is available. Operating
segments are reported in a manner consistent with
the internal reporting provided to the chief operating
decision maker (‘CODM').
The Company's Board has identified the CODM who
is responsible for financial decision making and
assessing performance. The Company has a single
operating segment as the operating results of the
Company are reviewed on an overall basis by the
CODM.
U. Leases
AS LESSEE
The Company, as a lessee, recognises a right-of-use
asset and a lease liability for its leasing arrangements,
if the contract conveys the right to control the use of
an identified asset. The determination of whether an
agreement is, or contains, a lease is based on the
substance of the agreement at the date of inception.
The contract conveys the right to control the use of an
identified asset, if it involves the use of an identified
asset and the Company has substantially all of the
economic benefits from use of the asset and has right
to direct the use of the identified asset.
INITIAL MEASUREMENT
Lease Liability: At the commencement date, a
Company measure the lease liability at the present
value of the lease payments that are not paid at that
date. The lease payments shall be discounted using
incremental borrowing rate. Right-of-use assets:
initially recognised at cost, which comprises the initial
amount of the lease liability adjusted for any lease
payments made at or prior to the commencement date
of the lease plus any initial direct costs less any lease
incentives.
SUBSEQUENT MEASUREMENT
Lease Liability: Company measure the lease liability by
(a) increasing the carrying amount to reflect interest on
the lease liability; (b) reducing the carrying amount to
reflect the lease payments made; and (c) remeasuring
the carrying amount to reflect any reassessment or
lease modifications. Right-of-use assets: subsequently
measured at cost less accumulated depreciation and
impairment losses. Right-of-use assets are depreciated
from the commencement date on a straight line basis
over the shorter of the lease term and useful life of the
under lying asset.
IMPAIRMENT:
Right of use assets are evaluated for recoverability
whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable.
For the purpose of impairment testing, the recoverable
amount (i.e. the higher of the fair value less cost to sell
and the value in-use) is determined on an individual
asset basis unless the asset does not generate cash
flows that are largely independent of those from
other assets. In such cases, the recoverable amount
is determined for the Cash Generating Unit (CGU) to
which the asset belongs.
SHORT TERM LEASE OR LOW VALUE LEASE
Short term lease is that, at the commencement date,
has a lease term of 12 months or less. A lease that
contains a purchase option is not a short-term lease.
Low value lease is for which the underlying asset is of
low value. If the company elected to apply short term
lease/Low Value Lease, the lessee shall recognise the
lease payments associated with those leases as an
expense on either a straight-line basis over the lease
term or another systematic basis. The lessee shall
apply another systematic basis if that basis is more
representative of the pattern of the lessee's benefit.
V. Share based payment / arrangements
The grant of stock options to the employees in terms of
the Company's Stock Options Schemes, are measured
at the grant date on fair value of the options or the
average purchase price of the shares acquired by the
Employee Welfare Trust from Secondary Acquisition.
The Company has created a Sangam Employees
Welfare Trust for implementation of the said ESOP
Scheme. The Company treats the ESOP Trust as its
extension and shares held by ESOP Trust are treated
as treasury shares.
Any losses or expenses incurred by the trust in this
regard are reimbursed by the company and recognised
as expenses in the year such losses or expenses are
incurred. Similarly, any losses or expenses incurred on
grant of shares to the employee of subsidiary company
are also recovered from the subsidiary company.
W. Earnings per share
Basic earnings per equity share is computed by dividing
the net profit or loss attributable to equity shareholders
of the Company by the weighted average number of
equity shares outstanding during the financial year.
Diluted earnings per equity share is computed by
dividing the net profit or loss attributable to equity
shareholders of the Company by the weighted average
number of equity shares considered for deriving basic
earnings per equity share and also the weighted
average number of equity shares that could have been
issued upon conversion of all dilutive potential equity
shares.
X. Standards issued but not effective
There are no standards issued after 1st April 2023
resulting into any amendments in IND AS.
20.4 GENERAL RESERVE
The Company appropriates a portion to General Reserves out of the profits voluntarily to meet future contingencies. The
said reserves is available for payment of dividend to the shareholders as per the provisions of the of the Companies Act,
2013.
20.5 REMEASUREMENT OF DEFINED BENEFIT PLANS
Remeasurements of defined benefit plans represents the following as per Ind AS 19, Employee Benefits:
(a) Actuarial Gains and Losses;
(b) The return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and
(c) Any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit
liability (asset).
Nature and Purpose of Other Reserves / Other Equity
20.1 CAPITAL RESERVE
Capital Reserve created on account of merger/ amalgamation. This is to be utilised for issue of fully paid bonus shares
and as per provisions of the Companies Act, 2013.
20.2 SECURITIES PREMIUM
Balance of Security premium consists of premium on issue of share over its face value. This is to be utilised for issue of
fully paid bonus shares, buy-back of its own shares as per provisions of the Companies Act, 2013.
20.3 PREFERENCE SHARE CAPITAL REDEMPTION RESERVE
Preference Share Capital Redemption Reserve represents the statutory reserves created when the capital is redeemed and
the same will be utilised for issue of bonus share as per provisions of the Companies Act, 2013.
22.1 All Term Loans from banks (including current maturities) except vehicle loan are secured by a joint equitable mortgage
by deposit of title deeds in respect of all immovable properties and first hypothecation of the entire moveable properties
of the Company, both present and future (save and except book debts) subject to prior charges created/to be created in
favour of bankers for securing working capital borrowing, ranking pari-passu with the charges created / to be created in
favour of other participating bankers. The above Term Loans are further secured by personal guarantee of directors of
the Company.
22.2 Vehicle Loans (including current maturities) are secured by hypothecation of respective vehicle(s).
22.3 There is no default in repayment or interest of any loans on due dates.
22.4 The terms and conditions for repayment of loan are as under:
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees
who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on
retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days
salary multiplied for the number of years of service. Gratuity liability is being contributed to the gratuity fund formed
by the Company. Company makes contributions to Group Gratuity Schemes administrated by the LIC of India.
Other long term employee benefit plans
Compensated absences
Every employee is entitled to paid leave as per the Company's policies. The employees are allowed to avail leave
and carry forward a specified number of days, the same is encashable during the service period and at the time of
separation from the Company or retirement, whichever is earlier.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity
were carried out as at 31st March, 2025. The present value of the defined benefit obligations and the related current
service cost and past service cost, were measured using the Projected Unit Credit Method.
Sensitivities due to mortality & withdrawals are insignificant & hence ignored. Sensitivities as to rate of inflation, rate of
increase of pensions in payment, rate of increase of pensions before retirement & life expectancy are not applicable being
a lump sum benefit on retirement.
Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide
an approximation of the sensitivity of the assumptions shown.
F. DESCRIPTION OF RISK EXPOSURES:
Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company is
exposed to various risks as follow:
A) Salary Increases- Actual salary increases will increase the Plan's liability. Increase in salary increase rate
assumption in future valuations will also increase the liability.
B) Investment Risk- If Plan is funded then assets liabilities mismatch & actual investment return on assets lower
than the discount rate assumed at the last valuation date can impact the liability.
C) Discount Rate: Reduction in discount rate in subsequent valuations can increase the plan's liability.
D) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation
can impact the liabilities.
E) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal
rates at subsequent valuations can impact Plan's liability.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the
counter derivatives) 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 is not based on observable market data, the instrument is included in level 3.
II. Financial risk management
The Company has exposure to the following risks arising from financial instruments:-
Credit Risk;
Liquidity Risk ; and
Market Risk.
I. RISK MANAGEMENT FRAMEWORK
The Company's board of directors has overall responsibility for the establishment and oversight of the Company's
risk management framework. The board of directors has established the processes to ensure that executive
management controls risks through the mechanism of property defined framework.
The Company's risk management policies are established to identify and analyse the risks faced by the Company, to
set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and
systems are reviewed by the board annually to reflect changes in market conditions and the Company's activities.
The Company, through its training and management standards and procedures, aims to maintain a disciplined and
constructive control environment in which all employees understand their roles and obligations.
The Company's Audit Committee oversees compliance with the Company's risk management policies and procedures,
and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The
Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc
reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
II. CREDIT RISK
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from the Company's receivables from customers and
investments in debt securities.
The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit risk
very closely both in domestic and export market. The Management impact analysis shows credit risk and impact
assessment as low.
Trade and other receivables
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base, including
the default risk of the industry and country in which customers operate.
The Company Management has established a credit policy under which each new customer is analyzed individually
for creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The
Company's review includes market check, industry feedback, past financials and external ratings, if they are available,
and in some cases bank references.
The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade
and other receivables. The management uses a simplified approach for the purpose of computation of expected
credit loss for trade receivables.
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base, including
the default risk of the industry and country in which customers operate.
The gross carrying amount of trade receivables is ' 50,820 Lakhs (31st March, 2024 - ' 46,149 Lakhs).
A default on a financial asset is when counterparty fails to make payments within 60 days when it falls due.
III. LIQUIDITY RISK
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to
managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they
are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Company's reputation.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the cash flows
generated from operations to meet obligations when due and to close out market positions. Due to the dynamic
nature of the underlying businesses, the Company's treasury maintains flexibility in funding by maintaining availability
under committed credit lines.
Management monitors rolling forecasts of the Company's liquidity position comprising the undrawn borrowing
facilities and cash and cash equivalents on the basis of expected cash flows. This is generally carried out in
accordance with practice and limits set by the Company. In addition, the Company's liquidity management policy
involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these,
monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt
financing plans.
The inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating
to derivative financial liabilities held for risk management purposes and which are not usually closed out before
contractual maturity.
The interest payments on variable interest rate loans in the table above reflect market forward interest rates at
the reporting date and these amounts may change as market interest rates change.
IV. MARKET RISK
Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will affect
the Company's income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
The Company uses derivatives like forward contracts to manage market risks on account of foreign exchange. All
such transactions are carried out within the guidelines set by the Risk Management Committee.
Currency risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect
to the USD and small exposure in EURO. Foreign exchange risk arises from future commercial transactions and
recognised assets and liabilities denominated in a currency that is not the Company's functional currency. The risk
is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to
minimise the volatility of the cash flows of highly probable forecast transactions by hedging the foreign exchange
inflows on regular basis.
Currency risks related to the principal amounts of the Company's foreign currency payables have not been hedged
using forward contracts.
In respect of other monetary assets and liabilities denominated in foreign currencies, the Company's policy is to
ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when
necessary to address short-term imbalances.
During the year ended 31st March, 2025, the Company has designated certain foreign exchange forward and options
contracts as cash flow hedges to mitigate the risk of foreign exchange exposure on highly probable forecast cash
transactions. The related hedge transactions for balance in cash flow hedge reserve as at 31st March, 2025 are
expected to occur and reclassified to Statement of Profit and Loss within three months.
The Company determines the existence of an economic relationship between the hedging instrument and hedged
item based on the currency, amount and timing of its forecasted cash flows. Hedge effectiveness is determined at
the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that
an economic relationship exists between the hedged item and hedging instrument, including whether the hedging
instrument is expected to offset changes in cash flows of hedged items.
56 ADDITIONAL REGULATORY REQUIREMENTS AS REQUIRED UNDER SCHEDULE III OF THE COMPANIES ACT, 2013
i) Title deeds of all immovable properties are held on the name of the Company.
ii) The Company has not revalued any Property, Plant and Equipments and Intangible Assets during the year.
iii) The Company has not given loan or advances in nature of loans to promoters, directors, KMPs and the related parties
which is repayable on demands or without specifying any terms or period of repayment.
iv) There is no proceedings initiated or pending against the Company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
v) The Company is not declared a willful defaulter by any bank or financial Institution or other lender.
vi) As informed by the Management, there are no transactions with companies struck off under section 248 of the
Companies Act, 2013 or section 560 of Companies Act, 1956 by the Company during the year and there are no
outstanding balance as on 31st March, 2025 with any struck off companies.
vii) There are no charges or satisfactions of charges which are yet to be registered with Registrar of Companies beyond
the statutory period.
viii) The company has complied with the provisions of cluase (87) of Section 2 of the Act with regard to the Companies
(Restriction on number of Layers) Rules 2017
ix) There is no Scheme of Arrangements approved by the competent authority in terms of section 230 to 237 of the
Companies Act, 2013 during the year.
X) The Company has not advanced or loaned or invested funds to any other person or entities, including foreign entities
(Intermediaries) with the understanding that the Intermediary shall (i) 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
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
xi) The Company has not received any fund from any person or entities, including foreign entities (Funding Party) with
the understanding that the Company shall (i) 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 (ii) provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.
xii) The Company has not surrendered or disclosed as income or the previously unrecorded income and related assets
during the year in the tax assessments which are not recorded in the books of accounts of the Company.
xiii) Working Capital loan were applied for the purpose for which the loans were obtained.
xiv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
xv) The Company has taken working capital loans from various Banks. Company has filed quarterly statements of
Current Assets with the banks that are in principle in agreement with the books of accounts.
57 SEGMENT INFORMATION
Operating Segment
(a) Based on the management approach as defined in IND AS 108 - Operating Segments, the Chief Operating Decision
Maker ("CODM") evaluates the Company's performance and allocates resources based on an analysis of various
indicators of business segment/s in which the Company operates. The Company is primarily engaged in the
business of textile manufacturing which the management and CODM recognise as the sole business segment.
Hence disclosure of segment-wise information is not required and accordingly not provided.
The other applicable information applicable where there is only one segment as required in accordance with IND AS
108 - Operating Segments, are as under:
(b) The Company does not have the information in respect of the revenues from external customers for each product
and service, or each group of similar products and services, and the cost to develop such system will be highly
excessive. Accordingly such information is not disclosed as allowed by para 32 of IND AS 108.
61 CAPITAL MANAGEMENT
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. Management monitors the return on capital as well as the level of
dividends to ordinary shareholders.
62 APPROVAL OF FINANCIAL STATEMENTS
The Financial Statements were approved for issue by the Board of Directors on 29th May, 2025.
The Board of Directors have recommended a dividend @20 % on equity share, subject to approval from the shareholders
at the ensuing AGM.
63 Previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current year's
classification/disclosure.
As per our Report of even date For and on the Behalf of the Board
For R Kabra & Co LLP For O. P. Dad & Co. (R. P. Soni) (Dr. S. N. Modani) (Anurag Soni)
Chartered Accountants Chartered Accountants Chairman Vice Chairman Managing Director
(Firm Registration No 104502W/W100721) (Firm Registration No 002330C) (DIN 00401439) (DIN 00401498) (DIN 03407094)
(Deepa Rathi) (Abishek Dad) (V. K. Sodani) (S. R. Dakhera)
Partner Partner Executive Director Chief Financial Officer
Membership No.104808 Membership No. 409237 (DIN 00403740)
UDIN: 25104808BMJHDL7738 UDIN: 25409237BMOVNS5871
Place: Bhilwara Place : Bhilwara Place : Bhilwara
Date: 29th May, 2025 Date: 29th May, 2025 Date: 29th May, 2025
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