1. Corporate Information
CDG PETCHEM LIMITED (Formerly Urbaknitt Fabs Limited) ("the company") is a Company registered under the Companies Act,
1956. It is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (BSE). The company was
incorporated on 7th February 2011, having its registered office at Plot no 10 & 11, MCH No 1-8-304 to 307/10, Pattigadda Road
Hyderabad 500003 TG. The company's CIN No. is L51100TG2011PLC072532. The company is engaged in the manufacture of
Knitted Fabrics, Mattresses and Pillows; along with Trading & Distribution of Minerals, Plasticizers, Construction, Plastic Raw
Materials and Pharma Chemicals.
2. Basis of preparation
The financial statements are separate financial statements prepared in accordance with Indian Accounting Standards (Ind AS)
notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time). For all periods up to
and including the year ended March 31, 2025, the Company prepared its financial statements in accordance with accounting
standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies
(Accounts) Rules, 2014 (Indian GAAP). These financial statements have been prepared and presented under the historical cost
convention, on the accrual basis of accounting except for certain financial assets and financial liabilities that are measured at
fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have
been applied consistently over all the periods presented in these financial statements.
3. Use of estimates and judgments:
The preparation of the financial statements in conformity with Ind AS requires the management to make estimates, judgments
and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported
amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period.
Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware
of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the
period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
4. Significant Accounting Policies:
(a) Business combinations and goodwill
In accordance with Ind AS 101 provisions related to first time adoption, the Group has elected to apply Ind AS
accounting for business combinations prospectively from April 1, 2016. As such, Indian GAAP balances relating to
business combinations entered into before that date, including goodwill, have been carried forward with minimal
adjustment. The same first time adoption exemption is also used for associates and joint ventures. Business
combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate
of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests
in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in
the acquiree at fair value or at the proportionate share of the acquiree's identifiable net assets. Acquisition-related
costs are expensed as incurred. At the acquisition date, the identifiable assets acquired and the liabilities assumed are
recognized at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities
representing present obligation and they are measured at their acquisition fair values irrespective of the fact that
outflow of resources embodying economic benefits is not probable. Goodwill is initially measured at cost, being the
excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests, and
any previous interest held, over the net identifiable assets acquired and liabilities assumed. After initial recognition,
goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill
acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash -generating units
that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are
assigned to those units.
(b) Revenue Recognition
Revenue is recognized and measured at the fair value of the consideration received or receivable, to the extent that it is
probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
Effective April 1, 2018, the Company adopted Ind AS 115 "Revenue from Contracts with Customers" using the
cumulative catch-up transition method, applied to contracts that were not completed as of April 1, 2018. The Company
has evaluated and there is no material impact of this amendment on the Financial Statement of the Company.
Other income:
Other income is comprised primarily of interest income, dividend income, gain / loss on investments and exchange
gain/loss on forward and options contracts and on translation of other assets and liabilities. Interest income is
recognized using the effective interest method. Dividend income is recognized when the right to receive payment is
established.
(c) Property, Plant and Equipment
Property, plant and equipment are stated at cost of acquisition or construction net of accumulated depreciation and
impairment loss (if any). All significant costs relating to the acquisition and installation of property, plant and equipment
are capitalized. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs
for long-term construction projects if the recognition criteria are met. When significant parts of plant and equipment
are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives.
Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and
equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are
recognized in statement of profit and loss as incurred. The present value of the expected cost for the decommissioning
of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the
item can be measured reliably. The carrying amount of the replaced part is derecognized. The identified components
are depreciated over their useful lives, the remaining asset is depreciated over the life of the principal asset.
Depreciation for identified components is computed on straight line method based on useful lives, determined based on
internal technical evaluation. Freehold land is carried at cost.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate.
(d) Investment Properties
Property that is held for long-term rental yields or for capital appreciation or both is classified as investment property.
Investment Property is measured at its cost, including related transaction costs and where applicable borrowing costs.
Subsequent expenditure is capitalized to the asset's carrying amount only when it is probable that future economic
benefits associated with the expenditure will flow to the company and the cost of the item can be measured reliably. All
other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the
carrying amount of the replaced part is derecognized. Investment Properties are depreciated using the straight-line
method as per the provisions of Schedule II of the Companies Act, 2013 or based on useful life estimated on the
technical assessment.
(e) Intangible Assets
Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset
will flow to the enterprise and the cost of the asset can be measured reliably.
(f) Depreciation and amortization:
Depreciation is provided on the straight-line method over the useful lives as prescribed under Part C of Schedule II of
the Companies Act 2013. Depreciation for assets purchased/sold during a period is proportionately charged.
(g) Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is
treated as current when it is: -
- Expected to be realized or intended to be sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realized within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period
- All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.
- The Company classifies all other liabilities as non-current.
(h) Financial assets
Financial assets comprise of cash and cash equivalents.
Initial recognition:
All financial assets are recognised initially at fair value. Purchases or sales of financial asset that require delivery of
assets within a time frame established by regulation or convention in the market place (regular way trades) are
recognised on the trade date, i.e., the date that the company commits to purchase or sell the assets.
Subsequent Measurement:
(i) Financial assets measured at amortised cost: Financial assets held within a business model whose objective is
to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial assets give
rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding are measured at amortised cost using effective interest rate (EIR) method. The EIR amortization is
recognised as finance income in the Statement of Profit and Loss.
The Company while applying above criteria has classified the following at amortized cost:
a) Trade receivable
b) Cash and cash equivalents
c) Other Financial Asset
Impairment of Financial Assets:
Financial assets are tested for impairment based on the expected credit losses.
De-recognition of Financial Assets:
A financial asset is primarily de-recognised when the rights to receive cash flows from the asset have expired or the
Company has transferred its rights to receive cash flows from the asset.
(i) Impairment of Non-Financial Assets
At each reporting date, the Company assesses whether there is any indication that an asset may be impaired. Where an
indicator of impairment exists, the company makes a formal estimate of recoverable amount. Where the carrying
amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its
recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset,
unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of
assets, in which case, the recoverable amount is determined for the cash generating unit to which the asset belongs.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
(j) Inventories
Finished Goods, work-in-process and wastage to be valued at cost or net realizable value, whichever is
lower.
Raw Material and Stores and Spares are valued at lower of cost or net realizable value after providing
for obsolescence.
Cost comprises of all cost of purchase, cost of conversion and other cost incurred in bringing the
inventory to their present location and conditions. Cost formula used is weighted average cost.
(k) Cash and Cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of
three months or less. Deposits with banks are subsequently measured at amortized cost and short-term investments are
measured at fair value through statement of profit & loss account.
(l) Financial liabilities
Initial recognition and measurement:
All financial liabilities are recognised initially at fair value and transaction cost that is attributable to the acquisition of
the financial liabilities is also adjusted. These liabilities are classified as amortised cost.
Subsequent measurement:
These liabilities include are borrowings and deposits. Subsequent to initial recognition, these liabilities are measured at
amortised cost using the effective interest method. Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance
costs in the statement of profit and loss. This category generally applies to borrowings.
De-recognition of financial liabilities:
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in
the statement of profit or loss.
(m) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective
asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest, exchange
differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest
cost and other costs that an entity incurs in connection with the borrowing of funds. Investment income earned on the
temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the
borrowing costs eligible for capitalization.
(n) Employee Benefits
Employee benefits are charged to the Statement of Profit and Loss for the year.
Provident Fund
Retirement benefits in the form of Provident Fund are defined contribution scheme and such contributions are
recognized, when the contributions to the respective funds are due. There are no other obligation other than the
contribution payable to the respective funds.
Gratuity
The Company has not created any gratuity fund. However adequate provisions have been made in the accounts for
gratuity liability. The benefit vests upon completion of five years of continuous service and once vested it is payable to
employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable
irrespective of vesting.
Compensated absences
Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance
sheet date is recognised on the basis of undiscounted value of estimated amount required to be paid or estimated value
of benefit expected to be availed by the employees.
Short-term employee benefits
Expense in respect of other short term benefits is recognised on the basis of the amount paid or payable for the
period during which services are rendered by the employee.
(o) Income Taxes
Income tax expense is comprised of current and deferred taxes. Current and deferred tax is recognized in net income
taxes for the current period, including any adjustments to tax payable in respect of previous years, are recognized and
measured at the amount expected to be recovered from or payable to the taxation authorities based on the tax rates
that are enacted or substantively enacted by the end of the reporting period.
Deferred income tax
Deferred income tax assets and liabilities are recognized for temporary differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax base using the tax rates that are expected to
apply in the period in which the deferred tax asset or liability is expected to settle, based on the laws that have been
enacted or substantively enacted by the end of reporting period. Deferred tax assets and liabilities are not recognized if
the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the taxable income nor the accounting income.
Minimum Alternative Tax (MAT)
MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay
normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as
an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered
Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT
Credit Entitlement. The company reviews the same at each balance sheet date and writes down the carrying amount of
MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal
Income Tax during the specified period.
(p) Leases
As a lessee
Leases of property, plant and equipment where the company, as lessee, has substantially all the risks and rewards of
ownership are classified as finance leases. Finance leases are capitalized at the lease's inception at the fair value of the
leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations,
net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is
allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so
as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the company as lessee
are classified as operating leases. Payments made under operating leases (net of any incentives received from the
lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are
structured to increase in line with expected general inflation to compensate for the lessor's expected inflationary cost
increases.
As a lessor
Lease income from operating leases where the company is a lessor is recognised in income on a straight-line basis over
the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for
the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their
nature.
Lease-hold land: Leasehold land that normally has a finite economic life and title which is not expected to pass to the
lessee by the end of the lease term is treated as an operating lease. The payment made on entering into or acquiring a
leasehold land is accounted for as leasehold land use rights (referred to as prepaid lease payments in Ind AS 17 "Leases")
and is amortized over the lease term in accordance with the pattern of benefits provided.
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