1. CORPORATE INFORMATION
The Company was incorporated on 6th March, 1989 under the laws of republic of India and has its registered office at Kolkata, West Bengal. The company is engaged in
manufacturing and export of cotton yarn and other various merchandise. The shares of the company are listed in National Stock Exchange & Bombay Stock Exchange .
Company has set up 100% export oriented unit with the state of art, Plant with manufacturing capacity of 55440 spindles at Kolhapur in Maharashtra. The company has
also set up yarn dying and cotton bleaching plant at Kagal Kolhapur. The Company was also awarded International standard Organization certificate for export
performance. The company's marketing network is spread over in various countries. The Company is also doing trading of cotton yarn and various commodities. The
company is Merchant exporter also.
2. (i) BASIS OF ACCOUNTING
A) Statement of Compliance
These financial statements have been prepared in accordance with the Indian Accounting Standards (“Ind AS") as prescribed by Ministry of Corporate Affairs pursuant to
Section 133 of the Companies Act, 2013 (“the Act"), read with the Companies (Indian Accounting Standards) Rules, 2015 (as amended), other relevant provisions of the Act
and other accounting principles generally accepted in India.
The standalone financial statements are approved for issue by the Company's Board of Directors at their meeting held on May 29, 2025. The same shall be placed before
the ensuing annual general meeting for the approval of the shareholders.
B) Basis of Preparation of Financial Statements
These Standalone financial statements are prepared in accordance with Indian Accounting Standard (Ind AS) under the historical cost convention on accrual basis except
for certain financial instruments, which are measured at fair values, the provisions of the Companies Act, 2013 (''the Act'') . The Ind AS are prescribed under Section 133 of
the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.
Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard
requires a change in the accounting policy hitherto in use. The material accounting policy information used in preparation of the audited Standalone financial statements
have been discussed in the respective notes.
As the year to date figures are taken from the source and rounded to the nearest digits, the figures reported for the previous quarters might not always add up to the year
to date figures reported in this statement.
C) Use of estimates and critical accounting judgments
The preparation of the financial statements require the use of accounting estimates which, by definition, will seldom equal the actual result. Management also needs to
exercise judgment in applying the Company's accounting policies.
This note provides an overview of the areas that involved a high degree of judgment or complexity, and of items which are more likely to be materially adjusted due to
estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included in
relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
D) Critical estimates and judgments
The areas involving critical estimates and judgments are:
i) Taxation
The Company is engaged in manufacturing and export of cotton yarn and other various merchandise activities and also subject to tax liability under MAT provisions.
material judgment is involved in determining the tax liability for the Company. Also there are many transactions and calculations during the ordinary course of business for
which the ultimate tax determination is uncertain. Further judgment is involved in determining the deferred tax position on the balance sheet date.
ii) Depreciation and amortisation
Depreciation and amortisation is based on management estimates of the future useful lives of the property, plant and equipment and intangible assets. Estimates may
change due to technological developments, competition, changes in market conditions and other factors and may result in changes in the estimated useful life and in the
depreciation and amortisation charges.
iii) Employee Benefits
The present value of the defined benefit obligations and long term employee benefits depends on a number of factors that are determined on an actuarial basis using a
number of assumptions. The assumptions used in determining the net cost (income) include the discount rate. Any changes in these assumptions will impact the carrying
amount of defined benefit obligations.
The Company determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated
future cash outflows expected to be required to settle the obligations. In determining the appropriate discount rate, the Company considers the interest rates of
Government securities that have terms to maturity approximating the terms of the related defined benefit obligation. Other key assumptions for obligations are based in
part on current market conditions.
iv) Provisions and Contingencies
Provisions and contingencies are based on Management's best estimate of the liabilities based on the facts known at the balance sheet date.
2(ii). MATERIAL ACCOUNTING POLICY
A) Property, plant and equipment
Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation and impairment, if any. For this purpose, cost includes
deemed cost which represents the carrying value of property,plant and equipment recognised as at 1st April, 2016 measured as per the previous Generally Accepted
Accounting Principles (GAAP).
An item of property, plant and equipment is recognised as an asset if it is probable that the future economic benefits associated with the item will flow to the Company
and its cost can be measured reliably. This recognition principle is applied to the costs incurred initially to acquire an item of property, plant and equipment and also to
costs incurred subsequently to add to, replace part of, or service it. All other repair and maintenance costs, including regular servicing, are recognised in the statement of
profit and loss as incurred. When a replacement occurs, the carrying value of the replaced part is de-recognised. Where an item of property, plant and equipment
comprises major components having different useful lives, these components are accounted for as separate items.
B) Intangibles
Subsequent to initial recognition, intangible assets with definite useful lives are reported at cost less accumulated amortisation and accumulated impairment losses.
C) Depreciation and amortisation of property, plant and equipment and intangible assets
(i) Depreciation is provided on pro rata basis on straight line method at the rates determined based on estimated useful lives of tangible assets where applicable, specified
in Schedule II to the Act. These charges are commenced from the dates the assets are available for their intended use and are spread over their estimated useful economic
lives or, in the case of leased assets, over the lease period, if shorter. The estimated useful lives of assets and residual values are reviewed regularly and, when necessary,
revised. No further charge is provided in respect of assets that are fully written down but are still in use. Depreciation on assets under construction commences only when
the assets are ready for their intended use.
ii) Lease Hold Land is being amortized over the lease period.
iii) Intangible assets (computer softwares) are amortised on straight-line method at the rates determined based on estimated useful lives.
D) 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 operating income.
Government grants relating to the acquisition/ construction 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 operating income.
E) Impairment
At each balance sheet date, the Company reviews the carrying values of its property, plant and equipment and intangible assets to determine whether there is any
indication that the carrying value of those assets may not be recoverable through continuing use. If any such indication exists, the recoverable amount of the asset is
reviewed in order to determine the extent of impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Company
estimates the recoverable amount of the cash generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. 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 for which the estimates of future
cash flows have not been adjusted. An impairment loss is recognised in the statement of profit and loss as and when the carrying value of an asset exceeds its recoverable
amount.
Where an impairment loss subsequently reverses, the carrying value of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount so
that the increased carrying value does not exceed the carrying value that would have been determined had no impairment loss been recognised for the asset (or cash
generating unit) in prior years. A reversal of an impairment loss is recognised in the statement of profit and loss immediately.
F) Leases
The Company determines whether an arrangement contains a lease by assessing whether the fulfillment of a transaction is dependent on the use of a specific asset and
whether the transaction conveys the right to use that asset to the Company in return for payment. Where this occurs, the arrangement is deemed to include a lease and is
accounted for either as finance or operating lease.
Leases are classified as finance leases where the terms of the lease transfers substantially all the risks and rewards of ownership to the lessee. All other leases are
classified as operating leases.
The Company as lessee
(i) Operating lease - Rentals payable under operating leases are charged to the statement of profit and loss on a straight line basis over the term of the relevant lease
unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising
under operating leases are recognised as an expense in the period in which they are incurred. In the event that lease incentives are received to enter into operating leases,
such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight line basis, except where
another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
(ii) Finance lease - Finance leases are capitalised at the commencement of lease, at the lower of the fair value of the property or the present value of the minimum lease
payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges
and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in the statement
of profit and loss over the period of the lease.
G) Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities
are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial
assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value measured on initial recognition of financial asset or
financial liability. The transaction costs directly attributable to the acquisition of financial assets and financial liabilities at fair value through profit and loss are immediately
recognised in the statement of profit and loss.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period.
The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a
shorter period.
a) Financial assets
Cash and bank balances
Cash and bank balances consist of:
(i) Cash and cash equivalents - which includes cash in hand, deposits held at call with banks and other short term deposits which are readily convertible into known
amounts of cash, are subject to an insignificant risk of change in value and have maturities of less than one year from the date of such deposits. These balances with banks
are unrestricted for withdrawal and usage.
(ii) Other bank balances - which includes balances and deposits with banks that are restricted for withdrawal and usage.
Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to
collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding.
Financial assets measured at fair value
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is to hold these
assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding.
The Company in respect of equity investments (other than in subsidiaries, associates and joint ventures) which are not held for trading has made an irrevocable election to
present in other comprehensive income subsequent changes in the fair value of such equity instruments. Such an election is made by the Company on an instrument by
instrument basis at the time of initial recognition of such equity investments.
Financial asset not measured at amortised cost or at fair value through other comprehensive income is carried at fair value through the statement of profit and loss.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial
assets:
• Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits and trade receivables
• Financial assets that are debt instruments and are measured as at FVTOCI
• Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18.
The Company follows 'simplified approach' for recognition of impairment loss allowance on trade receivables. The application of simplified approach does not require the
Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit
risk since initial recognition. If credit risk has not increased to a significant extent, 12-month ECL is used to provide for impairment loss. However, if credit risk has
increased significantly, lifetime ECL is used. If in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit
risk since initial recognition, the Company reverts to recognising impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the
lifetime ECL which results from default events that are possible within 12 months after the reporting date. ECL is the difference between all contractual cash flows that are
due to the Company in accordance with the contract and all the cashflows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/expense in the statement of profit and loss. This amount is reflected
under the head 'other expenses' in the statement of profit and loss. The balance sheet presentation for various financial instruments is described below:
Financial assets measured as at amortised cost: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The
allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.
Debt instruments measured at FVTOCI: Since financial assets are already reflected at fair value, impairment allowance is not further reduced from its value. Rather, ECL
amount is presented as 'accumulated impairment amount' in the OCI.
For assessing increase in credit risk and impairment loss, the Company combines financial instruments on the basis of shared credit risk characteristics with the objective
of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.
The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e., financial assets which are credit impaired on purchase/ origination.
Derecognition of financial assets
The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all
risks and rewards of ownership of the asset to another entity.
If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its
retained interest in the assets and an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also
recognises a collateralised borrowing for the proceeds received.
b) Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the
definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at
the proceeds received, net of direct issue costs.
Financial Liabilities
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate
method where the time value of money is significant.
Interest bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortised cost using the effective interest
rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the
borrowings in the statement of profit and loss.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or they expire.
Derivative financial instruments
In the ordinary course of business, the Company uses certain derivative financial instruments to reduce business risks which arise from its exposure to foreign exchange
and interest rate fluctuations. The instruments are confined principally to forward foreign exchange contracts and interest rate swaps. The instruments are employed as
hedges of transactions included in the financial statements or for highly probable forecast transactions/firm contractual commitments.
Derivatives are initially accounted for and measured at fair value from the date the derivative contract is entered into and are subsequently re-measured to their fair value
at the end of each reporting period.
H) Cash Flow
Cash Flows are reported using Indirect Method, where by profit / (Loss) before extraordinary items and its tax is adjusted for the effects of transaction of non-cash nature
and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of the company is segregated
based on the available information.
I) Employee benefits
Defined contribution plans
Payments to defined contribution plans are charged as an expense as they fall due. Payments made to state managed retirement benefit schemes are dealt with as
payments to defined contribution schemes where the Company's obligations under the schemes are equivalent to those arising in a defined contribution retirement
benefit scheme.
Defined benefit plans
For defined benefit retirement schemes the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at
each balance sheet date. Re-measurement gains and losses of the net defined benefit liability/(asset) are recognised immediately in other comprehensive income. The
service cost and net interest on the net defined benefit liability/(asset) is treated as a net expense within employment costs.
Past service cost is recognised as an expense when the plan amendment or curtailment occurs or when any related restructuring costs or termination benefits are
recognised, whichever is earlier.
The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as reduced by the fair value plan assets.
Compensated absences
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are
recognised based on actuarial valuation at the present value of the obligation as on the reporting date.
J) Inventories
Raw Materials: Valued at Cost or Net Realisable Value whichever is lower (Cost is computed using “Weighted Average Cost Method").
Work-in-Progress: Valued at Cost or Net Realisable Value whichever is lower (Cost includes material Cost plus appropriate share of overhead) (Cost is computed Using
“Weighted Average Cost Method").
Finished goods:
i) Manufacturing goods: At Cost or Net Realisable Value whichever is lower (Cost includes Cost of Purchase, Conversion Cost, and other Cost i.e. overhead) (Cost is
computed using “Weighted Average Cost Method").
ii) Trading goods: At Cost or Net Realisable Value whichever is lower (Cost is computed using" Specific Identification Method").
Packing Materials: At Cost or Net Realisable Value whichever is lower (Cost is Computed Using "FIFO Method")
Stores & Spare Parts: At Cost or Net Realisable Value whichever is lower (Cost is Computed Using "FIFO Method")
Waste: At Realisable Value
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