Nature and purpose of Reserves
(a) Securities Premium: The amount of difference between the issue price and the face value of the share is recognized in Securities Premium. This reserve is utilised in accordance with the specific provisions of the Companies Act 2013.
(b) General Reserve: General reserve is the accumulation of the profits transferred from retained earnings in the past years. This reserve is available for distirbution to the shareholders.
(c) Retained Earnings: Retained earnings represent the amount of profits of the Company earned till date net of distributions and other adjustments.
(d) Other Items of Other Comprehensive Income: Other Items of Other Comprehensive Income represents recognized remeasurement gains/ (loss) on defined benefit plans.
22.1 Working Capital loans from banks were repayable on demand and were secured by hypothecation of Inventories and book debts and second pari passu charge on all the immovable properties and plant and machinery of the Company, both present and future. These loans were further secured by the personal guarantee of the Chairman of the Company. The loans were carrying current floating interest rate of 8.55% p.a.based on 1.71% above 3 months Treasury Bill in case of HDFC Bank and 9.40% based on 0.50% above 6 months MCLR in case of State Bank of India as at March 31, 2025 payable on last day of the month.
22.2 Sanctioned Working Capital limits as at March 31,2026 - Nil (March 31,2025 - ' 3,000 lakhs).
22.3 The monthly returns/ statements submitted by the Company to the Banks during the year were in agreement with the books of account of the respective month.
22.4 The Company has been sanctioned Overdraft limits repayable on Demand by a bank aggregating to ' 1,582 lakhs against lien on Term Deposits disclosed in Note 12 and carrying interest @ 6.75% p.a. based on term deposits interest rate plus 0.50% p.a..
(a) JVVNL raised demand of ' 360 lakhs (March 31,2025 - ' 360 lakhs) towards transformationcharges (including late payment surcharge) in July 2023 which was disputed by the Company.However, the Company made the payment of ' 360 lakhs under protest to continue supply ofpower and filed an appeal before Rajasthan High Court which is pending for disposal.
(b) JVVNL raised demand of ' 1,201 lakhs (March 31, 2025 - ' 1,201 lakhs) towards ElectricityDuty, Water Conservation Cess and Urban Cess related to period from May 2013 to February2015 on supply of power from captive power plant. The Appeal filed by the Company in RajasthanHigh Court in this regard is pending for Disposal. The Company has made provision of ' 519 lakhs (March 31,2025 - ' 506 lakhs) in its books of account against this demand.
(c) The Company does not expect any reimbursement from third party in respect of the above contingent liabilities.
(d) The above demands are disputed by the Company and under appeals before various Courts/Appealate authorities.
(e) The timing and future cash flow in above matters will depend on the outcome of the respectiveproceedings.
The above sensitivity analysis has been determined based on reasonably possible changes of the respective assumption occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the method (Projected Unit Credit Method) used to calculate the liability recognized in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous year.
43. FINANCIAL RISK MANAGEMENT AND POLICIES
43.1 Capital Risk Management
(a) Risk Management
The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimize returns to the shareholders.
The capital structure of the Company is based on management’s judgement of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. The Management consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.
The Company’s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary, adjust, its capital structure.
The gearing ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents and Bank balances other than cash and cash equivalents Total capital is calculated as equity as shown in the balance sheet plus all other reserves attributable to equity shareholders of the Company.
(b) The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.
43.2 Financial Risk Management
The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance and support the Company’s operations. The Company’s principal financial assets comprise investments, term deposits with bank, cash and bank balance, trade and other receivables and security deposits.
The risk management policies of the Company are established to identify and analysis 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 regularly to reflect changes in market conditions and the Company’s activities.
The Company is exposed to market risk, credit risk, liquidity risk and operational and business risk. The Company’s management oversees the management of these risks to ensure the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with Company’s policies and risk objectives. The major risks are summarized below:
a) 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 value of financial instruments. The value of financial instruments may change as a result of changes in the interest rates, foreign currency exchange rates, market price risk such as equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including Investments, term deposits, security deposits, payables and loans and borrowings.
The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommend 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, borrowing strategies and ensuring compliance with market risk limits and policies.
a)(i) Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates and change in rate of interest on renewal of Term Deposits with Bank. The term deposits with banks are carried at amortised cost and carry interest at the fixed rate. Therefore, they are not subject to interest rate risk. However, in case of renewal of matured term deposits in future, the interest rate may fluctuate effecting the future cash flows. In case of Overdraft from Bank against term Deposits, interest payable is based on the interest rate applicable on the respective term deposits under security. In case of change in the rate of interest on Term Deposits, rate of interest payable on Overdraft will fluctuate accordingly effecting the future cash flows.
a) (ii) Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to import of machinery, store and spare and other materials. The Company’s foreign currency risks are identified, measured and managed at periodic intervals in accordance with the Company’s policies. However, there is no exposure of the Company to foreign currency risk as at March 31,2026.
a) (iii) Market Price Risk
Market price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices of equity shares, mutual funds units etc..In case of the Company, market risk primarily impacts Investment in Mutual Fund Units measured at fair value through profit or loss.
b) Credit Risk
Credit risk is the risk that counterparty will default on its contractual obligations resulting in financial loss to the company. The Company has adopted a policy of dealing with creditworthy customers.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as actual or expected significant adverse changes in business, operating results, financial or economic conditions and third-party collateral guarantees or credit.
Financial assets are written off when there is no reasonable expectation of recovery, such as a customer failing to engage in a repayment plan with the Company. Where receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized as income in the statement of profit and loss.
The Company measures the expected credit loss of trade receivables based on historical trend, available external and internal credit risk factors such as financial condition, ageing of accounts receivable etc., industry practices and the business environment in which the entity operates.
As at March 31,2026, the company did not consider there to be any significant concentration of credit risk, which had not been adequately provided for. The carrying amount of the financial assets recorded in the financial statements, grossed up for any allowances for losses, represents the maximum exposure to credit risk.
c) Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company’s treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows.
d) Operational and Business risk
The Company’s operating activities involved manufacturing and sale of Man-made Fibre Spun Yarn which are exposed to risks of price fluctuation. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material ) and global and regional economic conditions. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its products. The Price risk exposure is evaluated and managed by the Management through procurement and other related operating policies.
1. Fair value of cash and short-term deposits, term deposits with bank, loans, trade deposits, trade and other short-term receivables, trade payables, other current liabilities, short term loans from banks and others approximate their carrying amounts largely due to short term maturities of these instruments.
2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.
3. For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values. Valuation technique and Key Inputs to determine fair value
The above table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3, as described below:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Input other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3- Inputs for the assets or the liabilities that are not based on observable market data (Unobservable Inputs). Valuation Methodologies of financial instruments measured at fair value:
The Company is having investment in Mutual Fund Units only and the Fair values of investments in Mutual Fund Units is based on the Net Asset Value (NAV) as stated by the issuer of these Units as at Balance Sheet date and are classified as Level 1. NAV represents the price at which the issuer will further issue units of Mutual Funds and the price at which issuers will redeem such units from the investors.
1. The Company has incurred loss of ' 195 lakhs on 2 Power Generating Sets disposed of due to pollution related restrictions.
2. The Company had made provision of ' 58 lakhs towards the incremental impact of past period’s liability employee’s benefits pursuant to notification of the New labour Codes w.e.f. November 21,2025. The Government is in the process of notifying related rules to the New Labour Codes. Their impact, if any will be evaluated and accounted for in accordance with applicable accounting standards by the Company as and when notified.
3. The Company has received a compensation of ' 43 lakhs from a Real Estate Developer on default in delivery of the property pursuant to the agreement.
52. OTHER DISCLOSURES/INFORMATION
52.1 Additional information required as per Schedule III of the Companies Act, 2013
(i) Details of benami property held
No proceedings have been initiated or are pending against the Company as at March 31,2026 for holding benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016), as amended and rules made thereunder.
(ii) Wilful defaulter
The company has not been declared wilful defaulter by any bank, financial institution or lender as at March 31,2026.
(iii) Relationship with struck off companies
There is no transaction during the year with or outstanding balance of the struck off companies as at March 31,2026.
(iv) Compliance with number of layers of companies
The Company does not have any subsidiary or Associate or Joint Venture company during the year.
(v) Compliance with approved scheme(s) of arrangements
During the year, no scheme of arrangements in relation to the Company has been approved by the competent authority in terms of Section 232 to 237 of the Companies Act, 2013.
(vi) Utilisation of borrowed funds and share premium
During the year the Company has not advanced or lend or invested funds (either from the borrowed funds or share premium or any other sources or kind of funds) to any person or entity, including foreign entity (Intermediaries) with the understanding (whether recorded in writing or otherwise) 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 to or on behalf of the ultimate beneficiaries
The Company has not received any fund from any person or entity, including foreign entity (Funding Party) with the understanding (whether recorded in writing or otherwise) 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.
(vii) Undisclosed income
The Company does not have any unrecorded transactions in the books of account which have been surrendered or disclosed as Income during the year in the tax assessment under the Income Tax Act, 1961.
(viii) Transactions in crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the year ended March 31,2026.
(ix) Revaluation of property, plant & equipment and intangible asset
The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the year ended March 31,2026.
(x) Registration of charges or satisfaction with Registrar of Companies
There are no charges or satisfaction which are pending to be registered with the Registrar of Companies as on March 31, 2026.
52.2 Other Statutory information
(i) The Company has no long-term contracts including derivative contracts having material foreseeable losses as at March 31,2026.
(ii) The Company has not received any whistleblower complaint during the year ended March 31,2026.
(iii) There is no Core Investment Company within the group as defined in the regulations made by the Reserve Bank of India.
(iv) There is neither any fraud by the Company nor on the company noticed or reported during the year.
(v) There is no amount outstanding for transfer to the Investor Education and Protection Fund by the Company under Section 125 of Companies Act, 2013 as at March 31,2026.
(vi) The Company has not given any loans or advances in the nature of loans to promoters, directors, KMPs and/ or related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are repayable on demand, or without specifying any terms or period of repayment.
Definitions:
(a) Earnings available for debt services = Profit after tax non-cash items Interest on Term Loans Interest on lease liabilities other items like gain on sale of assets etc.
(b) Debt (outstanding Liabilities) = Borrowings
(c) Debt service = Principal Repayments of term loans and lease liabilities due within one year Interest payable on term loans and lease liabilities.
(d) Average inventory = (Opening inventory Closing inventory)/ 2
(e) Net sales = Gross sales minus Sales return.
(f) Average trade receivables = (Opening trade receivables Closing trade receivables) / 2
(g) Net purchase = Gross purchases minus Purchase return
(h) Average trade payables = (Opening trade payables Closing trade payables)/ 2
(i) Working capital = Current assets - Currents liabilities
(j) Earnings before interest and taxes = Profit before tax Finance costs
(k) Capital Employed = Tangible Net Worth Total Debt Deferred Tax Liability
(l) Profit after tax = Profit after tax before OCI
(m) Income from Investments = Income from Investments Fair value changes on Investments.
(n) Investments = Opening Investments Investments made during the year
55. The Company is using ERP software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the accounting software. However, the audit trail feature is not enabled when using administrative access right to the ERP application for direct data changes which is restricted to limited set of users who necessarily require this access for maintenance and administration of the database. Further, no instance of audit trail feature being tempered with has been noticed during the year in respect of the accounting software and the audit trail has been preserved by the Company as per the statutory requirements for record retention.
56. There are no events occurred after the Balance Sheet date having material impact and required to be disclosed in these financial statements.
57. All amounts in the financial statements and notes have been rounded off to the nearest lakh as per requirement of Schedule III except per share data and as otherwise stated. Figures in brackets represent corresponding previous year figures. Previous year figures have been regrouped / reclassified wherever considered necessary to confirm the current year presentation.
58. These Financial Statements have been approved for issue by the Board of Directors on May 27, 2026.
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