9. Provisions and Contingent liabilities
Provisions:-
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can
be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. 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.
Contingent liabilities:-
Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the
occurrence or non-occurrence of one or more future events not wholly within the control of the Company. Where it is not
probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is
disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. 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.
10. Foreign currency transactions and translation
Transactions in foreign currencies are initially recorded at the functional currency spot rates at the date the transaction first
qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of
exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognized
in Statement of profit or loss in the year in which it arises.
Non-monetary items are measured in terms of historical cost in a foreign currency are translated using the exchange rate at
the date of the transaction.
11. Revenue
Revenue is to be recognized upon transfer of control of promised products or services to customers in an amount that
reflects the consideration the Company expects to receive in exchange for those products or services.
a) Income from Sale of Goods
Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts, rebates, refunds,
price concessions, if any, as specified in the contracts with the customers. Revenue excludes taxes collected from customers
on behalf of the government.
The Company recognizes sales return only when the goods are actually returned by the customer. Therefore, a refund
liability which is included in current financial liabilities or is reduced from current financial assets, is recognized for the goods
actually returned.
Revenue from sale of products are recognized at a point in time on transfer of promised product to customer upon transfer
of control in an amount that reflects the consideration that the company expects to receive in exchange for those product.
b) Income from Job Work
Income from job work charges is recognised at a point in time when the control is transferred usually when the material is
fully processed and dispatched to the customer.
c) Other Export Benefit/Incentives
Export benefits arising from Duty Drawback scheme, RoDTEP and other eligible export incentives are recognised on post
export basis at the rate at which the entitlements accrue and is included in the 'Other Operating Income'.
Interest Income
For all financial instruments classified and measured at amortized cost, interest income is recorded using the effective
interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the
financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset. Interest income
is included in other income in the Statement of Profit or loss.
Dividend
Dividend Income is recognized when the Company's right to receive is established.
Employee Benefits
12.1 Short Term Employee Benefit
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service
is provided.
A liability is recognized for the amount expected to be paid under performance related pay if the Company has a present
legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation
can be estimated reliably.
1.2 Post-Employment benefits
Employee benefit that are payable after the completion of employment are Post-Employment Benefit (other than termination
benefit):-
12.2.1 Defined contribution plans
Defined contribution plans are those plans in which an entity pays fixed contribution into separate entities and will have
no legal or constructive obligation to pay further amounts. Provident Fund and Employee State Insurance are Defined
Contribution Plans in which the Company pays a fixed contribution based on the applicable law.
1.1.2 Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
Company pays Gratuity as per provisions of the Gratuity Act, 1972. The Company's net obligation in respect of defined
benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned
in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any
unrecognized past service costs and the fair value of any plan assets are deducted. The discount rate is based on the
prevailing market yields of Indian government securities as at the reporting date that have maturity dates approximating
the terms of the Company's obligations and that are denominated in the same currency in which the benefits are expected
to be paid.
The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation
results in a liability to the company, the present value of liability is recognized as provision for employee benefit. Any
actuarial gains or losses are recognized in Other Comprehensive Income (“OCI”) in the period in which they arise.
12.3 Other long-term employee benefits
Benefits under the Company's leave encashment, long-service award and economic rehabilitation scheme constitute
other long term employee benefits. The Company's net obligation in respect of leave encashment is the amount of future
benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted
to determine its present value, and the fair value of any related assets is deducted. The discount rate is based on the
prevailing market yields of Indian government securities as at the reporting date that have maturity dates approximating
the terms of the Company's obligations. The calculation is performed using the projected unit credit method by a qualified
actuary. Actuarial gains or losses are recognized in statement of profit or loss in the period in which they arise.
13 Taxes
Provision for current tax is made as per the provision of the Income tax Act, 1961. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other
comprehensive income or in equity). Management periodically evaluates positions taken in the tax return with respect to
applicable tax regulations which are subject to interpretation and establishes provisions where appropriate.
Deferred tax is provided using the Balance Sheet method on temporary difference between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax assets and liabilities
are measured based on tax rates (and tax law) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other
comprehensive income or in equity).
14 Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys
the right to control the use of an identified assets for a period of time in exchange for consideration.
As a lessee (Assets taken on lease)
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and
leases of low-value assets. The Company recognize lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
Lease Liabilities
At the commencement date of the lease, the Company recognize lease liabilities measured at the present value of
lease payments to be made over the contractual non cancellable lease term, for which enforceable rights is available.
In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease
commencement date, if the interest rate implicit in the lease is not readily determinable. After the commencement date,
the amount of lease liabilities is increased to reflect the accretion on interest and reduced for the lease payment made.
Right-of-use
The Company recognize right-of-use assets at the commencement date of the lease (i.e., the date the underlying assets
is available for use). Right-of-use are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. Perpetual Right of Use assets related to land are not depreciated but
tested for impairment loss, if any.
Short-term lease and lease of low-value-assets
The Company applies the short -term lease recognition exemption to its short-term leases of Property, Plant and Equipment
(i.e those leases that have lease term of 12 months or less from the commencement date and do not contain a purchase
option). It also applies the lease of low-value assets recognition exemptions to lease that are considered of low value and
is not intended for sublease. Lease payments on short-term leases and leases of low-value assets are recognized as
expenses on a straight-line basis over the lease term or another systematic basis if that basis is more representative of the
pattern of the lessee's benefits.
As a lessor
Rental income from operating lease is recognized on straight-line basis over the term of the relevant lease except where
another systematic basis is more representative of the time pattern of the benefits derived from the assets given on lease.
15 Impairment of Non-financial Assets
The carrying amounts of the Company's non-financial assets are reviewed at each reporting date to determine whether there
is any indication of impairment considering the provisions of Ind AS 36 'Impairment of Assets'. If any such indication exists,
then the asset's recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs to disposal and its 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
the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of
assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or
groups of assets (the “cash-generating unit”, or “CGU”).
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognized in statement of profit or loss. Impairment losses recognized in respect of CGUs are
reduced from the carrying amounts of goodwill of that CGU, if any and then the assets of the CGU.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been
recognized.
16 Dividends to Share Holders
Interim dividends and Final dividends payable to a Company's shareholders are recognized in the period in which they are
approved by the shareholders' meeting and the Board of Directors respectively.
17 Statement of Cash Flows
Statement of cash flows is prepared in accordance with the indirect method prescribed in Ind AS-7 'Statement of cash flows.
18 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial assets
Initial recognition and measurement
All Financial Assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through
profit or loss, transaction cost that are attributable to the acquisition of the Financial Asset. However, trade receivables that
do not contain a significant financing component are measured at transaction price. Transaction costs directly attributable to
the acquisition of financial assets measured at fair value through profit or loss are recognized immediately in the Statement
of Profit and Loss.
Subsequent measurement
For the purpose of subsequent measurement, Financial Assets are classified in four categories:
• Financial Assets at amortised cost
• Debt Instruments at fair value through Other Comprehensive Income (FVTOCI)
• Equity Instruments at fair value through Other Comprehensive Income (FVTOCI)
• Financial Assets and derivatives at fair value through profit or loss (FVTPL)
Financial Assets at amortized cost
A Financial Asset is measured at the amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and
interest (SPPI) on the principal amount outstanding.
Financial Assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is
calculated by taking into account any discount or premium on acquisition and fees or cost that are an integral part of the EIR.
The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognized
in the profit or loss. Apart from the same, any income or expense arising from remeasurement of financial assets measured
at amortised cost, in accordance with Ind AS 109, is recognized in the Statement of Profit and Loss. This category generally
applies to trade and other receivables.
Debt Instruments at fair value through Other Comprehensive Income (FVTOCI)
A 'Debt Instrument' is classified as at the FVTOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial
assets, and
b) The asset's contractual cash flows represent solely payments of principal and interest (SPPI).
Debt Instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value.
Fair Value movements are recognized in the Other Comprehensive Income (OCI). However, the Company recognizes
interest income, impairment losses & reversals and foreign exchange gain or loss in the Statement of Profit and Loss.
On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the Equity to the
Statement of Profit and Loss.
Interest earned whilst holding FVTOCI Debt Instrument is reported as interest income using the EIR method.
Equity Instruments at fair value through Other Comprehensive Income (FVTOCI)
All equity investments in entities are measured (except equity investment in joint venture and subsidiary) at fair value. Equity
instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to
classify the same either as at FVTOCI or FVTPL. The Company makes such election on an instrument by instrument basis.
The classification is made on initial recognition and is irrevocable.
If the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instruments,
excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to statement of profit and
loss, even on sale of investment. However the company may transfer cumulative gain or loss within the equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the
statement of profit and loss.
Financial Assets and derivatives at fair value through profit or loss (FVTPL)
FVTPL is a residual category for financial assets. Any financial assets, which does not meet the criteria for categorization as
at amortised cost or as FVTOCI, is classified as at FVTPL.
This category also includes derivative financial instruments entered into by the Company that are not designated as hedging
instruments in hedge relationships as defined by Ind AS 109. Debt Instruments included within the FVTPL category are
measured at fair value with all changes recognized in the Statement of Profit and Loss. Interest income on such instruments
has been presented under interest income.
Impairment of financial assets
The Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the
a) Financial Assets that are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance
Simplified Approach
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 recognizes
impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its
trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade
receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are
updated and changes in the forward-looking estimates are analysed. On that basis, the Company estimates provision on
trade receivables at the reporting date.
General Approach
For recognition of impairment loss on other financial assets, the Company determines that whether there has been a
significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-months 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, then the entity reverts to recognizing impairment loss allowance based on 12-months ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial
instrument. The 12-months ECL is a portion of the lifetime ECL which results from default events that are possible within 12
months after the reporting date.
Financial liabilities
Initial recognition and measurement
All Financial Liabilities are recognized initially at fair value and, in the case of liabilities subsequently measured at amortised
cost, they are measured net of directly attributable transaction cost. In case of Financial Liabilities measured at fair value
through profit or loss, transaction costs directly attributable to the acquisition of financial liabilities are recognized immediately
in the Statement of Profit and Loss.
The Company's Financial Liabilities include trade and other payables, loans and borrowings including derivative financial
instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
A. Financial Liabilities at fair value through profit or loss
Financial Liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated
upon initial recognition as at fair value through the Statement of Profit and Loss. This category also includes derivative financial
instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by
Ind AS 109. Gains or losses on liabilities held for trading are recognized in the Statement of Profit and Loss.
B. Financial Liabilities at amortised cost
Financial Liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at
the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured
at amortised cost are determined based on the effective interest method. Gains and losses are recognized in the
Statement of Profit and Loss when the liabilities are derecognized as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or cost that are an
integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.
Derivative financial instruments
The Company uses forwards to mitigate the risk of changes in exchange rates. Such derivative financial instruments
are initially recognised at fair value on the date on which a derivative contract is entered into and are also subsequently
measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial
liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are
taken directly to Statement of Profit and Loss.
19. Current and non-current classification
All assets and Liabilities have been classified as current or non-current. the Company has determined its operating cycle as
12 months for the purpose of current and non-current classification of assets and liabilities.
Deferred tax assets/liabilities are classified as non-current
D. Major Estimates and Judgments made in preparing Standalone Financial Statements
The preparation of the Company's Standalone Financial Statements requires management to make judgements
and estimates that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. These include recognition and measurement of financial
instruments, estimates of useful lives and residual value of Property, Plant and Equipment and Intangible Assets, valuation
of inventories, measurement of recoverable amounts of cash-generating units, measurement of employee benefits,
actuarial assumptions, provisions etc.
Uncertainty about these judgments and estimates could result in outcomes that require a material adjustment to the
carrying amount of assets or liabilities affected in future periods. The Company continually evaluates these estimates
and assumptions based on the most recently available information. Revisions to accounting estimates are recognized
prospectively in the Statement of Profit and Loss in the period in which the estimates are revised and in any future
periods affected.
A. JUDGEMENTS
In the process of applying the company's accounting policies, management has made the following judgements, which
have the significant effect on the amounts recognised in the Standalone Financial Statements:
Materiality
Ind AS requires assessment of materiality by the Company for accounting and disclosure of various transactions
in the Standalone Financial Statements. Accordingly, the Company assesses materiality limits for various items for
accounting and disclosures and follows on a consistent basis. Overall materiality is also assessed based on various
financial parameters such as Gross Block of assets, Net Block of Assets, Total Assets, Revenue and Profit Before Tax.
The materiality limits are reviewed and approved by the Board.
Provisions and contingencies
The assessments undertaken in recognizing provisions and contingencies have been made in accordance with Ind AS
37, 'Provisions, Contingent Liabilities and Contingent Assets'. The evaluation of the likelihood of the contingent events
has required best judgment by management regarding the probability of exposure to potential loss. Should circumstances
change following unforeseeable developments, this likelihood could alter. In the similar line, management also on the
basis of best judgment and estimate determines the net realizable value of the Inventories to make necessary provision.
B. MAJOR ESTIMATES
The key assumptions concerning the future and other key sources of estimation at the reporting date, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below.
Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances
arising that are beyond the control of the company. Such changes are reflected in the assumptions when they occur.
1. Useful life of property, plant and equipment and intangible assets
The estimated useful life of property, plant and equipment is based on a number of factors including the effects of
obsolescence, demand, competition and other economic factors (such as the stability of the industry and known
technological advances) and the level of maintenance expenditures required to obtain the expected future cash
flows from the asset.
Useful life of the assets other than Plant and machinery are in accordance with Schedule II of the Companies Act, 2013.
The Company reviews at the end of each reporting date the useful life of property, plant and equipment, and are
adjusted prospectively, if appropriate.
Intangible assets is being amortized on straight line basis over the period of six years.
2. Post-employment benefit plans
Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and
withdrawal rates as well as assumptions concerning future developments in discount rates, the rate of salary
increases and the inflation rate. The Company considers that the assumptions used to measure its obligations are
appropriate and documented. However, any changes in these assumptions may have a material impact on the
resulting calculations.
3. Income Taxes
The Company uses estimates and judgements based on the relevant facts, circumstances, present and past
experience, rulings, and new pronouncements while determining the provision for income tax. A deferred tax asset
is recognised to the extent that it is probable that future taxable profit will be available against which the deductible
temporary differences and tax losses can be utilised.
4. Estimation of net realisable value of inventories
Inventories are stated at the lower of cost and net realisable value. In estimating the net realisable value of
inventories the Company makes an estimate of future selling prices and costs necessary to make the sale.
5. Impairment of Financial Assets
The impairment provisions for trade receivables are made considering simplified approach based on assumptions
about risk of default and expected loss rates. The Company uses judgement in making these assumptions and
selecting the inputs to the impairment calculation based on the company's past history and other factors at the end
of each reporting period. In case of other financial assets, the Company applies general approach for recognition
of impairment losses wherein the Company uses judgement in considering the probability of default upon initial
recognition and whether there has been a significant increase in credit risk on an ongoing basis throughout each
reporting period.
18.2 Rights, preferences and restrictions to the shareholders : Equity Shares
All equity shareholders are having right to get dividend in proportion to paid up value of each equity share as and when declared.
The Company has equity shares having at face value of Rs. 5 each. Each shareholder is entitled to one vote per share held.
The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General
Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after
distribution of all preferential amounts, in proportion to their shareholding.
Nature & Purpose of the Reserve:
(A) Capital reserve: Capital reserve created on account of merger/amalgmation. The reserve will be utilised in accordance
with the provisions of the Companies Act, 2013.
(B) Capital redemption reserve: Capital redemption reserve is being created by transfer from Retained earnings at the time
of buy back of equity shares in accordance with the Act. The reserve will be utilised in accordance with the provisions of the
Companies Act, 2013.
(C ) Securities premium: Securities premium is credited when shares are issued at premium. This will be utilised in accordance
with the provisions of the Companies Act, 2013.
(D) General reserve: The General reserve is created by way of transfer of profits from retained earnings for appropriation
purposes. This reserve is utilised in accordance with the provisions of the Companies Act, 2013.
(E) Retained earnings: The balance consists of surplus retained from earned profits after payment of dividend and tax thereon.
Acturial gains and losses for defined benefit plans are recognized through OCI in the period in which they occure. Re¬
measurement are not re-classified to the statement of profit and loss in subsequent period.
A. Securities for Term Loan from Banks:
(i) Terms Loans from Banks are secured by a joint equitable mortgage and /or hypothecation charges ranking pari-passu
on immovable/movable properties situated at Banswara, Daman and Surat, both present and future of the Company
and are also secured by second charge on current assets of the Company ranking pari-passu.
(ii) Term Loans from Banks amounting to Rs. 1,624.81 Lakhs (Previous Year Rs. 2,694.68 Lakhs) are guaranteed by
Shri Ravindra Kumar Toshniwal (Vice-Chairman) and Shri Shaleen Toshniwal (Managing Director) in their personal
capacities as per sanctions of the respective Financial Institutions and Banks.
B. For Fixed deposits
(i) Fixed Deposits accepted by the Company are in accordance with the provisions of section 73(2)(a) and section 76
of the Companies Act, 2013 and rule 4(1) and 4(2) of the Companies (Acceptance of Deposits) Rules, 2014 are
unsecured. Fixed Deposits are repayable within 1 to 3 years depending upon the terms of deposits.
(ii) Fixed Deposits Interest rate ranging from 8.50% to 9.00% (Previous Year 8.50 % to 9.00%).
(iii) In accordance with provision of section 73(2) of the Companies Act, 2013 the Company has deposited adequate
amount in Deposit Repayment reserve Account with Schedule Bank.
Terms and Condition
Secured Loan
25.1 Securities and Guarantees
(i) Cash Credit Facility and Export Packing Credit Facility from banks are secured by way of hypothecation (Floating charges)
of Raw material, Dyes-Chemicals, Packing Materials, Stores & Spares, Stock-in-process, Finished goods, Book debts,
Export Incentives and second charge on all the Property , Plant and Equipments (situated at Banswara, Daman & Surat)
of the Company and also guaranteed by Shri Ravindra Kumar Toshniwal (Vice-Chairman) and Shri Shaleen Toshniwal
(Managing Director) in their personal capacities.
(ii) Cash Credit Facility and Export Packing Credit Facility Interest rate ranging from 5.95% to 9.00% (Previous Year from
7.50% to 9.15%).
*The company has deposited Rs. 4.30 Lakhs representing unpaid dividend for the Financial Year 2011-12 to the Investor Education
and Protection Fund (“IEPF”) vide Challan No.U56885791 dated 4th December, 2019. The company also filed a Statement in
Form IEPF on 22 October 2019. The said amount was erroneously returned by IEPF authority with out any reason and credited
to our Bank account. The company have lodged a complaint to IEPF authority in this regard and awaiting clearance from their side.
Except the amount stated as above, there are no amounts due and outstanding to be credited to the Investor Education and
Protection Fund at the year end.
The Company has recognised an expenses of Rs. 2,354.54 Lakhs (Previous Year Rs. 2,228.91 Lakhs) towards the defined
contribution plan.
In accordance with the Employees Provident Fund & Miscellaneous Provisions Act, 1952, employees are entitled to
receive benefits under the Provident Fund. Both the employees and the employer make monthly contributions to the plan
at a predetermined rate of an employee's basic salary.These contributions are made to the regional fund administered and
managed by the Employees Provident Fund Organisation (EPFO). The Company has no further obligations under the fund
managed by the EPFO beyond its monthly contributions which are charged to the statement of profit and loss in the period
they are incurred.
B) Defined benefits plan
The Company has following post employment benefits which are in the nature of defined benefit plans:
Gratuity
The Company provides for gratuity payable to 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 divided by 26
days multiplied for the number of years of service. The gratuity plan is a funded plan administered by a Trust and the Company
makes contributions to Life Insurance Corporation of India (LIC).
Description of Risk Exposure
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
a) Asset volatility
The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this
will create a deficit. Most of the plan asset investments are in fixed income securities with high grades and in government securities.
These are subject to interestrate risk and the fund manages interest rate riskwith derivatives to minimize riskto an acceptable level. A
portion of the funds are invested in equity securities and in alternative investments which have l ow correlation with equity securities.
The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. the
Company has a risk management strategy where the aggregate amount of risk exposure on a portfolio level is maintained
at a fixed range. Any deviations from the range are corrected by rebalancing the portfolio. the Company intends to maintain
the above investment mix in the continuing years.
b) Discount rate
A decrease in discount rate will increase plan liabilities, although this will be partially offset by an increase in the value of
the plans' bond holdings.
c) Inflation risks
In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
d) Life expectancy
The pension plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in
an increase in the plans' liabilities. This is particularly significant where inflationary increases result in higher sensitivity to
changes in life expectancy.
(e) Investment Risk
If Plan is funded then assets liabilities mismatch and actual investment return on assets lower than the discount rate
assumed at the last valuation date can impact the liability.
(f) 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.
(g) Mortality & disability - Actual deaths and disability cases proving lower or higher than assumed in the valuation can
impact the liabilities.
(h) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at
subsequent valuations can impact Plan's liability.
The Company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that
has been developed to achieve long-term investments that are in line with the obligations under the employee benefit plans.
Within this framework, the Company's ALM objective is to match assets to the pension obligations by investing in long-term
fixed interest securities with maturities that match the benefit payments as they fall due and in the appropriate currency.
the Company actively monitors how the duration and the expected yield of the investments are matching the expected cash
outflows arising from the employee benefit obligations. the Company has not changed the processes used to manage its
risks from previous periods. the Company uses derivatives to manage some of its risk. Investments are well diversified, such
that the failure of any single investment would not have a material impact on the overall level of assets.
C) Other Long Term Employee Benefit
Leave Policy
Other long term employee benefit includes earned leave to the employees of the Company which accrue annually for 24
days. Earned leave can be accumulated up to 90 days while in service. These accumulated earned leave are encashable
at the time of retirment or leaving the services of the Company. The scheme is unfunded and liability for the same is
recognised on the basis of actuarial valuation. A provision of Rs. 180.24 Lakhs (Previous Year: Rs. 98.42 Lakhs) have
been made on the basis of actuarial valuation and debited to the Statement of Profit and Loss.
Amount of Rs. 278.74 Lakhs (Previous Year; Rs. 188.64 Lakhs) is recognised as expenses and included in Note No 36
“Employee benefit expenses”
Note No. 45. Disclosure as per Ind AS 21 ‘The Effects of Changes in Foreign Exchange Rates
The amount of exchange differences (net) credited to the Statement of Profit & Loss is Rs. 640.68 Lakhs (Previous Year : Rs. 643.33 Lakhs).
Note No. 46. Disclosure of Corporate social responsibility (CSR)
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2%
of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities.
The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare,
environment sustainability, disaster relief, and rural development projects. A CSR committee has been formed by the Company
as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are
specified in Schedule VII of the Companies Act, 2013:
Performance obligation
Information about the Company's performance obligations are summarised below:
a) Income from Sale of Goods
Revenue from sale of products are recognized at a point in time on transfer of promised product to customer upon transfer of
control in an amount that reflects the consideration that the company expects to receive in exchange for those product. The
performance obligation is satisfied upon delivery of goods and payment is generally due within 30 to 180 days from delivery.
The contract generally provide customers with a right to early payment rebate which give rise to variable consideration
subject to constraint.
b) Income from Rendering of Services
Income from sale of services is recognised when the company satisfies performance obligation by transferring promised
services to the customer i.e. at a point in time.
Note No. 51. Disclosure as per Ind AS 108 ‘ Operating segment'
(a) The Company is engaged in production of textile products having integrated working and captive power generation. For
management purpose, Company is organized into major operating activity of the textile products. The Company has no
activity outside India except export of textile products manufactured in India. Thereby, no geographical segment and no
segment wise information is reported.
(b) The Company is domiciled in India. The amount of its revenue from external customers broken down by location of the
customers is shown in the table below.
Note No. 52. Disclosure as per Ind AS 107 ‘Financial instrument disclosure'
A) Capital management
For the purpose of the Company's capital management, capital includes issued equity capital and all other equity reserves
attributable to the equity holders of the Company. The primary objective of the Company's capital management is to ensure that it
maintains an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder value.
The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions or its business
requirements. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return
capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio and includes within net debt,
interest bearing loans and borrowings less cash and short-term deposits (including other bank balance).
B) Financial risk management
Financial Risk Management
The Company's principal financial liabilities comprise Borrowings, trade payables, Lease Liabilities and other payables. The
main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets
include trade & other receivables, cash & cash Equivalent, Investment, deposits & other assets.
Company is exposed to following risk from the use of its financial instrument:
(a) Credit Risk
(b) Liquidity Risk
(c) Market Risk
(i) Foreigen Currency Risk
(ii) Interest Rate Risk
The Company's Financial Risk Management is an integral part of how to plan and execute its business strategies. The
Company's financial risk management is set by the Managing Board.
(a) 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 resulting in a financial loss to the Company. Credit risk arises principally from trade receivables,
loans & advances, cash & cash equivalents and deposits with banks and financial institutions.
Trade Receivable
Customer credit risk is managed by each business unit subject to the Company's established policy, procedures and control
relating to customer credit risk management. Trade receivables are non-interest bearing and are generally on 30 days to 180
days credit term (Payment Terms). Credit limits are established for all customers based on internal rating criteria. Outstanding
customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit.
The Company has no concentration of credit risk at the customer base is widely distributed both economically and geographically.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large
number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The Company
uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute
the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and
internal credit risk factors such as financial condition, ageing of outstanding and the Company's historical experience of
customers. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets
disclosed in Note 12. The Company does not hold collateral as security. The Company evaluates the concentration of risk
with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in
largely independent markets. The requirement of impairment is analysed at each reporting date.
Other Financial Instruments and Cash & Cash Equivalent
The Company maintain its cash & cash equivalent in current account to meet the day to day requirements, in fixed deposits
for bank margin & to meet regulatory requirements for repayment of deposits and other term deposits. The credit risk of
these instruments are limited as the counter part of these financial instruments are banks with high credit rating assigned
by international credit rating agencies. Other financial instruments are loan given to employee. The Company's maximum
exposure to credit risk for the component of the Balance Sheet as of 31 March 2026 & 31 March 2025 is the carrying
amount as disclosed in Note 11,12,15 & 16.
Provision for Expected Credit or Loss
(i) Financial assets for which loss allowance is measured using 12 month expected credit losses.
The Company has assets where the counter-parties have sufficient capacity to meet the obligations and where the risk of
default is very low. Accordingly, no loss allowance for impairment has been recognised.
(ii) Financial assets for which loss allowance is measured using life time expected credit losses
The Company provides loss allowance on trade receivables using life time expected credit loss and as per simplified
approach.
(b) 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 always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
(c) 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. The objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
The Board of Directors is responsible for setting up of policies and procedures to manage market risks of the Company. All
such transactions are carried out within the guidelines set by the Managing Board.
(i) 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 is exposed to foreign currency risk on certain transactions that are denominated in
a currency other than entity's functional currency, hence exposure to exchange rate fluctuations arises. The risk is that the
functional currency value of cash flows will vary as a result of movements in exchange rates. The company uses forward
contracts to mitigate its risk from foreign currency fluctuations.
(ii) Interest Rate Risk
Interest rate risk arises from the sensitivity of financial assets and liabilities to changes in market rates of interest.
The Company is exposed to interest rate risk arising mainly from long term borrowings with floating interest rates. The
Company is exposed to interest rate risk because the cash flows associated with floating rate borrowings will fluctuate with
changes in interest rates. The Company manages the interest rate risks by entering into different kinds of loan arrangements
with varied terms.
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and
borrowings affected. With all other variables held constant, the Company's profit before tax is affected through the impact on
floating rate borrowings, as follows:
Note No. 53. Disclosure as per Ind AS 113 ‘Fair Value Measurement'
Fair Value Hierarchy
This section explains the judgments and estimates made in determining the fair values of the financial instruments that are:-
(a) recognised and measured at fair value and ;
(b) measured at amortised cost and for which fair values are disclosed in financial statements. To provide an indication about
the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three
levels prescribed under the accounting standard.
Fair value are categorised into different level in a fair value hierarchy which are as follows:
Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2 : The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximize the use of observable market data and rely as little as possible on entity
specific estimates.
Level 3 : If one or more of the significant inputs is not based on observable market data, the instrument is included
in Level 3 is determined in accordance with generally accepted pricing models based on discounted cash
flow analysis using prices from observable market transactions and dealer quotes of similar instruments.
Valuation Techniques used to determine fair values:
A) Specific valuation technique is used to determine the fair value of the financial instruments which include:
i) For financial instruments other than (ii) and (iii)- the use of quoted market prices.
ii) For financial liabilities (domestic currency loans) :- appropriate market borrowing rate of the entity as of each balance sheet
date used.
iii) For financial assets (employee loans) : appropriate market rate of the entity as of each balance sheet date used.
b) The Company does not have any investment property, hence the question of disclosure and valuation by a registered valuer
as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 does not arise.
c) The Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or
both during the year.
d) During the year the Company has not given Loan.
e) Benami property : There are no proceedings being initiated or are pending against the Company for holding any benami
property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
f) The Company had Borrowed secured Loan from Banks against current assets
i) Quarterly returns or statements of current assets filed by the company with banks or financial institutions are in
agreement with the books of accounts.
ii) As returns/ statements of current assets are in agreement with the books of account, summary of reconciliation and
reasons of material discrepancies, if any to be adequately disclosed does not arise.
(g) Wilful Defaulter : the Company has not been declared as wilful defaulter by any bank or financial institution or other lender.
(h) There are not transactions or relationship with Struck off Companies except detail as given below during the year.
(i) Registration of charges or satisfaction with Registrar of Companies:- There are currently no outstanding charges or
satisfactions pending registration with the Registrar of Companies beyond the stipulated statutory period, except for two
instances where charge pending to satisfied:
1. The Industrial Credit & Investment Corporation of India Ltd. (Rs. 10 Lakhs), and
2. Rajasthan State Industrial Development & Investment Corporation Ltd. (Rs. 45 Lakhs).
These charges were created on 26-02-1982 and 30-10-1981, respectively, with the Registrar of Companies in Jaipur. The
Company is in process for satisfication for these charges.
(j) The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act
read with the Companies (Restriction on number of Layers) Rules, 2017.
(k) Detailed Ratio analysis given in note number 54.
(l) There are no Scheme of Arrangements as on March 31, 2026
(m) Utilisation of borrowings availed from banks :-The borrowings obtained by the company from banks have been applied for
the purposes for which such loans were was taken and funds raised on short term basis have not been utilised for long
term purposes.
(n) Additional information to be disclosed by way of Notes to Statement of Profit and Loss
i) The Company does not have any undisclosed income as on March 31, 2026.
ii) The Company does not have any details of Crypto Currency or Virtual Currency as on March 31, 2026.
(o) Utilisation of borrowed funds and share premium
The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Company(Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries The Company has not received
any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether
recorded in writing or otherwise) 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
Note No. 57. Events occurring after the Balance Sheet Date : - Proposed Dividend
The Board of Directors of the Company have recommended payment of final dividend of Re 1/- per equity share of face value
of Rs 5/- each for the financial year ended 31st March 2026, subject to the approval of shareholders at the ensuing Annual
General Meeting and if approved, would result in a cash outflow of Rs. 342.32 lakhs.
Note No. 58. Disclousre as per section 186 of the Companies Act, 2013
The details of loans, gurantees and investment under section 186 of the Companies Act, 2013 read with Companies (Meeting
of Board and its Powers) Rules, 2014 are as follows:
(i) Details of Investment made are given in Notes 6 of the financial statement.
(ii) There are no guaranatees issued by the Company as at 31 March 2026 and 31 March 2025
(iii) Loan given to wholly owned subsidiary Current year Rs. Nil (Previous Year Rs. Nil Lakhs)
Note No 59 Other Receivables
During the year Financial Year 2024-25, cash embezzlement was done by an employee of the Company for Rs 42.66 Lakhs.
An FIR has been lodged with the police, and appropriate legal proceedings are currently underway. Management views this as
an isolated case of misconduct, and no significant changes to internal controls are deemed necessary.
Note No 60 Impairment of Investment in Branswara Brands Private Limited
The Company has recognized an impairment loss of Rs. 129 lakhs during the year in respect of its investment in its subsidiary,
Banswara Brands Private Limited, based on an independent valuation assessment. The recoverable amount of the investment
was determined at Rs. 664 lakhs based on value in use calculations using a discount rate of 17.55%.
Note No 61 Exceptional Item
The Government of India has notified the implementation of the four Labour Codes namely, the Code on Wages,
2019, Industrial Relations Code, 2020, Code on Social Security, 2020 and Occupational Safety, Health and Working
Conditions Code, 2020 with effect from 21 November 2025, subsuming and rationalising 29 existing labour laws.
Based on the information presently available, the Company has reassessed its employee benefit obligations arising
on account of the implementation of the aforesaid Labour Codes. Accordingly, based on management's best estimate
of the impact pertaining to past periods, an amount of Rs. 891.38 Lakhs has been recognised as an expense and
disclosed as an Exceptional Item in the Statement of Profit and Loss for the quarter and year ended 31 March 2026.
The Company continues to monitor the finalisation of the State Rules and further clarifications from the Government, and any
additional impact, if any, will be accounted for in the future period , if required.
Note No. 62 Disclosure as required by Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)
Regulation, 2015
A. Loans and advances in the nature of loans
To Joint Venture : Nil
To Wholly Owned Subsidiary : Rs. Nil (Previous Year Rs. Nil Lakhs)
B. Investment by the loanee : Nil
Note No. 63 Certain Prior year amounts have been reclassified for consistency with the current period presentation. These
reclassification have no effect on the reported results of operations.
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