3.12. Provisions, Contingent Liabilities and Contingent Assets
a) Provisions
Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event and
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation. Provisions are determined by discounting
the expected future cash flows (representing the best estimate of the expenditure required to settle the present
obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of
money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
b) Contingent Liabilities
Contingent liability is a possible obligation arising from past events and the existence of which will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the Company or a present obligation that arises from past events but is not recognised because it is not possible
that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable
estimate of the amount of the obligations cannot be made. The Company discloses the existence of contingent
liabilities in other notes to financial statements.
c) Contingent Assets
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of
an inflow of economic benefits. Contingent assets are not recognised though are disclosed, where an inflow of
economic benefits is probable.
3.13. Intangible Assets
a) Recognition and Measurement
Intangible assets comprise of computer software, expected to provide future enduring economic benefits are
stated at cost less accumulated amortisation and impairment, if any. Cost comprises purchase price, non-refundable
taxes, duties, and incidental expenses after deducting trade discounts and rebates related to the acquisition and
installation of the assets.
b) Subsequent Expenditure
Subsequent costs are included in the asset's carrying amount, only when it is probable that future economic benefits
associated with the cost incurred will flow to the Company and the cost of the item can be measured reliably. All
other expenditure is recognised in the statement of profit and loss.
c) Amortisation
• Intangible assets are amortised over a period of five years under straight line method.
• The amortisation period and the amortisation method are reviewed at least at the end of each financial year. If
the expected useful life of the assets is significantly different from previous estimates, the amortisation period is
changed accordingly.
d) Intangible Assets under Development
Intangible assets under development is stated at cost which includes expenses incurred in connection with development
of Intangible assets in so far as such expenses relate to the period prior to getting the assets ready for use.
3.14. Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to ordinary shareholders
by the weighted average number of ordinary shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding during the period are adjusted for the
effects of all dilutive potential ordinary shares.
3.15. Cash Dividend Distribution to Equity Holders
The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution
is authorised and the distribution is no longer at the discretion of the Company. Final dividends on shares are recorded
as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of
declaration by the Company's Board of Directors.
3.16. Measurement of Fair Values
A number of the accounting policies and disclosures of the Company require the measurement of fair values, for both
financial and non-financial assets and liabilities.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes place either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a
liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest. A fair value measurement of a non-financial
asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest
and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within
the fair value hierarchy, described as follows, based on the input that is significant to the fair value measurement as a
whole:
• Level 1 — Quoted prices (unadjusted) in active market for identical assets or liabilities. The mutual fund / alternative
investment fund are valued using the quoted price/closing net asset value (NAV).
• Level 2 — Inputs other than quoted price / NAV included within level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
• Level 3 — Inputs which are unobservable inputs for the asset or liability.
External valuers are involved for valuation of significant assets and liabilities. Involvement of external valuers is decided
by the management of the Company considering the requirements of Ind AS and Companies Act, 2013 and selection
criteria include market knowledge, reputation, independence and whether professional standards are maintained.
4. SIGNIFICANT JUDGEMENTS AND KEY SOURCES OF ESTIMATION IN APPLYING ACCOUNTING POLICIES
Information about significant judgements and key sources of estimation made in applying accounting policies that
have the most significant effects on the amounts recognised in the financial statements is included in the following
notes:
a) Recognition of Deferred Tax Assets:
The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the
Company's future taxable income against which the deferred tax assets can be utilised. In addition, significant
judgement is required in assessing the impact of any legal or economic limits.
b) Useful Lives of Depreciable/ Amortisable Assets (Property, Plant and Equipment and Intangible Assets):
Management reviews its estimate of the useful lives of depreciable/ amortisable assets at each reporting date, based
on the expected utility of the assets. Uncertainties in these estimates relate to actual normal wear and tear that may
change the utility of plant and equipment.
c) Extension and Termination Option in Leases:
Extension and termination options are included in many of the leases. In determining the lease term the management
considers all facts and circumstances that create an economic incentive to exercise an extension option, or not
exercise a termination option.
This assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this
assessment and that is within the control of the Company.
d) Defined Benefit Obligation (DBO):
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, medical cost trends,
anticipation of future salary increases and the inflation rate. The Company considers that the assumptions used to
measure its obligations are appropriate. However, any changes in these assumptions may have a material impact on
the resulting calculations.
e) Provisions and Contingencies:
The assessments undertaken in recognising 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 is applied best judgement by management regarding the probability of exposure to potential loss.
f) Impairment of Financial Assets:
The Company reviews its carrying value of investments carried at amortised cost annually, or more frequently when
there is indication of impairment. If recoverable amount is less than its carrying amount, the impairment loss is
accounted for.
g) Fair Value Measurement of Financial Instruments:
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured
based on quoted prices in active markets, their fair value is measured using valuation techniques including the
discounted cash flow model. The input to these models are taken from observable markets where possible, but where
this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations
of inputs such as liquidity risk, credit risk and volatility.
* Change in shareholding is on account of interse transfer during the year.
As per records of the Company, including its register of shareholders/members as on 31st March, 2026, the above
shareholding represents legal ownership of shares.
f) The Company had bought back 2,00,000 ordinary shares of face value of T 10/- each during the financial year 2020-21,
2,50,000 ordinary shares of face value of T 10/- each during the financial year 2021-22 and 1,75,000 ordinary shares of
face value of T 10/- each during the financial year 2024-25.
g) No ordinary shares have been reserved for issue under options and contracts/commitments for the sale of shares/
disinvestment as at the Balance Sheet date.
h) No securities convertible into equity/preference shares have been issued by the Company during the year.
i) No calls are unpaid by any director or officer of the Company during the year.
Nature and purpose of other equity
Capital reserve
Capital reserve represents capital profits appropriated as per erstwhile Companies Act, 1956 arising on sale of fixed assets
during the year ended 30th November, 1985 and 31st March, 1992. This reserve can be utilised in accordance with the
provisions of the Companies Act, 2013.
General reserve
General Reserve represents the reserve created through annual transfer of net profit at a specified percentage in accordance
with the provisions of the erstwhile Companies Act, 1956. Consequent to the introduction of the Companies Act, 2013, the
requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn, though the
Company may voluntarily transfer such percentage of its profits for the financial year, as it may consider appropriate. This
reserve can be utilised in accordance with the provisions of the Companies Act, 2013.
Capital redemption reserve
Capital redemption reserve represents the reserve created in earlier years on account of redemption/Buy-back of cumulative
preference share capital and ordinary share capital under the provisions of the Companies Act, 1956/2013. This reserve can be
utilised in accordance with the provisions of the Companies Act, 2013.
Retained earnings
Retained earnings represents the cumulative profits of the Company after appropriation. Retained earnings can be utilised in
accordance with the provisions of the Companies Act, 2013.
Other comprehensive income reserve
Equity instruments through other comprehensive income
This represents the cumulative gains and losses, net of tax, arising on the fair valuation of equity instruments measured at fair
value through other comprehensive income. The Company transfers amounts from this reserve to retained earnings when the
relevant equity instruments are derecognised.
Revaluation surplus
Revaluation surplus represents the gain/(loss), net of deferred tax, on revaluation of freehold land. The same is not available for
distribution to the shareholders.
Remeasurements of the defined benefit plans
Remeasurements of the defined benefit plans comprises actuarial gains and losses and remeasurements of return on plan
asset (excluding interest income) which are recognised in other comprehensive income and then immediately transferred to
retained earnings.
Terms and conditions :
a) Cash Credit is secured by hypothecation of entire current assets of the Company on first charge basis and all movable fixed
assets located at Budge Budge on second charge basis, both present and future. The loan is further secured by mortgage
of immovable properties located at Budge Budge on second charge basis.
b) Cash credit is repayable on demand and carries interest @ REPO 3.25 % p.a. (presently 8.50 % p.a.) payable at monthly
intervals. (31st March, 2025 : 9.30 % p.a.)
c) No loans have been guaranteed by the directors of the Company.
d) There is no default as on the balance sheet date in the repayment of borrowings and interest thereon.
e) The quarterly returns or statements of current assets filed by the Company with bank are in agreement with the books of
account.
44. DIVIDEND
The Board of Directors at its meeting held on 21st May, 2026 have recommended dividend of ? 25/- (F.Y. 2024-25 ? 5/-) per
ordinary share on 58,41,875 ordinary shares of face value of ? 10/- each amounting to ? 1,460.47 for the financial year ended
31st March, 2026.
The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a
liability.
45 DISCLOSURE PURSUANT TO INDIAN ACCOUNTING STANDARD - 19 'EMPLOYEE BENEFITS'45.1Defined Contribution Plans:
The Company has during the year recognised an expense of ? 613.06 (F.Y. 2024-25 ? 644.12) towards defined contribution plans.
Out of the total contribution, made for employees' provident fund, a sum of ? NIL (F.Y. 2024-25 ? 91.23) has been made to Cheviot
Company Limited Employees' Provident Fund while the remaining contribution has been made to the provident fund plan
operated by the Regional Provident Fund Commissioner. During the previous year, the Company had voluntarily surrendered
its exemption granted by the Central Provident Fund Commissioner under Section 17(1)(a) of The Employees' Provident Funds
and Miscellaneous Provisions Act, 1952 w.r.t. Cheviot Company Limited Employees' Provident Fund and started complying as an
un-exempted establishment with effect from 1st January 2025.
45.2 Defined Benefit Plans:Gratuity Plan
This is a funded defined benefit plans for qualifying employees. The Company makes contributions to the Cheviot Company
Limited Employees' Gratuity Trust Fund. Gratuity is payable to all eligible employees of the Company on superannuation, death,
permanent disablement and on resignation/termination of employment in terms of the provisions of Chapter V of the Code on
Social Security, 2020 read with rules thereunder or as per the Company's rule, whichever is more beneficial to the employee.
a) Risk Exposure
Defined benefit plans expose the Company to actuarial risks such as: Interest rate risk, Salary risk and Demographic risk.
i) Interest rate risk: The defined benefit obligation calculated uses a discount rate based on government bonds. If the bond
yield falls, the defined benefit obligation will tend to increase.
ii) Salary risk: Higher than expected increase in salary will increase the defined benefit obligation.
iii) Demographic risk: This is the risk of variability of results due to unsystematic nature of decrements that includes mortality,
withdrawal, disability and retirement. The effect of these decrements on the defined benefits obligations is not straight
forward and depends on the combination of salary increase, discount rate and vesting criteria. It is important not to
overstate withdrawals because in the financial analysis, the retirement benefit of the short service employee typically
costs less per year as compared to a long service employee.
46. SEGMENT REPORTING
46.1 Segment information
Operating segments are reported in a manner consistent with the internal reporting to the chief operating decision
maker (CODM). The Chief Executive Officer of the Company being the CODM, assesses the financial performance
and position of the Company and makes strategic decisions. The CODM primarily uses earnings before interest,
tax, depreciation and amortisation (EBITDA) as performance measure to assess the performance of the operating
segments. However, the CODM also receives information about the segment revenues, segment assets and segment
liabilities on regular basis.
46.2 Description of Segment
The Company is engaged in a single business segment i.e. manufacturing and sale of jute goods. Hence, disclosure
requirements as required by Ind AS -108 are not applicable in respect of business segment.
* Revenue outside India includes sale to USA ? 5,860.99 (F.Y. 2024-25 ? 6,658.06)
** Non-current assets other than financial instruments include property, plant and equipment, capital work-in-progress,
right of use assets, other intangible assets, non-current tax assets (net) and other non-current assets.
46.4 Extent of reliance on major customer
Revenue from a government agency amounting to ? 29,325.84 (53.84% of total revenue); F.Y. 2024-25 ? 18,343.00
(42.14% of total revenue) has arisen on sale of jute bags within India.
47 DISCLOSURES PURSUANT TO IND AS - 115
47.1 Nature of goods and services : The Company is engaged in the manufacturing and sale of jute products and the same
is only reportable segment of the Company.
51 CAPITAL MANAGEMENT
For the purpose of the Company's capital management, capital includes issued capital and all other equity reserves
attributable to the ordinary shareholders of the Company. The primary objective of the Company when managing
capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to
maximise shareholder value.
As at 31st March, 2026 and 31st March, 2025, the Company has only one class of ordinary shares and has low debt.
Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or
achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment
into business based on its long term financial plans.
52 DISCLOSURE ON FINANCIAL INSTRUMENTS
This section gives an overview of the significance of financial instruments for the Company and provides additional
information on balance sheet items that contain financial instruments.
The details of material accounting policies including the criteria for recognition, the basis of measurement and the
basis on which income and expenses are recognised in respect of each class of financial assets, financial liabilities and
derivative financial instruments are disclosed in Note 3.10 to the financial statements.
The management has assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, short
term borrowings and other current financial assets and financial liabilities approximate their carrying amounts largely
due to the short-term maturities of these instruments. The management has assessed that the fair value of floating rate
instruments approximate their carrying value.
52.2 Fair value Hierarchy
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities. The mutual fund/alternative
investment fund are valued using the quoted price/closing net asset value (NAV).
Level 2: Inputs other than quoted price/NAV included within level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair value of financial instruments that are
not traded in an active market is determined using market approach and valuation techniques which maximise the
use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required
to fair value an instrument are observable, the instrument is included in Level 2. The fair value of all debentures or
bonds which are not actively traded in the stock exchanges is valued using the closing price or dealer quotations as
at the reporting date. The valuation of unquoted equity share is valued using valuation techniques considering the
observable market inputs. Derivative financial instruments are valued based on quoted prices for similar assets and
liabilities in active markets or inputs that are directly or indirectly observable in the market place.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If
one or more of the significant inputs is not based on observable market data, the fair value is determined using
generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being
the discount rate that reflects the credit risk of counterparty. The fair value of short-term financial assets and liabilities
is considered to be approximately equal to its carrying value due to their short term nature. Costs of unquoted equity
instruments has been considered as an appropriate estimate of fair value where most recent information to measure
fair value is insufficient or if there is a wide range of possible fair value measurements.
52.3 Financial Risk Management
The Company has a risk management policy which covers risk associated with the financial assets and liabilities. The
risk management policy is approved by the Directors. The different types of risk impacting the fair value of financial
instruments are as below:
a) Credit Risk
The credit risk is the risk of financial loss arising from counter party failing to discharge an obligation. The credit risk is
controlled by analysing credit limits and credit worthiness of customers on continuous basis to whom the credit has
been granted, after obtaining necessary approvals for credit.
i) Trade Receivables
Customer credit risk is managed by the Company subject to Company's established policy, procedures and control
relating to customer credit risk management. Outstanding customer receivables are regularly monitored and major
customers are generally from government agencies and in respect of export debtors, terms of shipment is either
cash against document or 100% advance against proof of shipments or backed by letter of credit / ECGC coverage.
Thus, based on past trends, the Company does not foresee any losses in expected credit loss (ECL). The maximum
exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note - 14.
ii) Financial instruments and cash deposit
Credit risk is limited as the Company generally invest in deposits with banks and in bonds of companies having
high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include
investments in debentures or bonds, preference shares, real estate investment trust and alternative investment
funds. Counterparty credit limits are reviewed by the Company periodically and the limits are set to minimise
the concentration of risks and therefore mitigate financial loss through counterparty's potential failure to make
payments.
b) Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its financial obligations as they become due.
The Company monitors its risk by determining its liquidity requirement in the short, medium and long term. This is
done by drawing up cash forecast for short term and long term needs. The Company manages its liquidity risk in a
manner so as to meet its normal financial obligations without any significant delay or stress. Such risk is managed
through ensuring operational cash flow while at the same time maintaining adequate cash and cash equivalent
position. The management has arranged for diversified funding sources and adopted a policy of managing assets
with liquidity monitoring future cash flow and liquidity on a regular basis. Surplus funds not immediately required
are invested in certain mutual funds and fixed deposit which provide flexibility to liquidate. Besides, it generally has
certain undrawn credit facilities which can be used as and when required, such credit facilities are reviewed at regular
basis.
c) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises of following risk: interest rate risk, foreign currency risk, other price risk.
Financial instruments affected by market risk include investments, trade receivable, borrowings and trade payable.
i) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Company's financial instruments will
fluctuate because of changes in market interest rates.
The Company is exposed to risk due to interest rate fluctuation on its current borrowings with floating interest
rate. Interest rate risk is determined by current market interest rates, projected debt servicing capability and
view on future interest rate. Such interest rate risk is actively evaluated and is managed through portfolio
diversification and exercise of prepayment/refinancing options, where considered necessary.
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 has significant foreign currency exposure. To mitigate this risk,
foreign exchange exposure against exports are partly hedged by entering into forward contract.
a) Exposure to foreign currency risk
The Company's exposure to foreign currency risk at the end of the reporting period are as follows:
iii) Other price risk
The Company's exposure to securities price risk arises from investments held by the Company and classified in the balance
sheet either at fair value through OCI or at fair value through profit and loss. Having regard to the nature of securities, intrinsic
worth, intent and long term nature of securities held by the Company, fluctuation in their prices are considered acceptable
and do not warrant any management.
53. Pursuant to the notification issued by the Ministry of Labour and Employment, multiple existing labour legislations have
been consolidated into a unified framework comprising four Labour Codes, collectively referred to as the 'New Labour
Codes' which became effective from 21st November, 2025. The Company has reassessed its employee benefit obligations
in accordance with the revised definition of wages and FAQs issued by The Ministry of Labour and Employment.
Accordingly, an incremental liability of T 18.91 as past service cost on post-employment defined benefits and other long
term employee benefits for its employees has been recognised as an expense under the head employee benefits expense
during the year ended 31st March, 2026.
55. OTHER REGULATORY INFORMATION
i) The Company does not have any Benami property. Further, there are no proceedings initiated or are pending against
the Company for holding any Benami property under the Prohibition of Benami Property Transactions Act, 1988 and
rules made thereunder.
ii) The Company has not granted any loans or advances in the nature of loans either repayable on demand or without
specifying any terms or period of repayment to promoters, directors, KMPs and the related parties either severally or
jointly with any other person.
iii) The Company does not have any transaction during the current/previous year with the Companies struck off under
Section 248 of the Companies Act, 2013 or outstanding balance as on Balance Sheet date with such companies.
iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
v) 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 (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.
vi) 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:
(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) The Company does not have any transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
viii) The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender.
ix) The Company has complied with the number of layers prescribed under clause (87) of Section 2 of the Companies Act,
2013 read with the Companies (Restriction on number of Layers) Rules, 2017.
x) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
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