g. Provisions, contingent liabilities and
contingent assets
A provision is recognised 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 amount of time value of money
is material, 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. Expected future
operating losses are not provided for.
A contingent liability is a possible obligation that
arises from past events whose existence will be
confirmed by the occurrence or non-occurrence
of one or more uncertain 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 possibility of
an outflow of economic benefits is remote.
Contingent assets are neither recognised nor
disclosed except when realisation of income is
virtually certain, related asset is recognised.
h. Revenue Recognition
Revenue from contracts with customers is
recognised when control of the goods are
transferred to the customer at an amount that
reflects the consideration to which the Company
expects to be entitled in exchange for those
goods or services. The Company has generally
concluded that it is the principal in its revenue
arrangements because it typically controls the
goods before transferring them to the customer.
(i) Sale of goods
Revenue from sale of products is
recognised at the point in time when
control of the asset is transferred to the
customer. In case of domestic sales, control
is generally transferred on delivery of
goods and in case of export sales which
are secured against letter of credit, control
is generally transferred at the time of bill
of lading and in case of other export sales,
control is transferred when payment is
received and there are no unfulfilled
obligations. Amounts disclosed as revenue
are net of returns and allowances, trade
discounts and rebates.
Revenue is measured based on the
transaction price, which is the
consideration, adjusted for variable
consideration such volume discounts, cash
discounts etc. as specified in the contract
with the customer.
Contract asset is the entity's right to
consideration in exchange for goods or
services that the entity has transferred to
the customer. A contract asset becomes a
receivable when the entity's right to
consideration is unconditional, which is the
case when only the passage of time is
required before payment of the
consideration is due.
Contract liability is the obligation to transfer
goods or services to a customer for which
the Company has received consideration
(or an amount of consideration is due) from
the customer. If a customer pays
consideration before the Company transfer
goods or services to the customer, a
contract liability is recognised when the
payment is made or the payment is due
(whichever is earlier). Contract liabilities are
recognised as revenue when the Company
performs under the contract. Contract
liabilities are disclosed in Note 25 as
advance received from customers.
(ii) Rendering of services
Revenue from sale of services is recognised
to the extent that it is probable that the
economic benefits will flow to the Company
and the revenue can be reliable measured
and is recognised in the statement of profit
and loss in proportion to the stage of
completion of the transaction at the
reporting date
(iii) Duty Drawback and other export
benefits
The revenue in respect of duty drawback
and similar other export benefits is
recognised on accrual (subsequent to
recording of export sales) basis at the rate
at which the entitlements accrue.
Use of significant judgements in revenue
recognition
a) Jud gement is al so required to
determine the transaction price for
the contract. The transaction price
could be either a fixed amount of
customer consideration of variable
consideration with elements such as
volume discounts, price concessions
and incentives. Any consideration
payable to the customer is adjusted
to the transaction price, unless it is a
payment for a distinct product of
service from the customer. The
estimated amount of variable
consideration is adjusted in the
transaction price only to the extent
that is highly probable that a
significant reversal in the amount of
cumulative revenue recognised will
not occur and is reassessed at the end
of each reporting period. The
Company allocates the elements of
variable consideration to all the
performance obligations of the
contract unless there is observable
evidence that they pertain to one or
more distinct performance
obligations.
b) The Company uses judgement to
determine an appropriate selling
price for a performance obligation.
The Company allocates the
transaction price to each performance
obligations on the basis of the relative
selling price of each distinct product
promised in the contract.
c) The Company's performance
obligation under revenue contracts,
is satisfied at a point in time and
judgement is exercised in
determining point in time.
(iv) Other income
Interest income is recognised using the
effective interest method.
The 'effective interest rate' is the rate that
exactly discounts estimated future cash
receipts through the expected life of the
financial instrument to:
- the gross carrying amount of the
financial asset; or
When calculating the effective interest rate,
the Company estimates the expected cash
flows by considering all the contractual
terms of the financial instrument but does
not consider the expected credit losses.
Interest income is included in other income
in the statement of profit and loss.
i. Income taxes
Income tax expense comprises current tax
expense and the net change in the deferred tax
asset or liability during the year. Tax expense
recognised in statement of profit and loss
comprises the sum of deferred tax and current
tax not recognised in Other Comprehensive
Income ("OCI") or directly in equity.
(i) Current tax
Current tax expenses are accounted in the
same period to which the revenue and
expenses relate. Provision for current
income tax is made for the tax liability
payable on taxable income after
considering tax allowances, deductions and
exemptions determined in accordance with
the applicable tax rates and the prevailing
tax laws.
Current tax assets and current tax liabilities
are offset when there is a legally
enforceable right to set off the recognised
amounts and there is an intention to settle
the asset and the liability on a net basis.
(ii) Deferred Tax
Deferred tax is recognised for the future
tax consequences of deductible temporary
differences between the carrying values of
assets and liabilities and their respective tax
bases at the reporting date. Deferred tax
liabilities are generally recognised for all
taxable temporary differences except when
the deferred tax liability arises at the time
of transaction that affects neither the
accounting profit or loss nor taxable profit
or loss. Deferred tax assets are generally
recognised for all deductible temporary
differences, carry forward of unused tax
credits and any unused tax losses, to the
extent that it is probable that future taxable
income will be available against which the
deductible temporary differences and carry
forward of unused tax credit and unused
tax losses can be utilised, except when the
deferred tax asset relating to temporary
differences arising at the time of transaction
affects neither the accounting profit or loss
nor the taxable profit or loss. Deferred tax
relating to items recognised outside the
statement of profit and loss is recognised
outside the statement of profit and loss,
either in other comprehensive income or
directly in equity. The carrying amount of
deferred tax assets is reviewed at each
reporting date and reduced to the extent
that it is no longer probable that sufficient
taxable profit will be available to allow all
or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets
are re-assessed at each reporting date and
are recognised to the extent that it has
become probable that future taxable profits
will allow the deferred tax assets to be
recovered.
Deferred tax liabilities and assets are
measured at the tax rates that are expected
to apply in the period in which the liability
is settled or the asset realised, based on
tax rates (and tax laws) that have been
enacted or substantively enacted by the
end of the reporting period.
Deferred tax relating to items recognised
outside profit or loss is recognised outside
profit or loss (either in other comprehensive
income or in equity). Deferred tax items are
recognised in correlation to the underlying
transaction either in OCI or directly in
equity.
The Company offsets deferred tax assets
and deferred tax liabilities if and only if it
has a legally enforceable right to set off
current tax assets and current tax liabilities
and the deferred tax assets and deferred
tax liabilities relate to income taxes levied
by the same taxation authority on the same
taxable entity which intend either to settle
current tax liabilities and assets on a net
basis, or to realise the assets and settle the
liabilities simultaneously, in each future
period in which significant amounts of
deferred tax liabilities or assets are
expected to be settled or recovered.
When there is uncertainty regarding
income tax treatments, the Company
assesses whether a tax authority is likely to
accept an uncertain tax treatment. If it
concludes that the tax authority is unlikely
to accept an uncertain tax treatment, the
effect of the uncertainty on taxable income,
tax bases and unused tax losses and unused
tax credits is recognised. The effect of the
uncertainty is recognised using the method
that, in each case, best reflects the outcome
of the uncertainty: the most likely outcome
or the expected value. For each case, the
Company evaluates whether to consider
each uncertain tax treatment separately, or
in conjunction with another or several other
uncertain tax treatments, based on the
approach that best prefixes the resolution
of uncertainty.
j. Segment reporting
Operating segments are reported in a manner
consistent with the internal reporting provided
to the Chief Operating Decision Maker.
In accordance with Ind AS 108-Operating
Segments, the operating segments used to
present segment information are identified on
the basis of internal reports used by the
Company's Management to allocate resources
to the segments and assess their performance.
The Board of Directors is collectively the
Company's 'Chief Operating Decision Maker' or
'CODM' within the meaning of Ind AS 108. The
Company has only one reportable business
segment i.e. manufacture of cotton yarn.
k. Borrowing cost:
Borrowing costs are interest and other costs
(including exchange differences relating to
foreign currency borrowings to the extent that
they are regarded as an adjustment to interest
costs) incurred in connection with the borrowing
of funds.
Borrowing costs directly attributable to
acquisition or construction of an asset which
necessarily take a substantial period of time to
get ready for their intended use are capitalised
as part of the cost of that asset. Other borrowing
costs are recognised as an expense in the period
in which they are incurred.
In case of a specific borrowing taken for the
purpose of acquisition, construction or
production of a qualifying asset, the borrowing
costs capitalised shall be the actual borrowing
costs incurred during the period less any interest
income earned on temporary investment of
specific borrowing pending expenditure on
qualifying asset.
In case funds are borrowed generally and such
funds are used for the purpose of acquisition,
construction or production of a qualifying asset,
the borrowing costs capitalised are calculated
by applying the weighted average capitalisation
rate on general borrowings outstanding during
the period, to the expenditures incurred on the
qualifying asset.
If any specific borrowing remains outstanding
after the related asset is ready for its intended
use, that borrowing is considered part of the
funds that are borrowed generally for calculating
the capitalisation rate.
l. Government grant:
Grants from the Government are recognised at
their fair value where there is a reasonable
assurance that the grant will be received and the
Company will comply with all attached
conditions.
Government grants relating to income are
deferred and recognised in the statement of
profit or loss over the period necessary to match
them with the costs that they are intended to
compensate and presented within other
operating income/other income.
Government grants relating to the acquisition or
construction of property, plant and
equipment are amortised to the Statement of
Profit and Loss under other operating revenue
over the useful lives of the related assets, in
proportion to the depreciation charged on those
assets under the Companies Act, 2013.
Export benefits are accounted for in the year of
exports based on eligibility and when there is
no uncertainty in receiving the same.
m. Foreign currency transactions and translation
Company's functional currency is Indian Rupee
(INR) and the standalone financial statements are
presented in Indian Rupee (INR).
The company had sanctioned an unsecured loan to DCM Nouvelle Specialty Chemicals Limited (subsidiary), for an
amount not exceeding ' 4,500 lacs during the year ended 31 March 2024. This loan was given at floating interest rate
based on 1 year SBI MCLR 170 basis points spread (Effective rate ~ 10.25% per annum, on the date of agreement)
to be charged at monthly rests subject to review from time to time.
Moratorium of 2 years from the first drawdown was given for this loan and was repayable in 24 equal quarterly
installments starting from Oct' 2025 and ending on July' 2031. During the current year, this loan has been fully repaid
by the subsidiary company.
(g) Details of shares issued for consideration other than cash :
Issued, subscribed and fully paid up shares includes 1,86,77,749 equity shares issued during the financial year
ended 2019-20, pursuant to the Scheme of Arrangement between DCM Limited and DCM Nouvelle Limited, for
the demerger of the Textile Division of DCM Limited, on a going concern basis with effect from 1 April 2019 (i.e.
the appointed date) to the shareholders holding shares of DCM Limited without any consideration being received
in cash. Apart from this, the Company has not issued any bonus shares, shares for consideration other than cash
or bought back shares during any year since its inception.
Details of security, terms of repayment and interest rate on the borrowings is provided below:
(a) Term loan aggregating to ' Nil (31 March 2024: ' 82.10 lacs) was secured by first charge created on all property,
plant and equipments, alongwith the second charge created for availing cash credit, packing credit and Bill
discounting facilities described in note 21, on entire current assets both existing as well as future and an equitable
mortgage by deposit of title deed of Hisar land admeasuring 267.63 acres and all the immovable assets including
building, both present and future. The same was repayable in equated quarterly installment. The loan carried an
interest rate ranging between 9.50%-9.80% per annum (31 March 2024: 7.65%-8.60% per annum). Also, refer
note 47 for details of assets pledged as security.
(b) Term loan aggregating to ' Nil (31 March 2024: ' 379.49 lacs ) was secured by first charge created on all property,
plant and equipments, alongwith the second charge created for availing cash credit, packing credit and Bill
discounting facilities described in note 21, on entire current assets both existing as well as future and an equitable
mortgage by deposit of title deed of Hisar land admeasuring 267.63 acres and all the immovable assets including
building, both present and future. The same was repayable in equated quarterly installment. The loan carried an
interest rate of 9.50%-10.35% per annum (31 March 2024: 9.05% per annum). Also, refer note 47 for details of
assets pledged as security.
(c) Term loan aggregating to ' 8,151.36 lacs (31 March 2024: ' 9,262.63 lacs) is secured by first charge created on all
property, plant and equipments, alongwith the second charge created for availing cash credit, packing credit and
Bill discounting facilities described in note 21, on entire current assets both existing as well as future and an
equitable mortgage by deposit of title deed of Hisar land admeasuring 267.63 acres and all the immovable
assets including building, both present and future. The same is repayable in equated quarterly installment. The
loan carries an interest rate of 9.50%-9.80% per annum (31 March 2024: 8.00%-8.90% per annum). Also, refer
note 47 for details of assets pledged as security.
(d) Vehicle loans aggregating to ' 15.18 lacs (31 March 2024: ' 31.93 lacs) relate to vehicles purchased under
financing arrangements with banks/finance institutions and are secured by way of hypothecation of the specified
assets. Repayable in equated monthly installments. The loans carry an interest rate ranging between 8.60%-
10.05% per annum. (31 March 2024: 8.60%-10.05% per annum)
(e) There is no continuing default as on the balance sheet date in repayment of loans and interest thereon.
(f) The Company is required to comply with certain debt covenants for HDFC bank, as mentioned in the loan
agreement. During the current financial year, there have breaches in certain financial covenants however the
borrowing from HDFC bank is of short term in nature which is already classified as current liability. Also, the
Company has been able to fulfil its obligation in respect to payment of loan EMIs on due dates, and there is no
overdue balance as on reporting date. There have been no defaults in payment of borrowings by the Company
during the year.
Cash credit, Cash credit pledge, packing credit and bill discounting facilities aggregating to ' 25,327.43 lacs (31
March 2024: ' 27,335.68 lacs) carries interest rate ranging from 9.50% -10.35% p.a. for Cash Credit/Pledge facilities,
SOFR 1.00%-1.85% p.a, for Packing Credit in Foreign Currency (PCFC)/Bill Discounting (EBR).These are secured by
first charge created on entire current assets along with the second charge created on entire fixed assets, both present
and future. Also secured by an equitable mortgage of land admeasuring 267.63 acres and all immovable assets
including building, situated at Hissar and hypothecation of existing as well as future block of movable assets ranking
*During the financial year ended 31st March 2025, a fire incident occurred at the Company's cotton warehouse,
resulting in damage to the cotton inventory. The Company assessed the extent of the loss and its financial impact,
and subsequently filed an insurance claim amounting to ' 632.81 lacs. This amount is net of salvage value of ' 119.29
lacs, which includes GST of ' 5.68 lacs received on the sale of burnt stock, as input credit had already been availed on
the stock sold.
On 10th October 2024, the insurance company has approved the claim of ' 571.36 lacs, after deducting ' 61.45 lacs
from the claimed amount. Accordingly, the Company has recognized ' 61.45 lacs as an exceptional loss in the current
financial year.
38. Earnings per share (EPS)
Basic earnings per share are calculated by dividing the profit for the year attributable to equity holders by the
weighted average number of Equity shares outstanding during the year.
Diluted earnings per share are calculated by dividing the profit attributable to equity holders by the weighted average
number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would
be issued on conversion of all the dilutive potential Equity shares into Equity shares. The following reflects the
income and share data used in the basic and diluted EPS computations:
* The Company has been accruing interest subsidy on the term loan taken for installation of plant and machinery,
eligible under Technology Upgradation Fund ("TUF") schemes issued by the Ministry of Textiles. During the financial
year 2019-20, inspection had been carried out by authorities and shared its draft observations with the Company, in
respect of the certain interpretations made in the earlier years for computation of TUF subsidy. Basis such discussions
with the authorities and draft observations received, the management had recorded a provision of ' 282.28 lacs
including interest during the financial year 2019-20 in respect of the amounts which had already been received in the
prior years by the Company and have, also, recognised total accumulated impairment allowance of ' 47.59 lacs (upto
31 March 2024: ' 45.74 lacs) against liabilities payable to the authorities in respect of TUF subsidy in the current year.
This has led to recognition of expense of ' 1.85 lacs (31 March 2024: ' 1.86 lacs) in the Statement of Profit and Loss.
The Company has filed writ petition in 2020 before High Court of Delhi challenging the recovery of the interest
subsidy. The respondents have filed reply and hearing is underway. The next date of hearing is 29.09.2025. The
Company, as an interim measure has deposited ' 190.82 lacs with the Registrar General of High Court of Delhi.
#During the year, the Company received approval from the Director of Industries & Commerce, Haryana, under the
Fiscal Incentives and Infrastructure Schemes of the Haryana Enterprise & Employment Policy 2020 (HEEP Policy).
Pursuant to this, the Company received an in principal government grant of ' 4,000 lacs, classified as a capital grant,
in relation to the acquisition/construction of eligible assets, including buliding and plant & machinery, receivable in
8 (eight) years.
In accordance with the Company's accounting policy, the grant has been recognized as deferred income under non¬
current liabilities and is being amortized to the Statement of Profit and Loss over the useful life of the related assets,
in proportion to the depreciation charged under the Companies Act.
As of 31st March 2025, the total receivable under the grant stands at ' 3,371.23 lacs (31st March 2024: ' Nil), with a
corresponding liability of ' 3,080.90 lacs (31st March 2024: ' Nil), resulting in a net receivable of ' 290.33 lacs (31st
March 2024: ' Nil).
40. Segment Information
Description of segments and principal activities
The Company is primarily engaged in the business of manufacturing and sale of cotton yarn.
Operating segments are reported in a manner consistent with the internal reporting to the Chief Operating Decision
Maker "CODM" of the Company. The CODM is responsible for allocating resources and assessing performance of the
operating segments. The Company has monthly review and forecasting procedure in place and CODM reviews the
operations of the Company as a whole, hence there are no reportable segments as per Ind AS 108 "Operating
Segments". The measurement principles of segments are consistent with those used in significant accounting policies.
42. Provision against electricity duty on open access power
The Company has filed writ petition in 2014 before Punjab And Haryana High Court challenging the charge of
electricity duty on the power purchased through inter-state short term open access. Dakshin Haryana Bijli Vitran
Nigam (DHBVN) issued a sales circular no. 7/2010 clarifying the levy of electricity duty @ ' 0.10/KWH chargeable to
the short term open access consumers on the power contracted and drawn. This has been challenged by the Company
in front of "High Court of Punjab and Haryana" at Chandigarh and order is pending. Further, on a prudent basis, the
Company is carrying provision of ' 398.30 lacs (31 March 2024: ' 396.46 lacs) (refer note 26) in the financial statements
equivalent to the amount under dispute.
ix) Description of Risk Exposures:
The gratuity scheme is a final salary Defined Benefit Plan that provides for lump sum payment made on exit
either by way of retirement, death, disability or voluntary withdrawal. The benefits are defined on the basis of
final salary and the period of service and paid as lump sum at exit. The plan design means the risk commonly
affecting the liabilities and the financial results are expected to be:
a. Interest rate risk: The defined benefit obligation calculated uses a discount rate based on government
bonds, if bond yield fall, the defined benefit obligation will tend to increase
b. Salary inflation risk: Higher than expected increases in salary will increase the defined benefit obligation.
c. Demographic risk: This is the risk of variability of results due to unsystematic nature of decrements that
include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined ben¬
efit obligation is not straight forward and depends upon the combination of salary increase, discount rate
and vesting criteria.
44. Related party disclosures:
In accordance with the requirements of Ind AS 24 on Related Party Disclosures, the names of the related party where
control/ability to excercise significant influence exists, along with the aggregate amount of transactions and year end
balances with them as identified and certified by the management are given below:
* The carrying amounts of trade receivables, trade payables, cash and cash equivalents, bank balances other than
cash and cash equivalents, loans and other financial assets and liabilities, approximates the fair values, due to their
short-term nature. The carrying value of loans and other non-current financial assets and other non-current financial
liabilities approximates the fair values as on the reporting date.
# The Company's borrowings have been contracted at floating rates of interest. Accordingly, the carrying value of
such borrowings (including interest accrued but not due) approximates fair value.
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into
three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to
the measurement, as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
There have been no transfers between Level 1, Level 2 and Level 3 for the years ended 31 March 2025 and 31 March
2024.
b. Financial risk management
The Company has exposure to the following risks arising from financial instruments:
• Credit risk ;
• Liquidity risk; and
• Market risk
Risk management framework
The Company's board of directors has overall responsibility for the establishment and oversight of the Company's
risk management framework. The board of directors have authorised senior management to establish the processes,
who ensures that executive management controls risks through the mechanism of properly defined framework.
The Company's risk management policies are established to identify and analyse the risks faced by the Company, to
set appropriate risks limits and controls, to monitor risks and adherence to limits. Risk management policies are
reviewed regularly to reflect changes in market conditions and the Company's activities.
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, and arises principally from the Company's receivables from customers. However, in
certain cases, the Company may also consider a financial asset to be in default when internal or external information
indicates that the Company is unlikely to receive the outstanding contractual amounts in full prior to expiry of
contractual period. A financial asset is written off when there is no reasonable expectation of recovering the contractual
cash flows. The presumption under Ind AS 109 with reference to significant increases in credit risk since initial
recognition (when financial assets are more than 30 days past due) has been rebutted and is not applicable to the
Company, as the Company is able to collect a significant portion of its receivable that exceed the due date.
The maximum exposure to the credit risk at the reporting date is primarily from domestic trade receivables as export
receivables are secured through letter of credit and are derived from revenue earned from customers primarily
located in Bangladesh. Domestic trade receivables are generally unsecured and are derived from revenue earned
from customers primarily located in India. The Company continuously monitors the economic environment in which
it operates. The Company manages its Credit risk through credit approvals, establishing credit limits and continuously
monitoring credit worthiness of customers to which the Company grants credit terms in the normal course of business.
Majority of trade receivables are from customers, which are fragmented and are not concentrated to individual
customers. Trade receivables are generally realised within the credit period.
The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables
based on a provision matrix. The provision matrix takes into account historical credit loss experience (including of the
period prior to acquisition of the related business) and adjusted for forward-looking information. The expected
credit loss allowance is based on the ageing of the days the receivables are due and are not expected to be recoverable.
Ageing matrix is disclosed below:
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 have sufficient liquidity to meet its liabilities when they fall due,
under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's
reputation.
The Company believes that its liquidity position, anticipated future internally generated funds from operations, and
its fully available, revolving undrawn credit facility will enable it to meet its future known obligations in the ordinary
course of business. However, if a liquidity needs were to arise, the Company believes it would be able to approach
and materialise new financing arrangements, which should enable it to meet its ongoing capital, operating, and
other liquidity requirements. The Company will continue to consider various borrowing or leasing options to maximise
liquidity and supplement cash requirements as necessary.
The Company's liquidity management process as monitored by management, includes the following:
- Day to day funding, managed by monitoring future cash flows to ensure that requirements can be met.
- Maintaining rolling forecasts of the Company's liquidity position on the basis of expected cash flows.
- Maintaining diversified credit lines.
Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market risk comprises two types of risk: currency risk and interest rate risk. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the
return.
Currency risk
Currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign
exchange rates. The Company is exposed to the effects of fluctuation in the prevailing foreign currency exchange
rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the
functional currency and other currencies from the Company's operating, investing and financing activities.
Foreign exchange derivative contracts
The Company uses derivative financial instruments exclusively for hedging financial risks that arise from its commercial
business or financing activities. The Company's Corporate treasury team manages its foreign currency risk by hedging
transactions that are expected to occur within 1 to 12 months for hedges of forecasted sales and purchases. When a
derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives
to match the terms of the hedged exposure. For hedges of forecast transactions, the derivatives cover the period of
exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the
resulting receivable or payable that is denominated in the foreign currency. All identified exposures are managed as
per the policy duly approved by the Board of Directors.
51. Other statutory information
(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.
(ii) The Company do not have any charges or satisfaction which is yet to be registered with Registrar of Companies
beyond the statutory period.
(iii) The Company have not traded or invested in Crypto currency or Virtual Currency during the period/year.
(iv) The Company have 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
(v) The Company have 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,
(vi) The Company have not any such 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 (such as, search or
survey or any other relevant provisions of the Income Tax Act, 1961).
(vii The Company is not declared wilful defaulter by and bank or financials institution or lender during the year.
(viii) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with
the Companies (Restriction on number of Layers) Rules, 2017.
(ix) Disclosure as per section 186 of Companies Act 2013 The details of loans, guarantees and investments under
section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014
are as follows:
(i) Details of investments made are given in note 4.
(ii) Details of loan given by the company and guarantees issued as at March 31, 2025 and March 31, 2024 refer
note 5 and note 44.
(x) The Company has not granted any loans or advances in nature of loan, either repayable on demand or without
specifying any terms or period of repayment, to promoters, directors, KMPs and the related parties.
52. Audit Trail
The Ministry of Corporate Affairs (MCA) has prescribed a requirement for companies under the proviso to Rule 3(1)
of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules, 2021 requiring
companies, which uses accounting software for maintaining its books of account, shall use only such accounting
software which has a feature of recording audit trail of each and every transaction, creating an edit log of each
change made in the books of account along with the date when such changes were made and ensuring that the
audit trail cannot be disabled.
The Company has used accounting software for maintaining its books of account which has a feature of audit trail
(edit log) facility and the same was enabled at the application level. During the year ended 31 March 2025, the
Company has not enabled the feature of recording audit trail (edit log) at the database level for the said accounting
software to log any direct data changes on account of recommendation in the accounting software administration
guide which states that enabling the same all the time consume storage space on the disk and can impact database
performance significantly.
53. Income Tax Litigation
DCM Limited had received a notice u/s 148 of Income Tax Act, 1961 for re-assessment of income for the A.Y 2019¬
20 ( Period prior to demerger of textile division to the Company) related to purchase transactions amounting to
' 2,590 lacs. The company had filed the response against this notice. Subsequently, a show cause notice was issued
to the company by the income tax department stating that the amount should be considered as unexplained
expenditure and added back this expenditure to the total income. Company had responded on the above show
cause notice stating the reasons and denied the claims made by the department.
Though Income tax department was not satisfied with the reply received from the company and had passed the
order against the company making an addition of ' 2,590 lacs to the total income. The amount of tax demand is not
ascertainable against this addition made by the department. Company has filed an appeal to Commissioner of
Income Tax (Appeals) against this order passed u/s 147, and the hearing of the appeal is awaited. Management
based upon the analysis believes likelihood of any liability divulging on the company to be immaterial.
54. Relationship with Struck off Companies
The Company has not entered into any transactions with the companies struck off under section 248 of Companies
Act, 2013 or section 560 of Companies Act, 1956 and do not have any outstanding balance as at the year ended 31
March 2025 and 31 March 2024.
55. Previous year's figures have been regrouped or reclassified wherever necessary to correspond with the current year
classification/ disclosure, which are not considered material to these standalone financial statements.
As per our report of even date attached For and on behalf of the Board of Directors of
For Walker Chandiok & Co LLP DCM Nouvelle Limited
Chartered Accountants
Firm's Registration No. : 001076N/N500013
Rohit Arora Dr. Meenakshi Nayar Hemant Bharat Ram
Partner Chairperson and Director Managing Director
Membership No. : 504774 DIN : 06866256 DIN : 00150933
Sandeep Kumar Jain Vivek Kaushal
Chief Financial Officer Chief Executive Officer
M. No. : 078691
Nitish Nautiyal
Company Secretary
M. No. : 50401
Place: Pune Place: New Delhi
Date: 29 May 2025 Date: 29 May 2025
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