Provisions and contingent liabilities
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pretax rate that reflects current market assessments of the time value of money and the nsks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.
Revenue recognition
Revenue is measured at the value of the consideration received or receivable. Amounts disclosed as revenue are exclusive of GST and net of returns, trade allowances, rebates, discounts, and value added taxes.
The Company recognises revenue when the amount of revenue can be reliably measured, it Is probable that future economic benefits will flow to the Company and specific critena have been met for each of the Company's activities as described below
Sale of goods
The Company earns revenue prlmanly from sale of manufactured goods (fabric, home textiles and garments). It has applied the principles laid down in Ind AS 115. In case of sale to domestic customers, sale Is made on ex-factory basis and revenue is recognized when the goods are dispatched from the factory gate. In case of export sales, revenue is recognized on shipment date, when performance obligation is met.
Revenue from services
Revenue from services is recognized in the accounting period in which the services are rendered Export Incentive
Export incentives under various schemes notified by government are accounted for In the year of exports based on eligibility and when there is no uncertainty in receiving the same.
Dividend and Interest Income
Dividend income from investments is recognised when the shareholder's right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured
reliab!y).lnterest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the pnncipal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.
Insurance claims
Insurance claims are accounted for to the extent the company is reasonably certain of their ultimate collection.
Employee benefits (i) Short-term obligations
Short term employee benefits (other than termination benefits) which are payable within 12 months after the end of the period
In which the employees render service are accounted on accrual basis. Company's contributions paid I payable during the year to Provident Fund and ESIC are recognized in the statement of profit and loss account. All leave encashment dues for
the year are settled within the same year.
(il) Defined contribution plans
For certain group of employees, employee benefit in the form of Provident fund. Employees State Insurance Contribution and Labour Welfare fund are defined contribution plans. The Company has no obligation, other than the contribution payable to the respective fund The Company recognises contribution payable to these funds/ schemes as an expense, when an employee renders the related service. If the contnbution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognised as a liability after deducting the contnbution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognised as an asset to the extent that the pre-payment will lead to. for example, a reduction in future payment or a cash refund.
(iii)Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contnbution plan. The Company provides for gratuity, a defined benefit retirement plan (‘the Gratuity Plan ) covering eligible employees of the Company. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Company.
Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each balance sheet date.
The Company recognises the net obligation of a defined benefit plan in Its balance sheet as an asset or liability. Remeasurement, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings throughOther Comprehensive Income (OCI) in the penod In which they occur. Remeasurement is not reclassified to profit or loss in subsequent periods.
Foreign currency translation and translations
Transactions in foreign currency are translated into the respective functional currencies using the exchange rates prevailing
at the dates of the respective transactions Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at the exchange rates prevailing at reporting date of monetary assets and liabilities
denominated in foreign currencies are recognized in the statement of profit and loss and reported within foreign exchange gains/ (losses).
Non-monetary assets and liabilities measured In terms of histoncal cost in foreign currencies are not retranslated. Foreign currency gains and losses are reported on a net basis.
Income tax
The income tax expense or credit for the period is the tax payable on the current penod's taxable income based on the applicable income tax rate adjusted by changes in deferred lax assets and liabilities attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method on temporary differences ansing between the tax bases of assets and liabilities and their carrying amount in the financial statement. Deferred income tax is determined using tax rates(and laws) that have been enacted or substantially enacted by the end of the reporting period and are excepted to apply when the related deferred income tax assets is realised or the deferred income tax liability is settled
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses, only if. it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable nght to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the Company has a legally enforceable nght to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal Income tax during the specified penod. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal Income tax during the specified period.
Earnings Per Share
Basic earnings per share
Basic earnings per share are calculated by dividing: the profit attributable to owners of the Company
-by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued dunng the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take Into account :the after-income tax effect of interest and other financing costs associated with dilutive potential equity shares, and the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
Government Grants
Grants from the government are recognized at their fair value where there is reasonable assurance that the grant will be received, and the Company will comply with all attached conditions.
Government grants relating to the purchase of property, plant and equipment are Included in non-current liabilities as deferred income and are credited to Profit and Loss on a straight - line basis over the expected lives of related assets and presented within other income.
Critical estimates and judgments
The preparation of financial statements requires the use of accounting estimates which by definition will seldom equal the actual results.
Management also need to exercise judgment In applying the company s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgment or complexity, and items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those onginally assessed. Detailed Information about each of these estimates and judgments Is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
The areas involving critical estimates or judgment are:
Estimation of current tax expenses and Payable.
Estimation of defined benefit obligation.
Note - 36 : FAIR VALUE MEASUREMENT.
Financial Instrument by category and hierarchy
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
1. Fair value of cash and short-term deposits, trade and other short-term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.
2. Financial instruments with fixed and vanable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.
The fair values for loans and security deposits were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the Inclusion of unobservable inputs including counter party credit risk.
The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the used of unobservable inputs, including own credit risk.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) pnces in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs that have significant effect on the recorded fair valuethat are not based on observable market data.
Note - 37: FINANCIAL RISK MANAGEMENT Credit risk
Credit nsk is the risk that counterparty will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company Is exposed to credit nsk from its operation activities (primanly trade receivables) and from its financing activities, foreign exchange transactions and other financial instruments.
The Company considers the probability of default upon Initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting penod. To assess whether there is a significant increase in credit nsk the Company compares the risk of default occurring on asset as at the reporting date with the nsk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking Information such as
I. Actual or expected significant adverse changes in business,
ii. Actual or expected significantchanges in the operating results of the counterparty,
iii Financial or economic conditions that are expected to cause a significant change to the counterparty's ability to meet its obligations,
iv. Significant increase in credit risk on other financial instruments of the same counterparty,
v. Financial assets are wntten off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company.
Trade Receivables
Customer credit risk is managed subject to the Company's established policy, procedures and control relating to customer credit nsk management. Trade receivables are non-interest bearing and generally on 7 days to 180 days credit term. Credit limits are established for all customers based on internal rating criteria. Outstanding customer receivables are regularly monitored. The Company has no concentration of credit nsk as 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 calculation is based on actual incurred historical data The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral security. The Company evaluated the concentration of nsk with respect to trade receivables as low. as its customers are located in serveral junsdictions and mdustnes and operate in largely independent markets
Dunng the year adequate provision for Doubtful Debts is provided which includes export and domestic receivables. Trade Receivables Ageing Schedule:
Financial risk management objectives and policies
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 policy is set by the Managing Board.
Market risk is the nsk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a
financial instrument The value of a financial statement may change as a result of changes in the interest rates, foreign
currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments.
Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign
currency receivables, payables and loans and borrowings
The Company manages market nsk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources. Implementing hedging strategies for foreign currency exposures like foreign exchange forward contracts, borrowing strategies and ensuring compliance with market risk limits and policies.
Liquidity Risk
Prudent liquidity nsk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses. Company treasury maintains flexibility In funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows.
(i) Financing arrangements
The Company had no un drawn borrowing facilities at the end of the reporting penod:
Note-38 : CAPITAL RISK MANAGEMENT Risk Management
The Company aim to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimize returns to our shareholders. The capital structure of the Company Is based on management s judgment of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares. The Company's policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company's will take appropriate steps in order to maintain, or if necessary, adjust, its capital structure.
Note-40: EXPORT PROMOTION CAPITAL GOODS (EPCG)
Export Promotion Capital Goods (EPCG) scheme allows import of certain capital goods including spares at concessional duty subject to an export obligation for the duty saved on capital goods imported under EPCG scheme The duty saved on capital goods imported under EPCG scheme being Government Grant, is accounted as stated in the Accounting policy on Government Grant.
Note-41 : DETAILS OF CORPORATE SOCIAL RESPONSIBILITY (CSR) EXPENDITURE
The Provisions of Section 135 of the Companies Act 2013 are not applicable to the Company dunng the Financial Year 2024-25.
NOTE:- 47: Title deeds of Properties
Titles deeds of all the immovable properties in the Financial Statements are held in the name of the company only.
NOTE:- 48: Capital-work-in progress.
There is no Capital-work-in progress as on the date of balance sheet as at 31st March 2025. There is no project which is temporarily suspended.
NOTE:- 49: Intangible Assots under development.
There are no any intangible assets under development as on the date of balance sheet as at 31st March 2025.
NOTE:- 50: Relationship with strike off companies.
Company does not have any transactions with the companies “Striken off" or in the process of strike off NOTE:- 51: Scheme of arrangements
The company has not entered into any “Scheme of Arrangements' during the year ended 31st March 2025 NOTE - 52: Details of Benami Property Held
The company does not hold any benami property as defined under the Benami Transactions (Prohibition) Act. 1988 (45 of 1988) and the rules made there under. No proceeding has been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act. 1988 (45 of 1988) and the rules made there under.
NOTE - 53: Compliance with number of layer of companies.
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
NOTE - 54: The Company has not traded or invested in crypto currency or virtual currency.
NOTE:-55: Registration of charges or satisfaction with Registrar of Companies.
The company does not have any charges or satisfaction, which is yet to be registered with ROC beyond the statutory period.
NOTE:-56: The Company has not done any revaluation of Property. Plant & Equipment or Intangible assets.
NOTE:-57: The Company was not declared as ‘willful defaulter by any bank or financial Institution or other lender.
Note : 58 The company has no such transactions 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 Income Tax Act, 1961).
Note 59: The company has not advanced or loaned or invested funds to any other person(s) or entity (les), Includng foreign entities (Intermedianes) with the understanding that the intermediary shall:
I. 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
li Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
Note 60: 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 Beneficlanes) or
ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
Note 61: Restructuring of Debit
The operations of the company came to halt since March 2024 due to TN Government Order putting a ban on drawal of processing water from Bhavani River, subsequently the Company has entered into a loan restructuring arrangement with its consortium lenders under the Reserve Bank of India’s framework for relief measures in areas affected by natural calamities. While the resolution plan has been approved by the majonty of the consortium lenders, one bank holding 7% of the debt exposure has dissented from the plan, and one Non-Banking Financial Company (NBFC) with an outstanding loan of Rs. 625 lakh has not participated in the restructuring scheme. With respect to the dissenting lenders' non-participation in the restructuring scheme, the Company has filed a writ petition before the Hon’ble High Court of Madras and obtained an injunction order, with the matter being sub-judice. Repayment under the restructured plan is scheduled to commence from the quarter ending March 2026 restructuring was implemented on 5th March 2025.
Note 62: Approved Financial Statements:
The Board of Directors of the company has reviewed the realizable value of all the current assets and has confirmed that the value of such assets in the ordinary course of business will not be less than the value at which these are recognized in the financial statements. In addition, the board has also confirmed the carrying value of the non-current assets in the financial statements. The Board, duly taking into account all the relevant disclosures made, has approved these financial statements in its meeting held on 30th May 2025.
Note 63: Stock Statement
The Company has borrowed from banks on the basis of security of current assets. Quarterly returns or statements of current assets filed by the Company are in agreement with books of accounts. Summary of reconciliation as at 31st March 2025 is given below.
As per our report at even date For and on dehalf of the Board of Directors
For GOPALAIYER AND SUBRAMANIAN KG BAALAKRISHNAN B SRIRAMULU B SRIHARI
Chartered Accountants Executive Chairman Managing Director Director
DIN 00002174 DIN:00002560 DIN:00002556
RMAHADEVAN M. BALAJI RAMAPRABHA .S
UDIN 25027497BMNBAP5744 Partner Company Secretary Chief Financial Officer
Place . Coimbatore Membership No.027497
Dato : 30,05.2025___
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