R) PROVISIONS, CONTINGENT LIABILITIES AND
CONTINGENT ASSETS
Provisions
Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event, 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. Expected future operating
losses are not provided for.
Where the Company expects some or all of the expenditure
required to settle a provision will be reimbursed by another party,
the reimbursement is recognised when and only when, it is
virtually certain that reimbursement will be received if the entity
settles the obligation. The reimbursement is treated as a separate
asset.
Contingent liabilities
Contingent liability is a possible obligation arising from past
events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of the entity or a present
obligation that arises from past events but is not recognised
because it is not probable that an outflow of resources embodying
economic benefits will be required to settle the obligation or the
amount of the obligation cannot be measured with sufficient
reliability. The Company does not recognise a contingent liability
but discloses its existence in the standalone financial statements.
Contingent assets
Contingent asset is not recognised in standalone financial
statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually
certain, then the related asset is not a contingent asset and is recognized.
Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.
S) ONEROUS CONTRACTS
A contract is said to be onerous when the expected economic benefits to be derived by the Company from the contract are lower than the
unavoidable cost of meeting its obligations under the contract. The provision for onerous contract is measured at the present value of the
lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract, which is determined based
on the incremental costs of fulfilling the obligation under the contract and an allocation of other costs directly related to fulfilling the contract.
Before such a provision is made, the Company recognises any impairment loss on the assets associated with the contract.
3A RECENTPRONOUNCEMENTS
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting
Standards) Rules as issued from time to time. For the year ended March 31,2025, MCA has notified Ind AS -117 Insurance Contracts and
amendments to Ind AS 116 - Leases, relating to sale and leaseback transactions, applicable to the Company w.e.f. April 1, 2024. The
Company has reviewed the new pronouncements and based on its evaluation has determined that it does not have any significant impact in
its financial statements.
16.1 Term/rights to shares
Equity shares
34,18,14,000 (Pr.Yr. 34,18,14,000) equity shares of ? 1 (? 1) each with voting rights. The holder of each equity share is entitled to
one vote per share. The Company declares and pays dividends in Indian rupees.
The Board declared and paid an interim dividend of ?2.50 per share (face value of? 1/-each) for the year 2024-25 (Pr.Yr. ? 2.50
per share) (face value of ?1/-each).
The Board has recommended a final dividend of 250% (? 2.50/- per share of the face value of ?1/- each) for the year 2024-25
(Pr.Yr. ? 2.50 per share) subject to the approval of the shareholders in Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive residual assets of the Company,
after settling the dues of preferential shareholders and other creditors as per priority. The distribution will be in proportion to the
number of equity shares held bythe shareholders.
As per the records of the Company, including its register of shareholders/members and other declarations received from
shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares as
at the balance sheet date.
6.4 For the period of five years immediately preceeding the date at which the Balance Sheet is prepared:
(i) The Company has not issued any shares without payment being received in cash.
(ii) The Company has not issued any bonus shares.
(iii) The aggregate number of equity shares bought back by the Company during the year is Nil (Previous Years 3,50,14,920
shares of? 1/-each, fully paid up).
(e) Provident Fund:
Pursuant to the Supreme Court judgement dated February 28, 2019 on the inclusion of special allowances for contribution to provident
fund, the Company has been legally advised that there are interpretative challenges on the application of the judgement retrospectively.
Based on the legal advice and in the absence of the reliable measurement of the provision for earlier periods, the Company has not
recorded a provision forthe prioryears.
Notes:
(i) Future cash outflows in respect of the above matters are determinable only on receipt of judgments / decisions pending at various
forums/authorities.
(ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are
required and disclosed as contingent liabilities where applicable, in these standalone financial statements. The Company does not
expect the outcome of these proceedings to have a materially adverse effect on its financial position.
36 Disclosure with respect to Micro, Small and Medium Enterprises Development Act, 2006
Disclosure of payable to vendors as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” (“MSMED Act,
2006”) is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as
per the intimation received from them on request made by the Company. There are no overdue principal amounts / interest payable
amounts for delayed payments to such vendors at the Balance sheet date. There are no delays in payment made to such suppliers
during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of
payment made during the year or on balance brought forward from previous year.
37 Corporate Social Responsibility Expenditure
The gross amount required to be spent by the Company during the year towards Corporate Social Responsibility (CSR) as per the
provisions of section 135 of the Companies Act, 2013 amounts to ? 1,647 Lakhs (Pr.Yr. ? 1,577 Lakhs). Amount spent during the year on
CSR activities (included in note 32 of the statement of profit and loss) as under:
The amount approved by the Board to be spent during the year towards Corporate Social Responsibility (CSR) as per the provisions of
section 135 of the Companies Act, 2013 amounts to? 1,680 Lakhs (Pr.Yr.? 1,590 Lakhs). _
# For financial assets and liabilities not measured at fair value, the Company has not disclosed the fair values of financial instruments, since
theircarrying amounts are reasonable approximations of theirfair values.
Note: There have been no transfers between Level 1, Level 2 and Level 3 during the current and previous year.
Refer note 2E to the standalone financial statements.
Capital Management
The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to
stakeholders through optimisation of borrowings and equity.
The capital structure of the Company consists of net debt (borrowings as detailed in note 21 which is offset by cash and bank balances as
defined below) and Total Equity of the Company.
The Company is not subject to any externally imposed capital requirements.
The Company's Net Debt to Total Equity ratio as at 31.03.2025 was as follows
Financial Risk Management
The Company has exposure to the following risks arising from financial instruments:
- Market risk (see A below)
- Credit risk (see B below)
- Liquidity risk (see C below)
Risk Management Framework
The Company’s corporate treasury function provides services to the business, co-ordinates access to domestic and International financial
markets, monitors and manages the financial risk relating to the operation of the Company through internal risk reports which analyse
exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk), credit risk and
liquidity risk.
The use of financial derivatives is governed by the Company’s policies approved by the board of directors, which provide written principles
on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivatives financial instruments, and the
investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The
Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
The Company's Board of Directors oversees how management monitors compliance with the Company's risk management policies and
procedures, and reviews the adequacy of the risk management policies and procedures and reviews the adequacy of the risk management
framework in relation to the risks faced by the Company. The Company's Board of Directors are assisted in its oversight role by internal audit.
Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to
the audit committee.
A. Market Risk
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Company's
income or the value of holding of its financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimising the return.
(i) Foreign currency risk
The Company’s sales and purchases activities expose it primarily to the financial risk of changes in foreign currency exchange rates. The
Company enters into plain vanilla forward contracts to manage its exposure to foreign currency risk.
Sensitivity analysis:
Sensitivity analysis is carried out for floating rate borrowings as at March 31,2025. For every 1 % increase in average interest rates, profit
before tax would be impacted by loss of approximately ? 241 lakhs (Pr.Yr: ? 287 Lakhs). Similarly, for every 1 % decrease in average interest
rates there would be an equal and opposite impact on the profit before tax. The calculations are based on a change in the average market
interest rate for each period and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other
variables are held constant.
The Company does not expect any change in interest rates on fixed rate borrowings and accordingly have not presented any sensitivities on
such borrowings.
(iii) Price risk
The Company is mainly exposed to the price risk due to its investment in mutual funds. The price risk arises due to uncertainties about the
future market values of these investments. As at 31.03.2025, the investments in mutual funds amounts to ? 22,651 lakhs (Pr.Yr: ? 3,204
Lakhs).
As regards Company's investments in unquoted equity instruments, the management contends that such investments do not expose the
Company to price risks. In general, these securities are not held for trading purposes.
Sensitivity analysis:
For every 1 % increase in price, profit before tax would be impacted by gain of approximately ? 227 lakhs (Pr.Yr: ? 32 Lakhs). Similarly, for
every 1 % decrease in price there would be an equal and opposite impact on the profit before tax.
B. Credit risk management
Credit risk is the risk that the counter party to a financial instrument will not meet its contractual obligations, leading to a financial loss. Credit
risk primarily arises from the Company’s trade receivables, loans, investments, cash and cash equivalents, bank balances other than cash
and cash equivalents and otherfinancial assets.
The carrying amounts of financial assets represent the maximum credit risk exposure.
The Company mitigates credit risk by strict receivable management procedures and policies. The Company has a dedicated independent
team to review credit and monitor collection of receivables. In addition, the Company mitigates credit risk substantially through availmentof
credit insurance for both domestic and export buyers.
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected
credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic
indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of
minimal credit losses to continue. Further, the management believes that unimpaired amounts that are past due by more than 90 days are
still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk. The impairment loss at the
reporting dates related to customers that have defaulted on their payments to the Company are not expected to be able to pay their
outstanding dues, mainly due to economic circumstances.
The concentration of credit risk is limited due to the customer base being large and unrelated. Further, the Company constantly evaluates
the quality of trade receivables and provides impairment loss on financial assets (trade receivables) based on expected credit loss model.
For movement of loss allowance in trade receivables, refer note 11.
The Company extended loans to its wholly-owned subsidiaries which are engaged in potential ventures. Also refer note 6, 32 and 47.
Investments:
Investments of surplus funds are made only with approval of Board of Directors. This primarily include investments in equity instruments of
an unlisted entity and mutual funds. The Company does not expect significant credit risks arising from these investments.
Cash and cash equivalents and Bank balances otherthan Cash and cash equivalents:
The Company held cash and cash equivalents and margin money deposits with credit worthy banks and financial institutions as at the
reporting dates which has been measured on the 12-month expected loss basis. The creditworthiness of the banks and financial institutions
are evaluated by the management on an ongoing basis and is considered to be good with low credit risk.
Otherfinancial assets:
Other financial assets primarily consists of Investment in wholly-owned subsidiary pending allotment, Interest accrued on bank deposits and
other deposits, security deposits and term deposit with Non-Banking Financial Companies. The Company does not expect any loss from
non-performance by these counter-parties.
C. Liquidity risk management
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 are due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Company’s reputation.
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk
management framework for the management of the Company’s short-term, medium-term and long-term funding and liquidity management
requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by
continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
All current financial liabilities are repayable within one year.
39.5 Terms and conditions of transactions with related parties
The sales to and purchases from related party are made on terms equivalent to those that prevail in arm's length transactions.
Outstanding balances at the period ended are unsecured and interest free and settlement occurs in cash. This assessment is
undertaken each financial year through examining the financial position of the related party and the market in which the related party
operates.
39.6 Transfer pricing
The Company has transactions with related parties. For the financial year ended 31.03.2024, the Company has obtained the
Accountant’s report from a Chartered Accountant as required by the relevant provisions of the Income-tax Act, 1961 and has filed the
same with the tax authorities. For the year ended 31.03.2025, the Company maintains documents as prescribed by the Income-tax
Act, 1961 to prove that these transactions are at arm's length and believes that the aforesaid legislation will not have any impact on
the financial statements, particularly on the amount of tax expense and that of provision for taxation.
Notes:
a. The Company does not have any potential equity shares. Accordingly basic and diluted earnings per share would remain the same.
41 Operating segments
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Company's other components, and for which discrete
financial information is available. All operating segments’ operating results are reviewed regularly by the Company's Managing Director
(MD) to make decisions about resources to be allocated to the segments and assess their performance.
The Company is engaged in only one business i.e. manufacturing and sale of textiles. The entity’s chief operating decision maker considers
the Company as a whole to make decisions about resources to be allocated to the segment and assess its performance. Accordingly, the
Company does not have multiple segments and these standalone financial statements are reflective of the information required by the Ind
AS 108 for textiles.
41.1 Revenue from sale of products and services by geographic location of customers:
The geographic information analyses the Company's revenue by the Company's country of domicile and other countries. In presenting the
geographical information, segment revenue has been determined based on the geographic location of the customers.
The estimate of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotions and other
relevant factors including supply and demand in the employment market.
43.3 Disclosure of Employee Benefits (Continued)
Asset-liability matching strategies
The Company has funded the liability with the insurance company. The entire investible assets are managed by the fund managers of the
insurance company and the asset values as informed by the insurance company has been taken for valuation purpose. The policy, thus,
mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of
liabilities. Thus, the Company is exposed to movement in interest rates (in particular, the significant fall in interest rates, which should
result in a increase in liability without a corresponding increase in the asset).
47 Impairment assessment of KPR Exports PLC, Ethiopia and KPRMill Pte. Ltd, Singapore
During the year ended 31.03.2025, the Company performed an impairment assessment for investments made in KPR Exports PLC,
Ethiopia, due to changes in business environment as a result of civil unrest in Ethiopia. Further to such evaluation, the Company has
recognized a provision for impairment loss on such investments aggregating to INR 188 lakhs. This provision for impairment loss has
been presented as part of 'Other expenses' in the statement of profit and loss for the year ended 31.03.2025. Also refer note 5 and 32 to
the standalone financial statements.
Further, during the previous year, the Company had performed an impairment assessment of investments made (including
investments pending allotment) and loans given due from M/s KPR Mill Pte. Ltd Singapore and had recognized a provision for
impairment towards carrying value of investments (including investments pending allotment) and loans of ? 275 lakhs as at
31.03.2024. The provision had been presented as part of 'Other expenses' in the statement of profit and loss for the year ended
31.03.2024. Also refer note 5,5.5,6 and 7 to the standalone financial statements.
48 Events after reporting period
The Board of Directors have recommended a final dividend of^ 8,545 Lakhs (? 2.50 per share of the face value of ? 1/- each (250%))
for the year 2024-25 subject to the approval of the shareholders in Annual General Meeting.
49 Other statutory information
a) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for
holding any Benami property.
b) The Company does not have any transactions with companies struck off.
c) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during
the current or previous year.
d) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.
e) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of
funds) by the Company to or in any other persons or entities, including foreign entities (“Intermediaries”), with the understanding,
whether recorded in writing or otherwise, thatthe Intermediary shall:
- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by
or on behalf ofthe Company or
- provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
f) No funds have been received by the Company from any persons or entities, including foreign entities (“Funding Parties”), with the
understanding, whether recorded in writing or otherwise, that the Company shall
- directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or
on behalf of the Funding Party or
- provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.
g) The Company does not have 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).
h) The Company has not have been declared as wilful defaulters by any bank or financial institution or government or any government
authority.
i) The Company has complied with the number of layers prescribed under the Companies Act, 2013.
j) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
k) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory
period.
Note: Invested funds in treasury funds = (Investment in margin money deposit, term deposit with Non-Banking Financial Companies and in
deposits with original maturity of less than three months as at the beginning of respective year Investment in margin money deposit, term
deposit with Non-Banking Financial Companies and in deposits with original maturity of less than three months as at the end of respective
year) divided by 2.
Reason for change more than 25%: Increase in ROI on treasury funds from 3.62% for the year ended 31.03.2024 to 5.56% in for the year
ended 31.03.2025 is on account of increase in income generated from treasury funds.
The notes from 1 to 50 are an integral part of these standalone financial statements.
For and on behalf of the Board of Directors of As per our report of even date attached
K.P.R. Mill Limited For B S R & Co. LLP
CIN : L17111TZ2003PLC010518 Chartered Accountants
ICAI Firm's Registration Number: 101248W/W-100022
K.P.Ramasamy Sampad Guha Thakurta
Chairman Partner
DIN : 00003736 Membership No. : 060573
KPD Sigamani P.Nataraj
Managing Director Chief Executive Officer and Managing Director
DIN :00003744 DIN :00229137
PL Murugappan P.Kandaswamy
Chief Financial Officer Company Secretary
Coimbatore Bengaluru
09.05.2025 09.05.2025
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