(G)Continqent Liabilities and Contingent Assets
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 beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.
Contingent assets are only disclosed when it is probable that the economic benefits will flow to the entity.
(H) Inventories
Inventories which comprise traded goods are valued at the lower of cost and net realisable value.
The basis of determining costs for various categories of inventories is as follows: Traded Goods
Lower of cost and net realizable value. Cost ascertained on Weighted Average basis includes all the purchase price, duties and taxes which are not recoverable from government authorities, freight inwards and other costs incurred in bringing to their present location and condition.
Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
O) Revenue Recognition (i) Revenue
Revenue from contracts with customers is recognised when control of the goods is 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.
1) Sale of Products
Revenue from sale of products is recognised at the point in time when control of the asset is transferred to the customer. Amounts disclosed as revenue are net of returns and allowances, trade discounts and rebates. The Company collects Goods & Service Tax (GST) on behalf of the government and therefore, these are not economic benefits flowing to the Company. Hence, these are excluded from the revenue.
Variable consideration includes trade discounts, volume rebates and incentives, etc. The Company estimates the variable consideration with respect to above based on an analysis of accumulated historical experience. The Company adjusts estimate of revenue at the earlier of when the most likely amount of consideration we expect to receive changes or when the consideration becomes fixed.
(ii) Contract Balances
1) Contract Assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.
Contract assets represent revenue recognized in excess of amounts billed and include unbilled receivables. Unbilled receivables, which represent an unconditional right to payment subject only to the passage of time, are reclassified to accounts receivable when they are billed under the terms of the contract.
2) Trade Receivables
A receivable represents the Company's right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
3) Contract Liabilities
A 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 transfers 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 include unearned revenue which represent amounts billed to clients in excess of revenue recognized to date and advances received from customers. For contracts where progress billing exceeds, the aggregate of contract costs incurred to date plus recognised profits (or minus recognised losses, as the case may be), the surplus is shown as contract liability and termed as unearned revenue. Amounts received before the related work is performed are disclosed in the balance sheet as contract liability and termed as advances received from customers.
P) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Other borrowing costs are charged to Statement of Profit and Loss in the period in which they are incurred.
Q) Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events for which it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated as at the balance sheet date. Provisions are measured based on management's estimate required to settle the obligation at the balance sheet date and are discounted using a rate that reflects the time value of money. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
R) Taxes
Income tax expense for the period is the tax payable on the current period's taxable income based on the applicable income tax rate and changes in deferred tax assets and liabilities attributable to temporary differences. The current income tax charge is calculated in accordance with the provisions of the Income Tax Act 1961.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted at the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences and brought forward losses only if it is probable that future taxable profit will be available to realise the temporary differences.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or 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.
The Company has elected to exercise the option permitted under Section 115BAA of the Income-tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019. Accordingly, the Company has recognized provision for income tax for year ended 31st March, 2024.
Provision for current tax and deferred taxes been made as per the prevailing income tax rates and Provision for Deferred Tax Assets has been calculated in terms of Ind AS 12.
30. EARNINGS PER EQUITY SHARE (Ind AS-33)
Basic earnings per equity share are computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
31. PROVISION FOR GRATUITY
The company has not made any provision for gratuity as none of the employees is eligible for gratuity as per the information provided. The rules of Provident Fund and ESI act are not applicable on the company; hence the company has not deducted and deposited any ESI and Provident Fund on behalf of its employees, hence Ind AS-19 is not applicable on the company.
37. OPERATING SEGMENT (IND AS -108)
The disclosure requirement of the Standard in term of Ind AS-108 "Segment Reporting” notified under Companies Act 2013 is not applicable to the company. The income of the company is from one segment only.
38. The balances of Trade receivable, loans, advances, trade payables, other payable are subject to their confirmation from respective parties.
39. Previous year figure have been regrouped and/or reclassified, wherever necessary.
40. The Company has no immoveable property held in the name of other than the company. Further neither any proceeding has been initiated nor pending against the company for holding any Benami property under the Benami transaction (Prohibition) Act, 1988 and rules made there under.
41. The company has no intangible assets so not revalued any intangible assets during the year 2023-24.
42. The company is not declared as willful defaulter by any bank or financial institutions or other lender.
43. The company has not transacted any transaction with any Struck off companies during the year 2023-24.
44. The company has no charge or satisfaction yet to be registered with The Registrar of Companies beyond the statutory period.
45. The company has not made any arrangement in terms of section 230 to 237 of The Companies Act 2013 during the year under review.
46. The company has not traded or invested in Crypto Currency or Virtual Currency during the year under review.
47. There was no transaction relating to previously unrecorded income that have been surrender or disclosed as income during the year in the tax assessment under The Income Tax Act 1961.
48. RATIO ANALYSIS :
The ratio analysis for the F.Y.2023-24 and 2022-23 along with the formula adopted is given below. The variation and the reason for the variation; if in excess of 25%; is also explained.
49. MSME COMMENTS
The disclosure pursuant to the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) as at 31st March 2024 and 31st March 2023 is as under
50. PENDING LITIGATIONS
Company was in litigation with Tata Tea Ltd. for the insurance claim of Rs.1705786/- which has been rejected by the court of National Commission, New Delhi. Company filed an appeal with the honorable Supreme Court of India.
51. FOREIGN CURRENCY TRANSACTIONS
The company has not made any foreign currency transactions during the year, hence Ind AS-109 is not applicable on the company.
52. Previous year figure have been regrouped and/or reclassified, wherever necessary.
53. Note No.1 to 52 pertaining to the Balance Sheet and statement of Profit & Loss Account form an integral part of the accounts.
for Parmod G Gupta & Associates For LWS KNITWEAR LTD.
Chartered Accountants
(Parmod Gupta) (Girish Kapoor) (Ramesh Kumar Sharma)
Partner Mg. Director Director
M.No - 096109 DIN - 01870917 DIN - 09545798
Date : 29.05.2024 Place : Ludhiana
UDIN NO. : 24096109BKDSAL3183
(Arjun Kapoor) (Laxmi Khatri)
CFO Company Secretary
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