(l) Provisions, Contingent liabilities and Contingent Assets
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. A present obligation that arises from past events where it is neither
probable that an outflow of resources will be required to settle nor a reliable estimate of the amount cannot be made, is
disclosed as a contingent liability. Contingent liabilities are also disclosed when there is a possible obligation arising from
past events, the existence of which will be confirmed only by the occurrence or non - occurrence of one or more uncertain
future events not wholly within the control of the Company. Contingent assets are not recognised in 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 recognised.
(m) Foreign currency transaction
Initial Recognition:
On initial recognition, transactions in foreign currencies entered into by the Company are recorded in the functional currency
(i.e. Indian Rupees), by applying to the foreign currency amount, the spot exchange rate between the functional currency
and the foreign currency at the date of the transaction. Exchange differences arising on foreign exchange transactions
settled during the year are recognized in the Statement of Profit and Loss.
Measurement of foreign currency items at reporting date:
Foreign currency monetary items of the Company are translated at the closing exchange rates. Non-monetary items that are
measured at historical cost in a foreign currency, are translated using the exchange rate at the date of the transaction. Non¬
monetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date
when the fair value is measured.
Exchange differences arising out of these transaction are recognized in the Statement of Profit and Loss.
(n) Revenue recognition
(i) Revenue arises mainly from the sale of manufactured and traded goods.
To determine whether to recognise revenue, the Company follows a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue as & when performance obligation(s) are satisfied.
Revenue is measured at fair value of consideration received or receivable, after deduction of any trade discounts, volume
rebates and any taxes or duties collected on behalf of the government which are levied on sales such as goods and service
tax, etc.
Revenue is recognized either at a point in time or over time, when (or as) the Company satisfies performance obligations by
transferring the promised goods or services to its customers.
Sale of goods
Revenue from sale of goods is recognized when the control of goods is transferred to the buyer as per the terms of the
contract, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods.
Control of goods refers to the ability to direct the use of and obtain substantially all of the remaining benefits from goods.
Rendering of services
Revenue from services is recognized as and when the services are rendered and on the basis of contractual terms with the
parties.
(ii) Export Incentives- Export incentives are recognized on post export basis.
(iii) Interest income - Interest income from debt instruments is recognized using the effective interest rate method.
(iv) Dividend income - Dividends are recognized in profit or loss only when the right to receive payment is established.
(v) Rental Income- Rental income is accounted for on accrual basis.
(vi) Scrap (i.e empties, wastage etc. Other than production ) is accounted for on sale basis.
(vii) Income and other Claims -Revenue in respect of claims is recognized when no Significant uncertainty exists with
regard to the amount to be realised and ultimate Collection thereof .
(o) Short-term leases and leases of low-value assets
The Company has elected not to recognize ROU assets and lease liabilities for short term leases as well as low value assets
and recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
(p) Income Tax
Income tax expense comprises current income tax and deferred tax.
Current tax expense for the year is ascertained on the basis of assessable profits computed in accordance with the
provisions of the Income Tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. 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 expected to
apply when the related deferred income tax asset 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 are reviewed
at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to same taxation authority. 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 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 that case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
(q) Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash in hand and
balances with banks.
(r) Trade receivables
Trade receivables are recognized initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment if any. The EIR is the rate that discounts estimated future cash income through
the expected life of financial instrument.
(s) Financial instruments
Financial assets and financial liabilities are recognized when a Company becomes a party to the contractual provisions of
the instruments.
Initial Recognition:
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair
value through profit or loss and ancillary costs related to borrowings) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in
Statement of Profit and Loss.
Classification and Subsequent Measurement: Financial Assets
The Company classifies financial assets as subsequently measured at amortised cost, fair value through other
comprehensive income (“FVOCI”) or fair value through profit or loss (“FVTPL”) on the basis of following:
• The entity's business model for managing the financial assets and
• The contractual cash flow characteristics of the financial asset.
Amortised Cost:
A financial asset shall be classified and measured at amortised cost if both of the following conditions are met:
• The financial asset is held within a business model whose objective is to hold financial assets in order to collect
contractual cash flows and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Fair Value through OCI:
A financial asset shall be classified and measured at fair value through OCI if both of the following conditions are met:
• The financial asset is held within a business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Fair Value through Profit or Loss:
A financial asset shall be classified and measured at fair value through profit or loss unless it is measured at amortised cost
or at fair value through OCI.
All recognized financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending
on the classification of the financial assets.
Impairment of financial assets:
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period.
The Company assesses on a forward looking basis the expected credit losses associated with its assets.
The impairment methodology applied depends on whether there has been a significant increase in credit risk. In case of
trade receivables, the Company follows the simplified approach permitted by Ind AS 109 -- Financial Instruments for
recognition of impairment loss allowance. The application of simplified approach does not require the Company to track
changes in credit risk. The Company calculates the expected credit losses on trade receivables using a provision matrix on
the basis of its historical credit loss experience.
Derecognition of financial assets:
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the
Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the
transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may
have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the
Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds
received.
Classification and Subsequent Measurement: Financial liabilities:
Financial liabilities are classified as either financial liabilities at FVTPL or 'other financial liabilities'.
Financial Liabilities at FVTPL:
Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial
recognition as FVTPL:
Gains or Losses on liabilities held for trading are recognised in the Statement of Profit and Loss.
Other Financial Liabilities
Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost
using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction
costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter
period, to the net carrying amount on initial recognition.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another financial liability from the same lender on substantially different terms, or the
terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in
the statement of profit and loss.
(t) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally
enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and
settle the liability simultaneously.
(u) Derivative financial instruments
The Company enters into derivative financial instruments viz. foreign exchange forward contracts to manage its exposure to
foreign exchange rate risks. The Company does not hold derivative financial instruments for speculative purposes.
Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss
immediately.
(v) Employee benefits
(i) Short term obligations
Liabilities for wages and salaries, short term compensated absence and ex-gratia including non-monetary benefits that are
expected to be settled wholly within 12 months after the end of the period in which the employees render the related service
are recognised in respect of employees services up to the end of the reporting period and are measured at the amounts
expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefits obligations in
the balance sheet.
(ii) Post-employment obligations
The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plans is the present value of the
defined benefit obligations at the end of the reporting period less the fair value of plan assets. The defined benefit obligation
is calculated annually by actuaries using the projected unit credit method.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the
fair value of plan assets.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings
in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are
recognised immediately in profit or loss as past service cost.
(iii) Defined contribution plans
Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and
Miscellaneous Provisions Act, 1952 and is charged to the Statement of Profit and Loss.
(w) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker [CODM]. The Operating Segment is the level at which discrete financial information is available. The CODM allocates
resources and assess performance at this level. The Company has Operating segments comprising of Textile, Sugar and
Others.
(x) Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid within the credit period allowed. Trade and other payables are
presented as current liabilities when payment is due within 12 months after the reporting period. Long term trade payables
are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
(y) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in
profit or loss over the period of the borrowings using effective interest method.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long term loan
arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the
reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period and before
the approval of the financial statements for issue, not to demand payment as a consequence of the breach.
(z) Earnings per share
(i) Basic earnings per share
Basic earnings per share is 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 during the year and excluding treasury shares
(ii) Diluted earnings per share
Diluted earnings per share adjusts 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 been outstanding assuming the conversion
of all dilutive potential equity shares.
Note: 2.1 Critical estimates and judgements
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual
results. Management also needs to exercise judgement in applying the Company's accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are
more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.
Detailed information about each of these estimates and judgements is included in relevant notes together with information about
the basis of calculation for each affected line item in the financial statements.
Critical estimates and judgements
The areas involving critical estimates or judgements are:
• Estimation of current tax expense and payable -
• Estimation of defined benefit obligation -
• Recognition of deferred tax assets for carried forward tax losses -
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including
expectations of future events that may have a financial impact on Company and that are believed to be reasonable under the
circumstances.
• Term Loan from Indian Bank and State Bank of India of ' 4,964.08 lacs are secured by hypothecation as pari-passu first charge on
whole of the immovable properties of the Company situated at Village Jalalpur, Chandigarh Ambala Road, Lalru, Distt. Mohali,
Village Jaladiwal, Near Raikot, Distt. Ludhiana (Punjab), Village Udaipur / Khljuriwas, Bhiwadi, Distt. Alwar (Rajasthan), Village
Salana Jeon Singh Wala, Tehsil Amloh, Distt. Fatehgarh Sahib (Punjab) Including the Company's movable Plant and Machinery,
Machinery Spares and other moveables both present and future and subject to the charge or charges created or to be created by
the Company in favour of its Bankers on its movables and also personally guaranteed by some of the Directors of the Company.
• Term loan (secured) includes ' 7,211.25 Lacs as LRD facility taken from HDFC Bank Ltd. against exclusive charge on the title
deeds situated at Focal Point, Phase-IV, Ludhiana (Previous year ' 5,581.06).
• Term loan (secured) includes ' 7,961.07 Lacs as term loan facility taken from Axis Bank against exclusive charge on the title deeds
situated at Ward No. 28, Mouza Garji, Garje Road, MC Road, Chandan Nagar, Hooghly, West Bengal (Previous year '3,149.98).
ii) NCNCRPS shall be redeemable at par within a period not exceeding 20 years from date of their issue or an earlier date only at the
discretion of the company.
• Term Loan from Indian Bank of ' 1,041.98 lacs are secured by hypothecation as pari-passu first charge on whole of the immovable
properties of the Company situated at Village Jalalpur, Chandigarh Ambala Road, Lalru, Distt. Mohali, Village Jaladiwal, Near
Raikot, Distt. Ludhiana (Punjab), Village Udaipur / Khljuriwas, Bhiwadi, Distt. Alwar (Rajasthan), Village Salana Jeon Singh Wala,
Tehsil Amloh, Distt. Fatehgarh Sahib (Punjab) and Negative Lien of immovable assets (property) Land measuring 15 acres (out of
total land of 100 acres) at Industrial Focal Point, Phase-VIII, Village Mundian, Distt. Ludhiana, Including the Company's movable
Plant and Machinery, Machinery Spares and other moveables both present and future and subject to the charge or charges created
or to be created by the Company in favour of its Bankers on its movables and also personally guaranteed by some of the Directors
of the Company.
• Term Loan (secured) includes ' 10.43 Lacs as vehicle loan taken from ICICI Bank against hypothecation of the respective Vehicles
only.
• Term loan (secured) includes ' 5,581.06 Lacs as LRD facility taken from HDFC Bank Ltd. against exclusive charge on the title
deeds situated at Focal Point, Phase-IV, Ludhiana.
The carrying amounts of trade receivables, other financial assets & liabilities, trade payables, other bank balances and
cash and cash equivalents are considered to be the same as their fair values, due to short term nature. The fair values for
loans, security deposits and investments in preference shares 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 borrowings rate . They are classified as level 3 fair values in the fair value hierarchy
due to the use 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.
43. Financial risk management objectives and policies
The Company's principle financial liabilities comprise loans and borrowings, trade and other payables. The main purpose
of these financial liabilities is to finance the Company's operations and to support its operations. The Company's financial
assets include investments, loans, trade and other receivables, cash & cash equivalents and other bank balances that
derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The company's senior management oversees the
management of these risks. The company's senior management is supported by a financial risk committee that advises on
financial risks and the appropriate financial risk governance framework for the Company. This financial risk committee
provides assurance to the Company's senior management that the Company's financial risk activities are governed by
appropriate policies and procedure and that financial risks are identified, measured and managed in accordance with the
Company's policies and risk objectives. The Board of Directors reviews and agrees policies for managing each risk, which
are summarised as below:
(A) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risks.
Financial instruments affected by market risk include loans and borrowings, deposits and payables/receivables in
foreign currencies.
a) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates
primarily to the Company's long term debt obligations with floating interest rates. The Company is carrying its
borrowings primarily at variable rate. The Company expects the variable rate to decline, accordingly the Company is
currently carrying its loans at variable interest rates.
(B) Credit risk
Credit risk is the risk that counter party will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables)
and from its financing activities, deposits with banks and financial institutions, foreign exchange transactions and other
financial instruments.
Credit risk management
The Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed
for each class of financial instruments with different characteristics. The Company assigns the following credit ratings to
each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.
(i) Low credit risk on reporting date
(ii) Moderate credit risk
(iii) High credit risk
Cash & cash equivalents and bank deposits
Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and
diversifying bank deposits and accounts in different banks across the country.
Trade receivables
Credit risk related to trade receivables are mitigated by taking Credit insurance for domestic sales/letter of credit for export
sales, which results in low credit risk. The Company closely monitors the credit-worthiness of the debtors through
internal systems that are configured to define credit limits of customers, thereby, limiting the credit risk to pre-calculated
amounts. The company assesses increase in credit risk on an ongoing basis for amount receivable that become past due
and default is consider to have occurred when amount's receivable become 365 days past due.
Gross carrying amount of trade receivables (for ageing Refer note no. 9b)
Other financial assets measured at amortised cost
Other financial assets measured at amortized cost includes loans and advances to employees, security deposits and others.
Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously.
(C) Liquidity risk
The Company monitors its risk of a shortage of funds by estimating the future cash flows. The Company's objective is to maintain a
balance between continuity of funding and flexibility through the use of bank overdrafts, cash credit facilities and bank loans.
The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has
access to a sufficient variety of sources of funding and debt maturity within 12 months can be rolled over with existing lenders. The
Company has access to the following undrawn borrowing facilities at the end of the reporting periods.
44. Capital Management
For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other
equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital
management is to maximise the shareholder value. The Company manages its capital structure and makes adjustments in
light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital
structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new
shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt , interest
bearing loans and borrowings, trade payables, less cash and cash equivalents.
(c) The company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.
(d) The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company as a wilful
defaulter at any time during the financial year or after the end of reporting period but before the date when the financial
statements are approved.
(e) The company has not enter into any transactions during the year with companies struck off under section 248 of the
Companies Act, 2013 or Section 560 of the Companies Act, 1956.
(f) The Company does not have any charges or satisfaction of charges which is yet to be registered with the Registrar of
Companies (ROC) beyond the statutory period.
(g) The company has complied with the number of layers as prescribed under Companies (Restriction on Number of Layers)
Rules, 2017.
(h) The company has not advanced or loaned or invested funds to any other person(s) or entities, including foreign
entities(intermediaries), 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
ii. Provide any guarantee, security, or the like to or on behalf of the Ultimate Beneficiaries.
(i) The Company has not received any funds 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 beneficiaries), or
ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(j) The Company has borrowings from banks and financial institutions on the basis of the security of current assets and
movable assets. The Company has complied with the requirement of filing of monthly/ quarterly returns/statements of
current assets with the banks or financial institutions, as applicable, and these returns were in agreement with the books of
accounts for the year ended March 31,2025.
(k) The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was
obtained.
(l) The Company has 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).
(m) The company has not revalued any of its Property, Plant, and Equipment, or Intangible assets during the year.
(n) The company has not granted any Loans or Advances in the nature of loans to promoters, directors, KMPs, and the
related parties (as defined under the Companies Act, 2013), either severally or jointly with any other person, that are
repayable on demand or without specifying any terms or period of repayment.
(o) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
48. Some balances of Trade Payables, Advances and Trade Receivables are subject to their Confirmation.
49. The Company has used accounting software for maintaining its books of account, which has a feature of recording audit
trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software.
Further no instance of audit trail feature being tampered with was noted in respect of accounting software, and the audit
trail has been preserved by the company as per the statuary requirements for record retention.
50. Previous year figures have been regrouped/recasted/rearranged/reclassified wherever considered necessary to make
them comparable.
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