t) Provisions and Contingencies
Provisions for legal claims and returns are recognised when the company has a present legal or
constructive obligation as a result of past event, 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
When the effect of time value of money is material, the 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 pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The increase in the
provisions due to the passage of time is recognized as finance costs.
A contingent liability is disclosed whenever there is a possible obligation that arises from past events whose
existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company or a present obligation that arises from past events is not
recognised as it is not probable to determine the reliability and outflow of resources that will be required to
settle the obligation.
u) Employee benefits
(i) Short-term obligations
All employee benefits that are expectd to be settled within 12 months in which the employees render the
related service are classifed as short-term employee benefits and are recognized in respect of employee's
services up to the end of the reporting period. The liabilities are presented as current employee benefit
obligations in the balance sheet.
(ii) Other long-term employee benefit obligations
The liabilities for earned leave is not expected to be settled wholly within 12 months after the end of the
period in which the employees render the related service. Therefore they are measured at the present
value of expected future payments to be made in respect of services provided by employees up to the end
of the reporting period using the projected unit credit method. The benefits are discounted using the market
yields at the end of the reporting period that have terms approximating to the terms of the related
obligations. Remeasurements as a result of the experience adjustments and changes in actuarial
assumptions are recognized in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an the
unconditional right to defer settlement for at least twelve months after the reporting period, regardless of
when the actual settlement is expected to occur.
(iii) Post-employment obligations
The company operates the following post-employment schemes:
(a) Defined benefit plans such as gratuity; and
(b) Defined contribution plans such as provident fund and employee state insurance.
Gratuity obligations
The liability or assets recognized in the balance sheet in respect of gratuity plans is the present value of the
defined benefit obligation 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 present value of the defined benefit obligation is determined by discounting the estimated future cash
outflows by reference to market yields at the end of the reporting period on government bonds that have
terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value plan assets. This cost is included in employee benefit expense in the statement
of profit and loss.
Remeasurement of gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognized directly in Other Comprehensive Income in the period in which they occur.
Changes in the present value of the defined benefit obligation resulting from plan amendments or
curtailments are recognized immediately in profit or loss.
Defined contribution plans
The company pays provident fund and employee state insurance contributions to publicly administered
funds as per local regulations. The Company has no further payment obligations once the contributions
have been paid. The contributions are accounted for as defined contribution plan and the contributions are
recognized as employee benefit expense when they are due.
(iv) Bonus plans
The Company recognizes a liability and an expense for bonuses. The Company recognizes a provision
where contractually obliged or where there is a past practice that has created a constructive obligation.
v) Earning per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
a) The profit / (loss) attributable to owners of the company
b) By the weighted average number of equity shares outstanding during the financial year.
The weighted average number of equity shares outstanding during the period and for all periods presented
is adjusted for events, other than the coversion of potential ordinary shares, that have changed the number
of ordinary shares outstanding without a corresponding change in resources.
(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:
a) The profit / (loss) for the period attributable to the owners of the company
b) The weighted average number of equity shares outstanding during the financial year, is adjusted for
the effects of the all the dilutive potential equity shares.
w) Non-Current Assets held for sale:
The Company classifies non-current assets as held for sale if their carrying amounts will be recovered
principally through a sale rather than through continuing use of the assets and a sale is considered
highly probable.
Non-current assets classified as held for sale are measured at the lower of their carrying amount and the fair
value less cost to sell. Non-current assets are not depreciated or amortized while they are classified as held
for sale.
x) 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.
The areas involving critical estimates or judgements are:
1. Estimation of defined benefit obligation
2. Useful lives of fixed assets
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 the Company and that
are believed to be reasonable under the circumstances.
Note 41 : Disclosure under IND AS 19:
A. Defined Contribution Plans
The Company has defined contribution plans like Provident Fund and Employee State Insurance Scheme for the
eligible employees of the Company in which both employees and the Company make monthly contributions at a
specified percentage of the covered employees' salary for the benefit of employees. The total expenses recognised
in Statement of Profit and Loss is Rs. 221.67 Lakhs (for the year ended 31.03.2024 Rs. 202.16 lakhs)
B. Defined Benefit Plans
Gratuity
The Company has an obligation towards Gratuity, a defined benefit retirement plan covering eligible employees.
The plan provides for a lump-sum payment to vested employees at retirement, death, while in employment or on
termination of employment of an amount equivalent to 15 days salary payable for each completed year of service.
Vesting occurs upon completion of five years of service. The Company accounts for the liability for gratuity benefits
payable in the future based on an Actuarial valuation. The Company makes annual contributions to a funded
Company Gratuity scheme administered by the SBI Life Insurance Company Limited.
The Company's liability towards Gratuity (funded), other retirement benefits and Compensated absences are
actuarially determined at each reporting date using the projected unit credit method.
These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk and
salary risk.
Investment risk - The present value of the defined benefit plan liability is calculated using a discount rate
determined by reference to the market yields on government bonds denominated in Indian Rupees. If the actual
return on plan asset is below this rate, it will create a plan deficit.
Interest risk - A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset
by an increase in the return on the plan's debt investments.
Longevity risk - The present value of the defined benefit plan liability is calculated by reference to the best estimate
of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the
plan participants will increase the plan's liability.
Salary risk - The present value of the defined benefit plan liability is calculated by reference to the future salaries of
plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.
Note 44 : Asset Classified as Held for Sale:
The Company, during the year ended 31.03.2024, has terminated the lease with Kandagiri Spinning Mills Limited.
On account of termination of lease with Kandagiri Spinning Mills Limited during the period, assets held in the leased
premises, except those that have been identified to be used in/shifted to other units of the Company have been
classified as Assets held for sale as per Ind AS 105 'Non-Current Assets Held for Sale and Discontinued
Operations'. The company has sold part of asset during the year and the carrying amount of Rs. 310.09 lakhs
(31.03.2024 - Rs. 390.09 Lakhs) has been disclosed under the head "Assets classified as held for Sale".
The Company has not charged depreciation to an extent of Rs. 71.11 lakhs during the year ended 31.03.2025
(Rs. 89.45 lakhs) on such assets in accordance with Ind AS 105.
The Company has disposed off Investments held in one of its associate companies viz Salem IVF Centre Private
Limited and recognised profit of Rs. 40.07 lakhs under exceptional item in the statement of profit and loss during the
year ended 31.03.2025.
Note 50 : Disclosure as required under section 186(4) of the Companies Act, 2013:
The Company has not made any fresh investments, given loans or advances or provided secuirty or guarantee
during the current year. The carrying value of investments made in earlier years by the Company as at 31.03.2025 is
Rs. 201.57 lakhs (31.03.2024 Rs. 202.29 lakhs)
Note 51 : Details of Corporate Guarantee:
(a) M/s. Kandagiri Spinning Mills Limited has given Corporate guarantee of Rs. 2279.38 lakhs to CSB bank for the
loan availed by the Company and also gave its immovable properties as collateral security for the above loan.
However, on 18.09.2024 the corporate guarantee has been relieved from corporate guarantee obligation.
(b) M/s. Sambandam Fabrics Private Limited has given Corporate guarantee of Rs. 2435 lakhs to CSB bank for the
loan availed by the Company and also extended its immovable properties as collateral security for the above loan.
The Company manages its capital to ensure that the Company will be able to continue as going concerns while
maximising the return to stakeholders through the optimisation of the debt and equity balance. Capital includes paid up
Equity capital, securities premium and all other reserves attributable to the equity shareholders of the Company. Debt
refers to Long Term Borrowings, Short Term Borrowings and interest accrued thereon for the purpose of Capital
Management of the Company.
The Company determines the amount of capital required on the basis of annual operating plans and long-term product,
other strategic investment plans. The funding requirements are met through equity, non-convertible debt securities, and
other long-term/short-term borrowings.
The capital structure of the Company consists of net debt (Borrowings as detailed in Notes 17 and 22 offset by cash and
cash equivalents) and total equity of the Company. The Company monitors the capital structure on the basis of total debt
to equity ratio and maturity profile of the overall debt portfolio of the Company.
The treasury function provides services to the business, co-ordinates access to domestic financial markets,
monitors and manages the financial risks relating to the operations through internal risk reports which analyze
exposures by degree and magnitude of risks. These risks include market risk (including interest rate risk), credit risk
and liquidity risk.
The Company seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk
exposures. 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, the use of financial derivatives, and the
investment of excess liquidity. The Company does not enter into or trade financial instruments, including derivative
financial instruments, for speculative purposes.
Market risk
Market risk is the risk that changes in market prices, liquidity and other factors that could have an adverse effect on
realisable fair values or future cash flows to the Company. The Company's activities expose it primarily to the
financial risks of changes in foreign currency exchange rates and interest rates as future specific market changes
cannot be normally predicted with reasonable accuracy.
Interest rate risk management
The Company is exposed to interest rate risk because it borrow funds at floating interest rates.
Interest rate sensitivity analysis:
The sensitivity analysis below have been determined based on the exposure to interest rates for non-derivative
instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the
amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 25 basis
point increase or decrease is used when reporting interest rate risk internally to key management personnel and
represents management's assessment of the reasonably possible change in interest rates.
If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Company's
loss for the year ended March 31,2025 would decrease/increase by Rs. 22.29 Lakhs (March 31,2024: decrease
/increase by Rs. 26.84 Lakhs). This is mainly attributable to the Company's exposure to interest rates on its variable
rate borrowings.
C. Equity price risk
Equity price risk is related to the change in market reference price of the investments in equity securities. The fair
value of some of the Company's investments in available-for-sale securities exposes the Company to equity price
risks. In general, these securities are not held for trading purposes. The details of such investments in equity
instruments are given in Note No. 5.
Equity price sensitivity analysis
The fair value of equity instruments as at March 31, 2025 was Rs. 202.09 Lakhs (March 31, 2024:
Rs. 220.05 Lakhs). A 5% change in prices of equity instruments held as at March 31, 2025 would result in an
impact of Rs. 0.13 Lakhs on equity (March 31, 2024 : Rs. 0.16 Lakhs).
Foreign Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rate. The Company's exposure to the risk of changes in foreign exchange rate relates
primarily to the Company's foreign currency denominated financial assets and financial liabilities.
The Company does not have foreign currency exposure at the end of the reporting period.
Liquidity risk management:
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk
management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company has obtained fund and non-fund based working capital lines from various banks.
The Company also constantly monitors funding options available in the debt and capital markets with a view to
maintaining financial flexibility.
Liquidity tables :
The following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities
with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of Financial
Liabilities based on the earliest date on which the Company can be required to pay.
Note 55 : Additional Regulatory Information:
i) Title Deeds not held in the name of the Company:
The title deeds of all Immovable Properties are held in the name of the Company.
ii) Fair value of Investment Property:
The Company does not have any investment property as on the reporting date.
iii) Revaluation of Property, Plant and Equipment:
The Company has not revalued any of its Property, Plant and Equipment during the year.
iv) Revaluation of Intangible Assets:
The Company has not revalued any of its intangible assets during the year.
v) Loans and advances granted to Promoters, Directors, KMP's and Related parties:
The Company has not granted any loans to promoters, directors, KMPs and the related parties as defined
under Companies Act, 2013 either jointly or severally with any other person that are repayable on demand or
without specifying any terms or period of repayment.
vi) Capital Work-in-Progress:
The ageing schedule of Capital Work-in-Progress has been disclosed in the Note No. 1 to the Financial Statements.
vii) Intangible Assets under Development : Not Applicable
viii) Details of Benami Property:
The Company does not have any Benami property, where any proceedings initiated or pending against the
Company for holding any Benami property.
ix) Reconciliation of Statement of Current Assets filed by the Company with Banks for Working capital
facilities availed by the Company:
The Company has availed working capital facilities in excess of Rs. 5 crores in aggregate during the years. The
quarterly stock statements filed by the Company are in agreement with the books of account of the Company.
x) Wilful Defaulter:
The Company has not been declared as willful defaulter by any Bank or Financial Institution (as defined under the
Companies Act, 2013) or consortium thereof or other Lender in accordance with the guidelines on willful defaulters
issued by the Reserve Bank of India.
xi) Relationship with Struck off Companies:
The Company does not have any transaction with Companies struck off under section 248 of the companies Act, 2013
or section 560 of the Companies Act, 1956
xii) Registration/Satisfaction of Charges with Registrar of Companies:
The Company does not have any charges yet to be registered or file the satisfaction of charges with the Registrar of
Companies beyond the statutory period
xiii) Layers of Companies:
The Company does not have any subsidiary Company as on the balance sheet date. However, the Company has
associate companies which is in compliance with the number of layers prescribed under Section 2(87) of the Companies
Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.
(xvi) Approved Scheme of Arrangements:
During the year, there is no approved scheme of arrangements.
(xvii) Utilisation of Borrowed funds and Share premium:
The Company has not advanced or loaned or invested funds to any other persons or entities including foreign
entities (intermediaries) with the understanding that the intermediary shall (a) directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Funding party (ultimate
Beneficiaries) or (b) provide any guarantee or security or the like on behalf of the Ultimate Beneficiaries.
The Company has not received any fund from other persons or entities including foreign entities (intermediaries)
with the understanding that the intermediary shall (a) directly or indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the Funding party (ultimate Beneficiaries) or (b) provide any
guarantee or security or the like on behalf of the Ultimate Beneficiaries.
Note 56 :
Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current
year's classification/ disclosure.
As per our report of even date attached For and on behalf of the board
For P.N. Raghavendra Rao & Co
Chartered Accountants S. Devarajan S. Dinakaran
Firm Registration N°. : 003328S Chairman and Managing Director Joint Managing Director
DIN :00001910 DIN :00001932
Pon Arul Paraneedharan - Partner
Membership No : 212860 S. Natarajan P. Boopalan
Company Secretary Chief Financial Officer
Salem
May 24, 2025
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