1.16 Contingent Liability
Contingent liabilities in respect of show cause notices received is considered only when they are converted into demands.
Payments in respect of such demands, if any are shown as advances.
Contingent liabilities under various fiscal laws includes those in respect of which the company/ Department is in appeal. No
Provision is made for a liability which is contingent in nature but if material is disclosed in the financial statement by way of
notes.
1.17 Current versus non-current classification
The classification of Assets and liabilities of the Company into current or no-current is based on the criterion specified in the
schedule III to the Companies Act,2013. The Company has ascertained its operating cycle as 12 months for the purpose of
current and non-current classification of assets and liabilities except trade receivables.
1.18 Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity. Financial assets and financial liabilities are recognised when Company becomes a party to the
contractual provisions of the instruments.
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) 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 the statement of profit and loss.
(i) Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Company are recognised at the proceeds received. Incremental costs directly
attributable to the issuance of new ordinary equity shares are recognized as a deduction from equity, net of tax effects.
(ii) Financial assets
(a) Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost using the Effective Interest Rate method (EIR) if these
financial assets are held within a business whose objective is to hold these 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.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from
impairment are recognised in the profit or loss. This category generally applies to bank deposits, loans and other financial
assets.
(b) Financial assets at fair value through profit or loss (FVTPL)
Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value
through other comprehensive income on initial recognition.
(c) Impairment of financial assets
In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of
impairment loss on the financial assets and credit risk exposure.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement
of profit and loss (P&L). This amount is reflected under the head ‘other expenses’ in the P&L. In balance sheet, ECL is
presented as an allowance, i.e., as an integral part of the measurement of financial assets.
(d) Derecognition
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.
(iii) Financial liabilities
(a) Financial liabilities at amortised cost
Financial liabilities are measured at amortised cost using the effective interest rate method (EIR). Gains and losses are
recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised
cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of
the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss. This category applies to trade
and other payables.
(b) Derecognition
The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or
have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid /
payable is recognised in the statement of profit and loss.
(iv) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently
enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets
and settle the liabilities simultaneously.
1.19 New and amended standards
The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated 31
March 2023 to amend the following Ind AS which are effective for annual periods beginning on or after 1 April 2023. The
Company applied for the first-time these amendments.
(i) Definition of Accounting Estimates - Amendments to Ind AS 8 The amendments clarify the distinction between changes in
accounting estimates and changes in accounting policies and the correction of errors. It has also been clarified how entities
use measurement techniques and inputs to develop accounting estimates.
The amendments had no impact on the Company’s financial statements
(ii) Disclosure of Accounting Policies - Amendments to Ind AS 1 The amendments aim to help entities provide accounting
policy disclosures that are more useful by replacing the requirement for entities to disclose their ‘significant’ accounting
policies with a requirement to disclose their ‘material’ accounting policies and adding guidance on how entities apply the
concept of materiality in making decisions about accounting policy disclosures. The amendments have had an impact on the
Company’s disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the
Company’s financial statements
28 Employee Benefits
a) Defined Contribution Plans
The Company has defined contribution plan for post employment benefit namely Provient fund which are administered by
appropriate authorities. The Company contributes to a government administered Provident fund and has no further obligation
beyond making its contributions.
The Company contributes to State Plans namely Employees'state Insurance fund and has no further obligation beyond making
the payment to them.
b) Defined Benefit plan
In Accordance with the payment of Gratuity Act,1972, the Company has a defined Benefit plan (unfunded) namely "Gratuity
Plan" covering its employee who has completed five year of service is entitled to gratuity benefit. The Company has made
provisions in the financial statement for payment of gratuity, but has not get it covered the same by insurance or has
maintained an approved fund.
The Company has also provided for leave encashment which is unfunded
The following Table summarises the net component of net benefit expenses recognised in the statement of Profit & loss and
amount recognised in the Balance sheet for the respective plans:
29 Segment Reporting
a) Primary Segment
The Company's management examines the Company performance from a product prospective and during the year the
Company's primary business segment is Textile only. Accordingly no disclosure relationg to Revenue segment are made.
b) Secondary Segment Reporting ( By Geographical Segments) :
The distribution of Company's consolidated sales is within india, accordingly no disclosure relating to Geographical Segment
are made.
30 The Company have received notices from the Department under section 148 of the Income Tax Act requiring details of specific
transactions and documents. In response, the Company submitted the required information, pursuant to which the Company
has received demand orders amounting to Rs. 305.35 Lakhs (excluding penalties) for the Assessment Years from 2016-17 to
2022-23. The amount of penalty & further interest is not ascertainable at this stage.
The Company has filed appeals against the demand orders received from the department with the Commissioner of Income
Tax (Appeals) for the AY 2016-17 to 2022-23. As per Company's own assessment and also based on legal opinion,
management is confident of favourable outcome for such appeals. Pending outcome of appeal proceedings, no adjustment has
been made to these financial statements and the said demand amount has been disclosed as contingent liability in note no 27
to the financial statement.
32 Financial Instruments and risk management
32.1 Capital Management
The Group's capital management is intended to create value for shareholders by facilating the meeting of long term and short
term gain goals of the Company.
The group's objective when managing capital are to:
- safeguard their ability to continue as A going concern, so that they can continue to provide returns for shareholders and
benefits for other stakeholders, and
- Maintain an optimal capital structur to reduce the cost of Capital.
The group determines the amount of capital required on the basis of annual business plan also taking into consideration any
long term strategic investment and expansion plans. The funding needs are met through equity and cash generated from
operations.
32.3 Financial risk management framework
Company's activities expose it to financial risks viz credit risk and liquidity risk
a) Credit Risk
Based on the overall credit worthiness of Receivables, coupled with their past track records, Company expects No / Minimum
risk with regards to its outstanding receivables. Also, there is a mechanism in place to periodically track the outstanding amount
and assess the same with regard to its realisation. Company expects that all the debtors will be realised in full, and adequate
provisions has been made in the books of accounts for doubtful receivables
b) Liquidity Risk
(i) Liquidity Risk Management
The Company manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring
forecast and actual cash flow and by matching the maturity profiles of financial assets and liabilities.
(ii) Maturities of Financial Liabilities
The following tables details the Company's remaining contractual maturities for its non-derivative financial liabilities with agreed
repayment periods. The amount disclosed in the tables have been drawn up based on the earliest date on which the Company
can be requierd to pay.
Fair value measurement
The management assessed the fair value of loans, current investments (unquoted), cash and cash equivalents, trade
receivebles, trade payables and other current liabilities approximate to their carrying amount largly due to the short-term
maturities of these instruments.
The fair value of the financial assets and liabilities is 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.
(i) The fair value of unquoted instruments are evaluated by the Company based on parameters such as interest rates and its
investments ratting.
(ii) The fair value of loans are estimated by discounted cash flow method to capture the present value of the expected future
economic benefits that will flow to the company.
34 Previous figures have been regrouped/rearranged wherever necessary to make them comparable.
35 Additional Regulatory Information Required By Schedule III
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.
(ii) The Company does not have any transactions with struck off companies.
(iii) Registration of charges or satisfaction with Registrar of Company (ROC):
In following cases charges or satisfaction yet to be registered with ROC beyond the statutory period
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding at 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
Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company have not received any fund from any persons or entities, including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company 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, security or the like on behalf of the Ultimate Beneficiaries
(vii) The company has not been declared willful defaulter by any bank or financial institutations or any lender.
(viii) There is no transaction which are not recorded in the books of account that has been surrendered or disclosed as income
during the year in the tax assessments under the Income Tax Act, 1961.
(ix) The Company did not have any long-term contracts including derivative contracts, for which there were any material
foreseeable losses.
36 There are no major events which has occurred after the balance sheet date.
The accompanying notes form an integral part of these Financial statements
As per our Audit Report of even date annexed
For M.M.Goyal & Co. For and on behalf of the Board
Chartered Accountants
Firm's Registration Number : 007198N Sd/- Sd/-
Vinod Kumar Aggarwal Sanjiv Kumar Agarwal
Director Director
DIN : 00170712 DIN : 00227251
Sd/- Sd/- Sd/-
Manmohan Goyal
Proprietor Anil Jodhani Aggarwal Manil Kumar Nagar
Membership No. 086085 Chief Financial Officer Company Secretary
Place : New Delhi M.No. A37299
Date : May 29, 2025
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