11. Provisions, Contingent Liabilities and Contingent Assets
The Company recognizes a provision when there is a present legal or constructive obligation as a
result of a past event that probably requires an outflow of resources and a reliable estimate can be
made of the amount of the obligation. 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 provision due to the passage of time is recognized as interest expense.
A disclosure for a contingent liability is made when there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of resources. Where there is a possible
obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no
provision or disclosure is made.
A contingent asset is a possible asset that arises 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. Contingent assets are not recognized till the realization of the
income is virtually certain. However, the same are disclosed in the financial statements where an
inflow of economic benefit is probable.
12 Revenue Recognition
Revenue from contracts with customers is recognized on transfer of control of promised goods to
customers for an amount that reflects the consideration to which the Company is expected to be
entitled to in exchange for those goods or services. Revenue excludes taxes or duties collected on
behalf of the government.
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction
price allocated to that performance obligation. Revenue is recognized only to the extent that it is
highly probable that the amount will not be subject to significant reversal when uncertainty relating
to its recognition is resolved.
Sale of Products
Revenue from sale of products is recognized when the control on the goods has been transferred to
the customer. The performance obligation in case of sale of products is satisfied at a point in time
i.e., when the material is shipped to the customer or on delivery to the customer, as may be
specified in the contract. The Company recognizes revenues on the sale of products, net of returns,
discounts (if any) and amounts collected on behalf of third parties (such as GST).
Rendering of Services
Income from services rendered is recognized based on agreements/arrangements with the
customers as the service is performed and there are no unfulfilled obligations.
Interest Income
Interest income is recognized using the effective interest rate (EIR) method.
13 Employee Benefits
i. Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as
short-term employee benefits and they are recognized in the period in which the employee renders
the related service. The Company recognizes the undiscounted amount of short-term employee
benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after
deducting any amount already paid.
ii. Post-Employment Benefits
> Defined Contributions plan
Provident Fund and Employee State Insurance Scheme
Defined contribution plans are Provident Fund Scheme and Employee State Insurance Scheme.
Recognition and measurement of defined contribution plans
The Company recognizes contribution payable to a defined contribution plan as an expense in
the Statement of Profit and Loss when the employees render services to the Company during the
reporting period. If the contributions payable for services received from employees before the
reporting date exceeds the contributions already paid, the deficit payable is recognized as a liability
after deducting the contribution already paid. If the contribution already paid exceeds the
contribution due for services received before the reporting date, the excess is recognized as an asset
to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash
refund.
The company is regular is depositing PF and ESI under such said schemes.
> Defined Benefit plans:
Gratuity scheme
However, there is no such Provision/ Payment during the year. Earlies year provision \is
written off during the year and offered as income credited to profit and loss account.
iii. Other Long-Term Employee Benefit
Entitlements to annual leave and sick leave are recognized when they accrue to employees. Sick
leave can only be availed while annual leave can either be availed or encased subject to a restriction
on the maximum number of accumulations of leave.
The company charges such benefits paid to employees to profit & loss account, as and when
paid to employees.
14 Income Taxes
Income tax expense comprises current tax expense and deferred tax expense. It is recognized in
profit or loss except to the extent that it relates to items recognized directly in equity or in OCI. In
which case, the tax is also recognized directly in equity or other comprehensive income, respectively.
Current tax:
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable
profit differs from ‘profit before tax’ as reported in the Statement of Profit and Loss because of items
of income or expense that are taxable or deductible in other years and items that are never taxable
or deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates that have been enacted by the end of reporting period for
the amounts expected to be recovered from or paid to the taxation authorities.
Management periodically evaluates positions taken in tax returns with respect to situations in
which applicable tax regulation is subject to interpretations and establishes provisions where
appropriate.
Deferred tax:
Deferred tax is recognized on temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit under Income Tax Act, 1961.
Deferred tax liabilities are generally recognized for all taxable temporary differences. However, in
case of temporary differences that arise from initial recognition of assets or liabilities in a
transaction (other than business combination) that affect neither the taxable profit nor the
accounting profit, deferred tax liabilities are not recognized. Also, for temporary differences if any
that may arise from initial recognition of goodwill, deferred tax liabilities are not recognized.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent it
is probable that taxable profits will be available against which those deductible temporary
difference can be utilized. In case of temporary differences that arise from initial recognition of
assets or liabilities in a transaction (other than business combination) that affect neither the taxable
profit nor the accounting profit, deferred tax assets are not recognized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profits will be available to
allow the benefits of part or all of such deferred tax assets to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted or
substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or settled.
Presentation of current and deferred tax:
Current and deferred tax are recognized as income or an expense in the Statement of Profit and
Loss, except when they relate to items that are recognized in Other Comprehensive Income, in which
case, the current and deferred tax income/ expense are recognized in Other Comprehensive Income.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable
right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize
the asset and settle the liability simultaneously.
As per the Appendix to Ind AS 12, the Company needs to assess whether it is probable that a tax
authority will accept an uncertain tax treatment used or a treatment which is being proposed to be
used in its income tax filings.
15 Foreign Currency Transactions
i. Functional and Presentation currency
The Company’s financial statements are prepared in Indian Rupees (INR “?”) which is also the
Company’s functional currency.
ii. Transactions and balances
Foreign currency transactions are recorded on initial recognition in the functional currency using
the exchange rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional
currency at the exchange rate at the reporting date. Non-monetary items that are measured based on
historical cost in a foreign currency are translated using the exchange rate at the date of the initial
transaction. Non-monetary items that are measured at fair value in a foreign currency are translated
using the exchange rate at the date the fair value is determined. Exchange differences arising on the
settlement or translation of monetary items are recognized in profit or loss in the year in which they
arise except for the qualifying cash flow hedge, which are recognized in OCI to the extent that the
hedges are effective.
16 Government Grant and subsidies
Grants in the nature of subsidy which are non-refundable are credited to the statement of profit and
loss, on accrual basis, where there is reasonable assurance that the Company will comply with all
the necessary conditions attached to them.
17 Derivative Financial instruments and hedge accounting
The Company uses derivative financial instruments, such as forward currency contracts, to hedge
its foreign currency risks and interest rate risks respectively. Such derivative financial instruments
are initially recognized at fair value on the date on which a derivative contract is entered into and are
subsequently re-measured at fair value at the end of each reporting period. The accounting for
subsequent changes in fair value depends on whether the derivative is designated as a hedging
instrument, and if so, the nature of item being hedged and the type of hedge relationship
designated.
Derivatives are carried as financial assets when the fair value is positive and as financial liabilities
when the fair value is negative.
Forward exchange contracts
The Company enters into forward exchange contracts in nature of currency swaps and interest rate
swaps to hedge against its foreign currency exposures relating to the underlying transactions and
firm commitments. The Company does not enter into any derivative instruments for trading or
speculative purposes.
The forward exchange contract is marked to market (MTM) and the gain/ loss on the same is
recognized as an expense/income over the life of the contract. Exchange differences on such
contracts are recognized in the Statement of Profit and Loss in the period in which the exchange
rates change. Any Profit or Loss arising on cancellation or renewal of such forward exchange
contract is also recognized as income or expense for the period.
18 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 recognized amounts and there is an
intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
19 Research and Development
Expenditure on research is recognized as an expense when it is incurred. Expenditure on
development which does not meet the criteria for recognition as an intangible asset is recognized as
an expense when it is incurred.
Items of property, plant and equipment and acquired intangible assets utilized for Research and
Development are capitalized and depreciated in accordance with the policies stated for Property,
Plant and Equipment and Intangible Assets.
20 Borrowing Cost
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the
arrangement of borrowings and exchange differences arising from foreign currency borrowings to
the extent they are regarded as an adjustment to the interest cost.
Borrowing costs, if any, directly attributable to the acquisition, construction or production of an
asset that necessarily takes a substantial period of time to get ready for its intended use or sale are
capitalized, if any. All other borrowing costs are expensed in the period in which they occur.
In accordance with the amended Ind AS 23 Borrowing Cost, if any specific borrowing remains
outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part
of the funds that an entity borrows generally when calculating the capitalization rate on general
borrowings.
21 Exceptional items
Exceptional items refer to items of income or expense within the income statement from ordinary
activities which are non-recurring and are of such size, nature or incidence that their separate
disclosure is considered necessary to explain the performance of the Company and to assist users of
financial statements in making projections of future financial performance.
22 Events after Reporting date
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at
the end of the reporting period, the impact of such events is adjusted within the financial
statements. Otherwise, events after the Balance Sheet date of material size or nature are only
disclosed.
23 Dividend
The Company recognizes a liability for any dividend declared but not distributed at the end of the
reporting period, when the distribution is authorized and the distribution is no longer at the
discretion of the Company on or before the end of the reporting period. As per Corporate laws in
India, a distribution is authorized when it is approved by the shareholders. A corresponding amount
is recognized directly in equity.
However, company has not declared any dividend during the year.
24 Earnings Per Share
Basic earnings per share is calculated by dividing the profit or loss for the period attributable to the
equity shareholders by the weighted average number of equity shares outstanding during the
period.
For the purpose of calculating diluted earnings per share, the profit or loss for the period
attributable to the equity shareholders and the weighted average number of equity shares
outstanding during the period is adjusted to take into account:
> The after income tax effect of interest and other financing costs associated with dilutive
potential equity shares, and
Weighted average number of additional equity shares that would have been outstanding
assuming the conversion of all dilutive potential equity shares.
25 Segment Reporting
The Company has identified RAW (GRAY) CLOTH EMBROIDRY WOK, GARMENTS YARN, KNITTED
FABRICS (ALL UNDER TEXTILES SEGMENT) and solar energy, Wind Mill as its single primary
reportable segment in accordance with the requirements of Ind AS 108 - Operating Segments.
26 In the opinion of the Directors:
The current assets and loans and advances are approximately of the value stated, if realized in the
ordinary course of business. The provision for depreciation and for all known liabilities is adequate
and not in excess of the amount reasonably necessary.
The above information is given to the extent available with the Company.
For, GHAEL CHOKSI & CO. CHARTERED ACCOUNTANTS For, SU RBHI INDUSTRIES LTD
FRN: 0153978W
Sd/-
Vikrant Bipinchandra Ghael Sd/ -
Partner RAVJIBHAI PARBATBHAI PATEL
Membership N°.: 112324 Managing Director DIN: 00023332
Managing Director
For, Pragnesh M Joshi.
Company Secretary
FRN: FCS 7238 BIPINBHAI JASMATBHAI PATEL
Director DIN: 00023447
Sd/- Director
Hetal Arvind Joshi
M. No. ACS 37178 Place: Surat
Date: 15.05.2025
Place: Surat
Date: 15.05.2025
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