xvi Provisions, Contingent Liabilities and Contingent Assets
A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past events and
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect
of which a reliable estimate can be made of the amount of obligation. Provisions (excluding gratuity and compensated
absences) are determined based on management’s estimate required to settle the obligation at the Balance Sheet date. In
case the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific
to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance
cost. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.
Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would
be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the Company. A contingent liability also arises, in rare cases, where a liability cannot be recognised because it cannot be
measured reliably.
xvii Cash Flows
Cash flows are reported using the indirect method, where by net profit before tax is adjusted for the effects of transactions
of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income
or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing
activities are segregated.
xviii Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the
inception of the lease. The arrangement is, or contains, a lease if fulfillment of the arrangement is dependent on the use
of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly
specified in an arrangement.
Company as a lessee
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All
other leases are classified as operating leases.
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. The
sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.
For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
xix Application of new and amended standards:
The company has adopted, with effect from April 1, 2024, the following new and revised standards and interpretations.
Their adoption has not any significant impact on the amounts reported in the financial statements.
(i) MCA has issued amendments to IND AS 116 concerning sale and leaseback contracts. The amendment specifies the
requirements for a seller-lessee in measuring the lease liability arising from a sale and leaseback transaction. It ensures
that the seller-lessee does not recognize any amount of the gain or loss related to the right of use it retains.
c. Terms/rights attached to equity shares
The Company has one class of equity shares having a par value of ' 10 (PY '10) per share. Each holder of equity shares is
entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares
held by the shareholders.
Note 38 : Disclosure relating to employee benefits as per Ind AS 19 ‘Employee Benefits’
A - Defined benefit obligations - Gratuity (unfunded)
The gratuity plan is governed by the Payment of Gratuity Act, 1972 under which an employee who has completed five years of
service is entitled to specific benefits. The level of benefits provided depends on the member’s length of service and salary at
retirement age.
I) Assumptions :
With the objective of presenting the plan assets and plan liabilities of the defined benefits plans at their fair value on the
balance sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.
The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions
occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key
assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption,the same method
used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in
preparing the sensitivity analysis did not change compared with the previous period.
IX) The Code on Social Security, 2020
“During the year ended 31 March 2026, the Central Government has notified the Code on Wages, 2019, the Industrial
Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions
Code, 2020, collectively referred to as the New Labour Codes, effective from 21 November 2025 primarily impacting the
wage definition to be considered for the purpose of defined benefit obligation relating to gratuity.
The New Labour Codes introduced by the Government of India, inter alia, requires gratuity to be calculated based on wages
constituting at least 50% of total remuneration. This has resulted in an increase in gratuity benefits in respect of services
rendered in prior periods, and accordingly, the company has recognised past service cost amounting to INR 0.28 Lakhs
during the year. In accordance with Ind AS 19, the past service cost has been recognised in the statement of profit and loss in
the current year in which the plan amendment became effective.”
The above figures of remuneration and salary does not include provisions for gratuity as the same is determined at the company
level and is not possible to determine for select individuals.
Note 40 : Segment Reporting
(i) Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision
Maker (“CODM”) of the Company. The CODM, who is responsible for allocating resources and assessing performance of
the operating segments, has been identified as the Managing Director of the Company. The Company operates only in two
Business Segment i.e. “Textile Business”, and “Real Estate Operation” hence we have two reportable Segments as per Ind
AS 108 “Operating Segments”.
(ii) Further, from two external customers in current year and two external customer in previous year the company has revenue
of ? 1,440.31 lakhs (March 31, 2025: ? 6,249.75 lakhs ) more than 10% of the total revenue from operations.
(iii) All the Non-current assets of the company are held in India
Operating Segments
Real estate operations
Textile operations
Segment revenue and results:
The expenses and income which are not directly attributable to any business segment are shown as unallocable expenditure
(net of allocable income).
Segment assets and Liabilities:
Segment assets include all operating assets used by the operating segment and mainly consist of inventory. Common assets
and liabilities which can not be allocated to any of the business segment are shown as unallocable assets / liabilities.
Ind AS 115 Revenue from contracts with customer has been notified by Ministry of Corporate Affairs (MCA) on 28 March 2018
and is effective from accounting period beginning on or after 1 April 2018, replace existing revenue recognition standard. The
adoption of standard did not have any impact on the standalone financials results of the Company.
b) Disaggregation of revenue from contracts with customers
The Company believes that the information provided under note 25- Revenue from operations and note 40- Segment
reporting best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by industry,
market and other economic factors.
Note 44 : Financial instruments - Fair values and risk management
“The fair value of the financial assets are included at amounts at which the instruments 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 value:
(a) Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities,
approximate their carrying amounts largely due to the short-term maturities of these instruments
(b) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as
interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account
for the expected losses of these receivables.”
B. Fair Value Hierarchy.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by
valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable,
either directly or indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable
market data.
Note 45 : Financial instruments - Fair values and risk management (Continue..)
Financial risk management objectives and policies
Risk management framework
A wide range of risks may affect the Company’s business and operational / financial performance. The risks that could have
significant influence on the Company are market risk, credit risk and liquidity risk. The Company’s Board of Directors reviews
and sets out policies for managing these risks and monitors suitable actions taken by management to minimise potential adverse
effects of such risks on the company’s operational and financial performance.
i) Market risk
Market Risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.
ii) Currency risk
The Company is not much exposed to currency risk.
iii) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Company’s trade and other receivables, cash and cash equivalents
and other bank balances. To manage this, the Company periodically assesses financial reliability of customers, taking
into account the financial condition, current economic trends and analysis of historical bad debts and ageing of accounts
receivable. The maximum exposure to credit risk in case of all the financial instruments covered below is restricted to their
respective carrying amount.
Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit limits and
monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant
increase in the credit risk on an ongoing basis through each reporting period. To assess whether there is a significant
increase in credit risk the Company compares the risk of default occurring on assets as at the reporting date with the risk
of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such
as:
i) Actual or expected significant adverse changes in business
ii) Actual or expected significant changes in the operating results of the counterparty
iii) Financial or economic conditions that are expected to cause a significant change to the counterparties ability to meet
its obligation
iv) Significant increase in credit risk on other financial instruments of the same counterparty
v) Significant changes in the value of the collateral supporting the obligation or in the quality of third party guarantees or
credit enhancements
Financial assets are written off when there is a no reasonable expectations of recovery, such as a debtor failing to engage in
a repayment plan with the Company. When loans or receivables have been written off, the Company continues to engage in
enforcement activity to attempt to recover the receivable due, When recoverable are made, these are recognised as income in the
statement of profit and loss.
The Company measures the expected credit loss of trade and other receivables based on historical trend, industry practices and
the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends.
Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.
(b) Cash and cash equivalents and other bank balances
The Company held cash and cash equivalents and other bank balances amounting to ? 170.48 Lakhs and ? 6.13 Lakhs
respectively (March 31, 2025: ? 41.75 and 10.80 Lakhs respectively). The cash and cash equivalents are held with bank
with good credit ratings and financial institution counterparties with good market standing.
Note 45 : Financial instruments - Fair values and risk management (Continue..)
The table below provides details regarding the contractual maturities of significant financial liabilities :
iv) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset.
Liquidity risk is managed by Company through effective fund management of the Company’s short, medium and long¬
term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate
reserves, banking facilities and other borrowing facilities, by continuously monitoring forecast and actual cash flows, and
by matching the maturity profiles of financial assets and liabilities.
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross
and undiscounted.
v) Commodity Price Risk
The company is exposed to the risk of price fluctuations of Raw Material as well as Finished Goods as it is not engagged in
manufacturing activity.
vi) 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 is exposed to interest rate risk through the impact of rate changes on interest-bearing
liabilities and assets. The Company manages its interest rate risk by monitoring the movements in the market interest rates
closely.
vii) Exposure to interest rate risk
Since there is no borrowing so relevaent disclosure for Company’s interest rate risk and cash flow sensitivity analysis for
variable is not applicable.
Note 46 : Capital management
For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves
attributable to the equity holders of the Company. The Company strives to safeguard its ability to continue as a going concern so
that they can maximise returns for the shareholders and benefits for other stake holders. The aim to maintain an optimal capital
structure and minimise cost of capital.
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 return capital to shareholders, issue
new shares or adjust the dividend payment to shareholders (if permitted). Consistent with others in the industry, the Company
monitors its capital using the gearing ratio which is total debt divided by total capital plus total debts.
Note : For the purpose of computing total debt to total equity ratio, total equity includes equity share capital and other equity and
total debt includes long term borrowings, short term borrowings, long term lease liabilities and short term lease liabilities.
Note 47 : Corporate Social Responsibility
The Provision for CSR are applicable as per Section 135 of Companies act 2013. During the year company is not liable to make
the expenditure towards CSR Activity, hence expenditure is not incurred towards CSR Activity.
Note 48 : ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III TO THE COMPANIES
ACT, 2013
The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against
the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made
thereunder.
The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the
Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.
Utilisation of borrowed funds and share premium
“The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), 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
Company (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.”
“The Company has not received any fund 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:
(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.”
The Company does not have any 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.
The Company has not traded or invested in crypto currency or virtual currency during the year.
The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies
beyond the statutory period.
During the year, the company has not announced any dividend during the year
The Company has not revalued any of its Property, Plant and Equipment (including Right-of-Use Assets) during the year.
The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the
Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.
The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 (as
amended) or section 560 of the Companies Act, 1956.
The Company has not been declared as a willful defaulter during the current financial year. However, certain banks had classified
the Company as a willful defaulter in the previous year.
In this regard, the Company has subsequently received a No Due Certificate from the Asset Reconstruction Company (ARC).
Accordingly, the Company has made the necessary representations to the concerned banks requesting removal of its name from
the list of willful defaulters.
Note 51: Prior year comparatives
Previous year’s figure’s audited by the predecessor Auditors, vide their report dated 21th April 2025, have been re-grouped,
re-arranged & re-classified, wherever considered necessary, to confirm the current periord figures.
As per our report of even date attached For and on behalf of the Board of Directors of
For S G C O & Co. LLP Shekhawati Industries Limited
Chartered Accountants (formerly known as Shekhawati Poly-Yarn Limited)
Firm Registration No. 112081W/W100184
Sd/- Sd/- Sd/-
Nitesh Musahib Mukesh Ruia Ravi Jogi
Partner Chairman & Managing Director Whole Time Director
Membership No. 53071 (DIN : 00372083 ) (DIN : 06646110 )
Sd/-
Place: Mumbai Meena Agal
Date: April 27, 2026 Chief Financial Officer Cum Company
Secretary & Compliance Officer
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