1.15 PROVISIONS AND CONTINGENCIES
A provision is recognised when there is 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 in respect of which a
reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the
current best estimates.
Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company
from a contract are lower than the unavoidable costs of meeting the future obligations under the contract.
A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that
may probably not require an outflow of resources or an obligation for which the future outcome cannot be
ascertained with reasonable certainty. When there is a possible or a present obligation where the likelihood
of outflow of resources is remote, no provision or disclosure is made.
1.16 CASH AND CASH EQUIVALENTS
Cash and Cash equivalents include cash and Cheque in hand, bank balances, demand deposits with banks
and other short-term highly liquid investments that are readily convertible to known amounts of cash & which
are subject to an insignificant risk of changes in value where original maturity is three months or less.
1.17 CASH FLOW STATEMENT
Cash flows are reported using the indirect method where by the profit before tax is adjusted for the effect of the
transactions of a non-cash nature, any deferrals or accruals of past and future operating cash receipts or
payments and items of income or expenses associated with investing or financing cash flows. The cash flows
from operating, investing and financing activities of the company are segregated.
1.18 BORROWING COST
General and specific borrowing costs that are directly attributable to the acquisition, construction or production
of qualifying assets are capitalized as a part of Cost of that assets, during the period till all the activities
necessary to prepare the Qualifying assets for its intended use or sale are complete during the period of time
that is required to complete and prepare the assets for its intended use or sale. Qualifying assets are assets
that necessarily take a substantial period of time to get ready for their intended use or sale.
Other borrowing costs are recognized as an expense in the period in which they are incurred.
1.19 EARNINGS PER SHARE
Basic EPS is arrived at based on net profit after tax available to equity shareholders to the weighted average
number of equity shares outstanding during the year.
The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential
dilutive equity shares unless impact is anti-dilutive.
1.20 SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to Chief Operating
Decision Maker (CODM).
The Company has identified its Managing Director as CODM which assesses the operational performance
and position of the Company and makes strategic decisions.
1.21 RECENT ACCOUNTING PRONOUNCEMENTS
The Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended
March 31,2024, MCA has not notified any new standards or amendements to the existing standards applicable
to the Company.
(a) The Company has only one class of issued Equity Shares having a par value of Rs. 10/- per share. Each
Shareholder is eligible for one vote per share held.In the event of liquidation, the Equity Shareholders are
eligible to receive the residual assets of the Company after distribution of all preferential amounts,in proportion
to their shareholding.
b) The Company has only one class of Preference Shares, i.e., 0.01 % Non-Convertible Redeemable Preference
Shares ('NCRPS') having a par value of Rs. 100 per share. These preference shares have been recognised
as Compound Financial Instruments in accordance with Ind-AS 109 - Financial Instruments. Accordingly,
the liability component of the preference shares issued has been disclosed in Note 14- Non-Current Liabilities-
Financial Liabilities-Borrowings.
32. RISK MANAGEMENT - FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company's financial risk management is an integral part of how to plan and execute its business strategies.
The company's activity expose it to market risk, liquidity risk , commodity risk and credit risk. In order to
minimise any adverse effects on the financial performance of the company, derivative financial instruments,
such as foreign exchange forward contracts, foreign currency option contracts are entered to hedge certain
foreign currency risk exposures and interest rate swaps to hedge variable interest rate exposures. Derivatives
are used exclusively for hedging purposes and not as trading or speculative instruments. The Company's
financial risk management policy is set by the Managing Director and governed by overall direction of Board
of Directors of the Company.
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change
in the price of a financial instrument. The value of a financial instrument may change as a result of changes
in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect
market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments
including investments and deposits , foreign currency receivables, payables and loans and borrowings.
A. CREDIT RISK
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as
agreed. To manage this, the Company periodically assess financial reliability of customers, taking into
account the financial condition, current economic trends, and analysis of historical bad debts and ageing
of accounts receivable. Individual risk limits are set accordingly.
The Company considers the probability of default upon initial recognition of asset and whether there has
been a significant increase in 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
asset 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 counter
party's ability to meet its obligations
iv) Significant increase in credit risk on other financial instruments of the same counterparty
The company catogarises financial assets based on the assumptions, inputs and factors specific to
the class of financial assets into High-quality assets, negligible credit risk; Quality assets, low credit
risk; Standard assets, moderate credit risk; Substandard assets, relatively high credit risk; Low quality
assets, very high credit risk; Doubtful assets, credit-impaired.
Financial assets are written off when there is no reasonable expectations of recovery, such as a
debtor failing to engage in a repayment plan with the Company. The Company categorises a loan or
receivable for write off when a debtor fails to make contractual payments greater than one year past
due. Where loans or receivables have been written off, the Company continues engage in enforcement
activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in
profit or loss.
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or
at a reasonable price. The Company's treasury department is responsible for liquidity, funding as well as
settlement management. In addition, processes and policies related such risk are overseen by senior
management. Management monitors the Company's net liquidity position through rolling forecasts on the
basis of expected cash flows.
C. MARKET RISK- INTEREST RATE RISK
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate
because of changes in market interest rates. In order to optimize the Company's position with regards to
interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive
corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial
instruments in its total portfolio.
D. MARKET RISK- FOREIGN CURRENCY RISK.
The Company operates internationally and portion of the business is transacted in several currencies and
consequently the Company is exposed to foreign exchange risk through its sales and services in overseas
and purchases from overseas suppliers in various foreign currencies. Exports of the company are significantly
higher in comparison to its imports. Foreign currency exchange rate exposure is partly balanced by exports
of goods and prudent hedging policy.
a) Principal Raw Material for Company's products is cotton which is an agricultural commodity and thus,
seasonal in nature. Company sources its raw material requirement from across the globe. Domestic
market prices are also generally remains in sync with international market price scenario.
b) Volatility in raw cotton prices, currency fluctuation of Rupee vis-a-vis other prominent currencies coupled
with demand-supply scenario in the world market and domestic market affect the effective price and
availability of cotton for the Company. Company effectively manages and deals with availability of
material as well as price volatility through:
1. Widening its sourcing base
2. Appropriate contracts and commitments
3. Well planned procurement & inventory strategy
33. CAPITAL RISK MANAGEMENT
A The Company's objectives 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
• maintain an optimal capital structure to reduce the cost of capital
The Company monitors capital on the basis of the following Debt Equity ratio:
34. DISCLOSURE PURSUANT TO IND AS - 19 "EMPLOYEE BENEFITS"
i) Gratuity: In accordance with the applicable laws, the Company provides for gratuity, a defined benefit
retirement plan ("The Gratuity Plan") covering eligible employees. The Gratuity Plan provides for a lump sum
payment to vested employees on retirement (subject to completion of five years of continuous employment),
death, incapacitation or termination of employment that are based on last drawn salary and tenure of
employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting
date and the Company makes annual contribution to the gratuity fund administered by life Insurance
Companies under their respective Group Gratuity Schemes.
a) Figures in brackets relate to previous year.
b) Related party relationship is as identified by the management and relied upon by the auditors.
c) No amounts in respect of related parties have been written off/ written back during the year
d) Terms and conditions for sales and purchases: All sale and purchase transactions with the related
parties are in the ordinary course of business based on normal commercial terms, conditions and market
rates with the related parties. For the year ended 31st March, 2024, the Company has not recorded any
loss allowances for the transaction between the related parties.
e) All the material transactions stated above with related parties are on arm's length basis.
39. Based on the “Management Approach” as defined in Ind AS 108 - Operating Segments, the Company is
engaged in the business of Textile Products and as such has only a Single Reportable Business Segment.
The Company has all its production facilities and all other assets located in India. Sales to external customers
comprise export sales of Rs. 7,095.84 lacs (Previous Year Rs. 12447.86 lacs) and local sales of Rs. 11441.74
lacs (Previous Year Rs. 18941.11 lacs).
1. Working Capital Loans are secured by a first charge by way of hypothecation of the current assets of the
Company, both present and future and by way of first charge on fixed assets, ranking paripassu, inter-se
among working capital banks. These Working Capital facilities are further guaranteed by Managing
Director and also secured by pledge of Equity Shares to the extent of 51% of promoters' holding with
voting rights ranking paripassu with Working Capital lenders.
41. The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post¬
employment benefits has been published in the Gazette of India. However, the date on which the Code will
come into effect has not been notified. The Company will assess the impact of the Code and recognise the
same when the Code becomes effective.
42. The title in respect of self-constructed buildings and title deeds of all other immovable properties, disclosed
in the financial statements included under Property, Plant and Equipment are held in the name of the
Company as at the balance sheet date.
43. No Loans or Advances have been granted to promoters, directors, KMPs and the related parties during the
year ended 31st March, 2024 and 31st March, 2023.
44. The Company does not have any Benami property, where any proceeding has been initiated or pending
against the Company for holding any Benami property.
45. The Company has not been declared a wilful defaulter (as defined by RBI Circular) by Any bank or financial
Institution or other lender.
46. The Company does not have any transactions with companies struck off under Section 248 of the Companies
Act, 2013 or Section 560 of Companies Act, 1956.
47. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
48. The Company does not have any subsidiaries and hence, the provisions of clause (87) of Section 2 of the Act
read with the Companies (Restriction on number of Layers) Rules, 2017 are not applicable to the Company.
49. The Company has not entered into scheme of arrangement during the year and previous year.
50. Utilisation of Borrowed funds and share premium:
(i) 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
(ii) 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.
53. The Company does not have any undisclosed income which is not recorded in the books of account that has
been surrendered or disclosed as income during the year (previous 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.
54. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
55. Previous year's figures have been re-grouped/re-classified wherever required to conform to current year's
classification. All figures of financials has been rounded to nearest lacs to rupees.
As per our attached report of even date For and on behalf of the Board
For Lodha & Co. v. raghU RAM M K PATODIA
Chartered.Accoun-anso, Chief Financial Officer Chairman and Managing Director
FRN - 301051 E/E300284 (DIN No 00004752)
R P BARADIYA P. PRABHAKARA RAO
Rj BARADIYA Company Secretary & M.R. VIKRAM
Patner Compliance Officer Independent Director
M. No. 44101 (M.No. 08974) (DIN No. 00008241)
Place: Mumbai Dl u . . . RAJUL KOTHARI
Date : 28-05-2024 Place: Hyderabad Independent Woman Director
: Date : 28-05-2024 (din No. 06903721)
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