(r) Provisions, contingent liabilities and contingent assets :
(i) Provision: is recognized when there is a present obligation as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are
determined (as provided/charged to the Statement of Profit and Loss) based on estimate of the amount required to settle the
obligation at the Balance Sheet date and are not discounted to present value.
(ii) Contingent Liabilities: are not recognized but are disclosed in the financial statements. Claims against the Company
where the possibility of materialization is remote are not considered as contingent liabilities.
(iii) Contingent Assets: are neither recognized nor disclosed in the financial statements.
(s) Segment Reporting: The Company deals in only one product i.e.'Textiles". The Company has identified and reported two
reportable operating segments, "Domestic" and "International" in accordance with the requirements of Ind-AS 108.
Operating Segment: Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision maker. The chief operating decision maker of the Company is responsible for allocating resources
and assessing performance of the operating segments and accordingly is identified as the chief operating decision maker.
The Chief Operational Decision Maker monitors the operating results of its business segments separately for the purpose of
making decisions about resource allocation and performance assessment. Segment performance is evaluated based on
profit and loss and is measured consistently with profit and loss in the financial statements. The Operating segments have
been identified on the basis of the nature of products/services.
i) Segment revenue includes sales and other income directly identifiable with the segment including intersegment revenue.
ii) Expenses that are directly identifiable with the segments are considered for determining the segment results. Expenses
which relate to the Group as a whole and not allocable to segments are included under unallocable expenditure.
iii) Income which relates to the Group as a whole and not allocable to segments is included in unallocable income.
iv) Segment result includes margins on inter-segment and sales which are reduced in arriving at the profit before tax of the
Group.
v) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable assets and
liabilities represent the assets and liabilities that relate to the Group as a whole and not allocable to any segment.
(t) Other Disclosure:
a. There are no proceedings initiated or are pending against the Company for holding any benami property under the Prohibition
of Benami Property Transactions Act, 1988 and rules made thereunder.
b. The Company has not entered into any transactions with struck off companies during the year.
c. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
d. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
e. The Company does not have any such 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).
f. The Company has not been declared as a willful defaulter by any lender who has powers to declare a company as a willful
defaulter at any time during the financial year or after the end of reporting period but before the date when the financial
statements are approved.
g) The Company has compiled with the number of layers prescribed under clause (87) of section 2 of the Companies Act 2013
read with Companies (Restrictions on number of Layers) Rules, 2017.
h) The company has not entered into any scheme of arrangement which has an accounting impact on current financial year
i) The company has not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign
entities(intermediaries), with the understanding that the intermediary shall;
i. 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
ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
j) The Company has not received any funds 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;
i. 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
ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
Notes:
2.1 Buildings include cost of 30 shares of Rs.50/- each in Balkrishna Krupa Co-operative Hsg. Soc. Ltd.
2.2 The title in respect of buildings and title deeds of all other immovable properties (other than properties where the Company is
the lessee and the lease agreements are duly executed in favour of the lessee), 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.
10.2 Rights attached to shares
Equity shares
The Company has one class of equity shares having a par value of Rs.10/- each. Each shareholder is eligible for one vote per
share held. The dividend, proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing
Annual General Meeting, except in case of interim dividend. In the event of liquidation, the repayment of capital will be in
proportion to the number of equity shares held. All equity shares have equal rights in respect of distribution of dividend and
repayment of capital.
12.2 The Company has a Working Capital limit of 850 Lakhs from Axis Bank comprising of Fund-based limits. For the said facility,
the Company has submitted Stock and debtors statement to the bank on monthly basis.
12.3 Capital management : The Company’s capital requirement is mainly to fund its capacity expansion and repayment of principal
and interest on its borrowings. The principal source of funding of the Company has been, and is expected to continue to be, cash
generated from its operations supplemented by funding from bank borrowings. The Company is not subject to any externally
imposed capital requirements
12.4 In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it
meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.
Breaches in meeting the financial covenants would permit the bank to immediately call back loans and borrowings. The PNB Term
Loan and GECL Loan accounts have turned NPA as on 24/07/2024. There have been no other breaches in the financial covenants
of any interest-bearing loans and borrowing in the current period
12.5 The Company monitors its Capital using Gearing ratio, which is Net Debt divided to Total Equity. Net Debt includes, Interest
bearing Loans and Borrowings less Cash and Cash Equivalents, Bank balance other than Cash and Cash Equivalents and
Current Investments.
32 The Goods & Service Tax assessments at Silvassa and Dharampur are both completed upto F.Y. 2023¬
24. The income tax assessment of the Company is completed upto A.Y.2024-25.
33 Segment Information
33.1 Operating Segments
The reportable segments of the Company are Domestic and International. The segments are largely organised and managed seperately. Operating segments are reported
in a manner that is consistent with the internal reporting provided to the Chairman and Managing Director (CMD) regarded as the Chief Operating Decision Maker ("CODM").
Description of each of the reportable segments for all periods presented is as under :
(a) Domestic Segment comprises of sale of manufactured products being textured yarns and draw warped and sized beams of Polyester and Nylon. It also comprises
the sale of traded goods being the finished yarns.
Note No. 34
Financial risk management
The Company has exposure to the following risks arising from financial instruments:
Credit risk;
Liquidity risk;
Market risk;
Currency risk; and
Interest Rate Risk.
(i) Risk management framework
The Company's board of directors has overall responsibility for the establishment and oversight of the Company risk management
framework. The board of directors is responsible for developing and monitoring the Company risk management policies.
The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and
management standards and procedures, aims to maintain a disciplined and constructive control environment in which all
employees understand their roles and obligations.
The audit committee oversees how management monitors compliance with the company's risk management policies and
procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit
committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk
management controls and procedures, the results of which are reported to the audit committee.
(ii) 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 receivables from customers and investments in debt securities,
cash and cash equivalents, mutual funds, bonds etc.
The carrying amount of financial assets represents the maximum credit exposure.
Trade and other receivables :
The customer credit risk is managed by requiring domestic and export customers to pay advances before transfer of ownership,
therefore substantially eliminating the Company's credit risk in this respect.
Based on prior experience and an assessment of the current economic environment, management believes that no provision is
required for credit risk wherever credit is extended to customers.
(iii) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company
manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company's reputation.
The Company has obtained fund and non-fund based working capital lines from the bank. The Company also constantly monitors
funding options available in the debt and capital markets with a view to maintaining financial flexibility.
Exposure to liquidity risk :
The table below analyses the Company's financial liabilities into relevant maturity groupings based on their contractual maturities
for:
* all non derivative financial liabilities
* net and gross settled derivative financial instruments for which the contractual maturities are essential for the understanding of
the timing of the cash flows.
(iv) Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market
rates and prices (such as interest rates, foreign currency exchange rates ) or in the price of market risk-sensitive instruments as a
result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial
instruments, all foreign currency receivables and payables and all short term and long-term debt. The Company is exposed to
market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of its investments. Thus, the
Company's exposure to market risk is a function of investing and borrowing activities and revenue generating and operating
activities in foreign currencies.
(v) Currency risk:
The company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchase,
other expenses and borrowings are denominated and the functional currency of the company. The functional currency of the
company is Indian Rupees (INR). The currencies in which these transactions are primarily denominated are USD.
From time to time, the Company uses forward exchange contracts to hedge its currency risk.
The Company, as per its risk management policy, uses foreign exchange forward contract primarily to hedge foreign exchange.
The Company does not use derivative financial instruments for trading or speculative purposes.
(vi) Interest Rate Risk:
a) 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 because funds are borrowed at both fixed
and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest
rate. The Company has exposure to interest rate risk, arising principally on changes in base lending rate. The Company
uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day
operations. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate
borrowings.
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