3.14 Provisions and Contingencies
a. Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a
result of a past event, itis probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
When the Company expects some or all of a provision to be reimbursed, for example, under an
insurance contract, the reimbursement is recognised as a separate asset, but only when the
reimbursement is virtually certain. The expense relating to a provision is presented in the statement of
profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate
that reflects,when appropriate, 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.
b. Contingent Liabilities and Contingent Assets
A contingent liability is a possible obligation that arises from a past event, with the resolution of the
contingency dependent on uncertain future events, or a present obligation where no outflow is
probable. Major contingent liabilities are disclosed in the financial statements unless the possibility of
an outflow of economic resources is remote. Contingent assets are not recognized in the financial
statements but disclosed, where an inflow of economic benefit is probable.
3.15 Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances
(with an original maturity of three months or less from the date of acquisition), highly liquid investments that
are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in
value.
3.16 Statement of cash flows
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of
transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments.
The cash flows from operating, investing and financing activities of the Company are segregated.
3.17 Insurance claims
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the
extent that there is no uncertainty in receiving the claims.
3.18 GST input credit
GST input credit is accounted in the books in the period in which the underlying service as well as invoice is
received and when there is no uncertainty in availing / utilizing the credits.
b) Rights, preferences and restrictions attached to equity shares:
(i) The Company has only one class of shares referred to as equity shares having par value of Rs 10 each.
(ii) Each holder of the equity share, as reflected in the records of the Company as of the date of the shareholders’
meeting, is entitled to one vote in respect of each share held for all matters submitted to vote in the
shareholders’ meeting.
(iii) The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of
Directors is subject to the approval of the shareholders in the ensuing General Meeting.
(iv) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the
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.
(v) Each Share holder has a right to inspect the statutory registers of the company as per the provisions of the
companies act, 2013.
(vi) Each and every share holder has a right to participate in the share holders’s meetings as and when called by
the company subject to provisions of the Companies Act, 2013.
40 Disclosure with respect to Micro, Small and Medium Enterprises
The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008
which recommends that the Micro and Small Enterprises should mention in their correspondence with its
customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance
with the ‘Micro, Small and Medium Enterprises Development Act, 2006’ (‘the MSMED Act’). However as on date,
the Company has not received any information with regard to vendors who have obtained registration under the
said act. Accordingly, the Company has disclosed the entire amount as payable to vendors other than Micro, small
and Medium enterprise.
51 Segment Reporting
An operating segment is a component of the company that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the
company’s other components, and for which discrete financial information is available. All operating segments’
operating results are reviewed regularly by the Company’s Chief Operating Decision Makers (Board of Directors)
to make decisions about resources to be allocated to the segments and assess their performance. The
Company’s sole business segment was manufacturing of textiles consisting of yarn, fabrics and garments upto
the year 31st March 2023, however the company has diversified into various other activities with effect from 1st
April 2024. Consequently, the management believes that there are no reportable segments as required under Ind
AS 108 - ‘Segment Reporting’.as on the Balance Sheet date.
The sensitivity analysis have been determined based on reasonably possible changes of the respective
assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the projected benefit
obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the
assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has
been calculated using the projected unit credit method at the end of the reporting period, which is the same
method as applied in calculating the projected benefit obligation as recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
B Fair value hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable
inputs).
The following table presents the fair value measurement hierarchy of assets measured at fair value on
recurring basis as at March 31,2024 and March 31,2023
Transfers between Level 1, Level 2 and Level 3
There were no transfers between Level 1, Level 2 or Level 3 during the year ended 31 March 2024 and 31 March
2023 respectively.
Valuation technique used to determine fair value
The management assessed that cash and cash equivalents, trade receivables, trade payables, short term
borrowings and other current liabilities and assets approximate their carrying amounts due to the short-term
maturities of these instruments.
56 Note on Going Concern
The Company has earned Net Profits after tax of Rs 32.58 lakhs during the year and the total equity stands at
a negative Rs 29.91 lakh as at 31 March 2024 as against Rs.-62.49 lakhs as at 31 March 2023. The company
has undertaken several cost cutting measures, to further cut down expenses and reduce losses and
company has also ventured into new line of activities. Company believes that it will be able to recover
fromlosses in the next succeeding years once the market stabilises. Accordingly, the accompanying
Company’s financial statements have been prepared assuming thatthe Company will continue as a going
concern which contemplates the realization of assets and the settlement of liabilities in the normal course of
business..Accordingly, the financial statement has been prepared on a going concern basis
57 NIL
58 NIL
59 Disclosure with respect to Micro, Small and Medium Enterprises
The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August
2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with
its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in
accordance with the ‘Micro, Small and Medium Enterprises Development Act, 2006’ (‘the MSMED Act’).
However as on date, the Company has not received any information with regard to vendors who have
obtained registeration under the said act.Accordingly, the Company has disclosed the entire amount as
payable to vendors other than Micro, small and Medium enterprise.
60 Financial risk management
The Company has exposure to following risks arising from financial instruments¬
- credit risk
- market risk
- liquidity risk
The Company’s board of directors has overall responsibility for the establishment and oversight of the
Company’s risk management framework. The Company’s risk management policies are established to
idenitfy 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 regulalrly to
reflect changes in market conditions and the Company’s activities.
The Company’s 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
relations to the risks faced by the Company.
A Market Risk
Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates, will
affect the Company’s income and its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters.
Currency risk
The Company operates internationally and a major portion of the business is transacted in several
currencies and consequently the Company is exposed to foreign exchange risk to the extent that there is
mismatch between the currencies in which its sales and services and purchases from overseas suppliers in
various foreign currencies. Market Risk is the risk that changes in market prices such as foreign exchange
rates will effect company’s income or value of its holding financial assets/ instruments. The exchange rate
between the Rupee and foreign currencies has changed substantially in recent years and may fluctuate
substantially in the future. Consequently, the results of the Company’s operations are adversely affected as
the Rupee appreciates/ depreciates against US dollar (USD), Euro (EUR), and British Pound (GBP).
B 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. The carrying amount of financial assets represents the
maximum credit exposure. Trade receivables are typically unsecured and are derived from revenue earned
from customers. Credit risk has always been managed by each business segment through credit approvals,
establishing credit limits and continuously monitoring the credit worthiness of customers to which the
Company grants credit terms in the normal course of business. More than 90% of the Company’s customers
have been transacting with the Company for continuous periods, and no significant impairment loss has
been recognized against these customers due to the realisation within the credit period . In monitoring
customer credit risk, customers are reviewed according to their credit characteristics, including whether
they are an individual or a legal entity, their geographic location, industry and existence of previous financial
difficulties
C Liquidity Risk
Liquidity 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. The Company’s approach to
managing the liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities
when they are due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company’s reputation.
To ensure continuity of funding, the Company primarily uses short-term bank facilities in the nature of bank
overdraft facility, cash credit facility and short-term borrowings to fund its ongoing working capital
requirements and growth needs. The Company believes that the working capital met by short term
borrowings is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived. The
Company closely monitors its liquidity position and maintains adequate source of funding.
Exposure to liquidity risk
The table below details the Company’s remaining contractual maturity for its non-derivative financial
liabilities. The contractual cash flows reflect the undiscounted cash flows of financial liabilities based on the
earliest date on which the Company can be required to pay.
61 Capital management
For the purpose of the Company’s capital management, capital includes issued equity capital, share
premium and all other equity reserves attributable to the equity holders of the Company. The primary
objective of the Company’s capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic
conditions, annual operating plans and long term and other strategic investment plans. In order to maintain
or adjust its capital structure, the Company may adjust the amount of dividends paid, return the capital to
shareholders, issue new shares or adjust its short term borrowings. The current capital structure of the
Company is equity based backed with short term borrowings.
63 Significant Change in above Rations :
The company has undertaken several cost cutting measures, to further cut down expenses and reduce
losses. Company believes that it will be able to recover from losses in the next succeeding years once the
market stabilises. Accordingly, the accompanying Company’s financial statements have been prepared
assuming that the Company will continue as a going concern which contemplates the realization of assets
and the settlement of liabilities in the normal course of business.. Accordingly, the financial statement has
been prepared on a going concern basis.
for and on behalf of the board of directors of
Spice Islands Industries Limited
(Previously Known as Spice Islands Apparels Limited)
Sd/- Sd/-
Shikha Bhura Sandeep Merchant
Chairman & MD Director
DIN :07799537 DIN :05210128
Sd/- Sd/-
Faraaz I Chapra Arti Lalwani
CFO & Director Company Secretary
Place : Mumbai Place : Mumbai Place : Mumbai
Date : 28th May, 2024 Date : 28th May, 2024 Date : 28th May, 2024
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