2.21 Provisions and Contingent Liabilities:
Provisions: Provisions are recognized when there is a present legal or constructive obligation as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation
and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the
expenditure required to settle the present obligation at the Balance sheet date and are not discounted to its present
value.These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
Contingent Liabilities:
Contingent liabilities is a possible obligation in the normal course of business arising from past events, the existence
of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly
within the control of the Company or a present obligation that arises from past events where it is either not probable
that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as
a contingent liability.
The Company does not recognise a contingent liability but discloses its existence in the financial statements.
2.22 Cash Flow Statement:
Cash flows are reported using the indirect method, whereby profit / loss before extraordinary items and tax for the period
is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash
receipts or payments. Cash flows from operating, investing and financing activities of the Company are segregated.
2.23 Cash and Cash equivalents Policy:
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three
months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value.
2.24 Earnings per Share:
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders
by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted
earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average
number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
2.25 Exceptional Items:
When an item of income or expense within profit or loss from ordinary is of such size, nature or incidence that their
disclosure is relevant to explain the performance of the company for the year, the nature and amount of such items is
disclosed as exceptional items.
(e) There are nil number of shares (Previous year Nil) reserved for issue under option and contracts or commitments
for the sale of shares or disinvestment.
(f) There are no issue of shares allotted as fully paid up shares pursuant to contract(s) without payment being received
in cash or buy back or bonus shares in the preceding five years.
(g) There are Nil number of shares (Previous year Nil) in respect of each class in the Company held by its holding
company or its ultimate holding company including shares held by or by subsidiary or associates of the holding
company or the ultimate holding company in aggregate.
(h) During the year ended 31.03.2025 and in the previous year, no securities convertible into Equity/Preferential shares.
(i) During the year ended 31.03.2025 and in the previous year, there are no calls unpaid including calls unpaid by
Directors and officers as on balance sheet date.
(j) Shares held by promoters at the end of the year
Working Capital facilities:
Working Capital Loans from Banks were secured by pari passu first charge by way of hypothecation of current
assets, and further secured by way of first charge on all immovable assets, both present and future and on all
movable assets of the company (excluding assets purchased on hire purchase basis), ranking pari passu interse
and also guaranteed by Chairman & Managing Director, a Director and one promoter of the Company.
Average rate of interest rate is (Pervious year 13.64% p.a)
Loan from Director and relatives of Directors:
As per the borrowal terms, the Company has the right to repay the amount fully or partly in case it does not require
the same to meet its working capital requirements. The Company proposes that repayment will be on long term
basis and hence classified as long term borrowings.
Rate of interest at 11.50% p.a. (Previous year 11.50% p.a.)
Loan from Corporates:
Loan from corporates are repayable on demand carrying interest rate ranging from 6.75% p.a. to 16.00% p.a.
(Previous year ranging from 6.75% to 16.00%)
Short Term Loan from Related parties:
Short Term Loan from related parties are repayable on demand Interest rate 7.00% (Previous year @ 7.00 %)
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 the completion of 5 years of continuous employment), death, incapacitation or termination of
the employment 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 Corporation of India, which is basically
a year-on-year cash accumulation plan. Though the Company has not fully funded to group gratuity policy fund of
LIC, adequate provision has been made in the books of accounts. As part of the scheme the interest rate is declared
on yearly basis and is guaranteed for a period of one year. The insurance company, as part of the policy rules, makes
payment of all gratuity settlements during the year subject to sufficiency of funds under the policy.
Notes:
(i) The related parties have been identified by the Management and relied upon by the auditors.
(ii) No amount has been provided for/written off/written back, pertaining to related parties.
26 Contingent liabilities and commitments
Contingent liabilities :
The Deputy Commissioner of SGST department, Aluva issue combined show cause notice for the years 2020-21 &
2021-22 proposing tax demand of ' 66.06 lac for short payment of RCM and excess utilisation of Input Tax credit.
Company had filed an appeal against this order to the appellate authority.
Commitments - Nil
27 Company's cotton yarn manufacturing operations from its Aluva, Kerala Plant was permanently stopped wef. 13.6.2022
on account of unsustainable wages, paucity of working capital and steep increase in cotton prices, which resulted in
lower capacity utilisation and making the operations unviable. Also the Company has fully repaid bank dues during the
year and closed bank facilities/accounts. In view of this, various financial risks (Credit Risk, Liquidity Risk, Interest Rate
Risk, Capital Risk) were not disclosed.
28 Pursuant to Revised MOU entered with a corporate buyer, out of total 28.14 acres of landed property, the Company
has sold 16.39 acres by 31.03.2025 for a sale consideration of ' 59.99 Cr. and agreement for sale of another 9.33 acres
was entered during March 2025. Company has received an amount of ' 27.15 Cr against advances as well as sales
proceeds during the first quarter 2025-26.
Indian Textiles Industry demand scenario is showing signs of improvement with recent US Tariff advantage, Various
Government initiatives (Finalisation of FTA with major markets like UK, EU etc., higher budgetary allocation for FY
2025-26 for Textiles sector, enhanced credit access, export promotion measures and the creation of the Bharat Trade
Net digital platform which will streamline trade documentation, facilitate smoother global integration and ease market
access for small and medium textile enterprises.
After sale of balance Land and with surplus funds as would be available, the Company intends to carry on outsourcing
of cotton yarn manufacturing / trading in cotton yarn or any other business as permitted in the objects clause of the
Memorandum of Association, for better prospects of the Company.
As per MOU entered with the Promoter directors, an amount of ' 14.58 Cr advanced to Patspin India Ltd by the
Company was adjusted against outstanding unsecured loan from the Promoter directors as at 31.3.2025. As a result,
Liabilities in the books of the Company gets reduced to that extent as at 31.03.2025
29 Company's cotton yarn manufacturing operations from its Aluva, Kerala Plant was permanently stopped wef. 13.6.2022
on account of unsustainable wages, paucity of working capital and steep increase in cotton prices, which resulted in
lower capacity utilisation and making the operations unviable. In view of this, Deferred Tax Asset for the current financial
year was not recognized and Deferred Tax Liability was re-assessed and reversed the excess provision of ' 16.77 lac
during the Financial year 2024-25.
31 Other Statutory Information
a) All title deeds of immovable property are held in the name of the Company and the Company does not have any
immovable property without Title in its name.
b) Since there is no addition / deletion in Capital Work in Progress (CWIP) and Intangible assets during the year and
hence disclosures regarding these items were not made.
c) Disclosure on PPE & Intangible Assets
(1) There is no restriction on the title of Property, Plant and Equipment and Property, which was mortgaged to
Lenders for the credit facilities sanctioned to Company.
(2) Company has not constructed any item in Property, Plant & equipment.
(3) Company has no contractual commitments for the acquisition of Property, Plant & Equipment.
(4) Company has no Impairment loss during the year for Property, Plant & Equipment.
(5) Company has not revalued any items of Property, Plant & Equipment during the Year
(6) Carrying amount of Property, Plant & Equipment are retired from active use and held for disposal.
(7) The existence and carrying amounts of intangible assets whose title is not restricted and the carrying amounts
of intangible assets are not pledged as security for liabilities.
d) Company does not hold any benami property and no proceedings were initiated or pending against the company
under the Benami Transactions (Prohibition) Act, 1988 and Rules thereon.
e) The Company is not a declared wilful defaulter by any bank or financial institution or other lenders.
f) The Company has not entered into any transactions with companies struck off under section 248 of the Companies
Act, 2013 or section 560 of Companies Act, 1956.
g) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
h) The Company has complied with the number of layers prescribed under clause(87) of section 2 of the Act read with
Companies ( Restriction on number of Layers) Rules, 2017.
i) Utilisation of Borrowed funds and Security Premium:
A. The Company has not advanced or loaned to or invested funds (either borrowed funds or share premium or any
other sources or kind of funds) to any other person(s) or entity (ies), 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.
B. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding 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 on behalf of the Ultimate Beneficiaries.
j) There were no transactions relating to previously unrecorded income that have been surrendered and disclosed
as income during the year in the tax assessments under the Income Tax Act, 1961
k) Company shall not be required to comply with Corporate Social Responsibility (CSR) as provisions of section 135
of the Companies Act, 2013 is not applicable.
l) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
32 Previous year's figures have been regrouped/reclassified wherever necessary to confirm the current year's presentation.
Signature to Note 1 to 32
As per our report of even date attached For and on behalf of the Board of Directors
For L. U. KRISHNAN & Co. B. K. PATODIA UMANG PATODIA
Chartered Accountants Chairman & Managing Director Director
(ICAI FRN 001527S) DIN: 00003516 DIN: 00003588
Place : Mumbai
Date : 30th May 2025
P. K. MANOJ E.K.BALAKRISHNAN ACHUTHAN M
Partner Vice President (Corporate Affairs) Chief Financial Officer
(M. No. 207550) & Company Secretary
Place : Chennai Place : Kochi Place : Kochi
Date : 30th May 2025 Date : 30th May 2025 Date : 30th May 2025
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