z) Provisions, Contingent Liabilities and Contingent Assets
^ Provisions
Provisions are recognized when there is a present obligation (legal or constructive) as a result of
a past event and it is 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.
> Contingent Liabilities
Contingent liability is a possible obligation arising from past events and 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 but is not recognized because it is not possible that an outflow of resources embodying
economic benefit will be required to settle the obligations or reliable estimate of the amount of
the obligations cannot be made. The Company discloses the existence of contingent liabilities in
Other Notes to Financial Statements.
^ Contingent Assets: Contingent assets usually arise from unplanned or other unexpected events
that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not
recognized though are disclosed, where an inflow of economic benefits is probable.
aa) Intangible Assets:
^ Recognition and Measurement
Intangible asset are stated at cost on initial recognition and subsequently measured at cost less
accumulated amortization and accumulated impairment loss, if any.
^ Amortization
1. Software’s are amortized over a period of three years.
2. The amortization period and the amortization method are reviewed at least at the end
of each financial year. If the expected useful life of the assets is significantly different
from previous estimates, the amortization period is changed accordingly.
bb) 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 Company has identified one reportable segment “Knitted Socks” based on the
information reviewed by the CODM.
cc) Significant Judgments and Key Sources of Estimation in Applying Accounting Policies
Estimates and judgments are continually evaluated. They are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the Company and
that are believed to be reasonable under the circumstances. Information about Significant judgements
and Key sources of estimation made in applying accounting policies that have the most significant
effects on the amounts recognized in the financial statements is included in the following notes:
^Recognition of Deferred Tax Assets: The extent to which deferred tax assets can be recognized
is based on an assessment of the probability of the Company’s future taxable income against which
the deferred tax assets can be utilized. In addition, significant judgement is required in assessing the
impact of any legal or economic limits.
^ Classification of Leases: The Company enters into leasing arrangements for various assets. The
classification of the leasing arrangement as a finance lease or operating lease is based on an
assessment of several factors, including, but not limited to, transfer of ownership of leased asset at
end of lease term, lessee’s option to purchase and estimated certainty of exercise of such option,
proportion of lease term to the asset’s economic life, proportion of present value of minimum lease
payments to fair value of leased asset and extent of specialized nature of the leased asset.
> Defined Benefit Obligation (DBO):
Employee benefit obligations are measured on the basis of actuarial assumptions which
include mortality and withdrawal rates as well as assumptions concerning future
developments in discount rates, medical cost trends, anticipation of future salary increases
and the inflation rate. The Company considers that the assumptions used to measure its
obligations are appropriate. However, any changes in these assumptions may have a material
impact on the resulting calculations.
^ Provisions and Contingencies:
The assessments undertaken in recognising provisions and contingencies have been made in
accordance with Indian Accounting Standards (Ind AS) 37, ‘Provisions, Contingent Liabilities and
Contingent Assets’. The evaluation of the likelihood of the contingent events is applied best
judgement by management regarding the probability of exposure to potential loss.
^ Impairment of Financial Assets:
The Company reviews its carrying value of investments carried at amortized cost annually, or more
frequently when there is indication of impairment. If recoverable amount is less than its carrying
amount, the impairment loss is accounted for.
> Allowances for Doubtful Debts:
The Company makes allowances for doubtful debts through appropriate estimations of
irrecoverable amount. The identification of doubtful debts requires use of judgment and estimates.
Where the expectation is different from the original estimate, such difference will impact the
carrying value of the trade and other receivables and doubtful debts expenses in the period in which
such estimate has been changed.
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot
be measured based on quoted prices in active markets, their fair value is measured using valuation
techniques including the Discounted Cash Flow model. The input to these models are taken from
observable markets where possible, but where this not feasible, a degree of judgement is required
in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit
risk and volatility.
39 Some of the sundry debtors, sundry creditors and loans & advances are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given
effect into the books of accounts in the year of such adjustment.
40 In the opinion of the Board, the Current Assets, Loans & Advances are approximately of the value stated and are realizable in the ordinary course of business
41 The items of inventories are measured at lower of cost or net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost
of conversion and other costs incurred in bringing them to their respective present location and condition. Raw material comprises of Yarn and packing material at cost,
Wastage is valued at net realizable value. Cost of Raw material, finished goods, Spare and Consumables are determined on First in First out basis. (FIFO)
44 a) Insurance claim of Rs. 89.35 Lacs alongwith interest theron upto date of settlement is filed by the company on account of fire occurred at the Company's Godown at
Aliyali - Palghar, Maharashtra on 26 th August, 2008 damaging complete Building and Stock in hand and the same is still pending with the insurance company. The
Company has filled a case against the insurance company in the National Consumer Court, New Delhi. The case is under hearing as on March 31, 2025.
b) The Company had filied an Appeal before Income Tax Appellate Tribunal, Mumbai against Income Tax Demand of Rs. 74,46,117/- for A.Y. 2005-06 and A.Y. 2006-07
against which an amount of Rs. 28,61,057/-had been paid by the Company in 2012. The said ITAT appeal has been decided in favor of company vide consolidated ITAT
Appeal order dated 15/09/2016 and refund of Rs. 32,81,628/- received in May'2022. Interest on the said amount is short received, and Company has filed a appeal with CP
Gram for recovery of said amount - Rs. 23,36,863/-, which is outstanding as on 31.3.25.
45 The Company has to fulfil export obligations under EPCG licence granted to the same on conversion from EOU status to DTA status. Since the Machineries required for
completion of the said obligation had been destroyed in fire in Dec' 2004, the Company has taken up the matter with the relevant authorities for cancellation of the said
Licence. The matter is still pending with relevant Authority as on March 31, 2025.
^Remuneration is being disclosed based on actual payment made on retirement/resignation of services, but does not includes provision made on actuarial basis as the same
is available for all the employees together.
Note: Related party relationship is as identified by the Company and relied upon by the Auditors
48 Segment Reporting
Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the Chief Operating
Decision Maker, in deciding how to allocate resources and assessing performance. Operating segments are reported in a manner consistent with the internal reporting
provided to the chief operating decision maker. Based on the management approach as defined in Ind AS 108, the Chief Operating Decision Maker evaluates the Company’s
performance based on only one segment i.e. Knitted Socks
49 During the FY 24-25, the Company has 2 customers doing individual business of 10% or more of the revenue and such customers accounted for
53.20% of revenue (FY 23-24, the Company had 1 such customers accounting for 47.66°% of revenue)
50 Other Statutory Information
a) Disclosure of transactions with Struck off companies - NIL
b) Title deeds of Immovable Property not held in name of the Company - NIL
c) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
d) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
e) The Company is not declared wilful defaulter by any bank or financials institution or lender during the year.
f) The Company does not have any charges which is yet to be registered with ROC beyond the statutory period.
g) The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties (as defined under the Companies Act,
2013), either severally or jointly with any other person
h) 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.
i) 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.
j) 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).
k) Clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017 does not apply to the Company.
For M/s. A K Kochar & Associates For and behalf of the Board of Director
Chartered Accountants
(CA Abhilash Darda) Sanjay S. Gadodia Danny F. Haosotia
Partner (Chairman) (Managing Director)
Membership No.: 423896 DIN - 00203433 DIN - 00203497
Firm Registration No. 120410W
Place :- Mumbai Place :- Palghar Priti Shukla
Date : 26th May, 2025 Date : 26th May, 2025 (Company Secretary)
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