a) The Company has no restriction on the realisability of its investment property and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.
b) The entity is under no contractual obligation to purchase, construct, or develop investment property for repairs, maintenance or enhancements.
c) The investment property is industrial Land and building located at Adinath Textiles, village Bholapur, Ludhiana with a total area of45,435 square yards, out of which 10958.44 sqaure yards is currently leased to multiple tenants"].
d) The Company is unable to measure the fair value of the investment property reliably due to the following reasons:
a) The market for comparable properties is inactive. There are few recent transactions, price quotations are not current, and observed transaction prices indicate that the seller was forced to sell.
b) Alternative reliable measurements of fair value, such as those based on discounted cash flow projections, are not available due to high uncertainty and variability in the assumptions used.
Note: 1. Trade receivables are non interest bearing and are generally on credit terms of 30-45 days.
2. In determining the allowances for doubtful trade receivables, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables taking into account historical credit loss experience. The expected credit allowance is based on the ageing of the receivables that are due & there is significant uncertainty regarding their recoverability.
Rights, preferences and restrictions attached to equity
The company has one class of equity shares having a par value of Rs. 10/- each. Each holder of equity shares is entitled to one vote per share. 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.
(e) The company issued 2000 11% Non-cumulative Redeemable Preference Shares of Rs.100/- each fully paid up in the year 2011-12 & the same will be redeemed with in the period specified under section 55 of the Companies Act, 2013 from the date of allotment i.e. 31.10.2012 or earlier at the discretion of Board of Directors.
(f) Shares held by holding company or its ultimate holding company or subsidiaries or associates of the holding company or the ultimate holding company in aggregate.
There is no holding or ultimate holding company of the company.
Nature and purpose of reserves
(i) Capital Reserve
Capital Reserve amounting to Rs.12000/- was created on account of excess amount received on forfeiture of shares in the year 1989-1990
(ii) Securities Premium
Securities Premium is created on recording of premium on issue of shares. The reserve is utilised in accordance with the provisions of companies act, 2013.
(iii) Retained Earnings
The same is created out of profits/(loss) of the company over the years and shall be utilised as per the provisions of the act.
(iv) Equity Instruments through other comprehensive income
It represents the portion of equity on convertible preference shares issued by the company on as per the provisions of IND AS- 109.
26. Contingent Liabilities and Capital Commitments
The Company expect no outflow of cash related to contingent liabilities and capital commitments.
27. In accordance with Ind AS-36 on “Impairment of Assets” the Company has assessed as on the balance sheet date, whether there are any indications with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.
28. Earnings Per Share: The calculation of Earnings per Share as disclosed in the statement of Profit & Loss has been in accordance with Indian Accounting Standard (Ind AS)-33 on “Earning per Share” issued by the Institute of Chartered Accountants of India.
The expenses incurres on account of the above defined contribution plans have been included in note no. 21 "Employee Benefits Expenses" under the head "Contribution to provident and Other Funds"
The Company has a defined benefit plan for gratuity and leave encashments. The present value of obligation is determined based on the actuarial valuation using the Project unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measure each unit separately to build up the final obligation.
The Indian Accounting Standard (Ind AS-19) on "Employee Benefits" is being followed and the following table summarize the components of net benefit/expenses recognised in the Statement of Profit and Loss and the amount recognised in the balance sheet for the gratuity and Leaves with wages plan.
10. Description of Risk Exposure: Actuarial Valuation are based on assumptions which are dynamic in nature and vary over time. As such entity is exposed to various risks as follows
A. Salary Increase- Actual salary increases will increase the Plan’s liability. Increases in salary increase rate assumption in future valuations will also increase the liability.
B. Imputed Rate of Return (IROR)- Reduction in IROR in subsequent valuation can increase the plan’s liability
C. Withdrawals- Actual withdrawals proving higher or lower than that assumed and change of withdrawal rate at subsequent valuation can impact plan’s liability.
D. Mortality- Actual deaths proving lower or higher than assumed in the valuation can impact the liabilities.
31. Disclosure pursuant to Ind AS - 116 on 'Leases'
Operating leases: The Company has given factory building to different parties for which the period varies from 1 to 3 years under operating lease. The lease income received during the year is Rs. 1,10,30,259. Leases are renewed only on mutual consent and at a prevalent market price.
General description of the Lease agreement:
i) Lease aggrement can be terminated by either party by giving advance notice either by lesse or lessor.
ii) Lessee can not sublet the building further.
iii) Lease rent is subject to yearly increase by 10%.
33. The summarized position of Post-Employment benefits and long term employee benefits recognized in the Profit & Loss Account and Balance Sheet as required in accordance with Indian Accounting Standard (Ind AS 19) are as under:
(a) Post-Employment benefits
Defined Benefit Plans (Gratuity): During the year the company has recognized an expense of Rs. 313539 (Previous Year Rs. 289433) in the Statement of Profit and Loss. The outstanding liability recognized in Balance sheet as at year end is Rs.1746907/-
Defined Contribution Plans (Provident Fund): During the year the company has recognized an expense of Rs. 558002/- (Previous Year Rs. 532749) as contribution to Employee Provident Fund in the Statement of Profit and Loss.
(b) Long-term employee benefits (Leave Encashment): During the year the company has provided an expense of Rs. 271466/- (Previous Year Rs. 223493/-) in the Statement of Profit and Loss. The outstanding liability recognized in Balance sheet as at year end is Rs. 872958/-.
34. The balances of Trade Receivables, Loan and Advances, Deposits, Trade Advances and Trade Payables are subject to confirmation/reconciliation and subsequent adjustments, if any. The management has requested for the confirmation of balances & believes that no material adjustments would be required in books of account upon receipt of these confirmations.
35. In the opinion of the Board of Directors, the financial assets & other current assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated except as expressly stated otherwise.
36. Previous year amounts have been reclassified wherever necessary and conform to Ind AS presentation.
C Contract Liabilities
Contract liability relate to payment received in advance for performance under contract. Contract liabilities are recognized as revenue at the time of sale of goods. Contract liabilities includes Non current or current advances received from customers to deliver goods.
Revenue recognized in the current reporting period to carried forward contract liabilities:
Revenue recognized that was included in the contract liabilities balance at the beginning of the period JobWork F 0
E Performance obligation and remaining performance obligation
The performance obligation is satisfied upon the delivery of Goods and payment is generally due within 7 days to 60 days after delivery.
The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to
recognize these amounts in revenue. As on 31st March, 2025, there were no remaining performance obligation as the same is satisfied upon delivery of goods / services.
Credit Risk Management Credit Risk
Credit risk refers to the risk that the counter party will default on its contractual obligations resulting in financial loss to the company. Credit risk arises from financial assets such as cash and cash equivalents, loans, trade receivables, derivative financial instruments and financial guarantees. Credit risk has always been managed by the company 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. We monitor our exposure to credit risk on an ongoing basis at various levels. On account of adoption of Ind AS 109, the company uses expected credit loss model to assess the impairment loss or gain. Credit risk on cash and bank balances is negligible as the company generally invests in deposits with banks and financial institutions with high credit ratings assigned by credit rating agencies. Investments primarily include investment in equity instruments for long term period. The Company’s credit risk in case of all other financial instruments is negligible.
Trade receivables:
The Company has exposure to credit risk majorly from trade receivable balances on sale of yarn and Trading of unstitched Suitings, Shirtings & Dress Materials which are typically unsecured. The Company routinely assesses the financial strength of its customers and, as a consequence, believes that its trade receivable credit risk exposure is limited. The company also assesses the creditworthiness of the customers internally to whom goods are sold on credit terms in the normal course of business. The credit limit of each customer is defined in accordance with this assessment. The Company ensures concentration of credit does not significantly impair the financial assets since the customers to whom the exposure of credit is taken are well established and reputed industries engaged in their respective field of business. The management of the company regularly evaluates the individual customer receivables. This evaluation takes into consideration customer’s financial condition and credit history, as well as current economic conditions. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. The company regularly tracks the outstanding trade receivables and proper action is taken by the company for collection of overdue trade receivables.
The impairment analysis is performed on client to client basis for the debtors that are past due at the end of each reporting date. The company has considered an allowance for doubtful debts on the basis of lifetime expected credit loss model as per provision matrix in case of trade receivables that are past due but there has not been a significant change in the credit quality and the amounts are still considered recoverable& no writing off from books is required.
Capital risk management
The 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 maintain optimum capital structure to reduce cost of capital and to maximize the shareholder value. The Company’s objectives when managing capital is to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The director’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. In order to maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.
Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital plus net debt. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions and the requirements of the financial covenants which otherwise would permit the banks to immediately call loans and borrowings.
Since there are no interest bearing loans & borrowings from banks, therefore, there are no breaches in the financial covenants of interest-bearing loans and borrowings in the current year ended 31st March 2025.
No Changes were made in the objectives, policies or processes during the years ended 31st March 2025 and 31st March 2024.
38. Financial Risk Management
The Company's principal financial liabilities comprises of loans and borrowings, trade and other payables, and other current liabilities. The main purpose of these financial liabilities is to raise finance for the Company's operations. The Company has loans and receivables, trade and other receivables, cash and short-term deposits that arise directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks and that advises on financial risks and the appropriate financial risk governance framework for the Company. There has been no change to the company’s exposure to the financial risks or the manner in which it manages and measures the risk. The company has not framed formal risk management policies; however, the risks are monitored by management on a continuous basis. The company does not enter into or trade in financial instruments, investment in securities, including derivative financial instruments, for speculative or risk management purposes.
This note explains the risks which the company is exposed to and policies and framework adopted by the company to manage these risks:
Market Risk: Market risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: interest rate risk, currency risk and other price risk, such as investment/ equity risk. Financial instruments affected by market risk include loans & borrowings.
(a) Foreign Currency Risk Management:
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company doesn’t operate internationally & didn’t undertook any transactions denominated in foreign currencies during the reporting period & previous year. Hence, exposures to exchange rate fluctuations didn’t arise.
(b) Interest Rate Risk
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’s exposure to the risk of changes in market interest rates does not arise due to non existence of any debt obligations with floating interest rates. The company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates. As the Company has no significant interest-bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.
(c) Other Price Risk
The company is exposed to equity price risk arising from equity investments. The company manages equity price risk by monitoring liquidity positions of such investments in short & long term periods. The company does not actively trade equity investments. Equity investments are mainly held for strategic rather than trading purposes.
(c.1) Equity price sensitivity analysis
The sensitivity analysis below has been determined based on exposure to equity price risks at the end of reporting period.
If Fair Value per share had been 1% higher/Lower, the profit for the year would have increased/decreased by /- 0.49 lakhs (Previous Year: increased/decreased by 0.49 lakhs ) as a result of the changes in fair value of equity shares.
Liquidity risk management
Liquidity risk refers to the probability of loss arising from a situation where there will not be enough cash and/or cash equivalents to meet the needs of depositors and borrowers, sale of liquid assets will yield less than their fair value and illiquid assets will not be sold at the desired time due to lack of buyers. The primary objective of liquidity management is to provide for sufficient cash and cash equivalents at all times and any place in the world to enable us to meet our payment obligations. The financial liabilities of the company include loans and borrowings, trade and other payables. The company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The company monitors its risk of shortage of funds to meet the financial liabilities using a liquidity planning tool. The company plans to maintain sufficient cash and marketable securities to meet the obligations as and when fall due. Currently the company is servicing all its obligations whether in case of borrowings or statutory dues payable to various authorities.
The company manages liquidity risk by maintaining adequate reserves, continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
Ultimate responsibility for liquidity risk management rest with the management which has built an appropriate liquidity risk management framework for the management of the company’s short, medium and long term funding and liquidity management requirements.
41. Other Disclosures
Forming the Part of Financial Statements for the Year Ended March 31,2025
(i) Details of title deeds of immovable property not held in name of the Company: Nil
(ii) 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.
(iii) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(iv) The Company is not declared a wilful defaulter by any bank or financial institution or any other lender.
(v) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(vi) There are no funds which have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (“Intermediaries”).
(vii) 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 on behalf of the Ultimate Beneficiaries.
(viii) There are no funds which have been received by the Company from any persons or entities, including foreign entities (“Funding Parties”), 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.
(ix) 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).
(x) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
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