27.17. Provisions, Contingent liabilities and Contingent Assets:
Provisions are recognised when the Company has a present obligation (legal or constructive) 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 a reliable estimate can be made of the amount of the obligation.
Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability. The Company does not recognise a contingent liability but discloses its existence in the standalone financial statements.
Contingent asset is not recognised in standalone financial statements since this may result in therecognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognized.
The Company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Company finances its operations by a combination of retained profit and bank borrowings. The Company monitors the capital structure on the basis of total debt to equity and maturity profile of the overall debt portfolio of the Company.
The Company is engaged mainly in the manufacture of yarn. The Company owns fifteen wind mills which were installed mainly for captive utilization of power generated with power cost of yarn production. The following is the power generated from these wind mills which is adjusted with the power cost of the yarn division and processing division.
b) The Company does not have any transactions with companies struck off.
c) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
d) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.
e) No funds 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”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:
- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Company or
- provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
f) No funds 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:
- directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Funding Party or
- provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.
g) 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).
h) The Company has not have been declared as wilful defaulters by any bank or financial institution or government or any government authority.
i) The Company has complied with the number of layers prescribed under the Companies Act, 2013.
j) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
k) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.
l) The Company has borrowings from banks on the basis of security of current assets and the quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of accounts.
27.34. Previous year figures have been regrouped and reclassified wherever necessary to conform to current year's classification.
As per my report of even date On behalf of the Board of Directors
For V.NARAYANASWAMI & CO., R. PREMCHANDER R.JAICHANDER
FRN NO.027417S Managing Director Joint Managing Director
Proprietor DIN : 00390795 DIN : 00390836
V.NARAYANASWAMI, M.A., F.C.A.
Chartered Accountant Member ship No.023661 Place : Tirupur
Date : 29/05/2024
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