Note 9.4
The general credit period in respective on Domestic and Export sale ranges between 30-90 days and by and large company is not charging any interest on late payment.
Note 9.5
Credit risk is managed at the operational segmental level. The credit limit and credit period are fixed for each customer after evaluating the financial position, past performance, business opportunities, credit references etc. The credit limit and the credit period are reviewed regularly at periodical intervals.
Note 9.6
Concentration risk considers significant exposures relating to industry, counterparty, geography, currency etc. The concentration of credit risk is not significant as the customer base is large and diversified.
Note 13.1
Terms/right attached to Equity Shares:
The company has only one class of shares referred to as Equity shares having face value of H 10/-. Each Holder of equity share 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. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholder.
The Company declares and pays dividends in Indian Rupees. The Dividend proposed by the Board of Director is subject to the approval of the shareholders in the ensuing Annual General Meeting.
(a) Dues to Micro and Small enterprises have been determined to the extent such parties have been identified on the basis of the information collected by the Management and the same has been relied by the auditor.
Disclosure of payable to vendors as defined under the "Micro, Small and Medium Enterprise Development Act, 2006” is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Company and the same has been relied by the Auditor.
Note 35.2 Fair Value Hierarchy
Level 1 : Quoted prices (unadjusted) in active markets for identical assets and 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 and liabilities that are not based on observable market data (unobservable inputs)
Note 35.2.1 Investment in equity shares quoted on recognised stock exchanges
The fair value of investment in equity shares is based on quoted price.
Note 35.2.2 Investment in unqouted preference shares
The fair value of unquoted preference shares has been determined using Level 3 inputs based on Discounted Cash Flow method. A one percentage point change in the unobservable inputs used in fair valuation of Level 3 does not have a significant impact on its value. The movement in unquoted investments is on account of sale of shares during the comparative period (Refer Note 5).
Note 35.2.3 Transfers between levels of fair value hierarchy
There have been no transfers between levels of fair value heirarchy during the year ended 31st March, 2024 and during the comparative period ended 31st March, 2023.
Note 35.2.4 Valuation Process
The finance department of the company includes a team that performs the valuations of financial assests and liabilities required for financial reporting purposes, including level 3 fair values. The fair valuation of level 1 and level 2 classified assests and
liabilities are readily available from the qouted prices in the open market and rates available in secondary market respectively.
The valuation method applied for various Financial assests and liabilities are as follows-
1. Quoted price in the primary market cosidered for the fair valuation of the non-current investment. Gain/ (loss) on fair valuation is recognised in profit and loss.
2. The carrying amount of trade receivable, trade payable, cash and bank balances, short term loans and advances, statutory/ receivable, short term borrowing, employee dues are considered to be the same as their fair value due to their short-term nature.
Note 35.3
Financial Risk Management
The company is exposed to market risk, credit risk and liquidity risk. The company's senior management oversees the management
of these risks. The Board of Directors review and agree policies for managing each of these risks, which are summarised below:
Note 35.3.1 Market Risk
Market risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate instrument because of changes
in market factors. Market risk comprises three type of risks:
a. Currency Risk
b. Interest Rate Risk
c. Price Risk
The company is exposed to currency risk and price risk. The same are analysed below:
a. Currency Risk
The company is exposed to foreign exchange risk arising from foreign currency borrowing denominated in US dollars (US$) and foreign currency notes denominated in various foreign currencies. The company also imports certain material which are denominated in US$ which exposes it to foreign currency risks. If the value of the Indian Rupee depreciates relative to these foreign currencies, the related costs may increase. The exchange rates between the Indian Rupee and US$ has changed substantially in recent periods and may continue to fluctuate substantially in the future. In order to mitigate the foreign Currency exposure risk , as on 31st March, 2024, the company has entered into derivative contract of H Nil Lakhs (31st March, 2023 H Nil Lakhs) to hedge exposure to fluctuation risk. The below sensitivity does not include the impact of foreign currency forward contracts which largly mitigate the risk:
For each of the years ended 31st March, 2024 and 31st March 2023, every percentage point depreciation / appreciation in the exchange rate between the Indian rupee and U. S. Dollars, has affected company's incremental operating margins by approximately 0.13% & 3.57% respectively.
Sensitivity analysis is computed based on the changes in the income and expenses in foreign currency upon conversion into functional currency, due to exchange rate fluctuations between the previous reporting period and the current reporting period.
b. Price Risk
The company's exposure to price risk arises from investments in equity shares of other companies (Refer Note 5 and 35.1). The company has not undertaken any risk mitigation measures to reduce the price risk. The table below summarises the impact of increases / decreases of share price of the investments and profit for the period. The analysis is based on the assumption that the market price of those investments in equity shares of other companies move by 5% point on either side with all other variables held constant.
c. Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company's position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.
According to the Company interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates.
Note 35.3.2 Liquidity Risk
Liquidity risk is the risk that the company would not be able to meet its financial obligations when they become due. The company is financed primarily by bank loans, loans from directors, and other operating cash flows. The company has undrawn borrowing facilities to the extent of J 6145.15 Lakhs as on 31st March, 2024 (as on 31st March,2023 H 314.89 Lakhs).
Note 35.3.3 Credit Risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The Company maintains its cash and cash equivalents and bank deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their credit-worthiness on an on-going basis.
The maximum exposure to credit risk at the reporting date is primarily from trade receivables. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
On account of the adoption of Ind AS 109, the Company uses ECL model to assess the impairment loss or gain. The Company uses a provision matrix to compute the ECL allowance for trade receivables and unbilled revenues. The provision matrix takes into account available external and internal credit risk factors and the Company's experience for customers.
The Company reviews trade receivables on periodic basis and makes provision for doubtful debts if collection is doubtful. The Company also calculates the expected credit loss (ECL) for non-collection of receivables. The Company makes additional provision if the ECL amount is higher than the provision made for doubtful debts. In case the ECL amount is lower than the provision made for doubtful debts, the Company retains the provision made for doubtful debts without any adjustment.
The company has assessed that credit risk on other Financial Asset, the same is insignificant based on the empirical data. Credit risk from balances with banks and financial institutions is managed by the Company's treasury department in accordance with the Company's assessment of credit risk about particular financial institution. None of the Company's cash equivalents, including term deposits (i.e., certificates of deposit) with banks, were past due or impaired as at each balance sheet date.
Note 37
Capital Management Disclosures
Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern in order to provide return to shareholders and benefits to other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
Company manages the capital structure and makes the adjustment to it in the light of changes in economic conditions and risk characteristics of the underlying assets. The company monitors capital on the gearing ratio basis.This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (Non-Current borrowing and current borrowings) less cash and cash equivalents. Total capital is calculated as total shareholder's equity.
Note 39
Details Of Hedged And Unhedged Exposure in Foreign Currency Denominated Monetary Items
a Exposure in foreign currency - Hedged
The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.
Note 41
Segment Reporting
The Company is considered to be engaged in Textile Industry with all activity revolving around this business and accordingly the company has only one reportable business segment in accordance with the requirement of Ind AS 108- Operating Segment.
Note 45
On periodical basis and as and when required, the Company reviews the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss have been provided in the Financial Year 2023-24 (PY. H Nil Lakhs)
Note: Asset pledge as security includes the Securities hypothecated with the bank for current and non-current borrowing
by the company.
Note 48 - Additional Regualtory Information (Non Ind AS)
The disclosures required by amendment to Division II of Schedule III of the Companies Act, 2013, are given only to the extent applicable:
(i) During the year no proceedings has been initiated or pending against the Company for holding any Benami Property under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and the rules made thereunder.
(ii) Company has not carried our any revaluation in respect of Property, Plant & Equipments and intangible Asset, hence during the year there has been no change of 10% or more in the aggregate of the Net Carrying value of Assets on account of revaluation of Assets in respect of Property, Plant & Equipments and intangible assets.
(iii) There are no intangible assets under development in the Company during the current reporting period.
(iv) The borrowing taken by the company from the banks has been used for the specific purpose for which it was taken.
(v) The company has not been declared as willful defaulter by any bank or financial institution or other lender in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.
(vi) Details in respect of difference in respect of Current Assets as per Books and details as provided in quarterly returns filed by the company, the details of the same are as under:
(viii) During the year under consideration the company has not traded or invested in crypto currency or virtual currency.
(ix) There are no transactions that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 which have not been recorded in the books of account.
(x) The Company does not have any transctions or relationships with any companies struck off under section 248 of the Companies Act, 2013.
Note 49
The Income Tax Department had carried out the search at the company's business premises from July 20,2022 to July 26, 2022. The assessments for the period covered by search are pending for some of the years. The management of the Company does not expect any material additional liability as a result of the search and hence no provision for the additional income tax liability has been made by the Company.
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