A Oneindia Venture
Click it and Unblock the Notifications
Accounting Policies of Shahlon Silk Industries Ltd. Company
Mar 31, 2025
II) MATERIAL SIGNIFICANT ACCOUNTING POLICIES:
The significant accounting policies applied by the
Company in the preparation of its financial statements
are listed below. Such accounting policies have been
applied consistently to all the periods presented in
these financial statements.
(A) BASIS OF PREPARATION OF FINANCIAL
STATEMENTS:
(I) Compliance with Ind AS
The Financial statements are prepared in
accordance with Indian Accounting Standards
(Ind AS) prescribed under Section 133 of the
Companies Act, 2013 read with the
Companies (Indian Accounting Standards)
Rules, 2015 as amended from time to time,
the provisions of the Companies Act, 2013
("the Act") as applicable and guidelines issued
by the Securities and Exchange Board of India
("SEBI").
The accounting policies have been
consistently applied except where a newly
issued accounting standard is initially
adopted or a revision to an existing
accounting standard requires a change in the
accounting policy hitherto in use.
The Financial Statements were approved and
authorized for issue in accordance with the
resolution of the Company''s Board of
Directors on 27th May, 2025.
(ii) Historical cost convention
These financial statements have been
prepared on a historical cost convention
basis, except for the following material items
which have been measured at fair value as
required by relevant Ind AS;
⢠The defined benefit asset (liability) is as
the present value of defined benefit
obligation less fair value of plan assets
and
⢠Financial instruments classified as fair
value through other comprehensive
income.
(iii) Current and non-current classification
The Company presents assets and liabilities in
the balance sheet based on current/ non¬
current classification.
An asset is treated as current when it is:
⢠Expected to be realised or intended to be
sold or consumed in normal operating
cycle
⢠Held primarily for the purpose of trading
⢠Expected to be realised within twelve
months after the reporting period, or
⢠Cash or cash equivalent unless restricted
from being exchanged or used to settle a
liability for at least twelve months after
the reporting period.
All other assets are classified as non-current.
A liability is current when:
⢠It is expected to be settled in normal
operating cycle
⢠It is held primarily for the purpose of
trading
⢠It is due to be settled within twelve
months after the reporting period, or
⢠There is no unconditional right to defer
the settlement of the liability for at least
twelve months after the reporting period.
All other liabilities are classified as non¬
current.
Deferred tax assets and liabilities are
classified as non-current assets and liabilities.
The operating cycle is the time between the
acquisition of assets for processing and their
realization in cash and cash equivalents.
Based on the nature of products / services and
time between acquisition of assets for
processing / rendering of services and their
realization in cash and cash equivalents,
operating cycle is less than 12 months.
However, for the purpose of current/non-
current classification of assets & liabilities
period of 12 months has been considered as
normal operating cycle.
(iv) Rounding of amounts
All amounts disclosed in the financial
statements and notes have been rounded off
to the nearest rupee - lakhs upto two
decimals as per the requirement of Schedule
III except number of shares and per share
data, unless otherwise stated.
(v) Use of estimates and judgment
The preparation of the financial statements in
conformity with Ind AS requires the
Management to make estimates, judgements
and assumptions. These estimates,
judgements and assumptions affect the
application of accounting policies and the
reported amounts of assets and liabilities, the
disclosures of contingent assets and liabilities
at the date of the financial statements and
reported amounts of revenues and expenses
during the period. Accounting estimates could
change from period to period. Actual results
could differ from those estimates.
Appropriate changes in estimates are made
as the Management becomes aware of
changes in circumstances surrounding the
estimates. Changes in estimates are reflected
in the financial statements in the period in
which changes are made and, if material, their
effects are disclosed in the notes to the
financial statements.
In particular, information about significant
areas of estimation, uncertainty and critical
judgment in applying accounting policies that
have the most significant effect on the
amounts recognized in financial statements
are included in the following notes:
⢠Useful lives of Property, plant and
equipment
⢠Measurement of defined benefit
obligations
⢠Provision for inventories
⢠Measurement and likelihood of
occurrence of provisions and
contingencies
⢠Deferred taxes
(B) Inventories: [Ind AS 2]
Inventories are assets:
⢠Held for sale in the ordinary course of
business
⢠In the process of production for such sale
⢠In the form of materials or supplies to be
consumed in the production process or in the
rendering of services.
Measurement of Inventory
Inventories consist of raw materials, stores &
spares, work-in-progress, finished goods, Stock-in¬
trade are stated ''at lower of cost and net realizable
value'' except for raw materials and traded goods
which is valued at cost.
Cost of Inventories
Cost comprises of all cost of purchase, cost of
conversion and other costs incurred in bringing
the inventories to their present location and
condition. Cost formula/ method for valuation
used is ''Weighted Average cost''. Due allowance is
estimated and made for defective and obsolete
items, wherever necessary.
Net Realisable Value
Net Realizable Value (NRV) is the estimated selling
price in the ordinary course of business less the
estimated costs of completion and the estimated
costs necessary to make the sale. Estimate of net
realizable value must be based on the most
reliable evidence available and take into account
fluctuations of price or cost after the end of the
period, if this is evidence of conditions existing at
the end of the period.
The Cost and net realizable value has been
compared for each separately identifiable item of
inventory, or group of similar inventories, rather
than for inventory in total.
(C) Cash flow statement [Ind AS 7]
Cash flows are reported using the Indirect Method,
as set out in Ind AS 7 ''Statement of Cash Flow'',
whereby profit/loss for the year is adjusted for the
effects of transaction of non-cash nature, any
deferrals or accruals of past or future operating
cash receipts or payments and item of income or
expenses associated with investing or financing
cash flows. The cash flows from operating,
investing and financing activities of the Company
are segregated.
(D) Property, Plant and Equipment (PPE): [Ind AS
16]
Recognition and Measurement
Items of Property, plant and equipment acquired
or constructed are initially recognized at historical
cost net of recoverable taxes, duties, trade
discounts and rebates, less accumulated
depreciation and impairment loss, if any. Costs
directly attributable to acquisition are capitalized
until the property, plant and equipment are ready
for use, as intended by the Management.
The historical cost of Property, plant and
equipment comprises of its
⢠purchase price including import duties and
non-refundable purchase taxes,
⢠borrowing costs directly attributable to the
qualifying asset in accordance with
accounting policy on borrowing cost,
⢠the cost of dismantling, removing the item
and restoring the site on which it is located
and
⢠Adjustment arising for exchange rate
variations attributable to the assets, including
any cost directly attributable to bringing the
assets to their working condition for their
intended use.
Freehold land is carried at cost. The company has
taken certain land on lease for period of 99 year
and no amortization provided on these assets.
Subsequent Expenditure
Subsequent costs are included in the asset''s
carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that
future economic benefits associated with the item
will flow to the Company and the cost of the item
can be measured reliably. All other repairs and
maintenance are charged to the Statement of
Profit and Loss during the reporting period in
which they are incurred.
Advances paid towards the acquisition of PPE
outstanding at each Balance Sheet date is
classified as capital advances under ''Other non¬
current assets'' and cost of assets not put to use
before such date are disclosed under ''Capital
work-in progress''. The Company identifies and
determines cost of each component of the plant
and equipment separately, if the component/part
has a cost which is significant to the total cost of
the plant and equipment and has useful lives that
is materially different from that of the remaining
plant and equipment.
Machinery spares which meet the criteria of PPE is
capitalised and depreciated over the useful life of
the respective asset.
Depreciation methods, estimated useful lives
and residual values
Depreciation is provided on written down value
method based on the respective estimate of useful
lives.
Depreciation is provided based on useful life of the
assets as prescribed in Schedule II of the
Companies Act, 2013. Management believes that
useful lives of assets are same as those prescribed
in Schedule II to the Act.
Depreciation methods, useful lives and residual
values are reviewed periodically, including at each
financial year end, taking into account commercial
and technological obsolescence as well as normal
wear and tear and adjusted prospectively, if
appropriate.
Disposal
An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset. Any gain or loss arising
on the disposal or retirement of an item of
property, plant and equipment is determined as
the difference between the sales proceeds and the
carrying amount of the asset and is recognised in
Statement of Profit and Loss. The carrying amount
of any component accounted for as a separate
asset is derecognised when replaced.
(E) Income Taxes (Ind AS 12)
Current Income Tax
Current income tax assets and liabilities are
measured at the amount expected to be recovered
from or paid to the taxation authorities. Current
tax is based on the taxable profit for the year which
may differ from ''profit or loss before tax'' as
reported in the statement of profit and loss
because of items of income or expense that are
taxable or deductible in other years and items that
are never taxable or deductible. The tax rates and
tax laws used to compute the amount are those
that are enacted or substantively enacted, at the
reporting date. Current income tax relating to
items recognised outside profit or loss is
recognised outside profit or loss (either in other
comprehensive income or in equity). The
Company offsets tax assets and liabilities if and
only if it has a legally enforceable right to set off
current tax assets and current tax liabilities and
the current tax assets and current tax liabilities
relate to income taxes levied by the same tax
authority.
Deferred Tax
Deferred tax is recognised on temporary
differences between the carrying amounts of
assets and liabilities in the financial statements
and the corresponding tax bases used in the
computation of taxable income. Deferred tax
assets are generally recognised for all deductible
temporary differences, the carry forward of any
unused tax losses, to the extent that it is probable
that taxable profits will be available against which
those deductible temporary differences can be
utilised. Such deferred tax assets and liabilities are
not recognised if the temporary difference arises
from the initial recognition (other than in a
business combination) of assets and liabilities in a
transaction that affects neither the taxable profit
nor the accounting profit.
Deferred tax liabilities are recognised for all
taxable temporary differences, except: In respect
of taxable temporary differences associated with
investments in subsidiaries, associates and
interests in joint ventures, when the timing of the
reversal of the temporary differences can be
controlled and it is probable that the temporary
differences will not reverse in the foreseeable
future. The carrying amount of deferred tax assets
is reviewed at each reporting date and reduced to
the extent that it is no longer probable that
sufficient taxable profit will be available to allow all
or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed
at each reporting date and are recognised to the
extent that it has become probable that future
taxable profit will allow the deferred tax asset to be
recovered. Deferred tax assets and liabilities are
measured at the tax rates that are expected to
apply in the year when the asset is realised or the
liability is settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted
at the reporting date. Current and deferred tax are
recognised in profit or loss, except when they
relate to items that are recognised in other
comprehensive income or directly in equity, in
which case, the current and deferred tax are also
recognised in other comprehensive income or
directly in equity respectively. Deferred tax assets
and deferred tax liabilities are offset if a legally
enforceable right exists to set off current tax
assets against current tax liabilities and the
deferred taxes relate to the same taxable entity
and the same taxation authority. A deferred tax
liability is recognized based on the expected
manner of realization or settlement
(F) Revenue from Contracts with Customers: [Ind
AS 115]
> Revenue from contract with customer is
recognized when control of Goods or services
are transferred to the buyer as per the terms
of the contract; the entity retains neither
continuing managerial involvement nor
effective control over the goods sold; the
amount of revenue can be measured reliably;
it is probable that the economic benefits
associated with the transaction will flow to the
entity; and the costs incurred or to be incurred
in respect of the transaction can be measured
reliably.
> Revenue is measured at fair value of the
consideration received or receivable, after
deduction of any trade discounts, volume
rebates and any taxes or duties collected on
behalf of the government which are levied on
sales.
> Export sales are accounted when the goods
have left the premises or when the goods are
received by the customers and terms are
fulfilled at the exchange rate prevailing on the
date of invoice. These are net of commission
and do not include freight wherever
applicable as per the terms of the sales
contract.
> Revenue from job work is recognized on
completion of the work and at the time when
no significant uncertainty exists as to its
determination and realization.
> Late payment charges are recognized on the
ground of prudence as and when recovered.
> Commission income is recognized when the
Company satisfies the performance
obligation, at fair value of the consideration
received or receivable based on a five- step
model as set out below:
Step 1:
Identify contract(s) with a customer: A
contract is defined as an agreement between
two or more parties that creates enforceable
rights and obligations and sets out the criteria
for every contract that must be met.
Step 2:
Identify performance obligations in the
contract: A performance obligation is a
promise in a contract with a customer to
transfer a good or service to the customer.
Step 3:
Determine the transaction price: The
transaction price is the amount of
consideration to which the Company expects
to be entitled in exchange for transferring
promised goods or services to a customer,
excluding amounts collected on behalf of
third parties.
Step 4:
Allocate the transaction price to the
performance obligations in the contract: For a
contract that has more than one performance
obligation, the Company allocates the
transaction price to each performance
obligation in an amount that depicts the
amount of consideration to which the
Company expects to be entitled in exchange
for satisfying each performance obligation.
Step 5:
Recognize revenue when (or as) the Company
satisfies a performance obligation.
(G) Employee Benefits: [Ind AS 19]
Short-term employee benefits
These are liabilities for wages and salaries,
including non-monetary benefits that are
expected to be settled wholly within twelve
months after the end of the period in which the
employees render the related employee service.
The undiscounted amount of short-term
employee benefits expected to be paid in
exchange for that service is recognised as a liability
(accrued expense), after deducting any amount
already paid. If the amount already paid exceeds
the undiscounted amount of the benefits, an
entity shall recognise that excess as an asset
(prepaid expense) or else recognised as an
expense, unless another Standard requires or
permits the inclusion of the benefits in the cost of
an asset.
Post-employment obligations
The Company operates the following
postemployment schemes:
(a) defined benefit plans such as gratuity and
pension; and
(b) defined contribution plans such as provident
fund etc.
(c) Other Employee Benefits
(a) Defined Benefit Plans
In accordance with the Payment of Gratuity
Act, 1972, applicable for Indian companies,
the Company provides for a lump sum
payment to eligible employees, at retirement
or termination of employment based on the
last drawn salary and years of employment
with the Company. The Company''s obligation
in respect of the gratuity plan, which is a
defined benefit plan, is provided for based on
actuarial valuation using the projected unit
credit method. Remeasurement gains and
losses arising from experience adjustments
and changes in actuarial assumptions are
recognized in the period in which they occur,
directly in other comprehensive income.
Defined Benefit Plan - Gratuity
The Company has a defined benefit gratuity
plan in India (unfunded). The company''s
defined benefit gratuity plan is a final salary
plan for employees. Gratuity is paid from
company as and when it becomes due and is
paid as per company scheme for Gratuity.
The Company''s obligation in respect of the
gratuity plan is provided for based on
actuarial valuation using the projected unit
credit method. The Company recognizes
actuarial gains and losses immediately in
other comprehensive income, net of taxes.
Gratuity is applicable only to employees
drawing a salary in Indian rupees and there
are no other foreign defined benefit gratuity
plans.
Characteristics of Defined Benefit Plan:
The Entity has a defined benefit gratuity plan
in India (funded). The Entity''s defined benefit
gratuity plan is a final salary plan for
employees, which requires contribution to be
made to a separately administered fund. The
fund is managed by a trust which is governed
by the Board of Trustees. The Board of
Trustees are responsible for the
administration of the plan assets and for the
definition of the investment strategy. During
the year, there were no plan amendments,
curtailments and settlements.
Risks associated with defined benefit plan
Gratuity is a defined benefit plan and
company is exposed to the Following Risks:
Interest rate risk: A fall in the discount rate
which is linked to the G.Sec. Rate will increase
the present value of the liability requiring
higher provision.
Salary Risk: The present value of the defined
benefit plan liability is calculated by reference
to the future salaries of members. As such, an
increase in salary of the members more than
assumed level will increase the plan''s liability.
Asset Liability Matching Risk: The plan faces
the ALM risk as to the matching cash flow.
Company has to manage pay- out based on
pay as you go basis from own funds.
Mortality risk: Since the benefits under the
plan is not payable for life time and payable till
retirement age only, plan does not have any
longevity risk.
Investment Risk: The present value of the
defined benefit plan liability is calculated
using a discount rate which is determined by
reference to market yields at the end of the
reporting period on government bonds. If the
return on plan asset is below this rate, it will
create a plan deficit. Currently, for the plan in
India, it has a relatively balanced mix of
investments in government securities, and
other debt instruments.
Concentration Risk: Plan is having a
concentration risk as all the assets are
invested with the insurance company and a
default will wipe out all the assets. Although
probability of this is very low as insurance
companies have to follow stringent regulatory
guidelines which mitigate risk.
(b) Defined Contribution Plans
Contributions to defined contribution
schemes such as employees'' state insurance,
provident fund, labour welfare fund etc. are
charged as an expense based on the amount
of contribution required to be made as and
when services are rendered by the
employees.
The Company is a member of recognized
Provident Fund scheme established under
The Provident Fund & Miscellaneous Act, 1952
by the Government of India. The contribution
paid or payable under the scheme is
recognized during the period under which the
employee renders the related services. The
above benefits are classified as Defined
Contribution Schemes as the Company has no
further defined obligations beyond the
monthly contributions. Thus, the amount of
the post-employment benefits received by the
employee is determined by the amount of
contributions paid by an entity (and perhaps
also the employee) to a post-employment
benefit plan or to an insurance company,
together with investment returns arising from
the contributions; and actuarial risk and
investment risk falls on the employee.
(c) Other Employee Benefits
Other employee benefit obligations are
measured on an undiscounted basis and are
recorded as expense as the related service is
provided.
(H) Foreign Currency: [Ind AS 21]
Functional and presentation currency
The financial statements are presented in Indian
Rupees (INR), which is the company''s functional
and presentation currency.
Foreign currency transactions
⢠Foreign currency transactions are translated
into the functional currency using the
exchange rates at the dates of the
transactions. Realized gains and losses on
settlement of foreign currency transactions
are recognized in the Statement of Profit and
Loss.
⢠Monetary foreign currency assets and
liabilities at the year-end are translated at the
year-end exchange rates and the resultant
exchange differences are recognized in the
Statement of Profit and Loss.
⢠Non-monetary items, which are carried in
terms of historical cost denominated in a
foreign currency, are reported using the
exchange rate at the date of transaction.
⢠Exchange difference arising on settlement of
monetary items or reporting monetary items
at rates different from those at which they
were initially recorded during the year, or
reported in previous financial statements, are
recognized as income or as expense in the
year in which they arise.
A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Financial assets:
Classification
The Company classifies its financial assets in the
following measurement categories:
⢠those to be measured subsequently at fair
value (either through other comprehensive
income, or through the Statement of Profit
and Loss), and
⢠those measured at amortized cost.
The classification depends on the entity''s business
model for managing the financial assets and the
contractual terms of the cash flows.
Initial recognition and measurement
Financial assets are recognized when the
Company becomes a party to the contractual
provisions of the instrument. Financial assets are
recognized initially at fair value plus, in the case of
financial assets not recorded at fair value through
Profit and Loss, transaction costs that are
attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried
at fair value through Profit and Loss are expensed
in the Statement of Profit and Loss.
Subsequent measurement
After initial recognition, financial assets are
measured at:
⢠fair value (either through other
comprehensive income or through Profit and
Loss), or
⢠amortized cost.
Amortised cost:
Assets that are held for collection of contractual
cash flows where those cash flows represent solely
payments of principal and interest are measured
at amortized cost. A gain or loss on a debt
investment that is subsequently measured at
amortized cost is recognized in the Statement of
Profit and Loss when the asset is derecognized or
impaired. Interest income from these financial
assets is included in other income using the
effective interest rate method.
Fair Value through Other Comprehensive
Income (FVOCI):
Assets that are held for collection of contractual
cash flows and for selling the financial assets,
where the assets'' cash flows represent solely
payments of principal and interest, are measured
at FVOCI. Movements in the carrying amount are
taken through OCI, except for the recognition of
impairment gains or losses, interest revenue and
foreign exchange gains and losses which are
recognized in the Statement of Profit and Loss.
When the financial asset is derecognized, the
cumulative gain or loss previously recognized in
OCI is reclassified from equity to Statement of
Profit and Loss and recognized in other gains/
(losses). Interest income from these financial
assets is included in other income using the
effective interest rate method.
Fair Value through Profit and Loss (FVTPL):
Assets that do not meet the criteria for amortized
cost or FVOCI are measured at FVTPL. A gain or loss
on a debt investment that is subsequently
measured at FVTPL is recognized in Statement of
Profit and Loss in the period in which it arises.
Interest income from these financial assets is
recognized in the Statement of Profit and Loss.
Equity instruments
All equity investments in scope of Ind AS 109 are
measured at fair value. Equity instruments which
are held for trading are classified as at FVTPL. For
all other equity instruments, the Company decides
to classify the same either as at FVOCI or FVTPL.
Financial assets are not reclassified subsequent to
their initial recognition, except if and in the period
the company changes its business model for
managing financial assets.
If the Company decides to classify an equity
instrument as at FVOCI, then all fair value changes
on the instrument, excluding dividends, are
recognized in Other Comprehensive Income (OCI).
There is no recycling of the amounts from OCI to
Statement of Profit and Loss, even on sale of such
investments.
Equity instruments included within the FVTPL
category are measured at fair value with all
changes recognized in the Statement of Profit and
Loss.
Debt instruments
Debt instruments are subsequently measured at
amortized cost on the basis of:
(I) the entity''s business model for managing the
financial assets and
(ii) the contractual cash flow characteristics of the
financial asset.
De-recognition
A financial asset shall be derecognized only when:
(a) the contractual rights to the cash flows from
the financial asset expire, or
(b) it transfers the financial asset and the transfer
qualifies for de-recognition.
(c) On de-recognition of a financial asset, the
difference between:
a. the carrying amount (measured at date of
de-recognition); and
b. the consideration received shall be
recognized in Statement of Profit and
Loss.
Note:
On de-recognition of Investments, the cumulative
balance of OCI account related to those
investments is been transferred to general
reserve.
In accordance with Ind AS 109, the company
applies Expected Credit Loss (ECL) model for
measurement and recognition of impairment loss
on the following financial assets and credit risk
exposure:
a) Financial assets that are debt instruments,
and are measured at amortized cost e.g.,
loans, debt securities, deposits, trade
receivables and bank balance.
b) Financial assets that are equity instruments
and are measured as at FVTOCI.
c) Lease receivables under Ind AS 17.
d) Trade receivables or any contractual right to
receive cash or another financial asset that
result from transactions that are within the
scope of Ind AS 115.
The company follows ''simplified approach'' for
recognition of impairment loss allowance on:
⢠Trade receivables
⢠All lease receivables resulting from
transactions within the scope of Ind AS 17
The application of simplified approach does not
require the company to track changes in credit
risk. Rather, it recognizes impairment loss
allowance based on lifetime ECLs at each reporting
date, right from its initial recognition.
For recognition of impairment loss on other
financial assets and risk exposure, the company
determines that whether there has been a
significant increase in the credit risk since initial
recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide for
impairment loss. However, if credit risk has
increased significantly, lifetime ECL is used. If, in a
subsequent period, credit quality of the
instrument improves such that there is no longer a
significant increase in credit risk since initial
recognition, then the entity reverts to recognizing
impairment loss allowance based on 12-month
ECL.
Lifetime ECL are the expected credit losses
resulting from all possible default events over the
expected life of a financial instrument. The 12-
month ECL is a portion of the lifetime ECL which
results from default events that are possible within
12 months after the reporting date.
ECL is the difference between all contractual cash
flows that are due to the company in accordance
with the contract and all the cash flows that the
entity expects to receive (i.e., all cash shortfalls),
discounted at the original EIR. When estimating
the cash flows, an entity is required to consider:
⢠All contractual terms of the financial
instrument (including prepayment, extension,
call and similar options) over the expected life
of the financial instrument. However, in rare
cases when the expected life of the financial
instrument cannot be estimated reliably, then
the entity is required to use the remaining
contractual term of the financial instrument.
⢠Cash flows from the sale of collateral held or
other credit enhancements that are integral to
the contractual terms.
As a practical expedient, the company uses a
provision matrix to determine impairment loss
allowance on portfolio of its trade receivables. The
provision matrix is based on its historically
observed default rates over the expected life of the
trade receivables and is adjusted for forward¬
looking estimates. At every reporting date, the
historical observed default rates are updated and
changes in the forward-looking estimates are
analyzed.
ECL impairment loss allowance (or reversal)
recognized during the period is recognized as
income / expense in the statement of Profit and
Loss. This amount is reflected under the head
''other expenses'' in the P&L. The balance sheet
presentation for various financial instruments is
described below:
⢠Financial assets measured as at amortized
cost, contractual revenue receivables and
lease receivables: ECL is presented as an
allowance, i.e., as an integral part of the
measurement of those assets in the balance
sheet. The allowance reduces the net carrying
amount. Until the asset meets write-off
criteria, the company does not reduce
impairment allowance from the gross carrying
amount.
⢠Loan commitments and financial guarantee
contracts: ECL is presented as a provision in
the balance sheet, i.e. as a liability.
⢠Equity instruments measured at FVTOCI:
Since financial assets are already reflected at
fair value, impairment allowance is not further
reduced from its value.
For assessing increase in credit risk and
impairment loss, the company combines financial
instruments on the basis of shared credit risk
characteristics with the objective of facilitating an
analysis that is designed to enable significant
increases in credit risk to be identified on a timely
basis.
The fair values of the investments are adjusted as
per closing rate quoted in active market through
Profit and Loss statement.
Financial liabilities:
Initial recognition and measurement
Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate,
in the case of a financial liability not at FVTPL,
transaction costs that are directly attributable to
the issue/origination of the financial liability.
Preference Shares being redeemable at fixed date
and having right of cumulative dividend are
considered as financial liability.
Subsequent measurement
Financial liabilities are classified as measured at
amortized cost or FVTPL. A financial liability is
classified as at FVTPL if it is classified as held for
trading, or it is a derivative or it is designated as
such on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net gains and
losses, including any interest expense, are
recognized in statement of profit and loss.
Other financial liabilities are subsequently
measured at amortized cost using the effective
interest method. Interest expense and foreign
exchange gains and losses are recognized in
Statement of profit and loss. Any gain or loss on
de-recognition is also recognized in statement of
Profit and Loss.
De-recognition
A financial liability is derecognized when the
obligation specified in the contract is discharged,
cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modified, such an exchange or modification is
treated as the derecognition of the original liability
and the recognition of a new liability. The
difference in the respective carrying amounts is
recognized in the statement of profit or loss.
Offsetting of financial instruments:
Financial assets and financial liabilities are offset
and the net amount is reported in the balance
sheet if there is a currently enforceable legal right
to offset the recognized amounts and there is an
intention to settle on a net basis, to realize the
assets and settle the liabilities simultaneously.
(J) Earnings Per Share: [Ind AS 33]
Basic and Diluted earnings/(loss) per share are
calculated by dividing the net profit / (loss) for the
period attributable to equity shareholders (after
deducting preference dividends and attributable
taxes) by the weighted average number of equity
shares outstanding during the period. The
weighted average numbers of equity shares
outstanding during the period are adjusted for any
share splits and bonus shares issues including for
changes effected prior to the approval of the
financial statements by the board of directors.
* The fair value of cash and cash equivalents, trade receivables, borrowings, trade payables, other current
financial assets and liabilities approximate their carrying amount largely due to the short-term nature of these
instruments. The Company''s long-term debt and investment in fixed deposit have been contracted at market
rates of interest. Accordingly, the carrying value of such instruments approximates their fair value.
(K) Fair value measurement [Ind AS 113]
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 or
disclosed in the financial statements are
categorised within the fair value hierarchy,
described as follows, based on the lowest level
input that is significant to the fair value
measurement as a whole.
⢠Level 1 - Quoted (unadjusted) prices in active
market for identical assets or liabilities.
Investments in Quoted Shares are valued as
per quoted price in active market.
⢠Level 2 - (Inputs other than quoted prices
included in Level 1) Valuation techniques for
which the lowest level input that is significant
to the fair value measurement is directly or
indirectly observable
⢠Level 3 - Valuation techniques for which the
lowest level input that is significant to the fair
value measurement is unobservable
The inputs to these models are taken from
observable markets where possible, but where
this is 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. Changes in
assumptions about these factors could affect the
reported fair value of financial instruments.
For financial assets and liabilities maturing within
one year from the Balance Sheet date and which
are not carried at fair value, the carrying amount
approximates fair value due to the short maturity
of these instruments.
(L) Cash and cash equivalents:
For the purpose of presentation in the Statement
of Cash Flows, Cash and Cash Equivalents includes
Cash on hand, balance with banks and demand
deposits with banks and other short term highly
liquid investments that are readily convertible into
cash and which are subject to an insignificant risk
of changes in value.
Mar 31, 2024
II) SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied by the Company in the preparation of its financial statements are listed below. Such accounting policies have been applied consistently to all the periods presented in these financial statements.
(A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
(I) Compliance with Ind AS
The Financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time, the provisions of the Companies Act, 2013 ("the Companies Act") as applicable and guidelines issued by the Securities and Exchange Board of India ("SEBI").
The accounting policies have been consistently applied except where a newly issued accounting standard is initially
adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The Financial Statements were approved and authorized for issue in accordance with the resolution of the Company''s Board of Directors on 27th May, 2024.
(ii) Historical cost convention
These financial statements have been prepared on a historical cost convention basis, except for the following material items which have been measured at fair value as required by relevant Ind AS;
⢠The defined benefit asset (liability) is as the present value of defined benefit obligation less fair value of plan assets and
⢠Financial instruments classified as fair value through other comprehensive income.
(iii) Current and non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ noncurrent classification.
An asset is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed in normal operating cycle
⢠Held primarily for the purpose of trading
⢠Expected to be realised within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
⢠It is expected to be settled in normal operating cycle
⢠It is held primarily for the purpose of trading
⢠It is due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as noncurrent.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. Based on the nature of products / services and time between acquisition of assets for processing / rendering of services and their realization in cash and cash equivalents, operating cycle is less than 12 months. However, for the purpose of current/non-current classification of assets & liabilities period of 12 months has been considered as normal operating cycle.
(iv) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III except number of shares and per share data, unless otherwise stated.
(v) Use of estimates and judgment
The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates, judgements and assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected
in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
In particular, information about significant areas of estimation, uncertainty and critical judgment in applying accounting policies that have the most significant effect on the amounts recognized in financial statements are included in the following notes:
⢠Useful lives of Property, plant and equipment
⢠Measurement of defined benefit obligations
⢠Provision for inventories
⢠Measurement and likelihood of occurrence of provisions and contingencies
⢠Deferred taxes
(B) Inventories: [Ind AS 2]
Inventories are assets:
⢠Held for sale in the ordinary course of business
⢠In the process of production for such sale
⢠In the form of materials or supplies to be consumed in the production process or in the rendering of services.
Measurement of Inventory
Inventories consist of raw materials, stores & spares, work-in-progress, finished goods, Stock-intrade are stated ''at lower of cost and net realizable value'' except for raw materials which is valued at cost.
Cost of Inventories
Cost comprises of all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formula/ method for valuation used is ''Weighted Average cost''. Due allowance is estimated and made for defective and obsolete items, wherever necessary.
Net Realisable Value
Net realizable value (NRV) is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Estimate of net realizable value must be based on the most reliable evidence available and take into account fluctuations of price or cost after the end of the period, if this is evidence of conditions existing at the end of the period.
The Cost and net realizable value has been compared for each separately identifiable item of inventory, or group of similar inventories, rather than for inventory in total.
(C) Cash flow statement [Ind AS 7]
Cash flows are reported using the Indirect Method, as set out in Ind AS 7 ''Statement of Cash Flow'', whereby profit/loss for the year is adjusted for the effects of transaction of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
(D) Property, Plant and Equipment (PPE): [Ind AS 16]
Recognition and Measurement
Items of Property, plant and equipment acquired or constructed are initially recognized at historical cost net of recoverable taxes, duties, trade discounts and rebates, less accumulated depreciation and impairment loss, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by the Management.
The historical cost of Property, plant and equipment comprises of its
⢠purchase price including import duties and non-refundable purchase taxes,
⢠borrowing costs directly attributable to the qualifying asset in accordance with accounting policy on borrowing cost,
⢠the cost of dismantling, removing the item and restoring the site on which it is located and
⢠Adjustment arising for exchange rate variations attributable to the assets, including any cost directly attributable to bringing the assets to their working condition for their intended use.
Freehold land is carried at cost. The company has taken certain land on lease for period of 99 year and no amortization provided on these asset.
Subsequent Expenditure
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.
Advances paid towards the acquisition of PPE outstanding at each Balance Sheet date is classified as capital advances under ''Other noncurrent assets'' and cost of assets not put to use before such date are disclosed under ''Capital work-in progress''. The Company identifies and determines cost of each component of the plant and equipment separately, if the component/part has a cost which is significant to the total cost of the plant and equipment and has useful lives that is materially different from that of the remaining plant and equipment.
Machinery spares which meets the criteria of PPE is capitalised and depreciated over the useful life of the respective asset.
Depreciation methods, estimated useful lives and residual values
Depreciation is provided on written down value method based on the respective estimate of useful lives.
Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Management believes that useful lives of assets are same as those prescribed in Schedule II to the Act.
Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end, taking into account commercial and technological obsolescence as well as normal wear and tear and adjusted prospectively, if appropriate.
Disposal
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in Statement of Profit and Loss. The carrying amount of any component accounted for as a separate asset is derecognised when replaced.
(E) Income Taxes (Ind AS 12)
Tax expenses for the period, comprising current and deferred income tax. Income tax expense is recognized in net profit in the Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income.
Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions in accordance with the provisions of the Income Tax Act, 1961.
Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.
A deferred tax liability is recognized based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of the reporting period.
A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Tax expense/(credit) recognized in the Statement of Profit and Loss for the year ended 31.03.2024:
> Revenue from contract with customer is recognized when control of Goods or services are transferred to the buyer as per the terms of the contract; the entity retains neither continuing managerial involvement nor effective control over the goods sold; the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the entity; and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
> Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government which are levied on sales.
> Export sales are accounted when the goods have left the premises or when the goods are received by the customers and incoterms are fulfilled at the exchange rate prevailing on the date of invoice. These are net of commission and do not include freight wherever applicable as per the terms of the sales contract.
> Dividend income is recognized when the right to receive the dividend is established by the reporting date, which is generally when shareholders approves the dividend.
> Interest income is recognized using the effective interest method (EIR) and accounted on accrual basis. EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of a financial liability or a financial asset to their gross carrying amount.
> Rental income arising from operating leases on investment properties is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit and loss due to its operating nature.
> Revenue from job work is recognized on completion of the work and at the time when no significant uncertainty exists as to its determination and realization.
> Late payment charges are recognized on the ground of prudence as and when recovered.
> Commission income are recognized when the Company satisfies the performance obligation, at fair value of the consideration received or receivable based on a five- step model as set out below, unless included in the effective interest calculation: IND AS 115.
Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.
Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.
Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation.
Step 5: Recognize revenue when (or as) the Company satisfies a performance obligation.
(G) Employee Benefits: [Ind AS 19]
Short-term employee benefits
These are liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related employee service. The undiscounted amount of short-term employee benefits expected to be paid in exchange for that service is recognised as a liability (accrued expense), after deducting any amount already paid. If the amount already paid exceeds the undiscounted amount of the benefits, an entity shall recognise that excess as an asset (prepaid expense) or else recognised as an expense, unless another Standard requires or permits the inclusion of the benefits in the cost of an asset.
Post-employment obligations
The Company operates the following postemployment schemes:
(a) defined benefit plans such as gratuity and pension; and
(b) defined contribution plans such as provident fund etc.
(c) Other Employee Benefits
(a) Defined Benefit Plans
In accordance with the Payment of Gratuity Act, 1972, applicable for Indian companies, the Company provides for a lump sum payment to eligible employees, at retirement or termination of employment based on the last drawn salary and years of employment with the Company. The Company''s obligation in respect of the gratuity plan, which is a defined benefit plan, is provided for based on actuarial valuation using the projected unit credit method. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income.
Defined Benefit Plan - Gratuity
The Company has a defined benefit gratuity plan in India (unfunded). The company''s defined benefit gratuity plan is a final salary plan for employees. Gratuity is paid from company as and when it becomes due and is paid as per company scheme for Gratuity.
The Company''s obligation in respect of the gratuity plan is provided for based on actuarial valuation using the projected unit credit method. The Company recognizes actuarial gains and losses immediately in other comprehensive income, net of taxes. Gratuity is applicable only to employees drawing a salary in Indian rupees and there are no other foreign defined benefit gratuity plans.
Characteristics of Defined Benefit Plan:
The Entity has a defined benefit gratuity plan in India (funded). The Entity''s defined benefit gratuity plan is a final salary plan for employees, which requires contribution to be made to a separately administered fund. The fund is managed by a trust which is governed by the Board of Trustees. The Board of Trustees are responsible for the administration of the plan assets and for the d e fi niti o n of the i nve stm e nt strategy. Du rin g the year, there were no plan amendments, curtailments and settlements.
Risks associated with defined benefit plan
Gratuity is a defined benefit plan and company is exposed to the Following Risks:
Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision.
Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in salary of the members more than assumed level will increase the plan''s liability.
Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Company has to manage pay- out based on pay as you go basis from own funds.
Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very low as insurance companies have to follow stringent regulatory guidelines which mitigate risk.
(b) Defined Contribution Plans
Contributions to defined contribution schemes such as employees'' state insurance, provident fund, labour welfare fund etc. are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. The Company is a member of recognized Provident Fund scheme established under The Provident Fund & Miscellaneous Act, 1952 by the Government of India. The contribution paid or payable under the scheme is recognized during the period under which the employee renders the related services. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions. Thus, the amount of the postemployment benefits received by the
employee is determined by the amount of contributions paid by an entity (and perhaps also the employee) to a post-employment benefit plan or to an insurance company, together with investment returns arising from the contributions; and actuarial risk and investment risk falls on the employee.
(c) Other Employee Benefits
Other employee benefit obligations are measured on an undiscounted basis and are recorded as expense as the related service is provided.
(H) Foreign Currency: [Ind AS 21]
Functional and presentation currency
The financial statements are presented in Indian
Rupees (INR), which is the company''s functional
and presentation currency.
Foreign currency transactions
⢠Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Realized gains and losses on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss.
⢠Monetary foreign currency assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognized in the Statement of Profit and Loss.
⢠Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of transaction.
⢠Exchange difference arising on settlement of monetary items or reporting monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expense in the year in which they arise.
As per Ind AS-24 issued by the Institute of chartered Accountants of India, the company''s related parties are disclosed below:
i. Enterprises over which Key Management Personnel or relatives of such personnel exercise significant influence or control and with whom transactions have taken place during the year
¦ Fairdeal Textile Park Pvt. Ltd.
¦ Lotus Marketing
¦ Autotech Non-Wovens Pvt. Ltd.
¦ Shahlon Enterprises LLP
ii. Key Management Personnel (KMP):
¦ Shri Dhirajlal R. Shah
¦ Shri Arvind R. Shah
¦ Shri Nitin R. Shah
a) Company Secretary
¦ Hitesh Garmora
b) Chief Financial Officer
¦ Satish Shah
iii. Promoters Group :
¦ Shri Dipan J. Shah
iv. Relatives of Key Management Personnel
¦ Shri Mahendra R. Shah
¦ Smt. Minaxi N. Shah
¦ Shri Dhruv A. Shah
¦ Shri Jayantilal R. Shah
¦ Smt. Avani A. Shah
¦ Smt. Kanchan D. Shah
v. Other related parties - NIL
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets:
Classification
The Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value (either through other comprehensive income, or through the Statement of Profit and Loss), and
⢠those measured at amortized cost.
The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.
Initial recognition and measurement
Financial assets are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through Profit and Loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through Profit and Loss are expensed in the Statement of Profit and Loss.
Subsequent measurement
After initial recognition, financial assets are measured at:
⢠fair value (either through other comprehensive income or through Profit and Loss), or
⢠amortized cost.
Amortised cost:
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost is recognized in the Statement of
Profit and Loss when the asset is derecognized or impaired. Interest income from these financial assets is included in other income using the effective interest rate method.
Fair Value through Other Comprehensive Income (FVOCI):
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in the Statement of Profit and Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to Statement of Profit and Loss and recognized in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.
Fair Value through Profit and Loss (FVTPL):
Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVTPL. A gain or loss on a debt investment that is subsequently measured at FVTPL is recognized in Statement of Profit and Loss in the period in which it arises. Interest income from these financial assets is recognized in the Statement of Profit and Loss.
Equity instruments
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVOCI or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the company changes its business model for managing financial assets.
If the Company decides to classify an equity instrument as at FVOCI, then all fair value changes on the instrument, excluding dividends, are recognized in Other Comprehensive Income (OCI). There is no recycling of the amounts from OCI to
Statement of Profit and Loss, even on sale of such investments.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.
Debt instruments
Debt instruments are subsequently measured at amortized cost on the basis of:
(i) the entity''s business model for managing the financial assets and
(ii) the contractual cash flow characteristics of the financial asset.
De-recognition
A financial asset shall be derecognized only when:
(a) the contractual rights to the cash flows from the financial asset expire, or
(b) it transfers the financial asset and the transfer qualifies for de-recognition.
(c) On de-recognition of a financial asset, the difference between:
a. the carrying amount (measured at date of de-recognition); and
b. the consideration received
shall be recognized in Statement of Profit and Loss.
Note:
On de-recognition of Investments the cumulative balance of OCI account related to those investments is been transferred to general reserve.
Impairment of financial assets
In accordance with Ind AS 109, the company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortized cost e.g., loans, debt securities, deposits, trade receivables and bank balance
b) Financial assets that are equity instruments and are measured as at FVTOCI
c) Lease receivables under Ind AS 17
d) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115
The company follows ''simplified approach'' for recognition of impairment loss allowance on:
⢠Trade receivables
⢠All lease receivables resulting from transactions within the scope of Ind AS 17
The application of simplified approach does not require the company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:
⢠All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life
of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument
⢠Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms
As a practical expedient, the company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forwardlooking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income / expense in the statement of profit and loss (P&L). This amount is reflected under the head ''other expenses'' in the P&L. The balance sheet presentation for various financial instruments is described below:
⢠Financial assets measured as at amortized cost, contractual revenue receivables and lease receivables: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the company does not reduce impairment allowance from the gross carrying amount.
⢠Loan commitments and financial guarantee contracts: ECL is presented as a provision in the balance sheet, i.e. as a liability.
⢠Equity instruments measured at FVTOCI: Since financial assets are already reflected at fair value, impairment allowance is not further reduced from its value. Rather, ECL amount is presented as ''accumulated impairment amount'' in the OCI.
For assessing increase in credit risk and impairment loss, the company combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an
analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.
Financial liabilities:
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate, in the case of a financial liability not at FVTPL, transaction costs that are directly attributable to the issue/origination of the financial liability.
Preference Shares being redeemable at fixed date and having right of cumulative dividend are considered as financial liability.
Subsequent measurement
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held for trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in statement of profit and loss.
Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in Statement of profit and loss. Any gain or loss on de-recognition is also recognized in statement of Profit and Loss.
De-recognition
A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
Offsetting of financial instruments:
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
(K) Earnings Per Share: [Ind AS 33]
Basic and Diluted earnings/(loss) per share are calculated by dividing the net profit / (loss) for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average numbers of equity shares outstanding during the period are adjusted for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the board of directors.
* The fair value of cash and cash equivalents, trade receivables, borrowings, trade payables, other current financial assets and liabilities approximate their carrying amount largely due to the short-term nature of these instruments. The Company''s long-term debt and investment in fixed deposit have been contracted at market rates of interest. Accordingly, the carrying value of such instruments approximates their fair value.
(L) Fair value measurement [Ind AS 113]
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 or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.
⢠Level 1 - Quoted (unadjusted) prices in active market for identical assets or liabilities. Investments in Quoted Shares are valued as per quoted price in active market.
⢠Level 2 - (Inputs other than quoted prices included in Level 1) Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
⢠Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
The inputs to these models are taken from observable markets where possible, but where this is 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. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
For financial assets and liabilities maturing within one year from the Balance Sheet date and which
are not carried at fair value, the carrying amount approximates fair value due to the short maturity of these instruments.
(M) Cash and cash equivalents:
For the purpose of presentation in the Statement of Cash Flows, Cash and Cash Equivalents includes Cash on hand, balance with banks and demand deposits with banks and other short term highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value.
Mar 31, 2023
Company Overview and Notes to the financial statements
I) CORPORATE INFORMATION:
SHAHLON SILK INDUSTRIES LIMITED is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956; now referred as Companies Act, 2013. The address of its registered office is SHAHLON SILK INDUSTRIES LIMITED, 3rd Floor Dawer Chambers, Beside J.K. Tower, Ring Road, Khatodara, Surat City, Surat, Gujarat, India -395002. The equity shares of the company are listed on the Bombay Stock Exchange (BSE) Limited in India.
The Company is mainly engaged in the business of manufacturing of fabric on water jet looms, air jet looms & rapier looms and various yarn preparatory activities like sizing, texturizing, yarn dyeing, twisting, crape, ply yarn etc. and trading of yarn & fabrics. The company is also engaged into an agency business with Reliance Industries limited for sale of yarn. The company caters to both domestic and international markets.
II) SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied by The Company in the preparation of its financial statements are listed below. Such accounting policies have been applied consistently to all the periods presented in these financial statements.
(A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
(I) Compliance with Ind AS
The Financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 201 3 read with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time, the provisions of the Companies Act, 2013 ("the Companies Act") as applicable and guidelines issued by the Securities and Exchange Board of India ("SEBI").
The accounting policies have been consistently applied except where a newly issued accounting standard is initially
adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The Financial Statements were approved and authorized for issue in accordance with the resolution of the Company''s Board of Directors on 26th May, 2023.
(ii) Historical cost convention
These financial statements have been prepared on a historical cost convention basis, except for the following material items which have been measured at fair value as required by relevant Ind AS;
⢠The defined benefit asset (liability) is as the present value of defined benefit obligation less fair value of plan assets and
⢠Financial instruments classified as fair value through other comprehensive income.
(iii) Current and non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ noncurrent classification.
An asset is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed in normal operating cycle
⢠Held primarily for the purpose of trading
⢠Expected to be realised within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
⢠It is expected to be settled in normal operating cycle
⢠It is held primarily for the purpose of trading
⢠It is due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as noncurrent.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. Based on the nature of products / services and time between acquisition of assets for processing / rendering of services and their realization in cash and cash equivalents, operating cycle is less than 12 months. However, for the purpose of current/non-current classification of assets & liabilities period of 12 months has been considered as normal operating cycle.
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III except number of shares and per share data, unless otherwise stated.
(v) Use of estimates and judgment
The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates, judgements and assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates.
Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
In particular, information about significant areas of estimation, uncertainty and critical judgment in applying accounting policies that have the most significant effect on the amounts recognized in financial statements are included in the following notes:
⢠Useful lives of Property, plant and equipment
⢠Measurement of defined benefit obligations
⢠Provision for inventories
⢠Measurement & likelihood of occurrence of provisions and contingencies
⢠Deferred taxes
(B) Inventories: [Ind AS 2]Inventories are assets:
⢠Held for sale in the ordinary course of business
⢠In the process of production for such sale
⢠In the form of materials or supplies to be consumed in the production process or in the rendering of services.
Inventories consist of raw materials, stores & spares, work-in-progress, finished goods, Stock-intrade are stated ''at lower of cost and net realizable value'' except for raw materials which is valued at cost.
Cost comprises of all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and
condition. Cost formula/ method for valuation used is ''Weighted Average cost''. Due allowance is estimated and made for defective and obsolete items, wherever necessary.
Net realizable value (NRV) is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Estimate of net realizable value must be based on the most reliable evidence available and take into account fluctuations of price or cost after the end of the period, if this is evidence of conditions existing at the end of the period.
The Cost and net realizable value has been compared for each separately identifiable item of inventory, or group of similar inventories, rather than for inventory in total.
(C) Cash flow statement [Ind AS 7]
Cash flows are reported using the Indirect Method, as set out in Ind AS 7 ''Statement of Cash Flow'', whereby profit/loss for the year is adjusted for the effects of transaction of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
(D) Property, Plant and Equipment (PPE): [Ind AS 16]Recognition and Measurement
Items of Property, plant and equipment acquired or constructed are initially recognized at historical cost net of recoverable taxes, duties, trade discounts and rebates, less accumulated depreciation and impairment loss, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by the Management.
The historical cost of Property, plant and equipment comprises of its
⢠purchase price including import duties and non-refundable purchase taxes,
⢠borrowing costs directly attributable to the qualifying asset in accordance with accounting policy on borrowing cost,
⢠the cost of dismantling, removing the item and restoring the site on which it is located and
⢠Adjustment arising for exchange rate variations attributable to the assets, including any cost directly attributable to bringing the assets to their working condition for their intended use.
Freehold land is carried at cost. The company has taken certain land on lease for period of 99 year and no amortization provided on these asset.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.
Advances paid towards the acquisition of PPE outstanding at each Balance Sheet date is classified as capital advances under ''Other noncurrent assets'' and cost of assets not put to use before such date are disclosed under ''Capital work-in progress''. The Company identifies and determines cost of each component of the plant and equipment separately, if the component/part has a cost which is significant to the total cost of the plant and equipment and has useful lives that is materially different from that of the remaining plant and equipment.
Machinery spares which meets the criteria of PPE is capitalised and depreciated over the useful life of the respective asset.
Depreciation methods, estimated useful lives and residual values
Depreciation is provided on written down value method based on the respective estimate of useful lives.
Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act,2013. Management believes that useful lives of assets are same as those prescribed in Schedule II to the Act.
Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end, taking into account commercial and technological obsolescence as well as normal wear and tear and adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in Statement of Profit and Loss. The carrying amount of any component accounted for as a separate asset is derecognised when replaced.
Tax expenses for the period, comprising current and deferred income tax. Income tax expense is recognized in net profit in the Statement of Profit and Loss except to the extent that it relates to
items recognized directly in equity, in which case it is recognized in other comprehensive income.
Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions in accordance with the provisions of the Income Tax Act, 1961.
Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.
A deferred tax liability is recognized based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of the reporting period.
A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Tax expense/(credit) recognized in the Statement of Profit and Loss for the year ended 31.03.2023:
|
Sr. No. |
Particulars |
Amount (In '') |
|
1. |
Opening Balance of DTA / (DTL) |
1,37,99,497 |
|
2. |
Deferred Tax Assets / (Liabilities) of the period |
(32,69,198) |
|
3. |
Closing Balance of DTA / (DTL) |
1,05,30,299 |
(F) Revenue from Contracts with Customers: [Ind
AS 115]
> Revenue from contract with customer is recognized when control of Goods or services are transferred to the buyer as per the terms of the contract; the entity retains neither continuing managerial involvement nor effective control over the goods sold; the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the entity; and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
> Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government which are levied on sales.
> Export sales are accounted when the goods have left the premises or when the goods are received by the customers and incoterms are fulfilled at the exchange rate prevailing on the date of invoice. These are net of commission and do not include freight wherever applicable as per the terms of the sales contract.
> Dividend income is recognized when the right to receive the dividend is established by the reporting date, which is generally when shareholders approves the dividend.
> Interest income is recognized using the effective interest method (EIR) and accounted on accrual basis. EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of a financial liability or a financial asset to their gross carrying amount.
> Rental income arising from operating leases on investment properties is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit and loss due to its operating nature.
> Revenue from job work is recognized on completion of the work and at the time when no significant uncertainty exists as to its determination and realization.
> Late payment charges are recognized on the ground of prudence as and when recoverd.
> Commission income are recognized when the Company satisfies the performance obligation, at fair value of the consideration received or receivable based on a five- step model as set out below, unless included in the effective interest calculation: IND AS 115.
Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.
Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.
Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation.
Step 5: Recognize revenue when (or as) the Company satisfies a performance obligation.
(G) Employee Benefits: [Ind AS 19]Short-term employee benefits
These are liabilities for wages and salaries, including non-monetary benefits that are
expected to be settled wholly within twelve months after the end of the period in which the employees render the related employee service. The undiscounted amount of short-term employee benefits expected to be paid in exchange for that service is recognised as as a liability (accrued expense), after deducting any amount already paid. If the amount already paid exceeds the undiscounted amount of the benefits, an entity shall recognise that excess as an asset (prepaid expense). Or else recognised as an expense, unless another Standard requires or permits the inclusion of the benefits in the cost of an asset.
The Company operates the following postemployment schemes:
(a) defined benefit plans such as gratuity and pension; and
(b) defined contribution plans such as provident fund etc.
In accordance with the Payment of Gratuity Act, 1972, applicable for Indian companies, the Company provides for a lump sum payment to eligible employees, at retirement or termination of employment based on the last drawn salary and years of employment with the Company. The Company''s obligation in respect of the gratuity plan, which is a defined benefit plan, is provided for based on actuarial valuation using the projected unit credit method. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income.
(b) Defined contribution plans
Contributions to defined contribution schemes such as employees'' state insurance, provident fund, labour welfare
fund etc. are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. The Company is a member of recognized Provident Fund scheme established under The Provident Fund & Miscellaneous Act, 1 952 by the Government of India. The contribution paid or payable under the scheme is recognized during the period under which the employee renders the related services. The above benefits are classified as Defined
Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions. Thus, the amount of the post-employment benefits received by the employee is determined by the amount of contributions paid by an entity (and perhaps also the employee) to a post-e mp l oy m e n t b e n e f i t p l a n o r t o a n insurance company, together with investment returns arising from the contributions; and actuarial risk and investment risk falls on the employee.
Other Employee Benefits
Other employee benefit obligations are measured on an undiscounted basis and are recorded as expense as the related service is provided.
Defined Benefit Plan - Gratuity
The Company has a defined benefit gratuity plan in India (unfunded). The company''s defined benefit gratuity plan is a final salary plan for employees. Gratuity is paid from company as and when it becomes due and is paid as per company scheme for Gratuity.
The Company''s obligation in respect of the gratuity plan is provided for based on actuarial valuation using the projected unit credit method. The Company recognizes actuarial gains and losses immediately in other comprehensive income, net of taxes. Gratuity is applicable only to employees drawing a salary in Indian rupees and there are no other foreign defined benefit gratuity plans.
Characteristics of Defined Benefit Plan:
The Entity has a defined benefit gratuity plan in India (funded). The Entity''s defined benefit gratuity plan is a final salary plan for employees, which requires contribution to be made to a separately administered fund. The fund is managed by a trust which is governed by the Board of Trustees. The Board of Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy. During the year, there were no plan amendments, curtailments and settlements.
Risks associated with defined benefit planGratuity is a defined benefit plan and company is exposed to the Following Risks:
Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision.
Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in salary of the members more than assumed level will increase the plan''s liability.
Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Company has to manage pay- out based on pay as you go basis from own funds.
Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default will
wipe out all the assets. Although probability of this is very low as insurance companies have to follow stringent regulatory guidelines which mitigate risk.
(H) Foreign Currency: [Ind AS 21]Functional and presentation currency
The financial statements are presented in Indian Rupees (INR), which is the company''s functional and presentation currency.
⢠Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Realized gains and losses on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss.
⢠Monetary foreign currency assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognized in the Statement of Profit and Loss.
⢠Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of transaction.
⢠Exchange difference arising on settlement of monetary items or reporting monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expense in the year in which they arise.
(I) Related parties [Ind AS 24]
As per Ind AS-24 issued by the Institute of chartered Accountants of India, the company''s related parties are disclosed below:
I. Enterprises over which Key Management Personnel or relatives of such personnel exercise significant influence or control and with whom transactions have taken place during the year
¦ Fairdeal Textile Park Pvt. Ltd.
¦ Lotus Marketing
¦ Autotech Non-Wovens Pvt. Ltd.
¦ Shahlon Enterprises LLP
ii. Key Management Personnel (KMP):
¦ Shri Dhirajlal R. Shah
¦ Shri Arvind R. Shah
¦ Shri Nitin R. Shah
¦ Hitesh Garmora
¦ Satish Shah
¦ Shri Dipan J. Shah
iv. Relatives of Key Management Personnel
¦ Shri Mahendra R. Shah
¦ Smt. Minaxi N. Shah
¦ Shri Dhruv A. Shah
¦ Shri Jayantilal R. Shah
v. Other related parties - NIL(J) Financial instruments: [Ind AS 109]
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets:Classification
The Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value (either through other comprehensive income, or through the Statement of Profit and Loss), and
⢠those measured at amortized cost.
The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.
Initial recognition and measurement
Financial assets are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through Profit and Loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through Profit and Loss are expensed in the Statement of Profit and Loss.
After initial recognition, financial assets are measured at:
⢠fair value (either through other comprehensive income or through Profit and Loss), or
⢠amortized cost.
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost is recognized in the Statement of Profit and Loss when the asset is derecognized or impaired. Interest income from these financial assets are included in other income using the effective interest rate method.
Fair Value through Other Comprehensive Income (FVOCI):
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are
recognized in the Statement of Profit and Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to Statement of Profit and Loss and recognized in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.
Fair Value through Profit and Loss (FVTPL):
Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVTPL. A gain or loss on a debt investment that is subsequently measured at FVTPL is recognized in Statement of Profit and Loss in the period in which it arises. Interest income from these financial assets is recognized in the Statement of Profit and Loss.
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVOCI or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the company changes its business model for managing financial assets.
If the Company decides to classify an equity instrument as at FVOCI, then all fair value changes on the instrument, excluding dividends, are recognized in Other Comprehensive Income (OCI). There is no recycling of the amounts from OCI to Statement of Profit and Loss, even on sale of such investments.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.
Debt instruments are subsequently measured at amortized cost on the basis of:
(I) the entity''s business model for managing the financial assets and
(ii) the contractual cash flow characteristics of the financial asset.
A financial asset shall be derecognized only when:
(a) the contractual rights to the cash flows from the financial asset expire, or
(b) it transfers the financial asset and the transfer qualifies for de-recognition.
(c) On de-recognition of a financial asset, the difference between:
a. the carrying amount (measured at date of de-recognition); and
b. the consideration received
shall be recognized in Statement of Profit and Loss.
On de-recognition of Investments the cumulative balance of OCI account related to those investments is been transferred to general reserve.
Financial liabilities:Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate., in the case of a financial liability not at FVTPL, transaction costs that are directly attributable to the issue/origination of the financial liability.
Preference Shares being redeemable at fixed date and having right of cumulative dividend are considered as financial liability.
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held for trading, or it is a derivative or it is designated as
such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in statement of profit and loss.
Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in Statement of profit and loss. Any gain or loss on de-recognition is also recognized in statement of Profit and Loss.
A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognized in the statement of profit or loss.
Offsetting of financial instruments:
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
(K) Earnings Per Share: [Ind AS 33]
Basic and Diluted earnings/(loss) per share are calculated by dividing the net profit / (loss) for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average numbers of equity shares outstanding during the period are adjusted for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the board of directors.
|
Calculation of EPS as appearing in Statement of Profit and Loss Account: |
|||
|
Sr. No. |
Particulars |
Current Period |
Previous Year |
|
(I) |
Net profit/(loss) as per Profit & Loss A/c1 (Rs. In Lakhs) |
377.77 |
317.73 |
|
(ii) |
Net Profit/(loss) adjusted from reserves |
||
|
(iii) |
Net Profit Attributable to ordinary Shareholders[(i) (ii)] |
377.77 |
317.73 |
|
(ii) |
Weighted average number of shares for Basic Earnings per share |
8,93,02,450 |
8,93,02,450 |
|
(iii) |
Weighted average number of shares for Diluted Earnings per share |
8,93,02,450 |
8,93,02,450 |
|
(iv) |
Nominal value per share |
2 |
2 |
|
(v) |
Basic earnings per share (?) |
0.42 |
0.36 |
|
(vi) |
Diluted earnings per share (?) |
0.42 |
0.36 |
(L) Fair value measurement [Ind AS 113]
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 or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.
⢠Level 1 - Quoted (unadjusted) prices in active market for identical assets or liabilities. Investments in Quoted Shares are valued as per quoted price in active market.
⢠Level 2 - (Inputs other than quoted prices included in Level 1) Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
⢠Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
The inputs to these models are taken from observable markets where possible, but where this is 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. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
For financial assets and liabilities maturing within one year from the Balance Sheet date and which
are not carried at fair value, the carrying amount approximates fair value due to the short maturity of these instruments.
(M) Cash and cash equivalents:
For the purpose of presentation in the Statement of Cash Flows, Cash and Cash Equivalents includes Cash on hand, balance with banks and demand deposits with banks and other short term highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value.
(N) Provisions and Contingent Liabilities: [Ind AS 37]
A provision is recognized when the company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimates required to settle the obligation at the balance sheet date.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably.
The fair value of cash and cash equivalents, trade receivables, borrowings, trade payables, other current financial assets and liabilities approximate their carrying amount largely due to the short-term nature of these instruments. The Company''s long-term debt and investment in fixed deposit have been contracted at market rates of interest. Accordingly, the carrying value of such instruments approximates their fair value.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on Shahlon Silk Industries Ltd.
-
Shahlon Silk Industries Ltd. Tools
- Bulk Deals
-
Shahlon Silk Industries Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- BSE Price History
-
Shahlon Silk Industries Ltd. Key Financial Ratios
- Ratios
-
Shahlon Silk Industries Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Shahlon Silk Industries Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Shahlon Silk Industries Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Shahlon Silk Industries Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
-
FY26 Market Review: Inside Nifty-Sensex's Sharpest Yearly Crash Since COVID; What's Next For Investors? -
Intraday Stocks To Buy Today, March 27: Top Picks By Anand James of Geojit Investments On Friday -
Indian equities open higher as Nifty tops 23,100 and Sensex climbs over 700 points -
Intraday Stocks To Buy Today, March 25: Top Picks By Anand James of Geojit Investments On Wednesday
-
Stock Market Today: Nifty Closes Near 23,000, Sensex Up 1.8%: IndiGo, L&T, Eternal, Asian Paints Top Gainers -
Steel Stock Gains 5.14% On Getting NCLT Nod For Key Merger; Do You Own? -
Stock Market Opens Strong: Nifty Up 1.5%, Sensex Rallies 1,516 Pts; Rupee Recovers as Trump Delays Iran Strike -
D-Street Mayhem: Rs 15 Lakh Cr Wiped Out As Nifty-Sensex Close 2.5% Lower, Rupee In Free-Fall Amid Iran-US War -
Indian equities outlook today as Bank Nifty remains weak and Nifty tests support -
Stock Market Crash: Sensex, Nifty Hit 1-Year Low; How US-Israel-Iran War Wiped Out Rs 4,753,333 Crore -
Intraday Stocks To Buy Today, March 23: Top Picks By Anand James of Geojit Investments On Monday
-
Nifty, Sensex Down 8% Amid Iran-US War, Crude Oil At Sky High: How Past Geopolitical Crises Have Shaped Market -
Stock Market Weekly Wrap: Sensex, Nifty End In Green Amid Iran-US War, Crude Surge, Rupee Slide -
Nifty Falls as Global Cues Persist and Gulf Tensions Weigh on Indian Markets -
Intraday Stocks To Buy Today, March 20: Top Picks By Anand James of Geojit Investments On Friday
-
Nifty, Sensex Stage Sharp Rebound After Biggest Crash; IT Stocks in Green | Why Is Stock Market Rising Today?
-
Block for 8 hours
-
Block for 12 hours
-
Block for 24 hours
-
Don't block
Sign in with Google- Male
- Female
- Others
- Under 18
- 18 to 25
- 26 to 35
- 36 to 45
- 45 to 55
- 55+