l) Provisions and contingent liabilities:
Provisions are recognised when the Company
has a present obligation (legal or constructive)
as a result of a past event, it is probable that the
Company will be required to settle the obligation,
and a reliable estimate can be made of the amount
of the obligation.
The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation at the end of the reporting period,
taking into account the risks and uncertainties
surrounding the obligation. When a provision is
measured using the cash flows estimated to settle
the present obligation, its carrying amount is the
present value of those cash flows (when the effect
of the time value of money is material). When
discounting is used, the increase in the provision
due to the passage of time is recognised as a
finance cost.
When some or all of the economic benefits required
to settle a provision are expected to be recovered
from a third party, a receivable is recognised as an
asset if it is virtually certain that reimbursement
will be received and the amount of the receivable
can be measured reliably.
A contingent liability is:-
a) a possible obligation that arises from past
events and whose existence will be confirmed
only by the occurrence or non-occurrence of
one or more uncertain future events not wholly
within the control of the entity; or
b) a present obligation that arises from past
events but is not recognised because:-
i) it is not probable that an outflow of
resources embodying economic benefits
will be required to settle the obligation; or
ii) the amount of the obligation cannot be
measured with sufficient reliability.
Contingent liability is disclosed in the case of:
• a present obligation arising from past events,
when it is not probable that an outflow of
resources will be required to settle the
obligation;
• a present obligation arising from past events,
when no reliable estimate is possible;
• a possible obligation arising from past events,
unless the probability of outflow of resources
is remote.
A contingent asset is disclosed where an inflow of
economic benefits is probable.
Provisions, contingent liabilities and contingent
assets are reviewed at each balance sheet date
m) Retirement and other employee benefits:
Post-employment benefits
• Payments to defined contribution benefit
plans are recognised as an expense when
employees have rendered service entitling
them to the contributions. For defined benefit
retirement plans, the cost of providing benefits
is determined using the projected unit credit
method, with actuarial valuations being
carried out at the end of each annual reporting
period. Remeasurement, comprising actuarial
gains and losses, the effect of the changes to
the asset ceiling (if applicable) and the return
on plan assets (excluding net interest), is
reflected immediately in the balance sheet
with a charge or credit recognised in other
comprehensive income in the period in which
they occur. Remeasurement recognised in
other comprehensive income is not reclassified
to statement of profit and loss. Past service
cost is recognised in statement of profit and
loss in the period of a plan amendment. Net
interest is calculated by applying the discount
rate at the beginning of the period to the net
defined benefit liability or asset. Defined
benefit costs are categorised as follows:
• Service cost (including current service cost,
past service cost, as well as gains and losses
on curtailments and settlements);
• Net interest expense or income; and
• Re-measurement.
The Company presents the first two components
of defined benefit costs in statement of profit and
loss in the line item "Employee benefits expense”,
and the last component in Other Comprehensive
Income. Curtailment gains and losses are
accounted for as past service costs.
The retirement benefit obligation recognised in
the balance sheet represents the actual deficit
or surplus in the Company's defined benefit
plans. Any surplus resulting from this calculation
i s limited to the present value of any economic
benefits available in the form of refunds from the
plans or reductions in future contributions to the
plans.
Terminal benefits
A liability for a termination benefit is recognised at
the earlier of when the entity can no longer withdraw
the offer of the termination benefit and when the
entity recognises any related restructuring costs.
Short-term and other long-term employee
benefits
A liability is recognised for benefits accruing
to employees in respect of wages and salaries,
performance incentives and similar benefits other
than compensated absences in the period the
related service is rendered at the undiscounted
amount of the benefits expected to be paid in
exchange for that service.
Liabilities recognised in respect of compensated
absences are measured on the basis of actuarial
valuation as on the balance sheet date.
Liabilities recognised in respect of other long-term
employee benefits are measured at the present
value of the estimated future cash outflows
expected to be made by the Company in respect of
services provided by employees up to the reporting
date.
n) Earnings per share:
Basic earnings per share is calculated by dividing
the profit/loss attributable to the owners of the
Company by the weighted average number of
equity shares outstanding during the financial year.
Diluted earnings per share adjusts the figure used
in determination of basic earnings per share to take
into account the after income tax effect of interest
and other financing costs associated with dilutive
potential equity shares, and the weighted average
number of additional equity shares that would have
been outstanding assuming the conversion of all
dilutive potential equity shares.
o) Operating segment
Identification of segment - Operating segments
are reported in the manner consistent with the
internal reporting provided to the Chief Operating
Decision Maker (CODM) of the Company.
Segment accounting policies - The Board of
Directors of the Company have been identified as
the Chief Operating Decision Maker (CODM) as
defined under Ind AS 108. CODM reviews overall
financial information of the Company together for
performance evaluation and allocation of resources
and does not review any discrete information to
evaluate performance of any individual product or
geography.
The Company prepares its segment information
in conformity with accounting policies adopted for
preparing and presenting the financial statements
of the Company as a whole.
p) Onerous contracts
If the Company has a contract that is onerous, the
present obligation under the contract is recognised
and measured as a provision. However, before
a separate provision for an onerous contract
is established, the Company recognises any
impairment loss that has occurred on assets
dedicated to that contract.
An onerous contract is a contract under which the
unavoidable costs (i.e., the costs that the Company
cannot avoid because it has the contract) of meeting
the obligations under the contract exceed the
economic benefits expected to be received under
it. The unavoidable costs under a contract reflect
the least net cost of exiting from the contract,
which is the lower of the cost of fulfilling it and any
compensation or penalties arising from failure to
fulfil it. The cost of fulfilling a contract comprises
the costs that relate directly to the contract (i.e.,
both incremental costs and an allocation of costs
directly related to contract activities).
q) Key sources of estimation uncertainty and critical
accounting judgements
In the course of applying the accounting policies, the
Company is required to make judgements, estimates
and assumptions about the carrying amount of
assets and liabilities that are not readily apparent
from other sources. The estimates and associated
assumptions are based on historical experience
and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period
in which the estimate is revised if the revision
affects only that period, or in the period of the
revision and future period, if the revision affects
current and future periods.
Key sources of estimation uncertainty
a) Useful lives of property, plant and equipment,
intangible assets, investment property and
right-of-use assets
Management reviews the useful lives of
property, plant and equipment at least once
a year. Such lives are dependent upon an
assessment of both the technical lives of the
assets and also their likely economic lives
based on various internal and external factors
including relative efficiency and operating
costs. Refer Note 2 and 30 for further
disclosure.
b) Property, plant and equipment, intangible
assets and investment property
Determining whether the property, plant and
equipment are impaired requires an estimate
in the value in use of cash generating units.
It requires to estimate the future cash flows
expected to arise from the cash generating
units and a suitable discount rate in order to
calculate present value. When the present
value of the cash flows are less than carrying
value of property, plant and equipment a
material impairment loss may arise. Refer
Note 2 for further disclosure.
c) Impairment of investments in and loan given
to subsidiaries and joint ventures
Determining whether the investments in and
loan given to subsidiaries and joint ventures
are impaired requires an estimate of the
value in use / recoverable amount of assets.
In considering the value in use / recoverable
amount of assets, the Management have
anticipated the future cash flows, discount
rates and other factors of the underlying
businesses/companies. In certain cases, the
Company engages third party qualified valuers
to perform the valuation. The management
works closely with the qualified external
valuers to establish the appropriate valuation
techniques and inputs to the model. Refer
Note 5, 6, and 39 for further disclosure.
d) Provisions, liabilities and contingencies
Provisions and liabilities are recognized in the
period when it becomes probable that there will
be a future outflow of funds resulting from past
events that can reasonably be estimated. The
timing of recognition requires application of
judgement to existing facts and circumstances
which may be subject to change.
In the normal course of business, contingent
liabilities may arise from litigation and
other claims against the Company. Potential
liabilities that are possible but not probable of
an outflow of resources embodying economic
benefits are treated as contingent liabilities.
Such liabilities are disclosed in the notes but
are not recognized. Refer Note 37 for further
disclosure.
e) Taxes
Deferred tax assets are recognized for unused
tax losses to the extent that it is probable
that taxable profit will be available against
which the losses can be utilized. Significant
management judgement is required to
determine the amount of deferred tax assets
that can be recognised, based upon the likely
timing and the level of future taxable profits
together with future tax planning strategies.
Refer Note 8 for further disclosure.
f) Employee benefit plans
The cost of defined benefit gratuity plan
and other post-employment benefits are
determined using actuarial valuations. An
actuarial valuation involves making various
assumptions that may differ from actual
developments in the future. These include
the determination of the discount rate, future
salary increases and mortality rates. Due
to the complexities involved in the valuation
and its long-term nature, a defined benefit
obligation is highly sensitive to changes in
these assumptions. All assumptions are
reviewed at each reporting date.
The mortality rate is based on publicly
available mortality tables for India. Those
mortality tables tend to change only at interval
in response to demographic changes. Future
salary increases and gratuity increases are
based on expected future inflation rates. Refer
Note 28 and 41 for further disclosure.
g) Recoverability of trade receivables
Judgements are required in assessing the
recoverability of overdue trade receivables and
determining whether a provision against those
receivables is required. Factors considered
i nclud e the cred it rati ng of the counterparty,
the amount and timing of anticipated future
payments and any possible actions that can
be taken to mitigate the risk of non-payment.
Refer note 11 for further disclosure.
h) Inventories
Inventories are reviewed on a regular basis
and the Company make allowance for aged
or obsolete inventories and write down to net
realizable value primarily based on historical
trends and management estimates of expected
and future product demand and related pricing.
Inventories are stated at the lower of cost and
net realisable value. Judgements are required
in assessing the expected realisable values
of Inventories. Factors considered includes
demand levels and pricing competition in the
industry. Refer note 10 for further disclosure.
i) Changes in accounting policies and
disclosures
New and amended standards
The Company applied for the first-time
certain standards and amendments, which
are effective for annual periods beginning on
or after 1 April 2024. The Company has not
early adopted any standard, interpretation or
amendment that has been issued but is not yet
effective.
The Ministry of Corporate Affairs has notified
Companies (Indian Accounting Standards)
Amendment Rules, 2024 to amend the
following Ind AS which are effective for annual
periods beginning on or after 1 April 2024.
(i) Ind AS 117 Insurance Contracts
These amendments had no significant
impact on the accounting policies and
disclosure made in the standalone
financial statements of the Company.
% change during the year 2024-25 - Nil
Reliance Industries Limited and JM Financial Asset Reconstruction Company Limited (acting in its capacity as
Trustee of JMFARC-March 2018-Trust) are also the only promoters of the Company.
(iii) Rights, preferences and restrictions attached to equity shares
i) The Company has one class of equity shares having a par value of 1 per share. Each holder of equity share is
entitled to one vote per share.
ii) Right to receive dividend as may be approved by the Board of Directors / Annual General Meeting.
iii) The equity shares are not repayable except in the case of a buy back, reduction of capital or winding up in terms
of the provisions of the Companies Act, 2013.
iv) Every member of the Company holding equity shares has a right to attend the General Meeting of the Company
and has a right to vote in proportion to his share of the paid-up capital of the Company.
v) In the event of liquidation, the equity shareholders are eligible to receive remaining assets of the Company, after
distribution of all preferential amounts, in proportion to their shareholding.
Notes:
(i) Optionally Convertible Preference Shares :
During the earlier year, as per the Approved Resolution Plan, On 28th February 2020, the Company has issued and
allotted 250,00,00,000 9% Optionally Convertible Preference Shares (OCPS) of Re. 1/- each to Reliance Industries
Limited (RIL). (i) RIL is entitled to convert these OCPS into equity shares of the Company (1:1 basis) at any time on or
before 18 months from their date of allotment i.e. 28th February 2020. (ii) if RIL does not convert the OCPS into equity
shares with in the period of 18 months, OCPS shall be redeemed at the end of 10 years from the date of allotment. (iii)
dividend @9% per annum is payable on cumulative basis.
(ii) Non-Convertible Redeemable Preference Shares :
During the previous year, the Company has issued and allotted 3300,00,00,000 9% Non-Convertible Redeemable
Preference Shares (NCRPS) of Re. 1/- each to Reliance Industries Limited(RIL). (i) These NCRPS shall be redeemable
at par at any time at the option of the Company within a period not exceeding 20 years from the date of allotment i.e.
2 January 2024. (ii) dividend @9% per annum is payable on cumulative basis.
Note a - Term loans from Banks are repayable in 28 quarterly instalments commencing from March 2026.
Note b - As per the approved resolution plan, loans from asset reconstruction company and body corporate are
interest free for a period of 8 years, post which the terms of the assigned debt shall be mutually agreed
among the resolution applicants and the Company (Refer note 34).
(v) During the earlier year (FY 2020-21), in accordance with the Approved Resolution Plan, JMFARC Limited and Reliance
Industries Limited have converted debt amounting to ' 5,298.58 crore into equity, whereby the Company has issued
2,75,46,00,000 equity shares at face value ' 275.46 crore, (refer note 15).
(vi) iany has satisfied all the covenants prescribed in the terms of borrowings.
Notes :
(1) Working capital loans are secured by; (i) first ranking pari-passu charge on the current assets of the Company,
both present and future (ii) second ranking pari-passu charge (after term loan) over the movable fixed assets of the
Company, both present and future. (iii) loan is repayable on demand and carrying interest 7% to 9.5% per annum.
(2) The Company has been sanctioned working capital limits in excess of ' five crores in aggregate from banks during
the year on the basis of security of current assets of the Company. The quarterly returns/statements filed by the
Company with such banks are in agreement with the books of account of the Company.
(3) As at 31 March 2025, the Company had available ' 154.76 crores (Previous Year: 123.75 crores) of undrawn committed
borrowing facilities.
(4) The Company has satisfied all the covenants prescribed in the terms of borrowings.
Performance Obligation
The performance obligation is satisfied upon delivery of the goods and payment is generally due within upto 90 days from
delivery. There are no material unsatisfied performance obligation outstanding at the year end.
The performance obligations of the Company are part of contracts that have an original expected duration of less than
one year and accordingly, the Company has applied the practical expedient and opted not to disclose the information
about it's remaining performance obligations in accordance with IND AS 115.
a. On July 12, 2024, certain spinning plants of the Company located at Silvassa was struck with tornado, causing
damage to certain assets of the Company. Basis preliminary assessment, management has assessed loss of ' 61.42
crore due to above and recorded a loss relating to property, plant and equipment (as per WDV) and inventories under
the head exceptional items. The Company is of the view that it has adequately covered its assets by insurance policy
and the surveyor's assessment is in progress, Company has already received on account payment of ' 55 crore
from the Insurance company. Since there is certainty on recovery of loss from insurance company, the Company has
recorded the entire amount of loss as insurance claim receivables under the head exceptional items .
b. During the year, the Company has sold certain Investment properties, leasehold land and building situated at
Mumbai, Pawne and Mahape which resulted into a gain of ' 94.14 crore.
33 In the earlier year, the Company has completed all the steps as laid down in the resolution plan approved by the National
Company Law tribunal vide its order dated 8 March 2019 and the resolution applicants had obtained joint control over
the Company and the Board of Directors had been re-constituted on 14 September 2020, being the closing date as
determined by the Company in terms of the resolution plan.
During the year, the Company incurred a loss of ' 768.81 crore for the year ended 31 March 2025 and has accumulated
losses of ' 22,868.40 crore as on that date, its current assets exceeds its current liabilities by ' 350.70 crore and it has
earned EBITDA of ' 136.69 crore for the year ended 31 March 2025. The market condition is improving and considering
the cash flow projection of the Company, the financial statements have been prepared on a going concern basis.
34 As per Clause 1.2 (xi) of Approved Resolution Plan, the outstanding debt amounting to Rs 17,384.02 crore assigned to
Resolution Applicants shall not carry interest for the first 8 years from the Closing Date (as defined in the Approved
Resolution Plan), hence such debt has been measured at cost. After such period of 8 years, the terms of assigned debt
shall be mutually agreed among the Resolution Applicants and the Company. The Approved Resolution Plan has an
overriding effect on the requirements of Ind AS, as per legal view obtained by the Company in this regard. Hence, had the
Company applied the Ind AS, it would have recognised the assigned debt at its fair value and accordingly recognized the
imputed interest cost over the period of loan in the statement of profit and loss.
35 As on June 2017, the Company had an amount of '11,623.94 crore receivable from trading debtors on account of sale
of fabric ("Outstanding Trading Dues”). As at 31 March 2019, the Company had created full provision against said
receivables by charging it to the statement of profit and loss in earlier year As per the Approved Resolution Plan, if any
of the trading debtors make payment towards the Outstanding Trading Dues or any person is required to contribute to
the assets of the Company under any legal process against the Outstanding Trading Dues and has contributed the same,
such amounts (net of any income tax payable by the Company on account of such receipt of the Outstanding Trading
Dues) shall be deposited in a designated escrow account ("Escrow Account") to be opened in the name of the Company.
Provided however, nothing contained in the resolution plan shall oblige the Resolution Applicants or the Company to take
steps for recovery of the Outstanding Trading Dues.
Accordingly, the Company has an obligation to deposit into the escrow account any collections received out of the
"Outstanding Trading Dues" or otherwise, as stated above, for the benefit of the Financial Creditors and as a result
therefore, the risk and reward associated with the Outstanding Trading Dues now belong to the Financial Creditor
Accordingly the Company had derecognised the said outstanding trade receivables and related provisions in the books.
The Company has not received any amounts towards Outstanding Trading Dues in the current year.
36 The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post employment
benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. Certain
sections of the Code came into effect on 3 May 2023. However, the final rules/interpretation have not yet been issued.
Based on a preliminary assessment, the entity believes the impact of the change will not be significant.
1 The Company has issued a letter of comfort to Alok Infrastructure Limited, wholly owned subsidiary Company in
order to meet its financial obligations. As on 31 March 2025, management has assessed that the possibility of
outflow of resources embodying economic benefits with respect to the letter of comfort issued is remote.
2 Claims / Debts against the Company up to the closing date which are addressed under the NCLT approved resolution
plan are not included in contingent liabilities though many of such claims / debts may be pending for disposal at
various judicial forums. As per clause 3.3.4 of the aforesaid resolution plan, these liabilities stands extinguished.
Accordingly, the management has assessed that the possibility of outflow of resources embodying economic benefits
with respect to such claims / debts is remote.
3 All direct and indirect tax liabilities relating to assessments of earlier year up to the closing date stand extinguished
as per the NCLT approved resolution plan. Further, the implementation of the resolution plan does not have any
effect over claims or receivables owed to the Company. Accordingly, the Company has assessed that any receivables
due to the Company, evaluated based on merits of underlying litigations, from various governmental agencies
continues to subsist.
(i) Sales to related parties and concerned balances
Sales are made to related parties on the same terms as applicable to third parties in an arm's length transaction and
in the ordinary course of business. The Company enters into sales transactions with related parties as per business
practice, the Company determines the transaction price considering the amount it expects to be entitled in exchange
of transferring promised goods or services to the customer.
Trade receivables outstanding balances are unsecured and require settlement in cash. No guarantee or other
security has been received against these receivables.
(ii) Purchases of goods and services received from related parties and related balances
Purchases are made / services received (IT Support and related services) from related parties on the same terms
as applicable to third parties in an arm's length transaction and in the ordinary course of business. Discount for this
purpose is mutually negotiated and agreed between transacting parties.
Trade payable outstanding balances are unsecured and require settlement in cash. No guarantee or other security
has been received against these receivables.
(iii) Services rendered to related parties
The Company has entered into contract with related party for rendering of job work services of Polyester.
The Company mutually negotiates and agrees the price and payment terms with the related parties on a fixed price
based on capacity utilisation.
Outstanding balances are unsecured and require settlement in cash. No guarantee or other security has been
provided against these payables.
(iv) Items of Property, Plant and Equipment (PPE) purchased from the related party
During the year 2024-25, the Company purchased items of PPE from Sintex Industries Limited. The purchase was
made on the same terms as applicable to third parties in an arm's length transaction and in the ordinary course of
business. The Company mutually negotiated and agreed purchase price and payment terms with Sintex Industries
Limited by benchmarking the same to sale transactions with non-related parties entered into by the counter-party.
The amount was fully paid at the reporting date.
(v) Loans given to related parties
During the earlier years (prior to NCLT period), the Company had given loan to its subsidiaries. These loans are
fully provided for except for loan given to Alok Infrastructure Limited. Loan given to Alok Infrastructure Limited is
' 1,372.99 crore out of which ' 1,168.93 crore is provided, refer note no. 47 and 49. Further, repayment of this loan
was due in the previous year ended 31 March 2024.
(vi) Loans taken from the related parties
As per the approved resolution plan, outstanding loan as on 31 March 2025'17,384.02 crore is assigned to Reliance
Industries Limited and JMFARC. Further, the Company had issued preference shares worth ' 3,300.00 crore to
Reliance Industries Limited to finance partial repayment of term loan and working capital requirements. Refer note
no. 17 and 34 for additional details.
(vii) Guarantees given by related parties
As on the reporting date, the Company has an outstanding term loan amounting to ' 3,496.39 crore from banks.
The loan is secured with charge over the assets of the Company (refer note no. 17). In addition, Reliance Industries
Limited has given a guarantee to the bank against loan obligation of the Company. As per the Guarantee arrangement,
Reliance Industries Limited will be required to make specified payments to reimburse the bank for the loss incurred
if the Company fails to make payment when due in accordance with the original terms of the loan arrangement.
Reliance Industries Limited is entitled to recover losses from the Company if it needs to make any payment to
bank under the guarantee arrangement. The Company has incurred ' 1.75 crore as commission towards Reliance
Industries Limited for the said guarantee.
(viii) Investment made in subsidiary company and joint ventures
In the previous years (prior to NCLT period), the Company has invested in its subsidiaries and joint ventures. These
investments are fully impaired as on the reporting date. Refer note no. 5 for details of investments. There are not
investments made in current and previous year.
(ix) Investment made by related parties
Refer note 15 and 17. no new investments made during the current year.
(x) Reimbursement of expenses
Alok International Inc. (wholly owned subsidiary) make certain rent payment on behalf of the Company. During the
year ended 31 March 2025, Company has reimbursed an amount of ' 4.72 crore (31 March 2024: ' 7.02 crore) in
respect of expenses paid by Alok International Inc. on behalf of the Company.
(xi) Compensation to KMP of the Company
The amounts disclosed in the table are the amounts recognised as an expense during the financial year related to
KMP. The amounts do not include expense, if any, recognised toward post-employment benefits and other long-term
benefits of KMP unless actually paid during the year. Such expenses are measured based on an actuarial valuation.
Hence, amounts attributable to KMPs are not separately determinable.
Note: Potential ordinary shares shall be treated as dilutive when, and only when, their conversion to ordinary shares
would decrease earnings per share or increase loss per share from continuing operations. If the Potential ordinary
shares are anti-dilutive then Basic EPS is considered for Dilutive EPS.
41 Disclosures Pursuant to - “Employee benefits":
i) Defined contribution plans:
The Company's contribution to Provident Fund for the year 2024-25 aggregating to ' 8.99 crore (Previous Year: ' 9.74
crore), ' 0.90 crore (Previous Year: ' 0.89 crore) for ESIC has been recognised in the statement of profit and loss
under the head employee benefits expense. (Refer Note 28).
ii) Defined benefit plans:
a) Gratuity Plan:
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed
five years of service is entitled to specific benefit. though the gratuity liability is recognised from the date the
employee commences service, regardless of whether the employee has completed five years of continuous
service. The level of benefits provided depends on the member's length of service and salary at retirement age.
The Company makes annual contribution to the Employee's Company Gratuity Assurance Scheme, a funded
defined benefit plan for qualifying employees. The Fund invests in the scheme of insurance with the Life
Insurance Corporation of India, IndiaFirst Life Insurance Company Limited, SBI Life Insurance Company Limited
and Canara HSBC Life Insurance Company Limited. The scheme provides for lump sum payment to vested
employees at retirement, death while in employment or on termination of employment of an amount equivalent
to fifteen days salary payable for each completed year of service or part thereof in excess of six months.
The plans typically expose the Company to actuarial risks such as: interest rate risk, longevity risk and salary
risk.
Interest risk : The plan exposes the Company to the risk off all in interest rates. A fall in interest rates will result
in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value
of the liability.
Longevity Risk : The present value of the defined benefit plan liability is calculated by reference to the best
estimate of the mortality of plan participants both during and after their employment. An increase in the life
expectancy of the plan participants will increase the plan's liability.
Salary risk: The present value of the defined benefit plan is calculated with the assumption of salary increase
rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from
the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's
liability.
The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation
were carried out at 31 March, 2025 by KP Actuaries and Consultants LLP. The present value of the defined
benefit obligation, and the related current service cost and past service cost, were measured using the Project
Unit Credit Method as per Ind AS 19.
The following table sets out the status of the gratuity plan for the year ended 31 March 2025 as required under
Ind AS 19.
43 Capital Management and Financial Management Framework:
The Company being in a working capital intensive industry, its objective is to maintain a strong credit rating, healthy
ratios and establish a capital structure that would maximize the return to stakeholders through optimum mix of debt and
equity.
The Company's capital requirement is mainly to fund its capex, working capital, repayment of principal and interest on its
borrowings. The principal source of funding of the Company has been, and is expected to continue to be, cash generated
from its operations supplemented by funding from bank borrowings and the capital markets. The Company is not subject
to any externally imposed capital requirements.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided
by total capital plus net debt. Since net worth of the Company is negative, debt equity ratio is not calculated.
The key risks associated with day to day operations of the Company and working capital management are given
below:
A. Credit Risk:
Credit risk is the risk that counter party will not meet its obligation under a financial instrument or customer
contract leading to a financial loss. The Company is exposed to credit risk mainly from trade receivables and other
financial assets.
i) Trade Receivables:
Trade receivables are typically unsecured and are derived from revenue earned from customer ' Credit risk has
been managed by the Company through credit approvals, establishing credit limits and continuously monitoring
the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment
loss or gain. The Company uses a provision matrix and forward-looking information and an assessment of the
credit risk over the expected life of the financial asset to compute the expected credit loss allowance for trade
receivables. Concentrations of credit risk with respect to trade receivables are limited.
ii) Other Financial Assets & loans
The Company has limited credit risk arising from cash and cash equivalents as the deposits are maintained
with banks and financial institutions with high credit rating. Hence, these are low risk items and the Company
evaluates the recoverability of these financial assets at each reporting date and wherever required, a provision
is created against the same.
The Company had in earlier years given loans to its subsidiaries/a Company in which erstwhile directors were
interested of Rs 1,465.99 crore, which are fully provided for in the books. The net exposure of ' 204.06 crore
is with respect of one wholly owned subsidiary whereby the Company has impaired to the extent of the fair
valuation of the subsidiary's investment properties / inventories.
B. Market Risk:
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises of three types of risks - interest rate risk, currency risk and other
price risk in a fluctuating market environment. Financial instrument affected by market risks includes loans and
borrowings, deposits, derivatives and other financial assets.
i) Currency Risk
The Company's functional currency is Indian Rupees (INR). The Company undertakes transactions denominated
in foreign currencies; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates
affects the Company's revenue from export markets and the costs of imports. The Company has exports and to
that extent has a natural hedge as a mitigation measure to cover foreign exchange risk on account of imports/
expenses in foreign currency. The Company hedges its foreign currency risk by entering into forward contracts.
Foreign Currency Sensitivity
5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel
and represents management's assessment of the reasonably possible change in foreign exchange rates. The
sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their
translation at the period end for a 5% change in foreign currency rates. A positive number below indicates an
increase in profit and negative number below indicates a decrease in profit.
ii) Interest rate risk
a. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument wifi fluctuate
because of changes in market interest rates. The Company is exposed to interest rate risk because funds
are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow
sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated
in rupees with a mix of fixed and floating rates of interest. The Company has exposure to interest rate risk,
arising principally on changes in base lending rate. The Company uses a mix of interest rate sensitive
financial instruments to manage the liquidity and fund requirements for its day to day operations. The risk
is managed by the Company by maintaining a mix between fixed and floating rate borrowings.
iii) Commodity Price Risk
Commodity price risk arises due to fluctuation in prices of raw materials like cotton and yarn. The Company has
a risk management framework aimed at prudently managing the risk arising from the volatility in commodity
prices and freight costs. The Company's commodity risk is managed centrally through well-established trading
operations and control processes.
C. Financial risk management objectives
The Company has a Risk Management Committee established by its Board of Directors for overseeing the
Risk Management Framework and developing and monitoring the Company's risk management policies.
The risk management policies are established to ensure timely identification and evaluation of risks,
setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks
and their limits, improve risk awareness and transparency. Risk management policies and systems are
reviewed regularly to reflect changes in the market conditions and the Company's activities to provide
reliable information to the Management and the Board to evaluate the adequacy of the risk management
framework in relation to the risk faced by the Company.
D. Liquidity Risk:
Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to
shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring
financing. The Company requires funds both for short term operational needs as well as for long term
capital expenditure for capex. The Company generates sufficient cash flow from operations, which together
with the available cash and cash equivalents provide liquidity in the short-term and long-term. The
Company has established an appropriate liquidity risk management framework for the management of the
Company's short, medium and long-term funding and liquidity management requirements. The Company
manages liquidity risk through cash generated from operations, banking facilities and reserve borrowing
facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles
of financial assets and liabilities. As at 31 March 2025, the Company has undrawn committed borrowing
facilities amounting to ' 154.76 crore and the Company expects to avail all the working capital limits
sanctioned to it in FY 25-26.
The following tables detail the Company's remaining contractual maturity for its non-derivative financial
liabilities with agreed repayment periods. The amount disclosed in the tables have been drawn up based
on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can
be required to pay. The contractual maturity is based on the earliest date on which the Company may be
required to pay.
Fair value hierarchy
The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instrument by
valuation technique:
(i) Level 1 — quoted (unadjusted) market prices in active markets for identical assets or liabilities;
(ii) Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable;
(iii) Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.
There has been no transfers between level 1 & level 2 during the period.
45 Lease Disclosures
Company as a lessee
The Company has lease contracts for land used in its operations, which has a lease terms of 95 year As per the terms
of lease, the Company was required to make one-time advance lease payment for the leased land. Hence, following the
terms of the leased agreement, the Company has made the one-time lease payment and consequently, there are no
lease liabilities recorded in the Balance Sheet as at 31 March 2024. further during the current year the Company has sold
these leased lands.
The Company has entered into lease contracts (from 1 October 2022), for factory buildings with tenure of 10 years with a
lock in period of 3 year.
Refer note 2 for disclosure relating to right of use assets.
Set out below are the carrying amounts of lease liabilities (on the face of Balance sheet under Financial Liabilities)
and the movements during the period:
The Company had total cash outflows for leases of INR ' 5.06 crore in 31 March 2025 (Previous Year: ' 5.06 crore).
incremental borrowing rate for lease liabilities is 9%.
Extension and termination option
The lease of building contain termination options exercisable by both the lessor and the lessee after the end of the
non-cancellable contract period. Where practicable, the Company seeks to include termination options in new leases to
provide economic viability. The Company assesses at lease commencement whether it is reasonably certain to exercise
the termination options. The Company reassesses whether it is reasonably certain to exercise the options if there is a
significant event or significant change in circumstances within its control.
Company as a lessor
The Company has entered into leases on its investment property portfolio consisting of certain Residential flats and
commercial buildings (see Note 3). These leases have terms of between 5 and 20 year All leases include a clause to
enable upward revision of the rental charge on an annual basis according to prevailing market conditions. Rental income
recognised by the Company during the year is ' 0.26 crore (2023-24: ' 0.14 crore). There are no non-cancellable leases.
46 During the year the Board of Directors of the Company in their meeting held on 14 October 2024 has approved the sell
/ lease of some of the assets, accordingly; Land of ' 11.74 crore (net block) and Investment properties of ' 1.02 crore
transferred to "Assets held for sale".
47 The Company had granted interest free loan in earlier years (prior to corporate insolvency resolution process) to a
company which is outstanding as at the year-end amounting to ' 233.32 crores (against which an impairment allowance
of ' 233.32 crores is made). Further, the Company had granted interest free loan in earlier years (prior to the corporate
insolvency resolution process) to its wholly owned subsidiaries ('WOS') which are outstanding as at the year-end
amounting to ' 2,605.66 crores (against which an impairment allowance of Rs 2,401.60 crores is made). Based on legal
opinion obtained by the Company, the provisions of section 186 of the Companies Act, 2013 are not applicable to all such
interest free loans granted under the erstwhile Companies Act, 1956 and by virtue of the resolution plan approved by the
NCLT, any claim from the authorities with respect to the breach / contravention / non-compliance of any Applicable law
is abated, settled and extinguished as at the closing date (i.e. 14 September 2020).
48 As per Section 135 of the Companies Act, 2013, a company meeting the applicability threshold, needs to spend at least
2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR)
activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture,
healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural development projects.
A CSR committee has been formed by the Company as per the Act. The Company has incurred losses in current and
in previous years, Accordingly, as the average net profit for immediately preceding three financial years is NIL there
are no amounts required to be spend on corporate social responsibility under section 135 of the Companies Act, 2013.
Consequently, there are no unspent amount on ongoing projects / other than ongoing projects.
49 In the earlier year, on 22 March 2021, the NCLT has passed the order for withdrawal of the corporate insolvency resolution
process for Alok Infrastructure Limited ("AIL"), wholly owned subsidiary of the Company. Post this, the subsidiary had
also performed a valuation of its investment properties / inventories with the help of external valuation specialists
and accordingly considered impairment in its books in earlier year AIL do not have significant business operations and
has made a loss of ' 8.08 crore for the year ended 31 March 2025 and has accumulated losses of ' 1526.03 crore as
on 31 March 2025. During the current year, the said subsidiary has also reassessed the valuation of its investment
properties / inventories with the help of external valuation specialist and there is significant change in the valuation,
though the company has incurred losses during the year and considering improved valuations of assets of the company,
the impairment provision has been reversed by ' 32.28 crore and closing provision stands at ' 1,168.93 crore (previous
year '1,201.21 crore) against gross loan value of '1,372.99 crore (previous year '1,372.99 crore) is made as on 31 March
2025 (refer note 6). Further, the aforesaid loan was due for repayment during the previous year and has not been repaid
by AIL.
50 The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) to or in any other person or entity, including foreign entities (“Intermediaries"), with the understanding,
whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries")
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Further, the Company has not received any funds from any person or entity, including foreign entities (“Funding Parties"),
with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly,
lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party
(“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
51 The Company has used accounting software for maintaining its books of account which has a feature of recording
audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the
software. Further, there are no instance of audit trail feature being tampered with. Also, Company has preserved the
audit trail details as per the statutory requirements for record retention.
52 Other Disclosure
a. There are no proceedings initiated or are pending against the Company for holding any benami property under the
Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.
b. The Company has not entered into any transactions with struck off companies during the year.
c. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
d. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
e. The Company does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
f. The Company has not been declared wilful defaulter by any bank or financial institution or government or any
government authority.
55 There are no standards that are notified and not yet effective as on the date.
As per our report of even date For and on behalf of the Board of Directors of
Alok Industries Limited
For S R B C & CO LLP A. Siddharth | (Chairman) (DIN:00016278)
Chartered Accountants Harsh Bapna Mumtaz Bandukwala (Non-Executive, Independent Director) (DIN:07129301)
ICAI firm registration number -
324982E/E300003 (Chief Executive Officer) Rahul Dutt (Non-Executive, Independent Director) (DIN:08872616)
Anil Kumar Mungad Hemant Desai (Non-Executive, Non Independent Director) (DIN:00008531)
per Pramod Kumar Bapna (Chief Financial Officer) Anil Kumar Rajbanshi (Non-Executive, Non Independent Director) (DIN:03370674)
Partner Hitesh Kanani V. Ramachandran (Non-Executive, Non Independent Director) (DIN:02032853)
Membership Number: 105497 (Company Secretary) Nirav Parekh (Non-Executive, Non Independent Director) (DIN:09505075)
Place: Mumbai Place: Mumbai
Date: 21st April 2025 Date: 21st April 2025
Corporate Identity Number of Alok Industries Limited - L17110DN1986PLC000334
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