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.
Dakshin Gujarat VijCompany Ltd. has raised demand of cross subsidy surcharges for the financial year 2005-06 of ' 66.73 lakhs vide its show cause notice / letter no. DGVL/C&R/CPP/ Cross-Sub.Surch/08/2821 dated 05-06-2008 to Shahlon Industrial Infrastructure Pvt. Ltd, which is merged with Shahlon Silk Industries Ltd. The amount payable is under Dispute. Shahlon Industrial Infrastructure Pvt. Ltd., one of the transferor Company which is merged with Shahlon Silk Industries Ltd. has received notice from collector of electricity duty demanding electricity duty @15% on supply of electricity to its members, whereas the said company has paid electricity duty 0.40 paisa per unit considering power generation is for captive purpose. The amount payable is under dispute.
Contingent assets are neither recognized not disclosed in the financial statement.
Provisions, Contingent Liabilities and Contingent assets are reviewed at each balance sheet date.
Grants and subsidies from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all the attached conditions.
Government grants relating to purchase of property, plant and equipment are included in the non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
As per the Second Amendment Rules 2018 notified by MCA on 20th September, 2018 amending IND-AS 20 - Government Grants, an alternative is provided to reporting entities whereby government grant related to assets can be presented by deducting the value of grant from the carrying amount of asset. The said amendment is applicable effective from reporting period beginning on or after 1st April, 2018.
Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the assets can be measured reliably.
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less accumulated amortization/depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably. Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
(Q) Impairment of non-financial assets - property, plant and equipment and intangible assets: [Ind AS 36]
The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors.
An impairment loss is recognized in the Statement of Profit and Loss to the extent, asset's carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset's fair value less cost of disposal and value in use.
Value in use is based on the estimated future cash flows, discounted to their present value using pretax discount rate that reflects current market assessments of the time value of money and risk
specific to the assets. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost of such asset. A Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
Interest income earned on the temporary investment of specific borrowing pending their expenditure on qualifying asset is deducted from the borrowing cost eligible for capitalization. All Other borrowing costs are charged to statement of profit and loss for the period in which they are incurred.
Leases are classified as finance leases whenever the terms of the lease, transfers substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The company has acquired 99 years leasehold right of Plot no.: Composite unit 1 and 2 & Plot No.
3, 4, 5A and 15, Fairdeal Textile Park, Village: Mahuvej, Taluka: Mangrol, Dist.: Surat, by subscribing to the shares of Fairdeal Textile Park Pvt. Ltd. All the risk and rewards of the leasehold land has been transferred to the Company. The life of leasehold land has been considered beyond estimate because of the period of lease being 99 years and renewable thereafter gives the Company ownership of the plot in perpetuity.
The leasehold land has been recognized at Nil value and the value by virtue of which the Company acquired the leasehold right has been recognized non-current at their historical cost.
Operating lease payments are recognized as an expense. Further, there is no outstanding lease contract which requires the treatment to recognize the right to lease asset and lease liability.
(T) Earning in foreign exchange: F.O.B. values of exports Rs.1,765.43 lakhs (Pre. Year Rs. 2,906.91 lakhs)
(U) Sales/Purchase included inter-divisional transfers of NIL (Pre. Year NIL)
(V) Debtors of Rs.14,544.06 lakhs include Rs.4.34 lakhs (Pre. Year Rs. 11,861.91 lakhs includes Rs. 10.08 lakhs) due from concern in which Directors are interested.
As per our Report of even date For and on behalf of the Board
For Rasesh Shah & Associates Shahlon Silk Industries Limited
Chartered Accountants Firm Reg. No : 108671W
Dhirajlal R. Shah Arvind R. Shah
CA Rasesh B. Shah Chairman Managing Director
Partner DIN :00010480 DIN :00010483
M.NO. : 034217
Place : Surat Hitesh K- Garmora Satish H. Shah
UDIN: 24034217BKEXYN9265 Company Secretary Chief Financial Officer
Date : 27.05.2024