Provident Fund:
The eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the cover employee's salary. The provident fund contributions are made to EPFO.
Bonus Payable:
The Company recognises a liability and an expense for bonus. The Company recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
i. Provisions:
A Provision is recorded when the Company has a present legal or constructive obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated.
Provisions are evaluated at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expenses.
ii. Contingent liabilities:
As of the Balance Sheet date the management believes that there are no contingent liabilities that may fall upon the company pursuant to the Hon. ble NCLT dated 25 Mar. 2024
iii. Contingent Assets:
The Company does not recognise contingent assets. If it is virtually certain then they will be recognised as asset. These are assessed continually to ensure that the developments are appropriately disclosed in the financial statements.
Basic earnings per share are calculated by dividing the net profit or loss attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares).
Diluted earnings per share are computed by dividing the net profit or loss attributable to equity shareholders by the weighted average number of equity shares outstanding during the year after giving effect to all dilutive potential equity shares. Since the Company has no dilutive instruments, Basic EPS and Diluted EPS are the same.
During the year, the Company implemented a capital reduction and consolidation of equity shares pursuant to the NCLT-approved scheme. Consequently, the number of equity shares outstanding was reduced and consolidated into 33,69,574 equity shares of ?10 each.
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within three months from the date of acquisition and which are readily convertible into cash and which are subject to only an insignificant risk of changes in value.
Cash flows are reported using the indirect method, whereby profit/(loss) before tax is appropriately classified for the effects of transactions of non-cash nature and any deferrals or accruals of past or future receipts or payments. In the cash flow statement, cash and cash equivalents include cash in hand, cheques on hand, balances with banks in current accounts and other short- term highly liquid investments with original maturities of thee months or less.
The Company operates in one business segment namely “Textile. “Hence reporting under this standard is not applicable.
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period in which they are incurred under finance costs.
While preparing the financial statements, management has made a number of judgments, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.
(i) Significant management judgment
The following are significant management judgments in applying the accounting policies of the Company that have significant effect on the financial statements.
(ii) Recognition of deferred tax assets
The extent to which deferred tax assets can be recognized is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry-forwards can be utilized. In addition, careful judgment is exercised in assessing the impact of any legal or economic limits or uncertainties in various tax issues.
In consideration of prudence, no provision is made in respect of net deferred tax asset, arising due to timing differences after set off of deferred tax liability, against deferred tax asset.
(ili) Estimation of uncertainty
Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is mentioned below. Actual results may be different.
a. Useful life of depreciable assets
Management reviews its estimate of the useful life of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of assets including Intangible Assets.
b. Inventories
Management has carefully estimated the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by market-driven changes.
c. Defined benefit obligation (DBO)
Management's estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses (as analysed in Note .10).
d. Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current or non-current classification of assets and liabilities.
e. Exceptional and Extraordinary Items
In accordance with Ind AS 1 - Presentation of Financial Statements, the Company has separately disclosed items of income and expense which are of such size, nature or incidence that their separate disclosure is relevant to explain the performance of the Company. These are classified as Exceptional Items.
Pursuant to the Order of the Hon'ble National Company Law Tribunal, Mumbai Bench Court III, dated 04 February 2025, in IA No. 5666 of 2024 in CP (IB) No. 1499/MB/C-MI/2017, the liquidation proceedings of Abhishek Corporation Limited were formally closed, and the Corporate Debtor was successfully sold as a going concern to M/s Mahalaxmi Textile (Successful Bidder) .
The Order discharged the Liquidator from his duties and responsibilities and directed communication of closure to the Registrar of Companies and the IBBI .
In view of the above closure:
• Adjustments relating to Insolvency Reserve (?150.54 lakhs) and Interest on Loan (?165 lakhs) were recognised as exceptional items in FY 2024-25.
• These adjustments represent the final settlement effects of the liquidation process, duly completed under the said NCLT Order.
Pursuant to the acquisition plan approved by the Hon'ble NCLT and implemented by the liquidator during the year, the
equity share capital structure of the Company has undergone the following changes:
1. The pre-liquidation promoter shareholding of 92,25,495 equity shares of f10 each stood cancelled, extinguished, and permanently discharged.
2. The public shareholding of 67,82,967 equity shares of ?10 each was reduced by way of capital reduction, with the face value reduced from ?10 each to ? 0.25 each, thereby effecting a reduction of ? 9.75 per share.
3. Post such reduction, the said equity shares were consolidated into fully paid equity shares of ?10 each, resulting in a reduced number of equity shares.
4. The successful bidder infused equity share capital of ? 3,20,00,000, in addition to infusion by way of loan/issue of securities of ? 37,25,00,000, aggregating to total liquidation sale consideration of ? 40,45,00,000
1 "Current Ratio : Improvement is mainly on account of reduction in current liabilities pursuant to settlement and restructuring, though the ratio continues to reflect a lower-than-ideal liquidity position.
2 "Debt Equity Ratio : Negative net worth in FY 2024-25 due to losses and capital reduction has impacted the ratio, making it not strictly comparable with previous year.1'
3 "Return on Net Worth : Decline is attributable to net loss in FY 2024-25 compared with significant one-time income in the previous year. Negative net worth impacts comparability."
4 Trade Receivables Turnover Ratio: Ratio has reduced significantly as sales volumes declined and average receivables increased post business restructuring.
5 Trade Payables Turnover Ratio: Ratio has declined as purchases reduced substantially during FY 2024-25.
6 Net Capital Turnover Ratio: Increase is on account of negative working capital balance; changes are arithmetic in nature and not reflective of operational efficiency.
7 Net Profit Ratio: Though the Company reported a loss, the loss as a percentage of revenue is lower than last year because FY 2023-24 included higher exceptional items.
8 Return on Capital Employed (ROCE): Variation is due to reduced capital employed after restructuring; negative ratio is mainly on account of operating losses.
9 Return on Investment (ROI): Decline is attributable to lower investment income earned in FY 2024-25 as compared to FY 2023-24.
1 The Outstanding balnces as on 31-03-2025 in respect of sundry debtors, sundry creditors, Loans & Advances, Deposits are subject to confirmation from respective parties and consequential reconciliation/adjustment arising there from, if any. The Management, however, does not expect any material variation.
2 In the opinion of the Board of Directors , the current assets, loans and advances as well as unquoted investments have realisable value in the ordinary course of business at least equal to the amounts at which they are stated.
3 Figures of the previous year are regrouped wherever necessary
4 Figures are rounded off to nearest lakh of rupees.
9 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Group for holding any Benami property.
10 The Company does not have any transactions with struck off companies to the knowledge of the Management.
11 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
12 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
13 The company has been declared a willful defaulter by Union Bank of India (erstwhile Corporation Bank) & Punjab National Bank. However, pursuant to the Liquidation proceedings and the order of Hon. NCLT dated 25.03.2024 the debts of the company stands settled and thereby as on the date of the balance sheet there are no defaults in repayment of debt.
14 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding that the intermediary shall: a) 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 b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
15 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Group shall: a) 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 b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
16 The Company has no 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).
17 The code of Social Security, 2020 (code) relating to employee benefits during employment and post-employment received Presidential assent in September, 2020 and its effective date is yet to be notified. The Company will assess and record the impact of the Code, once it is effective.
18 As the company is incurring continiuos Losses.