(ii) Terms / rights attached to equity shares :

a. The company has only one class of issued shares referred to as equity shares having a par value of Rs. 10 each. Each holder of equity shares is entitled to one vote per share.

b. The dividend (except in case of interim dividend) proposed by the Board of Directors, if any, is subject to the approval of shareholders in the ensuing Annual General Meeting.

c. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amount. The distribution will be in proportion to the number of equity shares held by the share holders.

a. General reserve:

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations.

Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.

b. Capital Redemption Reserve:

i) An amount of ' 55 Lacs was transferred to capital redemption reserve consequent to the buy back of 5,50,000 equity shares in July '2002 as per the statutory requirement and

ii) ' 300 Lacs has been transferred from Meridian Industries Limited in 2006-07 to the Company in the course of business combination and can be utilized in accordance with the provisions of the Companies Act, 2013.

C. Securities Premium:

Security premium has been created consequent to issue of shares at premium. The reserve shall be utilized in accordance with the provisions of the Companies Act,2013.

b. Security details:

Note 1 : Second ranking pari-passu charge by way of hypothecation of the company's entire stock of raw materials, semi finished & finished goods, consumable stores & spares ,book debts, bills receivable, outstanding monies & other receivables of the company , both present & future, ranking pari-passu with other participating banks and Second raking pari-passu charge on entire fixed assets of the company ranking pari-passu with other participating banks.

Note 2 : Pari passu second charge on entire movable and immovable fixed assets and pari passu second charge on Current Assets and exclusive charge on Promoter's Residential property

Note 3 : Extension of charges on stocks and receivables and pari-passu second charge on the entire fixed assets of the company.

Note 4 : Pari passu second charge on current and fixed Assets of the Company.

Note 5 : Hypothecation of plant & machinery of proposed solar project & first charge over factory land and building at Hindpur, second charge over the entire fixed assets of the Company on Pari passu basis with other Multiple Banking Arrangement banks excluding fixed assets exclusively charged to other banks including Land and Building at various locations, hyphothecation of fixed asset and personal guarantee of promoter directors.

Note 6 : Hypothecation of plant & machinery of proposed solar project & first charge over factory land and building at Kanjikode, Kerala and personal guarantee of promoter directors.

Note 7 : Pari passu second charge with the existing credit facilities in terms of cash flows (including repayments) and securities

Note 8 : Paripassu first charge on the entire Current Assets of the Company and Paripassu second charge on the entire Fixed Assets of the Company.

Note 9 : Second Pari passu charge on the entire current Assets of the Company, both present and future and second Pari passu charge on the collateral securities offered for the existing facilities of the Company.

Note 10 : Charge on the assets purchased out of the term loan. Paripassu first charge on the assets situtaed at Pollachi Unit, Paripassu second charge on the entire current assets of the Company along with other capital working lenders.

II - Hire purchase loans from financial institution of ? 83.86 Lakhs (March 31,2023 : ?114.67 Lakhs) carries interest

@ 7.63% to 10.65% p.a. The loans are repayable in 60 monthly instalments starting from the respective date of

finance. The loan is secured by specific assets financed (Vehicle).

III - Debentures represents 12% 700 Non-convertible debentures of ? 10,00.000/- each issued for cash at par to ICICI

Prudential Corporate Credit Opportunities Fund -1. The interest is payable on quarterly basis.

(a) Terms of Repayment:

The debentures are redeemable at a premium of 0.50% per annum on the principal amount and are repayable as

follows:

- At the end of 12 months from the deemed date of allotment - 7.5% of the principal amount

- At the end of 18 months from the deemed date of allotment - 7.5% of the principal amount

- At the end of 24 months from the deemed date of allotment - 7.5% of the principal amount

- At the end of 30 months from the deemed date of allotment - 7.5% of the principal amount

- At the end of 36 months from the deemed date of allotment - 10% of the principal amount

- At the end of 42 months from the deemed date of allotment - 10% of the principal amount

- At the end of 45 months from the deemed date of allotment - 50% of the principal amount.

(b) Security details:

- First charge on Technical Textile Plant and all assets thereof, identified land parcels and on the identified Spinning Unit Plant (Land, Building and Machinery) located at Walayar, Kerala.

1 Working capital loan from banks are secured by pari passu first charge on all the current assets of the Company and pari passu second charge on fixed assets of the Company and are repayable on demand.

2 In respect of the above, working capital rupee loans carry interest rate ranging from 8.60% p.a. to 9.25% p.a. and working capital foreign currency loans carry interest rate ranging from 1.60 % p.a. to 2.01 % p.a. plus applicable SOFR.

3 The quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of accounts of the Company of the respective quarters.

39. Employee Benefit Plans

(a) Defined contribution plans - Provident Fund

In accordance with The Employees Provident Funds Act, 1952 employees are entitled to receive benefits under the provident fund. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (12% for fiscal year 2024 and 2023) of an employee’s basic salary. All employees have an option to make additional voluntary contributions. These contributions are made to the fund administered and managed by the Government of India (GOI). The Company has no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the statement of profit and loss in the period they are incurred.

The expense recognised during the period towards this defined contribution plan is ' 337.99 Lakhs (March 31,2023 - ' 307.07 Lakhs).

(b) Defined contribution plans - Employee State Insurance

In accordance with Employees' State Insurance Act, 1948, the eligible employees are entitled to receive benefits under the ESI Scheme. The employer contributes 3.25 percent and employee contributes 0.75 percent, total share 4 percent. This fund is managed by the ESI Corporation (ESIC) according to rules and regulations stipulated there in the ESI Act 1948, which oversees the provision of medical and cash benefits to the employees and their family.

The Company has no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the statement of profit and loss in the period they are incurred.

The expense recognised during the period towards this defined contribution plan is ' 60.55 Lakhs (March 31,2023 - ' 70.16 Lakhs).

(c) Defined Benefit Plans - Gratuity

The company has defined benefit gratuity plan for its employees, which requires contributions to be made to a separately administered fund. It is governed by the Payment of Gratuity Act, 1972. The plan provides for a lump-sum payment to vested employees at retirement, death, while in employment or on termination of employment of an amount equivalent to 26 days salary payable for each completed year of service. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets including investment of the funds in accordance with the norms prescribed by the Government of India.

Each year, the Board of Trustees and the Company review the level of funding in the India gratuity plan. Such a review includes the asset-liability matching strategy and assessment of the investment risk. The Company decides its contribution based on the results of this annual review.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31 March 2024 by Mr.Srinivasan Nagasubramanian, Armstrong International Employee Benefits Solution, Fellow of the Institute of Actuaries of India . Company’s liability towards gratuity (funded) is actuarially determined at each reporting date using the projected unit credit method.

(i) Risk Exposure:

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk The present value of the defined benefit plan liability is calculated by

reference to the future salaries of the plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.

Interest risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.

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 liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

The management assessed that the fair value of cash and cash equivalents, trade receivables, loans,other financial assets, trade payables and other financial liabilities approximate the carrying amount largely due to short-term maturity of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Investments in subsidiaries are carried at cost.

Investements in unquoted equity shares are carried at FVTOCI.

Investements through Portfolio Management scheme is carried at FVTPL.

41. FAIR VALUE MEASUREMENT (a) Fair value hierarchy

Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:

Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 : inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.,as prices) or indirectly (i.e., derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

The Company has not disclosed the fair values for short term / current financial instruments (such as short term trade receivables, short term trade payables, Current Loans and Short term borrowings etc.,) because their carrying amounts are a reasonable approximation of Fair value.

(c) Measurement of fair values:

The basis of measurement in respect of each class of financial assets and liabilities are disclosed in significant accounting policies.

42. CAPITAL MANAGEMENT:

The Company’s capital management strategy is to effectively determine, raise and deploy capital so as to create value for its shareholders. The same is done through a mix of either equity and/or preference and/or convertible and/or combination of short term /long term debt as may be appropriate.

The Company determines the amount of capital required on the basis of its product, capital expenditure, operations and strategic investment plans. The same is funded through a combination of capital sources be it either equity and/or preference and/or convertible and/or combination of short term/long term debt as may be appropriate.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents and current investments.

43. FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES

The Company's financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company's financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

In course of its business, the Company is exposed to certain financial risks that could have significant influence on the Company's business and operational / financial performance. These include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Board of Directors reviews and approves risk management framework and policies for managing these risks and monitors suitable mitigating actions taken by the management to minimise potential adverse effects and achieve greater predictablity to earnings.

In line with the overall risk management framework and policies, the treasury function provides services to the business, monitors and manages through an analysis of the exposures by degree and magnitude of risks.

The Company uses derivative financial instruments to hedge risk exposures in accordance with the Company's policies as approved by the board of directors.

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 three types of risks: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments.

a) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will 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 and US dollars with a mix of fixed and floating rates of interest.

The sensitivity analyses below have been determined based on the exposure to interest rates for floating rate liabilities, assuming the amount of the liability outstanding at the year-end was outstanding for the whole year.

If interest rates had been 100 basis points higher / lower and all other variables were held constant, the Company's profit/ (loss) for the year ended 31 March 2024 would decrease / increase by ' 369.69 Lakhs (for the year ended 31 March 2023 : decrease / increase by ' 378.68 Lakhs). This is mainly attributable to the Company's exposure to interest rates on its variable rate borrowings.

b) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company enters into forward exchange contracts with average maturity of less than 6 month to hedge against its foreign currency exposures relating to the recognised underlying liabilities and firm commitments. The Company's policy is to hedge its exposures above predefined thresholds from recognised liabilities and firm commitments that fall due in 20-30 days. The Company does not enter into any derivative instruments for trading or speculative purposes.

At the time of borrowing decisions, appropriate sensitivity analysis is carried out for domestic borrowings vis-a-vis overseas borrowings.

The below table demonstrates the sensitivity to a 5% increase or decrease in the respective currency against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents management's assessment of reasonably possible change in foreign exchange rate. A positive number below indicates an increase in profit or equity where INR strengthens 5% against the relevant currency. For a 5% weakening of INR against the relevant currency, there would be a comparable impact on profit or equity, and the balances below would be negative.

c) Commodity Price Risk

The Company's revenue is exposed to the market risk of price fluctuations related to its raw material i.e., Cotton. Market forces generally determine prices for the cotton procured by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may increase the Cost of Production that the Company incurs for manufacture of Yarn.

The following table details the Company's sensitivity to a 5% movement in the input price of Cotton. The sensitivity analysis includes only 5% change in commodity prices for quantity consumed during the year, with all other variables held constant. A positive number below indicates an increase in profit where the commodity prices reduces by 5%. For a 5% increase in commodity prices, there would be a comparable impact on profit, and the balances below would be negative.

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial instruments, other balances with banks, loans and other receivables. To manage the credit risk, the company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of account receivables. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occuring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The company considers reasonable and supportive forward-looking information.

The average credit period on sales of products is 21 to 60 days. Credit risk arising from trade receivables is managed in accordance with the Company's established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on a detailed study of credit worthiness and accordingly individual credit limits are defined/modified. The concentration of credit risk is limited due to the fact that the customer base is large.

3) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Group's treasury department is responsible for maintenance of liquidity (including quasi liquidity), continuity of funding as well as timely settlement of debts. In addition, policies related to mitigation of risks are overseen by senior management. Management monitors the Group's net liquidity position on the basis of expected cash flows vis a vis debt service fulfillment obligation.

The table below analysis derivative and non-derivative financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Note :Electricity bills of Southern Power Distribution Company of Andhra Pradesh Limited reflects an amount aggregating to ' 7,829.51 lakhs as “Court Case Arrears”. This is a unilaterally arrived at figure, with no details made available to the Company. Further this amount is not mentioned as the amount payable in the bill but under “Court Case Arrears”. This could be consequent to various litigations pending with regard to Andhra Pradesh Gas Power Corporation Limited as reflected in the earlier Annual Reports.

46. Exceptional items :

a. A parcel of land measuring 3.40 acres was under dispute, for which a suit was filed before the subordinate judge at Palakkad seeking nullification of the conveyance of property. The said dispute was dismissed by the court vide judgement dated 5^th December 2002, thereby granting absolute ownership of the property to the company.

The above order was challenged by way of an appeal by the appellant before the Kerala High Court. The High Court allowed the appeal and set aside the order of the subordinate judge of Palakkad vide court order dated 16^th June 2023.

Aggrieved by the order, an appeal by way of a Special Leave Petition was preferred by the company before the Honourable Supreme Court of India, which was dismissed. Consequently the carrying value of the land amounting to ? 183.60 Lakhs has been written off.

b. The Company, as a shareholder and power consumer, has several pending litigations against Andra Pradesh Gas Power Corporation Limited (APGCL) before various judicial forums. The disputes range from monthly consumption of units, tariff related issues, wheeling charges, peak hour energy allocation, restriction and control measurement charges, surplus allocation charges, peak hour penalty and load factor incentive. These disputes relate to various periods from 2003 to 2020 against which the Company, Southern Power Distribution Company Limited (SPDCL) and APGPCL are litigants at various forums. The company's efforts to obtain full details and the basis of claims of SPDCL and APGPCL from their various offices of SPDCL and APGPCL were futile. Various other shareholders of APGPCL and power consumers are also before various judicial forums on one or more of the above-mentioned issues. The company had in the past, based on then available data, made provisions in the books of accounts in respect of these issues in various years. The carrying value of these liabilities as at 31.03.2024 was ? 806.75 Lakhs.

During September 2022, APGPCL had suspended its operations and had declared layoff of their employees effective 01 November 2022. Considering the layoff and the long pending litigations over several years, the ability of APGPCL to timely represent the pending legal cases, the company has reviewed the issue in totality and has written back an amount of ? 806.75 Lakhs as an exceptional item.

47. Power and Fuel is net of wind power income of ' 220.44 lakhs (PY ' 208.64 lakhs) representing power supplied to the grid against which equivalent consumption was made in house.

The Company has disclosed the suppliers who have registered themselves under "Micro, Small and Medium Enterprises Development Act, 2006" to the extent they have identified on the basis of information available with the Company in respect of the registration status of its vendors.

57. The Code on Social Security 2020 has been notified in the Official Gazette on 29^th September 2020. the effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in the period in which the said code becomes effective and the rules framed thereunder are published.

58. Events after the reporting period

The Board of Directors, in its meeting held on 23^rd May, 2024, has recommended a dividend of 15% ('1.50 per fully paid up equity shares of ' 10 each) for the year ended 31^st March, 2024 subject to the approval of the shareholders at the ensuing Annual General Meeting.

60. Additional disclosure relating to Schedule III Amendment of Companies Act , 2013

(i) Details of Benami property:

No proceedings have been initiated or are pending against the company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder

(ii) Utilisation of borrowed funds and share premium:

A) 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.

B) The company has not received any funds from any person(s) or entity(ies), including foreign entities (Funding party) with the understanding (whether recorded in writing or otherwise) that the Company 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 to or on behalf of the ultimate beneficiaries.

(iii) Compliance with number of layers of companies:

The company has complies with the number of layers prescribed under the Companies Act, 2013.

(iv) Undisclosed income:

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income tax Act,1961, that has not been recorded in the books of account.

(v) Details of crypto currency or virtual currency:

The company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(vi) Valuation of Property, Plant and Equipment, intangible asset and investment property:

The company has not revalued its property, plant and equipment (including Right of use Assets) or intangible assets or both during the current of previous year.

(vii) Struck off Companies:

The company does not have any transaction with companies struck off.

(viii) Wilful Defaulter:

The company had not been declared a wilful defaulter by any bank or financial institution or other lender (as defined under the Companies Act, 2013) or consortium thereof. In accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

(ix) The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies (ROC) beyond the statutory period.

61 The amounts and disclosures included in the financial statements of the previous year have been reclassified wherever necessary to conform to the current year classification.

62. All figures are in lakhs unless otherwise stated and rounded off to the nearest two decimals.