K) Provision

Provisions are recognised in the balance sheet when the Company has a present obligation (legal or constructive) as a result of a past event, which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated. Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date. Where the time value of money is significant, provisions are measured on a discounted basis.

Constructive obligation is an obligation that derives from an entity's actions where:

(i) by an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities and;

(ii) as a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities.

L) Onerous contracts

A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

M) Income taxes

Tax expense for the year comprises current and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of profit and loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying values of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences. In contrast, deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.

The carrying value of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on the tax rates and tax laws that have been enacted or substantially enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to cover or settle the carrying value of its assets and liabilities.

Deferred tax assets and liabilities are offset to the extent that they relate to taxes levied by the same tax authority and there are legally enforceable rights to set off current tax assets and current tax liabilities within that jurisdiction.

Current and deferred tax are recognised as an expense or income in the statement of profit and loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive income or directly in equity.

Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. MAT is recognised as deferred tax assets in the Balance Sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised.

N) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable net of discounts, taking into account contractually defined terms and excluding taxes or duties collected on behalf of the government.

Sale of Goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there are significant uncertainties regarding recovery of the amount due, associated costs or the possible return of goods.

Sale of Services

Revenue is recognised when it is earned and no significant uncertanity exists as to its realisation or collection.

O) Foreign Currency Transactions

The financial statements of the Compny are presented in Indian rupees ('), which is the functional currency of the Company and the presentation currency for the financial statements.

In preparing the financial statements, transactions in currencies other than the Company's functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are re-translated at the rates prevailing at the end of the reporting period. Nonmonetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated.

Exchange differences arising on translation of long term foreign currency monetary items recognised in the financial statements before the beginning of the first Ind AS financial reporting period in respect of which the Company has elected to recognise such exchange differences in equity or as part of cost of assets as allowed under Ind AS 101-"First time adoption of Indian Accounting Standard" are recognised directly in equity or added/deducted to/ from the cost of assets as the case may be. Such exchange differences recognised in equity or as part of cost of assets is recognised in the statement of profit and loss on a systematic basis.

Exchange differences arising on the retranslation or settlement of other monetary items are included in the statement of profit and loss for the period.

Loans in foreign currency for financing the fixed assets are converted at the prevailing exchange rate on the transaction dates. Liabilities payable in foreign currencies on the date of Balance Sheet are restated and all exchange rate differences arising from such restatement are adjusted with the fixed asset.

P) Borrowing Costs

Borrowings costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for the intended use or sale.

Q) Cash and Cash Equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other shortterm highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

R) Trade Receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment, if any.

S) Segment Reporting Identification of Segments

The Company has identified manufacturing and export of cotton yarn and other various merchandise as its sole operating segment and the same has been treated as

primary segment. The Company’s secondary geographical segments have been identified based on the location of customers and then demarcated into Indian and overseas revenue earnings.

T) Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

U) Contingent Liabilities & Contingent Assets

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. The company does not recognize a contingent liability but discloses its existence in the financial statements. Contingent assets are neither recognised nor disclosed in the financial statement.

i) Rupee Term loan from Canara Bank - Kolkata is secured by:

(a) an equitable mortgage ranking exclusive charges inter-se by deposit of title deeds of all the immovable properties of the company both present and future, relating to its processing unit at Plot No. T-48 Kagal - Hatkangale Five Star Industrial Area, MIDC, Villange : Talandage, Tal. Hatkanangale, District: Kolhapur, Maharastra -416236

(b) all the existing securities for other regular limits will be available as collateral secutiry as second charge on pari passu basis.

ii) Working Capital Loan from Canara Bank, specialised Mid Corporate Branch, Kolkata , Punjab National Bank, Mid Corporate Branch, Kolkata, Indian Bank, CFB Mission Row Branch, Kolkata, Karnataka Bank Ltd, Overseas Branch, Kolkata and State Bank of India - Overseas Branch, Mumbai are secured byway of :

(a) First charge by way of hypothecation of stock of Raw materials, Work-in-process, finished goods and book debts relating to spinning unit at Village : Yavluj, District : Kolhapur, Maharashtra, and processing unit at Kagal - Hatkanangale Five Star Industrial Area, MIDC, Village : Talandage, Tal. Hatkanangale, District: Kolhapur, Maharashtra and stock-in-trade at trading unit at various ports/warehouses in India, both present and future in a form and manner satisfactory to the bank, ranking pari passu with each other participating working capital banks in consortium.

(b) Second charge on all the fixed assets of the company situated at Village Yavluj & Talandage both at Kolhapur, both present and future ranking pari passu with each other among participating working capital banks in consortium.

(c) Personal guarantee of some of the Directors of the Company.

(iii) Guaranteed Emergency Credit Line (GECL 2.0) Loan from Canara Bank,specialised Mid Corporate Branch, Kolkata, Punjab National Bank, Mid Corporate Branch, Kolkata, Indian Bank, CFB Mission Row Branch, Kolkata, State Bank of India - Overseas Branch, Mumbai and Karnataka Bank Ltd, Overseas Branch, Kolkata are secured by way of :

(a) Primary Security : On the current assets and fixed assets purchased / created out of the credit facilities so extended and Pari Passu charge on the entire current assets of the Company and extension of second pari passu charge on fixed assets of the Company situated at Village Yavluj and talangade both at Kolhapur.

(b) Collateral Security: No fresh collateral security. GECL 2.0 shall rank second charge with the existing credit facility in terms of cash flow and securities.

Guaranteed Emergency Credit Line (GECL 2.0 Extn) Loan from Canara Bank, Mid Corporate Branch, Kolkata, Punjab National Bank,specialised Mid Corporate Branch, Kolkata and Indian Bank, CFB Mission Row Branch, Kolkata are secured by way of :

(a) Primary Security : On the current assets and fixed assets purchased / created out of the credit facilities so extended and Pari Passu charge on the entire current assets of the Company and extension of second pari passu charge on fixed assets of the Company situated at Village Yavluj and talangade both at Kolhapur.

(b) Collateral Security: No fresh collateral security. GECL 2.0 Extn shall rank second charge with the existing credit facility in terms of cash flow and securities.

Facilities are also covered under emergency Credit Line Guarantee Scheme (ECLGS) administered by National Credit Guarantee Trustee Company (NCGTC) Ltd,

37 FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The Company has exposure to the following risks from financial instruments.

i) Market Risk

ii) Liquidity Risk

iii) Credit Risk

Market risk:

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates & prices such as interest rates, foreign currency exchange rates or in the price of market risk-sensitive financial instruments. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk

and the market value of its investments. Thus the company's exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

Interest Rate Risk:

Interest rate risk refers that the fair value of future cash flows of a financial instument will flucuate because of changes in market interest rates. The objective of the Company's interest rate risk management processes are to lessen the impact of adverse interest rate movement on its earning and cash flows and to minimise counter party risks.

a) Currency Risk:

The company is exposed to currency risk to the extent that there is a mismatch between the currencies in which Export sales, Import purchase, other expenses and borrowings in foreign currency are denominated and the functional currency of the company. The functional currency of the company is Indian Rupees (INR). The currencies in which these transactions are primarily denominated are Euro and USD.

At any point in time, the Company generally hedges its estimated foreign currency exposure in respect of its forecast sales over the following 12 to 18 months. The company uses forward exchange contracts to hedge its currency risk. Such contracts are generally designated as cash flow hedges.

The Company as per its risk management policy uses foreign exchange forward contract and cross currency forward contracts primarily to hedge foreign exchange. The Company does not use derivative financial instruments for trading or speculative purposes.

Loans to Others:

The credit worthiness of the counter party is evaluated by the management on an ongoing basis and is considered to be good.

Investment in mutual funds:

The investment in mutual funds, are entered into with credit worthy fund houses. The credit worthiness of these counter parties are evaluated by the management on an on-going basis and is considered to be good. The Company does not expect any losses from these counter parties.

Cash and Cash equivalents:

Credit risk from balances with banks is managed by the Company in accordance with the company's policy. Investment of surplus funds are made in mainly in mutual funds with good returns and within approved credit ratings.

Unquoted Investments:

The cost of unquoted investments approximate the fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range.

43 B RIGHT ISSUE AND UTILISATION STATEMENT

The Rights Issue Committee of the Company at their meeting held on 5th March, 2024 have allotted 1,87,49,550 equity shares to the Equity Shareholders of the Company through Rights Issue at issue price of Rs. 20/- per equity Share (including a premium of Rs. 15/- per equity Share and Face Value of Rs.5/- each).

The total Rights Issue proceeds of the Company is Rs. 3,749.91 lakhs .

The funds raised through the aforesaid issue were utilized in accordance with the objectives of the said Right issue stated in the Letter of Offer.

44 DETAILS OF LOANS AND GUARANTEES GIVEN COVERED UNDER SECTION 186(4) OF THE COMPANIES ACT, 2013:

The Company has made investments in the shares of different companies and given loans and advances to different parties which are general in nature. The loans given are interest bearing which are not lower than the prevailing yield of related government security close to the tenure of the respective loans. Further, the company has not given any gurantee or provided any security.

45 The Company does not have any Benami Property. Further there are no proceedings initiated or are pending against the Company for holding any Benami Property under the prohibition of Benami Property Transaction Act., 1988 and rules made there under.

46 The Company does not have transactions with any Struck off Company's during the year.

47 The Company has not traded or invested in Crypto Currency or virtual Currency during the financial year.

⁴⁸ The Company has not advanced or loaned or invested funds to any other person(s) or entity(s) including foreign entities (intermediaries) with the understanding that the

intermediaries shall:

a. Directly or indirectly lend or invest in other persons or entities in any manner what so ever by or on bebalf of the Company (ultimate beneficiaries); or

b. Provide any guarantee,security or the like to or on behalf of the ultimade beneficiaries.

49 The Company has not received any fund from any person(s) or entity(s), including foreign entities ( funding party) with understanding ( whether recorded in writing or otherwise) that the Company will:

a. Directly or indirectly lend or invest in other persons or entities identified in any manner what so ever by or onbehalf of the funding party ( ultimate beneficiaries); or

b. Provide any guarantee,security or the like on behalf of the ultimate beneficiaries.

50 The Company has not done 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 assesments under the Income Tax Act.,1961

51 The Company has not been declared as a willful defaulter by any Bank of Financial Institution or Government or any Government Authority.

52 The Company has not filed any scheme of arrangements in terms of Section 230 to 237 of the Company's Act., 2013 with any competent Authority.

53 Statement of Financial Ratio's as per Schedule III Requirements has been separately enclosed.

54 The Previous Years Figures has been regrouped /rearranged whenever necessary to confirm to the current year presentation.

55 The financial statements are approved by the audit committee at its meeting held on 30th May, 2024 and by the Board of Directors on 30th May, 2024.

As per our separate report attached of even date For and on Behalf of the Board of Directors

For B Nath & Co. , .

Chartered Accountants bu/^- Su/~

Firm Regn No. 307057E Sushil Patwari Sunil Ishwarlal Patwari

, DIN:00023980 DIN: 00024007

' Chairman Managing Director

CAGauravMore ^ ,

Partner Sd/- Sd/-

M. No. 306466 Manoj Agarwal Jyoti Sin ha Banerjee

Place : Kolkata Chief Financial Officer Mem No.: A55830

Date: May 30, 2024 Company Secretary