14. Provisions and contingencies

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 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 reimbursements will be
received and the amount of the receivable can be measured reliably.

A disclosure of a contingent liability is made when there is a possible obligation that may, but probably will
not, require outflow of resources. Where there is possible obligation or a present obligation where the
likelihood of outflow of resources is remote, no provision or disclosure is made.

15. Financial Instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the
contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial
assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value
of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are
recognised immediately in profit or loss.

Financial assets :

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date
basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of
assets within the time frame established by regulation or convention in the marketplace.

Classification of financial assets

The financial assets are initially measured at fair value. Transaction costs that are directly attributable to the
acquisition of financial assets are added to the fair value of the financial assets on initial recognition.

(i) Financial assets (other than Investments and derivative instruments) are subsequently measured at
amortised cost using the effective interest method.

Effective interest method is a method of calculating the amortised cost of a debt instrument and of
allocating interest income over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash receipts (including all fees and points paid or received that form an
integral part of the effective interest rate, transaction costs and other premiums or discounts) through
the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying
amount on initial recognition.

Investments in debt instruments that meet the following conditions are subsequently measured at
amortised cost:

? the asset is held within a business model whose objective is to hold assets in order to collect
contractual cash flow; and

? the contractual terms of the instrument give rise on specified dates to cash flows that are solely
payments on principal and interest on the principal amount outstanding.

Income on such debt instruments is recognised in profit or loss and is included in the 'Other Income'.

The Company has not designated any debt instruments as fair value through other comprehensive income.

(ii) Financial assets (i.e., derivative instruments and investments in instruments other than equity of
subsidiaries, joint ventures and associates) are subsequently measured at fair value.

Such financial assets are measured at fair value at the end of each reporting period, with any gains (e.g any
dividend or interest earned on the financial asset) or losses arising on re-measurement recognised in profit
or loss and included in the “Other Income”.

Investments in equity instruments of subsidiaries, joint ventures and associates

The Company measures its investments in equity instruments of subsidiaries, joint ventures and
associates at cost in accordance with Ind AS 27. At transition date, the Company has elected to continue
with the carrying value of such investments measured as per the previous GAAP and use such carrying
value as its deemed cost.

Impairment of financial assets:

A financial asset is regarded as credit impaired when one or more events that may have a detrimental effect
on estimated future cash flows of the asset have occurred. The Company applies the expected credit loss
model for recognising impairment loss on financial assets (i.e., the shortfall between the contractual cash
flows that are due and all the cash flows (discounted) that the Company expects to receive).

De-recognition of financial assets:

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the
asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of
ownership and continues to control the transferred asset, the Company recognises its retained interest in
the asset and an associated liability for amounts it may have to pay. On de-recognition of a financial asset in
its entirety, the difference between the asset's carrying amount and the sum of the consideration received
and receivable is recognised in the Statement of profit and loss.

Impairment of financial assets

A Financial asset is regarded as credit impaired or subject to significant increase in credit risk, when one or
more events that may have a detrimental effect on estimated future cash flows of the asset have occurred.
The Company applies the expected credit loss model for recognising impairment loss on financial assets
(i.e. the shortfall between the contractual cash flows that are due and all the cash flows (discounted) that the
company expects to receive). The Company uses simplified approach for expected credit loss and on a
case to case basis.

Financial liabilities and equity instruments :

Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity
in accordance with the substance of the contractual arrangements and the definitions of a financial liability
and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by a group entity are recognised at the proceeds
received, net of direct issue costs.

Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No
gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own
equity instruments.

Financial liabilities

All financial liabilities (other than derivative instruments) are subsequently measured at amortised cost
using the effective interest method. The carrying amounts of financial liabilities that are subsequently
measured at amortised costs are determined based on the effective interest method. Interest expense that
is not capitalised as part of costs of an asset is included in the “Finance Costs”.

The effective interest method is a method of calculating the amortised cost of a financial liability and of
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments (including all fees and points paid or received that form an
integral part of the effective interest rate, transaction costs and other premiums or discounts) through the
expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on
initial recognition.

Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in
accordance with the terms of debt instrument.

Financial guarantee contracts issued by the Company are initially measured at their fair values and are
subsequently measured (if not designated as at Fair value though profit or loss) at the higher of:

* the amount of impairment loss allowance determined in accordance with requirements of
Ind AS 109; and

* the amount initially recognised less, when appropriate, the cumulative amount of income recognised
in accordance with the principles of Ind AS 18.

The Company derecognises financial liabilities when, and only when, the Company's obligations are
discharged, cancelled or have expired. An exchange between with a lender of debt instruments with
substantially different terms is accounted for as an extinguishment of the original financial liability and the
recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing
financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability. The difference
between the carrying amount of the financial liability derecognised and the consideration paid and payable
is recognised in profit or loss.

Derivative financial instruments :

The Company enters into a variety of derivative financial instruments to manage its exposure to interest
rate and foreign exchange rate risks, including foreign exchange forward contracts.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are
subsequently re-measured to their fair value at the end of each reporting period. The resulting gain or loss is
recognised in profit or loss immediately unless the derivative is designated and effective as a hedging
instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedging
relationship and the nature of the hedged item.

Embedded derivatives

Derivatives embedded in non-derivative host contracts that are not financial assets within the scope of
Ind AS 109 are treated as separate derivatives when their risks and characteristics are not closely related to
those of the host contracts and the host contracts are not measured at Fair value through profit or loss.

As of the transition date, the Company has assessed whether an embedded derivative is required to be
separated from the host contract and accounted for as a derivative on the basis of the conditions that
existed on the later of the date of first became a party to the contract and the date when there has been
change in the terms of the contract that significantly modifies the cash flows that otherwise would be
required under the contract.

Hedge accounting :

The Company designates certain derivatives as hedging instruments in respect of foreign currency risk, as
either fair value hedges, cash flow hedges. Hedges of foreign exchange risk on firm commitments are
accounted for as cash flow hedges.

At the inception of the hedge relationship, the entity documents the relationship between the hedging
instrument and the hedged item, along with its risk management objectives and its strategy for undertaking
various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the
Company documents whether the hedging instrument is highly effective in offsetting changes in fair values
or cash flows of the hedged item attributable to the hedged risk.

Fair value hedges

Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are
recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk. The change in the fair value of the designated portion of
hedging instrument and the change in the hedged item attributable to the hedged risk are recognised in
profit or loss in the line item relating to the hedged item.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised,
or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the
hedged item arising from the hedged risk is amortised to profit or loss from that date.

Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges is recognised in other comprehensive income and accumulated under the heading of cash flow
hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in profit or
loss, and is included in the “Other Income”.

Amounts previously recognised in other comprehensive income and accumulated in equity relating to
(effective portion as described above) are reclassified to profit or loss in the periods when the hedged item
affects profit or loss, in the same line as the recognised hedged item. However, when the hedged forecast
transaction results in the recognition of a non-financial asset or non-financial liability, such gains and losses
are transferred from equity (but not as a reclassification adjustment) are included in the initial measurement
of the cost of the non-financial asset or non-financial liability.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised,
or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive
income and accumulated in equity at that time remains in equity and is recognised when the forecast
transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to
occur, the gain or loss accumulated in equity is recognised immediately in profit or loss.

16. Cash flow statement

Cash flows are reported using the indirect method, whereby profit / loss before tax is adjusted for the effects
of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or
payments and item of income or expenses associated with investing or financing flows. The cash flows from
operating, investing and financing activities of the Company are segregated.

17. 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 short-term, 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.

18. 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. The
weighted average number of equity shares outstanding during the period is adjusted for events of bonus
issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split
(consolidation of shares)

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.

19. Critical accounting judgments and key sources of estimation uncertainty

The preparation of financial statements in conformity with Ind AS requires the Company's Management to
make judgments, estimates and assumptions about the carrying amounts of assets and liabilities
recognised in the Ind AS financial statements that are not readily apparent from other sources. The
judgments, estimates and associated assumptions are based on historical experience and other factors
including estimation of effects of uncertain future events 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(accounted on a prospective basis) and recognised 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 periods of the revision affects
both current and future periods.

The following are the critical judgments and estimations that have been made by the Management in the
process of applying the Company's accounting policies and that have the most significant effect on the
amounts recognised in the financial statements and/or key sources of estimation uncertainty at the end of
the reporting period that may have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.

Inventories

An inventory provision is recognised for cases where the realisable value is estimated to be lower than the
inventory carrying value. The inventory provision is estimated taking into account various factors, including
prevailing sales prices of inventory item, changes in the related laws/emission norms and losses
associated with obsolete/slow-moving /redundant inventory items. The Company has, based on these
assessment, made adequate provision in the books.

Taxation

The expense is calculated using applicable tax rate and laws that have been enacted or substantially
enacted. In arriving at taxable profits and all tax bases of assets and liabilities, the Company determines the
taxability based on tax enactments, relevant judicial pronouncements and tax expert opinions, and makes
appropriate provisions which includes an estimation of the likely outcome of any open tax assessments /
litigations. Any difference is recognised on closure of assessment or in the period in which they are agreed.

Deferred income tax assets are recognised to the extent that it is probable that future taxable income will be
available against which the deductible temporary differences, unused tax losses, unabsorbed depreciation
and unused tax credits could be utilized.

Provisions

The management makes judgments based on experience regarding the level of provision required to
account for potentially uncollectible receivables using information available at the Balance Sheet date.
Provisions so created are based on management assessment of the receivable balances after
communication with the respective debtors and are created on the receivable balances net off against
related brokerage dues outstanding.

Provisions for litigation and contingencies are determined based on evaluations made by the management
of the present obligation arising from past events the settlement of which is expected to result in outflow of
resources embodying economic benefits, which involves judgments around estimating the ultimate
outcome of such past events and measurement of the obligation amount. Due to the judgments involved in
such estimations, the provisions are sensitive to the actual outcome in future period.

Fair value measurements and valuation processes

Some of the Company's assets and liabilities are measured at fair value for financial reporting purposes.
The Management determines the appropriate valuation techniques and inputs for the fair value
measurements. In estimating the fair value of an asset or a liability, the Company used market-observable
data to the extent it is available. Where Level 1 inputs are not available, the Company engaged third party
qualified valuers to perform the valuations in order to determine the fair values based on the appropriate
valuation techniques and inputs to fair value measurements.

Financial risk management objectives

The treasury function provides services to the business, co-ordinates access to domestic financial markets,
monitors and manages the financial risks relating to the operations through internal risk reports which analyse
exposures by degree and magnitude of risks. These risks include market risk (including interest rate risk), credit risk
and liquidity risk.

The Company seeks to minimise the effects of these risks by using derivative financial instruments to hedge risk
exposures. The use of financial derivatives is governed by the Company's policies approved by the board of
directors, which provide written principles on foreign exchange risk, the use of financial derivatives, and the
investment of excess liquidity. The Company does not enter into or trade financial instruments, including derivative
financial instruments, for speculative purposes.

Market risk

Market risk is the risk that changes in market prices, liquidity and other factors that could have an adverse effect on
realisable fair values or future cash flows to the Company. The Company's activities expose it primarily to the
financial risks of changes in foreign currency exchange rates and interest rates as future specific market changes
cannot be normally predicted with reasonable accuracy.

Interest rate risk management

The Company is exposed to interest rate risk because it borrow funds at floating interest rates.

Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates for non-derivative
instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the
amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 25 basis
point increase or decrease is used when reporting interest rate risk internally to key management personnel and
represents management's assessment of the reasonably possible change in interest rates.

If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Company's
profit for the year ended March 31, 2024 would decrease/increase by Rs. 3.00 lakhs (March 31, 2023:
decrease/increase by Rs. 3.00 lakhs). This is mainly attributable to the Company's exposure to interest rates on its
variable rate borrowings.

Equity price risk

Equity price risk is related to the change in market reference price of the investments in equity securities. The fair
value of some of the Company's investments in available-for-sale securities exposes the Company to equity price
risks. In general, these securities are not held for trading purposes.

Equity price sensitivity analysis

The fair value of equity instruments as at March 31, 2024 was Rs. Nil (March 31, 2023: Rs.nil). A 5% change
in prices of equity instruments held as at March 31, 2024 would result in an impact of Rs. Nil on equity
(March 31,2023 : Rs. nil).

42. Going Concern

Though the Company incurred loss of Rs 176.74 lakhs and erosion in networth for the year ended March 31,2024,
your Directors continued their effort to overcome the losses. As a part of measure, your Directors continued to do the
yarn trading business and also exploring new business in the coming years. The promoters also started infusing
funds and assured to contribute additional funds as and when necessary. Considering the above, the Board of
Directors deem it fit to continue adoption of Going Concern Concept in preparation of the financial statements
although the Statutory auditors have qualified their opinion with respect to the same.

43. The title deeds of immovable properties are held in the name of the Company.

44. The Company has not revalued any of its Property, Plant and Equipment during the year.

45. The Company has given its immovable properties (land and building) as security and extended Corporate
Guarantee in favour of CSB bank Ltd in respect of loans aggregating to an amount of Rs. 2,279.38 lakhs availed by
M/s sambandam spinning Mills Limited. As on 17.04.2023, the total limit for Corporate Guarantee provided and the
land and building of the Company provided as security in favour of CSB Bank is of Rs.1,999.26 lakhs

46. The Company does not have any Benami property, where any proceedings initiated or pending against the
Company for holding any Benami property.

47. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.

48. The Company is not declared as willful defaulter by any Bank or Financial Institution (as defined under the
Companies Act, 2013) or consortium thereof or other Lender in accordance with the guidelines on willful defaulters
issued by the Reserve Bank of India

49. The Company does not have any transaction with Companies struck off under section 248 of the
Companies Act, 2013 or section 560 of the Companies Act, 1956

50. The Company has not advanced or loaned or invested funds to any other persons or entities 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 Funding party (ultimate Beneficiaries)
or (b) provide any guarantee or security or the like on behalf of the Ultimate Beneficiaries

51. The Company has not received any fund from other persons or entities 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 Funding party (ultimate Beneficiaries) or (b) provide any
guarantee or security or the like on behalf of the Ultimate Beneficiaries

52. The Company does not have any 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)

1. Current Assets and Current Liabilities as per Balance sheet.

2. Total debt: Long term borrowings (including current maturities of long term borrowings) and short term
borrowings;

Total Equity : Issued Equity share capital Other Equity (excluding revaluation reserve)

3. Average shareholder's equity= Average of Opening equity and closing equity

4. Inventory = Raw materials

Average Inventory = Average of Opening and closing Inventory;

Raw material consumed includes cost of materials consumed and change in inventories of finished goods
and work in progress

5. Cost of materials consumed includes raw materials and yarn purchases for trading

6. Working Capital = [(Current Assets as per Balance sheet) - (Current Liabilities as per balance sheet
excluding current maturities of long term debts)]

7. Average Capital Employed =(Shareholder's equity Total Debt Deferred tax liability)

54. The Company does not have any subsidiary Company and accordingly the provisions with respect to the number
of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 to read with the Companies
(Restriction on number of Layers) Rules, 2017 is not applicable to the Company.

55. The Company has not traded or invested in Crypto currency or Virtual currency during the
financial year 2023-24

57. Previous year figures have been regrouped / reclassified / amended wherever necessary to conform to current
year classification.

As per our report of even date For and on behalf of the board

For Krishnen & Associates

Chartered Accountants

Firm Registration No. 018163S „ . „

R. Selvarajan Dr. A. Sarayu

Managing Director Director

R Krishnen - Partner ^DIN : ^{00001703 DIN : 06953362}

Membership No. 201133

J. Asifa S. Vijay Shankar

^Salem Company Secretary Chief Financial Officer

May 27, 2024