m) Provisions:

Provisions are recognised when there is a present legal or constructive obligation that can be estimated reliably,
as a result of a past event, when it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are not recognised for future operating losses.

Any reimbursement that the Company can be virtually certain to collect from a third party with respect to
the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related
provisions.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no
longer probable that an outflow of economic resources will be required to settle the obligation, the provisions
are reversed. Where the effect of the time of money is material, provisions are discounted using a current pre¬
tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase
in the provisions due to the passage of time is recognised as a finance cost.

n) Contingencies:

Where it is not probable that an inflow or an outflow of economic resources will be required, or the amount
cannot be estimated reliably, the asset or the obligation is not recognised in the statement of balance sheet
and is disclosed as a contingent asset or contingent liability. Possible outcomes on obligations/rights, whose
existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also
disclosed as contingent assets or contingent liabilities.

0) Taxes on Income:

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected
to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Current tax includes taxes to be
paid on the profit earned during the year and for the prior periods.

Deferred income taxes are provided based on the balance sheet approach considering the temporary
differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes at the reporting date.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the
balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty
that sufficient future taxable income will be available against which such deferred tax assets can be realised. In
situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets
are recognised only if it is probable that they can be utilised against future taxable profits.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes off
the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient future
taxable income will be available against which deferred tax asset can be realized. Any such write-off is reversed
to the extent that it becomes reasonably certain that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.

p) Prior period items:

In case prior period adjustments are material in nature, the company prepares the restated financial statement
as required under Ind AS 8 - ‘Accounting Policies, Changes in Accounting Estimates and Errors”. In case of
immaterial items, such adjustments are shown under respective items in the Statement of Profit and Loss.

q) Cash and cash equivalents:

Cash and cash equivalents include cash on hand and at bank, deposits held at call with banks, other short-term
highly liquid investment with original maturities of three months or less that are readily convertible to a known
amount of cash which are subject to an insignificant risk of changes in value and are held for meeting short-term
cash commitments.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the
Company's cash management.

r) Segment Reporting:

Operating segments are reported in a manner consistent with the internal reporting provided to the Executive
Management/Chief operating decision maker (“CODM”).

s) Financial instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.

Financial Assets:

a. Initial recognition and measurement:

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at
fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in the
statement of profit or loss. Purchases or sales of financial assets that require delivery of assets within a
time frame established by regulation or convention in the marketplace (regular way trades) are recognised
on the trade date, i.e., the date that the company commits to purchase or sell the asset.

b. Subsequent measurement:

For the purpose of subsequent measurement, financial assets are classified in to following categories

a. Debt instruments at amortised cost

b. Debt Instruments at fair value through profit and loss (FVTPL)

c. Equity instruments at fair value through profit and loss (FVTPL)

a. Debts Instruments at amortised cost:

A ‘Debt Instrument' is measured at the amortised cost if both the following conditions are
met:

i. The asset is held within a business model whose objective is to hold assets for collecting
contractual cash flows, and

ii. Contractual terms of the asset give rise on specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised
cost using the effective interest rate (EIR) method.

Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of EIR. The EIR amortisation is
included in other income in the profit or loss. The losses arising from impairment are
recognised in the profit or loss.

b. Debt Instruments at Fair value through profit and loss (FVTPL):

As per the Ind AS 101 and Ind AS 109, the Company is permitted to designate the previously
recognised financial asset at initial recognition irrevocably at fair value through profit and loss
on the basis of fact and circumstances that exists on the date of transition to Ind AS. Debt
instruments included within the FVTPL category are measured at fair value with all changes
recognised in the statement of Profit and Loss.

c. Equity instruments at fair value through profit and loss (FVTPL):

Equity instruments in the scope of Ind AS 109 are measured at fair value. The classification is
made on initial recognition and is irrevocable. Subsequent changes in the fair values at each
reporting date are recognised in the Statement of Profit and Loss.

c. Derecognition:

A financial asset or where applicable, a part of a financial asset is primarily derecognised when:

a. The rights to receive cash flows from the asset have expired, or

b. The company has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a ‘pass¬
through' arrangement and either (a) the Company has transferred substantially all the risks and
rewards of the asset, or (b) the company has neither transferred nor retained substantially all the
risks and rewards of the asset but has transferred control of the asset.

When the company has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates, if and to what extent it has retained the risks and
rewards of ownership. When it has neither transferred nor retained substantially all of the risks and
rewards of the asset, nor transferred control of the asset, the company continues to recognise the
transferred asset to the extent of the company's continuing involvement. In that case, the company
also recognises an associated liability. The transferred asset and the associated liability are measured
on a basis that reflects the rights and obligations that the company has retained.

d. Impairment of financial assets:

In accordance with Ind AS 109, the Company applies the expected credit loss (ECL) model for
measurement and recognition of impairment loss on financial instruments.

Expected credit loss is the difference between all contractual cash flows that are due to the company in
accordance with the contract and all the cash flows that the entity expects to receive.

The management uses a provision matrix to determine the impairment loss on the portfolio of trade and
other receivables. Provision matrix is based on its historically observed expected credit loss rates over the
expected life of the trade receivables and is adjusted for forward looking estimates.

The expected credit loss allowance or reversal recognised during the period is recognised as income or
expense, as the case may be, in the statement of profit and loss. In case of balance sheet, it is shown as an
adjustment from the specific financial asset.

Financial liabilities:

a. Initial recognition and measurement:

At initial recognition, all financial liabilities are recognised at fair value and in the case of loans, borrowings
and payables, net of directly attributable transaction costs.

b. Subsequent measurement:

i. Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Gains or losses on liabilities held for trading are recognised in the profit or loss. The company
does not designate any financial liability at fair value through profit or loss.

ii. Financial liabilities at amortised cost:

Amortised cost, in the case of financial liabilities with maturity more than one year, is calculated
by discounting the future cash flows with an effective interest rate. Effective interest rate
amortisation is included as finance costs in the statement of profit and loss. Financial liability
with maturity of less than one year is shown at transaction value.

c. Derecognition:

Financial liability is derecognised when the obligation under the liability is discharged, cancelled, or
expires. The difference between the carrying amount of a financial liability that has been extinguished
or transferred to another party and the consideration paid, including any non-cash assets transferred
or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Reclassification:

The Company determines classification of financial assets and liabilities on initial recognition. After
initial recognition, no reclassification is made for financial assets which are equity instruments
and financial liabilities. If the Company reclassifies financial assets, it applies the reclassification
prospectively from the reclassification date which is the first day of the immediately next reporting
period following the change in business model. The Company does not restate any previously
recognised gains, losses (including impairment gains or losses) or interest.

t) Fair Value Measurement:

The Company measures financial instruments at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on
the presumption that the transaction to sell the asset or transfer the liability takes place either

• in the principal market for such asset or liability, or

• in the absence of a principal market, in the most advantageous market which is accessible to the company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.

The company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:

a. Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

b. Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value
measurements is directly or indirectly observable.

c. Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re assessing the
categorization (based on the lowest level input that is significant to the fair value measurement as a whole)
at the end of each reporting period.

39. Discontinued Operations:

Pursuant to a resolution passed at their meeting held on August 13, 2020, the Board of Directors have resolved to
discontinue the operations of its spinning division with effect from September 22, 2020, as the Division has become
unviable due to Continued cash losses. The Board of Directors have also resolved to dispose the non - current assets
of the said division.

Accordingly, these non - current assets have been classified as assets held for sale as at the year end and the financial
performance of Spinning division has been presented as discontinued operations in the Statement of Profit and Loss
for the year ended March 31, 2024, and in accordance with the provisions of Ind As 105 - Non - current of the
division are presented as Assets Held for Sale of Discontinued Operations

The company is exposed to financial risks arising from its operations and the use of financial instruments. The key
financial risks include market risk, credit risk and liquidity risk. The company's risk management policies focus on the
unpredictability of financial risks and seek guidelines, where appropriate, to minimize the potential adverse impact
of such risks. There has been no change to the company's exposure to these financial risks or the manner in which
it manages and measures the risks.

The following sections provide the details regarding the Company's exposure to the financial risks associated with
financial instruments held in the ordinary course of business and the objectives. policies and processes for the
management of these risks.

The Company's principal financial liabilities comprise loans and borrowings, trade, and other payables. The main
purpose of these financial liabilities is to finance and support the Company's operations. The Company's principal
financial assets include loans, trade and other receivables and cash and cash equivalents which are derived from its
operations.

The company is exposed to market risk, credit risk and liquidity risk. The Company's management oversees the
mitigation of the risks. The Company's financial risk activities are governed by appropriate policies and procedures
and those financial risks are identified, measured, and managed in accordance with the Company's policies and
risk objectives. The management / board reviews and agrees policies for managing each of these risks, which are
summarized below.

A. Market Risk:

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and
other price risks such as equity risk. Financial instruments affected by market risk include loans and advances,
deposits, investments in debt securities, mutual funds, and other equity funds.

a. Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of the Company and the Company's
financial instruments will fluctuate because of changes in market interest rates. The Company's exposure
to interest rate risk arises primarily from the loans and advances given by the company, investment in debt
securities, investment in debt mutual funds and cash and cash equivalents.

The company's policy is to manage its interest rate risk by investing in fixed deposits, debt securities and
debt mutual funds. Further, as there are no borrowings the company's policy to manage its interest cost
does not arise.

The company is not exposed to significant interest risk as at the respective reporting dates.

b. Other price risk:

Other price risk is the risk that the fair value or future cash flows of the Company's financial instruments
will fluctuate because of changes in market prices (other than those arising from interest rate risk or
currency risk) whether those changes are caused by factors specific to the individual financial instrument
or its issuer or by factors affecting all similar financial instruments traded in the market.

The company invests surplus cash funds in Liquid, Debt, Equity and Balanced mutual funds. Mutual fund
investments are susceptible to market price risk mainly arising from changes in the interest rates or
market yields which may impact the return and value of such investments. However, due to the very
short tenor of the underlying portfolio in the liquid schemes they do not pose any significant price risk.

B. Credit risk:

Credit risk is the risk of loss that may arise on outstanding financial instruments when a counterparty defaults
on its obligations. The Company's exposure to credit risk arises primarily from trade and other receivables.
For other financial assets (including investment securities cash and short-term deposit) the Company minimise
credit risk by dealing exclusively with high credit rating counterparties. The Company's objective is to seek
continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Company
trades only with recognised and creditworthy third parties. It is the Company's policy that all customers who
wish to trade on credit terms are subject to credit verification procedures.

In addition, receivable balances are monitored on an ongoing basis with the result that the Company's exposure
to bad debts is not significant.

a. Exposure to credit risk:

At the end of the reporting period the Company's maximum exposure to credit risk is represented by
the carrying amount of each class of financial assets recognised in the statement of financial position. No
other financial assets carry a significant exposure to credit risk.

b. Credit risk concentration profile:

At the end of the reporting period there were no significant concentrations of credit risk. The maximum
exposures to credit risk in relation to each class of recognised financial assets is represented by the
carrying amount of each financial assets as indicated in the balance sheet.

c. Financial assets that are neither past due nor impaired:

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with a good
payment record with the Company. Cash and short-term deposits investment securities that are neither
past due nor impaired are placed with or entered with reputable banks financial institutions or companies
with high credit ratings and no history of default.

d. Financial assets that are either past due or impaired:

Trade receivables that are past due or impaired at the end of the reporting period for which lifetime
expected credit loss has been provided by the company according to its policy. These are shown in the
balance sheet at carrying value.

C. Liquidity risk:

The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are
settled by delivering cash or another financial asset.

The company ensures that it has sufficient cash on demand to meet expected operational demands including
the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot
reasonably be predicted.

The table below summarises the maturity profile of the Company's financial liabilities based on contractual
undiscounted payments:

Capital includes equity attributable to the equity Shareholders of the Company. The primary objective of the capital
management is to ensure that it maintain an efficient capital structure and healthy capital ratios in order to support
its business and maximize shareholder's value.

The company manages its capital structure and make adjustments to it in light of changes in economic conditions and
the requirements of the financial covenants. The Company monitors capital using a gearing ratio. The Company's
policy is to keep the gearing ratio at an optimal level to ensure that the debt related covenants are complied with.

# Total Borrowings include Long Term borrowings, short term maturities of long-term borrowings.

No changes were made in the objectives, policies, or processes for managing capital during the years ended 31
March 2024 and 31 March 2023.

per our report of even date

For K.S.Rao & Co. For and behalf of Board of Directors

Chartered Accountants Aananda Lakshmi Spinning Mills Ltd

Firms' Registration Number: 003109S

V. VENKATESWARA RAO D.K.Agarwal Manish Gupta

Partner Managing Director & CFO Director

Membership Number: 219209

Ashu

Place: Hyderabad Company Secretary

Date: May 29, 2024