p) Provisions, contingent liabilities and contingent asset Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event and 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 discounted, if the effect of the time value of money is material, using pre-tax rates that reflects the risks specific to the liability. When discounting is used, an increase in the provisions due to the passage of time is recognised as finance cost. These provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Necessary provision for doubtful debts, claims, etc., are made, if realisation of money is doubtful in the judgement of the management.

Contingent liabilities

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. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. Contingent liabilities are disclosed separately.

Show cause notices issued by various Government authorities are considered for evaluation of contingent liabilities only when converted into demand.

Contingent assets

Where an inflow of economic benefits is probable, the Company discloses a brief description of the nature of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their financial effect.

Contingent assets are disclosed but not recognised in the financial statements.

q) Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances with original maturity of less than 3 months, highly liquid investments that are readily convertible into cash, which are subject to insignificant risk of changes in value.

r) Cash Flow Statement

Cash flows are presented using indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.

Bank borrowings are generally considered to be financing activities. However, where bank overdrafts which are repayable on demand form an integral part of an entity’s cash management, bank overdrafts are included as a component of cash and cash equivalents for the purpose of Cash flow statement.

s) Earnings per share

The basic earnings per share are computed by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

Diluted EPS is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic EPS and also weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for bonus shares, as appropriate.

t) Events after the reporting period

Adjusting events are events that provide further evidence of conditions that existed at the end of the reporting period. The financial statements are adjusted for such events before authorization for issue. Non adjusting events are events that are indicative of conditions that arose after the end of the reporting period. Non-adjusting events after the reporting date are not accounted, but disclosed.

Note:

i) The title deeds, comprising all the immovable properties of land and buildings, are held in the name of the Company as at the balance sheet date, for the year under report and the comparable period/s presented.Therefore the disclosures pertaining to Title Deeds of immovable properties not held in the name of the Company as per Division II of Schedule III to the Companies Act, 2013 are not applicable and hence not furnished. Further there are no immovable properties jointly held with others for the year under report and the comparable period/s presented. Hence details regarding the same including disclosure of the extent of the company’s share as per Division II of Schedule III to the Companies Act, 2013, are not applicable. Further there are no restrictions to title in respect of any property, plant and equipment.

ii) The Company has no other adjustments/impairment loss/ reversal in the value of property, plant and equipment (including intangible assets) during the year and comparative year presented,including the related amortisation and impairment loss or reversal.

iii) The Company has not revalued its Property, plant and equipment and intangible assets during the year and comparative year presented.

iv) There were no acquisition of Property, Plant and equipment and intangible assets through business combinations during the year under report and for the figures for the comparable year presented.

v) The Company is maintaining proper records showing full particulars, including quantitative details of property, plant and equipment.The Company has a regular programme of physical verification of its property, plant and equipment by which all property, plant and equipment are verified in a phased manner over a period of three years. In accordance with this programme, during each of the period reported herein, the management has verified property, plant and equipment and no material discrepancies were noticed on such verification.

vi) For each of the reporting period, there was no temporarily idle property, plant and equipment .

vii) There were no borrowing costs capitalised during the year 2023-24 and 2022-23.

Foreign currency sensitivity analysis

In management’s opinion, the sensitivity analysis is not applicable as the Company is not exposed to any Direct Foreign Exchange Risk and hence not reported.

Interest rate risk management

The Company is exposed to interest rate risk because it borrow funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and 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.

The 25 basis point interest rate changes will impact the profitability by INR 8.35 Lakhs for the year (Previous INR 8.31 Lakhs)

Credit risk management

Credit risk arises when a customer or counterparty does not meet its obligations under a customer contract or financial instrument, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables. The Company’s concentration of credit risk with any counterparty is disclodsed in note 43(c).

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure is the total of the carrying amount of balances with banks, short term deposits with banks, trade/contract receivables, margin money and other financial assets excluding equity investments. The Company limits its exposure to credit risk by dealing with counter party that have good credit standing. The company does not expect any losses from non-performance by any counter parties.

(a) Trade Receivables

In respect of Trade/Contract receivables, the Company has credit evaluation policy for each customer and, based on the evaluation, credit limit of each customer is defined. Wherever possible and as per customary business practice,if the Company assesses the credit risk as high, the exposure is backed by either bank, guarantee/ letter of credit or security deposits.

As per simplified approach, wherever applicable, the Company makes provision of expected credit losses on trade/contract receivables using a provision matrix to mitigate the risk of default in payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

(b) Investments, Derivative Instruments, Cash and Cash Equivalents and Bank deposits

Credit Risk on cash and cash equivalents, deposits with the banks/financial institutions is generally low as the said deposits have been made with the banks/financial institutions, who have been assigned high credit rating by international and domestic rating agencies. Investments of surplus funds are made only with approved Financial Institutions/ Counterparty. The Company has standard operating procedures and investment policy for deployment of surplus liquidity, which allows investment in debt securities and mutual fund schemes of debt and arbitrage categories and restricts the exposure in equity markets.

Offsetting related disclosures

Offsetting of cash and cash equivalents to borrowings as per the consortium agreement is available only to the bank in the event of a default. Company does not have the right to offset in case of the counter party’s bankruptcy, therefore, these disclosures are not required.

Liquidity risk management

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company invests its surplus funds in bank fixed deposit and mutual funds, which carry minimal mark to market risks. The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

49 DISCLOSUES PURSUANT TO IND AS-113 Fair Valuation techniques :

Ind AS 113 specifies following valuation techniques to measure fair values:

(i) Market Approach

The market approach uses prices and other relevant information generated by market transactions involving identical or comparable (i.e. similar) assets, liabilities or a group of assets and liabilities, such as a business.

For example, valuation techniques consistent with the market approach often use market multiples derived from a set of comparables. Multiples might be in ranges with a different multiple for each comparable. The selection of the appropriate multiple within the range requires judgement, considering qualitative and quantitative factors specific to the measurement.

(ii) Income Approach

The income approach converts future amounts (e.g. cash flows or income and expenses) to a single current (i.e. discounted) amount. When the income approach is used, the fair value measurement reflects current market expectations about those future amounts.

It is a present value of all future earnings from an entity whose fair values are being evaluated or in other words all future cash flows to be discounted at current date to get fair value of the asset / liability.

Assumption to the future cash flows and an appropriate discount rate would be based on the other market participant’s views. Related risks and uncertainty would require to be considered and would be taken into either in cash flow or discount rate.”

(iii) Cost Approach

This method describes how much cost is required to replace existing asset/ liability in order to make it in a working condition. All related costs will be its fair value. It actually considers replacement cost of the asset/ liability for which we need to find fair value.

Key Inputs to Fair Valuation

- The inputs refer broadly to the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk.

- In order to establish comparability and consistency in fair value measurement, Ind AS 113 has made some hierarchy to define the level of inputs for fair value.

- The hierarchy is purely based on the level of inputs available for the specific Asset/ liability for which the fair value is to be measured.

Level 1 Inputs

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

- A quoted price in an active market provides the most reliable evidence of fair value and shall be used without adjustment to measure fair value whenever available.

Level 2 Inputs

- Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

- If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability

- Level 2 inputs include the following:

i. quoted prices for similar assets or liabilities in active markets.

ii. quoted prices for identical or similar assets or liabilities in markets that are not active.

iii. inputs other than quoted prices that are observable for the asset or liability.

Level 3 inputs

- Level 3 inputs are unobservable inputs for the asset or liability.

- Unobservable inputs shall be used to measure fair value to the extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

- Unobservable inputs shall reflect the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk.

Fair Valuation principle :

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price), regardless of whether that price is directly observable or estimated using a valuation technique. In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as explained herebelow.

Terms and Conditions of transaction with related parties.

1. The Related Party transactions above are Arms length transaction between two related parties in the ordinary course of business that is concluded as if they are unrelated so that there is no conflict of Interest.

2. The Company has not granted loans or advances that is repayable on demand or without specifying any terms or period of repayment to promoters, directors, KMPs and the related parties (as defined under the Companies Act, 2013), either severally or jointly with any other person, for the financial years ended 31st March 2024 and 31st March 2023

3. For the year ended 31st March 2024 and 3st March 2023, there have been no guarantees provided to or received by the company in respect of any related party receivables or payable. Further, ther were no outstanding commitments in respect of any related parties.

4. For the year ended 31st March, 2024, and 31st March 2023 the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party.

5. During the year ended 31st March 2024, and 31st March 2023 the Company has not written off any receivables due from related parties

6. There were no termination benefits and share based payment to any Key Management Personnel (KMP) during the year ended 31st March 2024 and 31st March 2023.

7. Outstanding balances as at the year ended are unsecured and settlement takes place in cash / transfer of assets.

8. For the year 31st March 2024 and 31st March 2023, there are no amounts incurred for provision of Key Management Personnel services that are provided by a separate entity.

9. The provisions relating to Post Employment Benefits (Gratuity) are determined based on actuarial valuation for the Company as a whole. Accordingly such benefits provided to individual Key Management Personnel is not disclosed .

52 RETIREMENT BENEFIT PLANS Defined contribution plans

In accordance with Indian law, eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees’ salary. The contributions, as specified under the law, are made to the Provident Fund to EPF; EDLI, EPS, etc.

The total expense recognised in profit or loss of Rs.10.12 Lakhs (for the year ended March 31, 2023: Rs.11.13 Lakhs) represents contribution paid to these plans by the Company at rates specified in the rules of the plan.

Defined benefit plans

(a) Gratuity

Gratuity is payable as per Payment of Gratuity Act, 1972. In terms of the same, gratuity is computed by multiplying last drawn salary (basic salary including dearness

Allowance if any) by completed years of continuous service with part thereof in excess of six months and again by 15/26. The Act provides for a vesting period of 5

years for withdrawal and retirement and a monetary ceiling on gratuity payable to an employee on separation, as may be prescribed under the Payment of Gratuity Act,

1972, from time to time. However, in cases where an enterprise has more favourable terms in this regard the same has been adopted.

1. The weighted average duration of the defined benefit obligation as at 31st March 2024 is 2 years (31st March 2023 is 2 years).

2. The estimate of future salary increase takes into account inflation, promotions, productivity gains and other relevant factors.

3. Discount rate is based on the prevailing market yields of Indian Government Bonds as at the Balance Sheet date for the estimated term of the obligation.

4. The above sensitivity analysis are based on change in an assumption which is holding all the other assumptions constant. In practice, this is unlikely to occur, and changes in some assumptions may be correlated. When calculating the sensitivity of defined benefit obligation to significant actuarial assumptions the same method of present value of defined benefit obligations calculated with Projected unit credit method at the end of the reporting period has been applied while calculating defined benefit liability recognised in the balance sheet.

5. The method and type of assumptions used in preparing the sensitivity analysis does not change as compared to the prior period.

53. Additional Regulatory Information

(a) Proceedings under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder

There are no proceedings initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Therefore disclosures pertaining to the same as per Division II of Schedule II to the Companies Act, 2013 are not applicable.

(b) Borrowings from banks

The Quarterly returns or statements of current assets filed by the company with banks or financial institutions are in agreement with the books of accounts, where the company has made borrowings on the basis of security of current assets.

(c) There are no registration or satisfaction of charges yet to be registered with ROC beyond the statutory period.

(d) The Company is not declared as wilful defaulter by any bank or financial Institution or other lenders.

(e) Relationship with Struck off Companies

The Company did not have any transactions with Companies struck off under Section 248 of Companies Act, 2013 or Section 560 of Companies Act, 1956 considering the information available with the Company.

(f) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017. Therefore disclosures to be made in respect of non-compliance thereof is not applicable.

Formula adopted for above Ratios:

Current Ratio = Current Assets / (Total Current Liabilities - Security Deposits payable on Demand - Current maturities of Long Term Debt)

Debt-Equity Ratio = Total Debt / Total Equity

Debt Service Coverage Ratio = (EBITDA - Current Tax) / (Principal Repayment Gross Interest on term loans)

Return on Equity Ratio = Total Comprehensive Income / Average Total Equity

Inventory Turnover Ratio (Average Inventory days) = 365 / (Net Revenue / Average Inventories)

Trade receivables Turnover Ratio (Average Receivables days) = 365 / (Net Revenue / Average Trade receivables)

Trade Payables Turnover Ratio (Average Payable days) = 365 / (Net credit purchases / Average Trade payables)

Net Capital Turnover Ratio = (Inventory Turnover Ratio Trade receivables turnover ratio - Trade payables turnover ratio)

Net Profit Ratio = Net Profit / Net Revenue

Return on Capital employed = (Total Comprehensive Income Interest) / (Average of (Equity Total Debt))

Return on Investment (Assets) = Total Comprehensive Income / Average Total Assets * Reason for Variance of more than 25% is provided below

(a) Variance on debt-service coverage ratio on account of increase in profits for the year in comparison with previous year.

(b) Variance in Return on Equity is on account of increase in profits for the year in comparison with previous year.

(c) Variance in Inventory Turnover Ratio is on the account of increased turnover and decrease in average inventory during the year in comparison with previous year.

(d) Variance in Trade Receivables Turnover Ratio is on the account of increase in Turnover during the year in comparison with previous year.

(e) Variance in Net Capital Turnover Ratio is on account of increase in Turnover during the year in comparison with previous year.

(f) Variance in Net Profit Ratio is on the account of increase in Turnover coupled with increase in profits during the year in comparison with previous year.

(g) Variance in Return on capital employed ratio is on the account of increase in turnover in comparison with previous year.

(h) Variance in Return on investment ratio is on the account of increase in profits for the year in comparison with previous year.

(h) Scheme of arrangements

There are no Scheme of Arrangements approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013 during the year.

(i) Advance or loan or investment to intermediaries and receipt of funds from intermediaries

The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall (i) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

The company has also not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall (i) 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 (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(j) Details of Loans to promoters, directors, KMPs and the related parties

The company has not granted any loans and advance in the nature of loans to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person that are repayable on demand or without specifying any terms or period of repayment.

(k) Undisclosed Income

The Company do not have any transaction which are not recorded in the books of accounts that has been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 during any of the years.

(l) Details of Crypto Currency or Virtual Currency

The Company did not trade or invest in Crypto Currency or virtual currency during the financial year. Hence, disclosures relating to it are not applicable.,

55 The Code on Social Security, 2020

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified.

56 Audit Trail

The Company has used an accounting software for maintaining its books of accounts for the year ended March 31, 2024 where in the accounting software did not have the audit trial feature enabled throughout the year. The management is evaluating different options to comply with the requirements.The Company has put in place sufficient controls to ensure operating effectiveness of the internal controls over financial reporting as at March 31, 2024.

57 No Fraud by the Company or on the Company has been noticed or reported during the financial year 2023-24 and during the financial year 2022-23.No Whistle Blower Complaints have been received by the Company during the financial year 2023-24 and during the financial year 2022-23.

58 There are no amounts required to be transferred to Central Government under the Investor Education and Protection Fund.

59 There are no loans or advances in the nature of loans that have been granted to promoters, directors, Key Management Personnel(s) and related parties (as defined under Companies Act, 2013.)

60 The Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees and security, wherever applicable.

61 Proper books of account as required by law have been kept by the Company, in electronic mode on servers physically located in India and further the process of taking daily backups is in place in the company.

62 The Company did not have any un-paid dividend as the end of each period reported herein.

63 There have been no events after the reporting date that requires disclosure in these Financial Statements.

64 Previous year figures have been regrouped, reclassified and rearranged, wherever necessary, to conform to current year presentation. There are no significant regroupings/ reclassifications for the year under report.

For and on behalf of the board of Sri Ramakrishna Mills (Coimbatore) Limited (CIN: L17111TZ1946PLC000175)

As per our report of even date attached For CSK PRABHU & CO

D. Lakshminarayanaswamy R. Guru Chandrasekar Sasirekha Vengatesh Chartered Accountants,

Managing Director Director Chartered Accountant Firm Regd. No. 002485S

(DIN : 00028118) (DIN : 0008421861) Internal Auditor

M.No. 200464 (Sd.) Mahesh Prabhu

M. Srividya G. Krishnakumar Partner

Company Secretary Chief Financial Officer M.No : 214194

UDIN: 24214194BKBGAB6954

Place : Coimbatore Place : Coimbatore

Date : 29.05.2024 Date : 29.05.2024