i) Rights,preferences and restrictions attached to Equity Shares

The Company has only one class of equity shares having a par value of ? 10 per share. Each share holder is entitled for one vote per share. The dividend if any proposed by the Board of Directors will be subject to approval of the share holders in the ensuing Annual General Meeting except interim dividend which is approved by Board of Directors. In the event of the liquidation of the company, the holders of the equity shares will be entitled to receive the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion of number of equity shares held by each equity share holder.

# During the year ended 31st March, 2022, the Company allotted 99,65,400 equity shares as fully paid up bonus shares in proportion of 3:1 (i.e. three bonus shares for every one equity share held) to the eligible members/beneficial owners as on 24th September, 2021, i.e. record date, by capitalisation of amount of ' 996.54 Lakhs which was by way of transfer from Capital Redemption Reserve ' 553.80 Lakhs and Securities Premium Reserve ' 442.74 Lakhs.

## The Board of Directors in its meeting held on January 28, 2023, has approved the proposal to buy-back upto 580000 fully paid up equity shares of the face value of ' 10/- at a price of ' 950/- per share payable in cash (“Buyback Price”) for a maximum amount not exceeding ' 5510 lakhs. This amount represents 7.18% of the paid-up equity share capital and free reserves as per audited financial statements of the Company for the financial year ended 31st March, 2022. The buy-back process was completed subsequent to the year end on 17th April, 2023 and 580000 shares have been extinguished.

1) Equity Component of Compound Financial Instruments

The fair value of the liability component of non- convertible preference shares issued by the company has been determined using a effective interest rate for an equivalent non-convertible instrument and the said amount is classified as a financial liability.The remainder of the proceeds is recognised as 'Equity Component of Compound Financial Instruments' in other equity as per provisions of Ind AS 32.

2) Capital Redemption Reserve

Capital redemption reserve is created out of profits for redemptions of capital.

3) Securities Premium

This represents amount of premium recognised on issue of shares to shareholders at a price more than its face value. The reserve can be utilised in accordance with the provisions of the Companies Act 2013.

4) General Reserve

This represents retained earnings which are kept aside out of company's profits. It is a free reserve which can be utilized to meet any future contingencies and to pay dividend to shareholders.

5) Retained Earnings

Retained earnings repersents to net earnings not paid out as dividend but retained by the company to be reinvested in its core business. The amount is available for distribution of dividend to its equity shareholders. It also includes balance of remeasurment of net defined benefit obligation (net of taxes)

Preference shares are having preference over equity shares in respect of payment of dividend and repayment of capital over equity shareholders and is entitled to voting rights in the resolutions directly affecting their interest.Preference shares are redeemable within 20 years from the date of allotment.The Board of directors has not decided the date of redemption yet.

A. Term Loan Primary Security:-

First pari passu charge on hypothecation of entire Property, Plant and Equipment of the Company (both present and future). Collateral Security:-

a) Second pari passu charge on hypothecation of entire Current assets of the company (both presen and future).Further loans are also secured by First pari paassu charge on industrial plot situated at Village Barmalipur,Ludhiana owned by promoters and First pari passu charge on Building owned by the Company on same land.

b) All term loans (other than vehicle loans) are further guaranteed by Sh. Munish Avasthi (Managing Director).

B. Vehicle Loan

The vehicle loans are secured against hypothecation of respective vehicles.

In case of Buyer's Credit Foreign Currency Loans (FCL), the above rate of interest does not include foreign exchange fluctuation treated as interest cost as per Ind AS 23. i) Nature of security against Working Capital Loans Primary Security:-

First pari passu charge on hypothecation of stocks of raw material,stock in process and finished goods,recoverables/book debts and other current assets (both present and future).

Collateral Security:-

Second pari passu charge on hypothecation of entire fixed assets of the company (both present and future).First pari paassu charge on industrial plot situated at Village Barmalipur,Ludhiana owned by promoters and First pari passu charge on Building owned by the Company on same land.

The Company has availed benefit under Export Promotion Capital Goods (EPCG) scheme amounting to ? 570.00 lakhs during the financial year ended March 31, 2024 (March 31, 2023 ? 1974.81 lakhs) on import of Property, Plant and Equipment and Spares parts which pertains to the duty saved for which input tax credit is not allowed under Goods and Service tax Act, 2017.

*Amount deposited/adjusted against outstanding demand is ' 110.90 Lakhs (Previous year ' 105.13 Lakhs) shown under refund receivable in note no. 24 of Income Tax (Liabilities)/Assets.

**Amount deposited/adjusted against outstanding demand is ' 0.034 Lakhs (Previous year Nil) shown under Recoverable from Govt authorities in note no. 11 of Other Current Assets.

Above figures are exclusive of interest accrued.

Note: Based on legal advice, discussions with the solicitors, etc., the management believes that there is fair chance of decision in the company's favour in respect of all the items listed above and hence no provision is considered necessary against the same. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company's financial position and results of operations. Future cash flows in respect of above will be determined only on receipt of judgments/decisions pending with revenue/ judicial authorities.

NOTE - 39: Impairment of Assets

In accordance with Ind AS-36 on “Impairment of Assets” the Company has assessed as on the balance sheet date, whether there are any indications with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly, no impairment loss has been provided in the books of account.

Defined Benefit Plan Gratuity:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. This defined benefit plan of gratuity is administered by a separate trust that is a legally separate entity. The Company makes annual contributions to the trust and trust is responsible for investments with regard to the assets of the trust. The contributions are generally invested by the trust in a scheme with Life Insurance Corporation of India or other insurer as permitted by Law. The Company accounts for the liability for gratuity benefits payable in the future based on actuarial valuation using projected unit credit method.

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

(i) Investment risk

If the actual return on plan assets is below the expected return, it will create plan deficit

(ii) Salary risk

The present value of defined benefit plan is calculated with the assumption of salary increase of participants in future. Deviation in rate of increase in salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.

(iii) Interest risk

The plan exposes the company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in value of the liability.

(iv) Longevity risk

The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants. An increase in the life expectancy of the plan participants will increase the plans liability.

The Following table set out the funded status of the gratuity plan and amounts recognised in the balance sheet and other disclosures as required under Ind AS 19 'Employee benefits':

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in employment market.

(h) Sensitivity analysis

Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity is computed by varying one actuarial assumption used for valuation of defined benefit obligation by 1.00% keeping all other actuarial assumptions constant. There is no change from the previous period in the methods and assumptions used in preparing the sensitivity analysis.

The quantitative sensitivity analysis on net liability recognized on account of change in significant actuarial assumptions is as hereunder:

(g) The payment in respect of lease liabilties amounting ' 14.03 Lakhs ( Previous year ' 12.62 Lakh )and in respect of interest liabilties amounting ' 6.63 Lakh (Previous year ' 8.03 Lakh have been showned under cash flows from financing activity in statement of cash flows.

(h) Rental expense recognized for short-term leases was ' 6.66 Lakhs for the year ended 31st March , 2024 (31st March 23'0.60 Lakhs) has been disclosed as rent under the head 'Other expenses'.

Company as lessor

The Company has given on lease certain portion of its office / factory premises under operating leases. These leases are not noncancellable and are extendable by mutual consent and at mutually agreeable terms. The gross carrying amount, accumulated depreciation and depreciation for the year in respect of such portion of the leased premises are not separately identifiable. These assets have not been classified as Investment property as it does not meet the criteria specified in INDAS 40. Rental income amounting to '4.55 Lakhs (Previous year is '4.51 Lakhs) in respect of these leases is recognised in the statement of profit and loss under “Other income”.

1. Managerial remuneration does not include provisions made for Gratuity and Compensated absence amounts as these are determined on actuarial basis for the company as a whole. Further remuneration does not include value of non-cash perquisites.

2. Terms and conditions of transactions with related parties

All related party transactions entered during the year were in ordinary course of the business and on arm's length basis. Outstanding balances at the year-end are unsecured and settlement occurs in cash

3. There have been no guarantees provided or received for any related party.

4. For the year ended 31st March, 2024, the Company has not recorded any impairment in respect of any bad or doubtful debts due from related parties (31st March, 2023: Nil).

(C) Detail of amount due from/to directors or other officers of the company or any of them either severally or jointly with any other person or debts due by firms or private companies respectively in which any director is a partner or a director or a member

1. The trade receivables include ' 48.73 Lakhs is (previous year Nil) due from the firms and private companies in which any director is a partner or a director or a member.

2. The advances to suppliers include Nil (previous year Nil) paid to the firms and private companies in which any director is a partner or a director or a member.

3. The trade payables include ' 1.00 Lakhs (previous year ' 202.29 Lakhs) due to the firms and private companies in which any director is a partner or a director or a member.

4. The advances from customers include Nil (previous year ' 257.83 Lakhs) received from the firms and private companies in which any director is a partner or a director or a member.

Revenue in respect of the export incentives is recognised on post export basis and it is reasonable to expect ultimate collection.

(ii) Trade receivables and Contract Balances

The company classifies the right to consideration that are unconditional in exchange for deliverables as receivable. Trade receivables are presented net of impairment in balance sheet.

The balances of trade receivables and advance from customers at the beginning and end of the reporting period have been disclosed at note no. 7 and 22 respectively.

The revenue recognised during the year ended 31st March 2024 includes revenue against advances from customers amounting to ' 787.14 Lakhs (Previous Year ' 612.71 lakhs) at the beginning of the year.

(iii) Performance obligations and remaining performance obligations

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue.

The revenue of Nil has been recognised during the year ended 31st March 2024 (previous year Nil ) against performance obligations satisfied (or partially satisfied) in previous periods.

NOTE -46: Segment Reporting

The Company is primarily in the business of manufacturing, purchase and sale of textile yarns. The Managing Director of the Company, which has been identified as being the Chief Operating Decision Maker (CODM), evaluates the Company's performance, allocate resources based on the analysis of the various performance indicators of the Company as a single unit. Therefore, there is only one reportable segment for the Company.

The Company has disclosed financial instruments such as cash and cash equivalents, other bank balances, trade receivables and trade payables at carrying value because their carrying amounts are a reasonable approximation of the fair values due to their short term nature.

(b) Fair Value Measurement

(i) Fair Value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are measured, subsequent to initial recognition, at fair value. The below is the fair value measurement hierarchy used by the Company to determine the fair value of financial instruments, grouped into Level 1 to Level 3 :-

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

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

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

NOTE 49: Capital Management

For the purposes of the Company's capital management, capital includes equity share capital, securities premium and all other reserves attributable to the equity shareholders. The primary objective of the Company's Capital Management is to maximize the return to shareholders and also maintain an optimal capital structure to reduce cost of capital.

The Company's policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence and to sustain future development of the business.

The Company monitors capital using a ratio of 'Net debt' to 'Total Equity'. For this purpose, net debt is defined as total interest-bearing loans and borrowings less cash and cash equivalents. The Company's Net debt to equity ratio is as follows.

(b) Loan Covenants

In order to achieve overall objective of capital management, amongst other things, the management aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings. The management carefully negotiates the terms and conditions of the loans and ensures adherence to all the financial covenants. Breaches in meeting the financial covenants would permit the bank to call loans and borrowings or charge some penal interest. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing during the year ended 31st March, 2024 and 31st March, 2023.

NOTE-50: Financial Risk Management

The principal financial assets of the Company include trade and other receivables, loans and advances and cash and bank balances that derive directly from its operations. The principal financial liabilities of the company include loans and borrowings, trade and other payables and the main purpose of these financial liabilities is to finance the day to day operations of the company.

The Company is exposed to market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The Company's senior management oversees the management of these risks. There are appropriate policies and procedures in place through which such financial risks are identified, measured and managed by the Company. The Audit Committee and the Board are regularly apprised of these risks and measures used to mitigation these risks.

I. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: foreign currency risk, interest rate risk and investment risk.

a) Foreign Currency Risk

The company operates internationally and business is transacted in several currencies. The export sales of company comprise around 46% of the total sales of the company, Further the company also imports certain assets and raw material/ stores etc. from outside India. The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the company is exposed to foreign currency risk and the results of the company may be affected as the rupee appreciates/ depreciates against foreign currencies. Foreign exchange risk arises from the future probable transactions and recognized assets and liabilities denominated in a currency other than company's functional currency.

The company measures the risk through a forecast of highly probable foreign currency cash flows and manages its foreign currency risk by appropriately hedging the transactions. The Company uses derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

As the Company has no significant interest -bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's debt obligations with floating interest rates.

II. Liquidity Risk

Liquidity risk arises from the Company"s inability to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring that it will always have sufficient liquidity to meet its liabilities when due.

The financial liabilities of the company, other than derivatives,include loans and borrowings,trade and other payables.

The company's principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations.

The Company's finance department is responsible for liquidity and funding arrangements. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company"s net liquidity position on the basis of expected cash flows in near future.

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss.The exposure to the credit risk at the reporting date is primarily from trade receivables which are typically unsecured. Credit risk on cash and bank balances is limited as the company generally invests in deposits with banks and financial institutions with high credit ratings assigned by credit rating agencies.The Company's credit risk in case of all other financial instruments is negligible.

The company assesses the credit risk based on external credit ratings assigned by credit rating agencies.The company also assesses the creditworthiness of the customers internally to whom goods are sold on credit terms in the normal course of business.The credit limit of each customer is defined in accordance with this assessment.Outstanding customer receivables are regularly monitored and shipments to overseas customers are generally covered by letter's of credit of foreign bank.

The Company's maximum exposure to credit risk as at 31st March, 2024 and 31st March, 2023 is the carrying value of the financial assets.

NOTE - 57

Other disclosures required as per Schedule III to the Companies Act, 2013

(i) The company has not been declared as wilful defaulter by any bank or financial Institution or other lender.

(ii) The company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

(iii) The company does not have any such transactions 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).

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency, during the financial year ended 31st March, 2024 and 31st March,2023.

(v) There are no loans or advances in the nature of loans granted to Promoters, Directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person.

(vi) No funds that have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Company; or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vii) No funds have been received by the company 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 directly or indirectly lend or invest in other persons or entities in any manner whatsoever by or on behalf of the funding party (“Ultimate beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(viii) The company does not have any charge or satisfaction which is yet to be registered with ROC beyond the statutory period.

(ix) The company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

(x) The company has used the borrowings from banks and fincacial institutions for the purpose for which it was taken.

NOTE - 58

The Board of Directors in its meeting held on January 28, 2023, has approved the proposal to buy-back upto 580000 fully paid up equity shares of the face value of ' 10/- at a price of ' 950/- per share payable in cash (“Buyback Price”) for a maximum amount not exceeding ' 5510 lakhs. This amount represents 7.18% of the paid-up equity share capital and free reserves as per audited financial statements of the Company for the financial year ended 31st March, 2022. The buy-back process was completed subsequent to the year end on 17th April, 2023 and 580000 shares have been extinguished.

NOTE - 59

The Board has recommended a Final Dividend of Rs. 5/- per equity share of face value of Rs. 10/- each on fully paid equity shares amounting to Rs. 635.36 Lakhs and 5% on Non-Cumulative Non- Convertible Redeemable Preference Shares of face value of Rs.10/- each amounting to Rs. 34.16 Lakhs for FY 2023-24.