Notes to Accounts of AB Cotspin India Ltd.

Mar 31, 2025

3.20'' Provisions, Contingent Liabilities and Contingent Assets.

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past
event, 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 measured at the
best estimate of the expenditure required to settle the present obligation at the Balance Sheet date.

If the effect of the time value of money is material, provisions are discounted to reflect its present value using a
current pre-tax rate that reflects the current market assessments of the time value of money and the risks
specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is
recognized as a finance cost.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of
which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company or a present obligation that arises from past events where it is either
not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the
amount cannot be made.

Provision for onerous contracts. i.e. contracts where the expected unavoidable cost of meeting the obligations
under the contract exceed the economic benefits expected to be received under it, are recognized when it is
probable that an outflow of resources embodying economic benefits will be required to settle a present
obligation as a result of an obligating event based on a reliable estimate of such obligation."

3.21 Lease

The Company''s lease asset classes consist of leases for Land and Buildings, Plant & Equipment, Furniture and
Fixtures & Office Equipment''s. The Company assesses whether a contract is or contains a lease, at inception of
a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration.

- To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses
whether:

- The contract involves the use of an identified asset.

- The Company has substantially all of the economic benefits from use of the asset through the period of the
lease and,

- The Company has the right to direct the use of the asset.

As a lessee

- At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a
corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of
twelve months or less (short- term leases) and leases of low value assets. Financial Statements recognizes the
lease payments as an operating expense on a straight-line basis over the term of the lease.

- The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and
impairment losses, if any. Right-of- use assets are depreciated from the commencement date on a straight-line
basis over the shorter of the lease term and useful life of the underlying asset.

- The lease liability is initially measured at the present value of the future lease payments. The lease payments
are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental
borrowing rates. The lease liability is subsequently remeasured by increasing. the carrying amount to reflect
interest on the lease liability and reducing the carrying amount to reflect the lease payments made.

- A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a
change in an index or rate used to determine lease payments. The remeasurement normally also adjusts the
leased assets.

3.22 Offsetting of Assets and Liabilities

The financial assets and financial liabilities are offset and presented on net basis in the Balance Sheet when there
is a current legally enforceable right to set-off the recognized amounts and it is intended to either settle on net
basis or to realize the asset and settle the liability simultaneously.

3.23 Cash and Cash Equivalents

Cash and cash equivalents comprise of cash in hand, demand deposits and short-term highly liquid investments
that are readily convertible into a known amount of cash and which are subject to an insignificant risk of changes
in value.

All financial liabilities are recognised initially at fair value and, in the case of amortised cost, net of directly
attributable transaction costs.

3.24 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit after 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 cash flows. The cash flows are
segregated into operating, investing, and financing activities.

3.25 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 and financial liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument. These statements are prepared under historical cost convention on accrual basis.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Transaction costs that are directly attributable to the acquisition or issue of financial instruments (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
recognized immediately in profit or loss. Subsequently, financial instruments are measured according to the
category in which they are classified.

3.26 Financial Assets

All recognized financial assets are subsequently measured in their entirety at either amortized cost using the
effective interest method or fair value, depending on the classification of the financial assets.

Classification of financial assets

Classification of financial assets depends on the nature and purpose of the financial assets and is determined at
the time of initial recognition. The Company classifies its financial assets in the following measurement
categories:

- Those to be measured subsequently at fair value (either through other comprehensive income, or through
profit or loss), and those measured at amortized cost.

- The classification depends on the entity''s business model for managing the financial assets and the contractual
terms of the cash flows.

- A financial asset that meets the following two conditions is measured at amortized cost unless the asset is
designated at fair value through profit or loss under the fair value option:

- Business model test: the objective of the Company''s business model is to hold the financial asset to collect the
contractual cash flows.

- Cash flow characteristic test: the contractual term of the financial asset gives rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding.

- A financial asset that meets the following two conditions is measured at fair value through other
comprehensive income unless the asset is designated at fair value through profit or loss under the fair value
option:

- Business model test: the financial asset is held within a business model whose objective is achieved by both
collecting cash flows and selling financial assets.

Cash flow characteristic test: the contractual term of the financial asset gives rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding.

- All other financial assets are measured at fair value through profit or loss."

3.27 Trade Receivables and Loans

Trade receivables that do not contain a significant financing component are measured at transaction price as
per Ind AS 115.

Subsequently, these assets are held at amortized cost, using the effective interest rate (EIR) method net of any
expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected
life of financial instrument."

3.28 Debt Instruments

Debt instruments are initially measured at amortized cost, fair value through other comprehensive income
(''FVOCI'') or fair value through profit or loss (''FVTPL'') till derecognition on the basis of (i) the entity''s business
model for managing the financial assets and (ii) the contractual cash flow characteristics of the financial asset.

Measured at amortized cost: Financial assets that are held within a business model whose objective is to hold
financial assets in order to collect contractual cash flows that are solely payments of principal and interest, are
subsequently measured at amortized cost using the effective interest rate (''EIR'') method less impairment, if any.
The amortization of EIR and loss arising from impairment, if any is recognized in the Statement of Profit and
Loss.

Measured at fair value through other comprehensive income: Financial assets that are held within a business
model whose objective is achieved by both, selling financial assets, and collecting contractual cash flows that
are solely payments of principal and interest, are subsequently measured at fair value through other
comprehensive income. Fair value movements are recognized in the other comprehensive income (OCI). Interest
income is measured using the EIR method and impairment losses, if any, are recognized in the Statement of
Profit and Loss. On derecognition, cumulative gain or loss previously recognized in OCI is reclassified from the
equity to ''other income'' in the Statement of Profit and Loss.

Measured at fair value through profit or loss: A financial asset not classified as either amortized cost or FVOCI,
is classified as FVTPL. Such financial assets are measured at fair value with all changes in fair value, including
interest income and dividend income if any, recognized as ''other income'' in the Statement of Profit and Loss."

3.29 Investments in Equity Instruments

All investments in equity instruments classified under financial assets are initially measured at fair value, the
Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL.

The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity
instrument are recognized as other income in the Statement of Profit and Loss unless the Company has elected
to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured
at FVOCI are recognized in OCI. Amounts recognized in OCI are not subsequently reclassified to the Statement
of Profit and Loss. Dividend income on the investments in equity instruments are recognized as ''other income''
in the Statement of Profit and Loss."

3.30'' Derivatives Financial Instruments

The Company uses derivative financial instruments to hedge its foreign currency and commodity risks.
Derivatives are measured at fair value. The treatment of changes in the value of derivative depends on their use
as explained below:

a) Cash Flow Hedges

Derivatives are held to hedge the uncertainty in timing or amount of future forecast cash flows. Such derivatives
are classified as being part of cash flow hedge relationships. For an effective hedge, gains, and losses from
changes in the fair value of derivatives are recognized in other comprehensive income. Any ineffective elements
of the hedge are recognized in the statement of profit and loss.

If the hedged cash flow relates to a non-financial asset, the amount accumulated in equity is subsequently
included within the carrying value of that asset. For other cash flow hedges, amounts accumulated in other
comprehensive income are taken to the statement of profit and loss at the same time as the related cash flow.

When a derivative no longer qualifies for hedge accounting, any cumulative gain or loss remains in equity until
the related cash flow occurs. When the cash flow takes place, the cumulative gain or loss is taken to the
statement of profit and loss. If the hedged cash flow is no longer expected to occur, the cumulative gain or loss
is taken to the statement of profit and loss immediately."

b) Derivatives for which hedge accounting is not applied.

Derivative financial instruments for which hedge accounting is not applied are initially recognized at fair value
on the date on which a derivative contract is entered and are subsequently measured at FVTPL.

c) Offsetting Financial Instruments

Financial assets and financial liabilities are offset, and the net amount is reported in the balance sheet, if there
is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle them
on a net basis or to realize the assets and settle the liabilities simultaneously.

d) Derecognition

Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange
for transferring distinct goods or services to a customer as specified in the contract, excluding amounts collected
on behalf of third parties (for example taxes and duties collected on behalf of the government).

Consideration is generally due upon satisfaction of performance obligations and a receivable is recognised when
it becomes unconditional.

e) Impairment of Financial Assets

Expected credit losses are recognized for all financial assets subsequent to initial recognition other than
financials assets in FVTPL category.

For financial assets other than trade receivables, as per Ind AS 109, the Company recognizes 12 month expected
credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial
asset has not increased significantly since its initial recognition. The expected credit losses are measured as
lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial
recognition. The Company''s trade receivables do not contain a significant financing component and the loss
allowance on trade receivables is measured at an amount equal to lifetime expected losses i.e., expected cash
shortfall.

The impairment losses and reversals are recognized in the Statement of Profit and Loss."

3.31 Financial Liabilities

a) Initial recognition and measurement

Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the
instrument. Financial liabilities are initially measured at the amortized cost unless at initial recognition, they are
classified as fair value through profit and loss. In the case of trade payables, they are initially recognized at fair
value and subsequently, these liabilities are held at amortized cost, using the effective interest method.

b) Subsequent Measurement

Financial liabilities are subsequently measured at amortized cost using the EIR method. Financial liabilities
carried at fair value through profit or loss are measured at fair value with all changes in fair value recognized in
the Statement of Profit and Loss.

c) Derrecognition

Financial liability is derecognized when the obligation specified in the contract is discharged, cancelled, or
expires.

3.32 Foreign Currency Transactions

• The financial statements are presented in Indian Rupees (''INR''), which is also the Company''s functional
currency. All amounts have been rounded off to the nearest rupee.

• Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.

• Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency
closing rates of exchange at the reporting date. Exchange differences arising on settlement or translation of
monetary items are recognized in Statement of Profit and Loss except to the extent of exchange differences
which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly
attributable to the acquisition or construction of qualifying assets which are capitalized as cost of assets.

3.33 Segment Reporting

An Operating Segment is the level at which discrete financial information is available. Business segments are
identified considering:

a) the nature of products and services

b) the differing risks and returns

c) the internal organization and management structure, and

d) the internal financial reporting systems.

Revenue and expenses directly attributable to segments are reported under each reportable segment.
Exceptional items and other expenses which are not attributable or allocable to segments are disclosed
separately. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each
reportable segment. All other assets and liabilities are disclosed as un-allocable assets and liabilities."

3.34 Business Combination

Business combinations are accounted for using the acquisition accounting method as at the date of the
acquisition, which is the date at which control is transferred to the Company. The consideration transferred in
the acquisition and the identifiable assets acquired and liabilities assumed are recognized at fair values on their
acquisition date. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred and the amount recognized for non-controlling interests, and any previous interest held, over the
net identifiable assets acquired and liabilities assumed. The Company recognizes any non-controlling interest in
the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest''s
proportionate share of the acquired entity''s net identifiable assets. Consideration transferred does not include
amounts related to settlement of pre-existing relationships. Such amounts are recognized in the Statement of
Profit and Loss.

Transaction costs are expensed as incurred, other than those incurred in relation to the issue of debt or equity
securities. Any contingent consideration payable is measured at fair value at the acquisition date. Subsequent
changes in the fair value of contingent consideration are recognized in the Statement of Profit and Loss."

For & on Behalf of For and on behalf of Board of Directors,

P L Mittal & Co. A B COTSPIN INDIA LIMITED (CIN: L17111PB1997PLC020118)

Chartered Accountants

FRN: 002697N Deepak Garg Manohar Lal

Managing Director 00843929 Whole Time Director 02406686

Sourabh Goyal Rajinder Prashad Garg Kannu Sharma

Partner 529363 Chief Financial Officer ABXPG1267D Company Secretary A64063

UDIN: 25529363BMULEN1732

Place: Bathinda Place: Bathinda

Date: (26-05-2025) Date: (26-05-2025)

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Mar 31, 2024

3.20 Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, 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 measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date.

If the effect of the time value of money is material, provisions are discounted to reflect its present value using a current pretax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.

Provision for onerous contracts. i.e. contracts where the expected unavoidable cost of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognized when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event based on a reliable estimate of such obligation.

3.21 Lease

The Company''s lease asset classes consist of leases for Land and Buildings, Plant & Equipment, Furniture and Fixtures & Office Equipment''s. The Company assesses whether a contract is or contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

- To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

- The contract involves the use of an identified asset.

- The Company has substantially all of the economic benefits from use of the asset through the period of the lease and,

- The Company has the right to direct the use of the asset.

As a lessee

- At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (shortterm leases) and leases of low value assets. Financial Statements recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

- The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.

- The lease liability is initially measured at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. The lease liability is subsequently remeasured by increasing. the carrying amount to reflect interest on the lease liability and reducing the carrying amount to reflect the lease payments made.

- A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a change in an index or rate used to determine lease payments. The remeasurement normally also adjusts the leased assets.

3.22 Offsetting of Assets and Liabilities

The financial assets and financial liabilities are offset and presented on net basis in the Balance Sheet when there is a current legally enforceable right to set-off the recognized amounts and it is intended to either settle on net basis or to realize the asset and settle the liability simultaneously.

3.23 Cash and Cash Equivalents

Cash and cash equivalents comprise of cash in hand, demand deposits and short-term highly liquid investments that are readily convertible into a known amount of cash and which are subject to an insignificant risk of changes in value.

All financial liabilities are recognised initially at fair value and, in the case of amortised cost, net of directly attributable transaction costs.

3.24 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit after 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 cash flows. The cash flows are segregated into operating, investing, and financing activities.

3.25 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 and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. These statements are prepared under historical cost convention on accrual basis. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Transaction costs that are directly attributable to the acquisition or issue of financial instruments (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 recognized immediately in profit or loss. Subsequently, financial instruments are measured according to the category in which they are classified.

3.26 Financial Assets

All recognized financial assets are subsequently measured in their entirety at either amortized cost using the effective interest method or fair value, depending on the classification of the financial assets.

Classification of financial assets

Classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. The Company classifies its financial assets in the following measurement categories:

- Those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and those measured at amortized cost.

- The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.

- A financial asset that meets the following two conditions is measured at amortized cost unless the asset is designated at fair value through profit or loss under the fair value option:

- Business model test: the objective of the Company''s business model is to hold the financial asset to collect the contractual cash flows.

- Cash flow characteristic test: the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

- A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option:

- Business model test: the financial asset is held within a business model whose objective is achieved by both collecting cash flows and selling financial assets."

Cash flow characteristic test: the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

- All other financial assets are measured at fair value through profit or loss."

3.27 Trade Receivables and Loans

Trade receivables that do not contain a significant financing component are measured at transaction price as per Ind AS 115.

Subsequently, these assets are held at amortized cost, using the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument."

3.28 Debt Instruments

Debt instruments are initially measured at amortized cost, fair value through other comprehensive income (''FVOCI'') or fair value through profit or loss (''FVTPL'') till derecognition on the basis of (i) the entity''s business model for managing the financial assets and (ii) the contractual cash flow characteristics of the financial asset.

Measured at amortized cost: Financial assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows that are solely payments of principal and interest, are subsequently measured at amortized cost using the effective interest rate (''EIR'') method less impairment, if any. The amortization of EIR and loss arising from impairment, if any is recognized in the Statement of Profit and Loss.

Measured at fair value through other comprehensive income: Financial assets that are held within a business model whose objective is achieved by both, selling financial assets, and collecting contractual cash flows that are solely payments of principal and interest, are subsequently measured at fair value through other comprehensive income. Fair value movements are recognized in the other comprehensive income (OCI). Interest income is measured using the EIR method and impairment losses, if any, are recognized in the Statement of Profit and Loss. On derecognition, cumulative gain or loss previously recognized in OCI is reclassified from the equity to ''other income'' in the Statement of Profit and Loss.

Measured at fair value through profit or loss: A financial asset not classified as either amortized cost or FVOCI, is classified as FVTPL. Such financial assets are measured at fair value with all changes in fair value, including interest income and

dividend income if any, recognized as ''other income'' in the Statement of Profit and Loss."

3.29 Investments in Equity Instruments

All investments in equity instruments classified under financial assets are initially measured at fair value, the Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL.

The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity instrument are recognized as other income in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured at FVOCI are recognized in OCI. Amounts recognized in OCI are not subsequently reclassified to the Statement of Profit and Loss. Dividend income on the investments in equity instruments are recognized as ''other income'' in the Statement of Profit and Loss."

3.30 Derivatives Financial Instruments

The Company uses derivative financial instruments to hedge its foreign currency and commodity risks. Derivatives are measured at fair value. The treatment of changes in the value of derivative depends on their use as explained below:

a) Cash Flow Hedges

Derivatives are held to hedge the uncertainty in timing or amount of future forecast cash flows. Such derivatives are classified as being part of cash flow hedge relationships. For an effective hedge, gains, and losses from changes in the fair value of derivatives are recognized in other comprehensive income. Any ineffective elements of the hedge are recognized in the statement of profit and loss.

If the hedged cash flow relates to a non-financial asset, the amount accumulated in equity is subsequently included within the carrying value of that asset. For other cash flow hedges, amounts accumulated in other comprehensive income are taken to the statement of profit and loss at the same time as the related cash flow.

When a derivative no longer qualifies for hedge accounting, any cumulative gain or loss remains in equity until the related cash flow occurs. When the cash flow takes place, the cumulative gain or loss is taken to the statement of profit and loss. If the hedged cash flow is no longer expected to occur, the cumulative gain or loss is taken to the statement of profit and loss immediately."

b) Derivatives for which hedge accounting is not applied.

Derivative financial instruments for which hedge accounting is not applied are initially recognized at fair value on the date on which a derivative contract is entered and are subsequently measured at FVTPL.

c) Offsetting Financial Instruments

Financial assets and financial liabilities are offset, and the net amount is reported in the balance sheet, if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle them on a net basis or to realize the assets and settle the liabilities simultaneously.

d) Derecognition

Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for transferring distinct goods or services to a customer as specified in the contract, excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government).

Consideration is generally due upon satisfaction of performance obligations and a receivable is recognised when it becomes unconditional.

e) Impairment of Financial Assets

Expected credit losses are recognized for all financial assets subsequent to initial recognition other than financials assets in FVTPL category.

For financial assets other than trade receivables, as per Ind AS 109, the Company recognizes 12 month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. The Company''s trade receivables do not contain a significant financing component and the loss allowance on trade receivables is measured at an amount equal to lifetime expected losses i.e., expected cash shortfall.

The impairment losses and reversals are recognized in the Statement of Profit and Loss.

3.31 Financial Liabilities

a) Initial recognition and measurement

Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortized cost unless at initial recognition, they are classified as fair value through profit and loss. In the case of trade payables, they are initially recognized at fair value and subsequently, these liabilities are held at amortized cost, using the effective interest method.

b) Subsequent Measurement

Financial liabilities are subsequently measured at amortized cost using the EIR method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognized in the Statement of Profit and Loss.

c) Derecognition

Financial liability is derecognized when the obligation specified in the contract is discharged, cancelled, or expires.

3.32 Foreign Currency Transactions

• The financial statements are presented in Indian Rupees (''INR''), which is also the Company''s functional currency. All amounts have been rounded off to the nearest rupee.

• Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.

• Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognized in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets which are capitalized as cost of assets.

3.33 Segment Reporting

An Operating Segment is the level at which discrete financial information is available. Business segments are identified considering:

a) the nature of products and services

b) the differing risks and returns

c) the internal organization and management structure, and

d) the internal financial reporting systems.

Revenue and expenses directly attributable to segments are reported under each reportable segment. Exceptional items and other expenses which are not attributable or allocable to segments are disclosed separately. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as un-allocable assets and liabilities."

3.34 Business Combination

Business combinations are accounted for using the acquisition accounting method as at the date of the acquisition, which is the date at which control is transferred to the Company. The consideration transferred in the acquisition and the identifiable assets acquired and liabilities assumed are recognized at fair values on their acquisition date. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. The Company recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest''s proportionate share of the acquired entity''s net identifiable assets. Consideration transferred does not include amounts related to settlement of pre-existing relationships. Such amounts are recognized in the Statement of Profit and Loss.

Transaction costs are expensed as incurred, other than those incurred in relation to the issue of debt or equity securities. Any contingent consideration payable is measured at fair value at the acquisition date. Subsequent changes in the fair value of contingent consideration are recognized in the Statement of Profit and Loss."

For & on behalf of For and on behalf of the Board of Directors of

P L Mittal & Co. A B COTSPIN INDIA LIMITED

Chartered Accountants

FRN:002697N Deepak Garg Manohar Lal

(Managing Director) (Whole Time Director)

(DIN 00843929) (DIN 02406686)

Sourabh Goyal

Partner

Membership No.: 529363 Rajinder Prashad Garg Kannu Sharma

UDIN: 24529363BKEPEM9757 (Chief Financial Officer) (Company Secretary)

(PAN: ABXPG1267D) (M. No. A64063)

Place: Bathinda Date: 28/05/2024

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Mar 31, 2023

a) Terms and rights attached to the equity shares:

The Company has only one class of equity shares having a par value ^ 10/- per share. The holders of the equity shares are entitled to voting rights proportionate to their share holding at the meetings of shareholders. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholder in the ensuing Annual General meeting.

(i) Capital Reserve: Capital Reserves include Capital Subsidy received by the Company in earlier years.

(ii) Securities Premium Reserve: Securities premium is used to record the premium received on issue of shares. This reserve can be utilized in accordance with the provisions of the Companies Act 2013.

(iii) Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

(iv) Equity Instruments & FVBDO though OCI: Any changes in the Asset i.e., Investments due to change in Market Price of Investments and Changes in liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognized in ‘Other comprehensive income’ and subsequently not reclassified to the Statement of Profit and Loss.

14(C) The Company has 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:

a) directly or indirectly lend or investment in other persons or entities identified in any manner whatsoever by or behalf of the funding party (Ultimate Beneficiaries) or,

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

14(D) The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company as a wilful defaulter at any time during the financial year, or after the end of the reporting period but before the date when financial statements are approved.

As on 31st March 2023- Credit Card Dues - Rs. 81,56,912/-, Cheque Issued but not presented - Rs.20,00,966/-Electricity Bill Payable - Rs.1,21,41,629/-, Advances from customers - Rs. 42,400/-, Capital Creditors-Rs. 68,29,534/- and Other Expenses Payable- Rs. 72,92,306/-

As on 31st March 2022- Credit Card Dues - Rs. 45,55,593/-, Cheque Issued but not presented - Rs.12,70,669/-Electricity Bill Payable - Rs. 92,12,160/-, Advances from customers - Rs. 650/-, Capital Creditors Rs.6,45,19,500/- and Other Expenses Payable- Rs. 6,54,67,120/-

Note- The aforesaid Finance cost excludes installation period interest & Other Borrowing Cost charged on specific borrowings from bank, capitalized during the year amounting to CY - Rs.1,52,16,738/-, PY- Rs. 12,04,526/-

Note: 27A Corporate Social Responsibility Expense

The company has spent Rs. 10,60,000/- of Corporate Social Responsibility (CSR) funds towards Ancient Indian Sciences These are eligible CSR activities Schedule VII of the Companies Act, 2013. The details are:

I. Gross amount required to be spent by the Company during the year: Rs. 10,57,0000/-

II. Amount spent during the year on:

i. Above includes a contribution of Rs. 10,60,000/-Dr. Narayan Dutt Shrimali foundation which is a Section 8 registered Company under Companies Act, 2013, with the main objectives of working in the areas of Ancient Indian sciences.

ii. The Company does not carry any provisions for Corporate social responsibility expenses for current year and previous year.

iii. There are no shortfalls as at the current year or previous years. Moreover, the Company does not wish to carry forward any excess amount spent during the year.

iv. The Company does not have any ongoing projects as at 31st March, 2023.

Note:

1. Earnings per share calculations are done in accordance with IND AS 33 “Earnings per share”. Weighted average number of equity shares is the number of equity shares outstanding at the beginning of the year adjusted by the number of equity shares issued during the year and subsequent to the Balance sheet date but before approval of accounts in the Board is multiplied by the time weighing factor. The time weighing factor is the number of days for which the specific shares are outstanding as a proportion of total number of days during the year.

2. The earnings per share figure for the year ended 31st March 2022 and 31st March 2021 have been adjusted to give effect to the allotment of the bonus shares, as required by Ind AS-33. Bonus issue in the ratio 2:1 has been declared on 26th April 2021.

Note: 30 CORPORATE INFORMATION

AB COTSPIN INDIA LIMITED is one of the leading names in textile industry in north india. The company is well accepted as a quality manufacturer in cotton yarns & fabrics circle. The company lays its emphasis on manufacturing quality yarns & fabrics with competence. The Company has matured over a period of time from ginning, cotton trading and then integrating to a cotton spinning mill and further adding knitting facility at the same premises.

AB COTSPIN INDIA LIMITED is a spinning mill located at BathindaRroad, Jaitu distt. Faridkot (Punjab), the company has 18000 spindles of world class technology with automation of various processes and knitting machines from Mayer & Cie. (Germany). The company is engaged in manufacturing world class 100% cotton yarns & fabrics both combed and karded, catering to requirements of niche customers who in turn are engaged in making garments for their international buyers. The company has world class state of art R & D

facility with both online and offline quality monitoring system round the clock. The company has added manufacturing slub yarns, BCI yarns, Double yarns into its product basket. The company is certified producer of BCI yarns from well acclaimed certifying agency and is planning to convert entire unit of spinning & knitting on to BCI yarns & fabrics production in near future. The company maintains complete traceability of BCI Products right from farmers to ginning, spinning yarns & fabrics.

d) Following disclosures shall be made where Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under companies Act, 2013) either severally or jointly with any other person that are:

(a) repayable on demand or

(b) without specifying any terms or period of repayment

f) Terms and conditions of transactions with the related parties

Transactions with the related parties are made on normal commercial terms and conditions and at market rates.

Note: 32 Provision and Contingency in compliance to the Ind AS 37 I. Contingent Liabilities not provided for

Particulars	For the year ended 31st March 2023	For the year ended 31st March 2023
(a) Claim against Company not acknowledged as debts	-	-
(b) Guarantees
(i) Foreign Trade Ministry of Commerce	1.04	1.04
(ii) Punjab Pollution Board	0.50	0.50
(c) Letter of Credit	225.40	2,689.50
Note: In case quantum of liability is immaterial, the same has been ignored.

Particulars	For the year ended 31st March 2023	For the year ended 31st March 2023
		Proforma
Contracts remaining to be executed on Capital accounts (Net of Advances)	3.90	1,199.32
Others	NIL	NIL

Note: 34 Capital Management

The capital includes issued equity capital and other equity reserves attributable to the equity holders of the company. The primary objective of the company''s capital management is to maintain optimum capital structure to reduce cost of capital and to maximize the shareholder value.

The Company manages its capital to ensure that the Company will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance.

The Company determines the amount of capital required on the basis of annual planning and budgeting and its plan for working capital and long-term borrowings. The funding requirements are met through equity, internal accruals and a combination of both long-term and short-term borrowings.

Note: 35 Previous Years Figure

Previous year''s figure has been regrouped/ rearranged /recast, wherever necessary, to make them comparable with the current year''s figures.

The Company is primarily in the business of manufacturing, purchase and sale of yarns and other allied products. The Chairman and 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 indicator of the Company as a single unit. Therefore, there is only one reportable segment for the Company.

Domestic information includes sales and services to customers located in India.

Overseas information includes sales and services rendered to customers located outside India.

Non-current segment assets includes property, plant and equipment, capital work in progress, intangible assets and other non-current assets.

The Company''s activities are exposed to market risk, liquidity risk and credit risk. The Company''s Board of Directors has overall Company''s responsibility for the establishment and oversight of the Company''s risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

a) Credit Risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company''s exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables and financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits. Other financial assets measured at amortized cost includes abandonment cost, security deposits and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

b) Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.

Management monitors rolling forecasts of the Company liquidity position and cash and cash equivalents on the basis of expected cash flows.

The Company does not have international transactions and is not exposed to foreign exchange risk arising from foreign currency transactions.

Note: 39 The Company has a process whereby periodically all long-term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the company has reviewed and ensured that adequate provision as required under any law/ accounting standards for material foreseeable losses on such long-term contracts (including derivative contracts) has been made in books of accounts.

Note: 40 The Company does not hold any benami property under the Benami Transactions (Prohibition) Act, 1988 and no proceeding has been initiated or is pending against the Company for holding any benami property.

Note: 41 The Company has not surrendered or disclosed any income during the year in the tax assessments under the Income Tax Act,1961.

Note: 42 No scheme of arrangement for the Company has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.

Note: 43 The Company has earned a profit of Nil (FY 2022-23: Nil) on sale of cryptocurrencies during the year. The Company does not hold any cryptocurrency or virtual currency as at 31st March 2023 and 31st March 2022. The Company has also not received any deposits or advances for the purpose of investing in cryptocurrencies or virtual currencies.

a) Economic Assumptions

The principal assumptions are the discount rate & salary growth rate. The discount rate has been determined with reference to expected market yields on CG-Secs of currency and term consistent with those of benefit obligations. Salary increases rate takes into account of inflation, seniority, promotion and other relevant factors on long term basis. Valuation assumptions selected by the Corporation are as follows:

Actuarial Method

a) Projected Unit Credit (PUC) Actuarial Method has been used to assess the plan''s liabilities of exiting employees for retirement, death-in-service and withdrawals (Resignations / Terminations).

b) Under the PUC method, a projected accrued benefit is calculated at the beginning of the period and again at the end of the period for each benefit that will accrue for all active members of the plan. The projected accrued benefit is based on the plan accrual formula and upon service as at the beginning or end of period, but using member''s final compensation, projected to the age at which the employee is assumed to leave active service. The plan liability is the actuarial present value of the projected accrued benefits as on the date of valuation.

Sensitivities due to mortality & withdrawals are not material & hence impact of change has not been calculated.

Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement.