Notes to Accounts of Precot Ltd.

Mar 31, 2025

X. Provisions and contingent liabilities

Provisions are recognised when the Company has a present
obligation (legal or constructive), as a result of past events,
and it is probable that an outflow of resources, that can be
reliably estimated, will be required to settle such an obligation.

The amount recognised as a provision is the best estimate of
the consideration required to settle the present obligation at
the balance sheet date, taking into account the risks and
uncertainties surrounding the obligation. When a provision is
measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those
cash flows (when the effect of the time value of money is
material).

When some or all of the economic benefits required to settle a
provision are expected to be recovered from a third party, a
receivable is recognized as an asset if it is virtually certain that
reimbursement will be received and the amount of the
receivable can be measured reliably.

A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but

probably will not, require an outflow of resources. When there
is a possible obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.

XI. Non-current assets held for sale

Non-current assets are classified as held for sale if its carrying
amount will be recovered principally through a sale
transaction rather than through continuing use. Non-current
assets classified as held for sale are measured at the lower of
their carrying value and fair value less costs to sell.

XII. Financial Instruments

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

Financial assets and financial liabilities are initially measured
at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial liabilities at
fair value through Statement of Profit and Loss (FVTPL)) 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
and loss are recognised immediately in Statement of Profit
and Loss.

A. Financial Assets:

(i) Recognition and initial Measurement: The Company initially
recognises loans and advances, deposits, debt securities
issues and subordinated liabilities on the date on which they
originate. All other financial instruments (including regular way
purchases and sales of financial assets) are recognised on the
trade date, which is the date on which the Company becomes
a party to the contractual provisions of the instrument. A
financial asset or liability is initially measured at fair value plus,
for an item not at FVTPL, transaction costs that are directly
attributable to its acquisition or issue. However, trade
receivables that do not contain significant financing
components are measured at transaction cost.

(ii) Classification of financial assets: On initial recognition, a
financial asset is classified to be measured at amortised cost,
fair value through other comprehensive income (FVTOCI) or
FVTPL.

A financial asset is measured at amortised cost if it meets both of

the following conditions and is not designated at FVTPL:

• The asset is held within a business model whose
objective is to hold assets to collect contractual cash flows;
and

• The contractual terms of the financial asset give rise on

specified dates to cash fiows that are solely payments of
principal and interest on the principal amount outstanding.

A debt instrument is classified as FVTOCI only if it meets both of
the following conditions and is not recognised at FVTPL;

i) The asset is held within a business model whose
objective is achieved by both collecting contractual cash
flows and selling financial assets; and

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

Debt instruments included within the FVTOCI category
are measured initially as well as at each reporting date at
fair value. Fair value movements are recognized in the
Other Comprehensive Income (OCI). However, the
Company recognizes interest income, impairment losses
& reversals and foreign exchange gain or loss in the
Statement of Profit and Loss. On derecognition of the
asset, cumulative gain or loss previously recognised in
OCI is reclassified from the equity to Statement of Profit
and Loss. Interest earned whilst holding FVTOCI debt
instrument is reported as interest income using the EIR
method.

Equity investments (other than investments in
subsidiaries and joint ventures):

All equity investments within the scope of Ind AS 109, ’Financial
Instruments’ are measured at fair value. Equity instruments which
are held for trading and contingent consideration recognised by
an acquirer in a business combination to which Ind AS 103 applies
are classified as at FVTPL. For all other equity instruments, the
Company may make an irrevocable election to present in other
comprehensive income subsequent changes in the fair value. The
Company makes such election on an instrument-by instrument
basis. The classification is made on initial recognition and is
irrevocable. If the Company decides to classify an equity
instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There
is no recycling of the amounts from OCI to Statement of Profit and
Loss, even on sale of investment. However, the Company may
transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are
measured at fair value with all changes recognized in the
Statement of Profit and Loss.

All other financial assets are classified as measured at FVTPL. In
addition, on initial recognition, the Company may irrevocably
designate a financial asset that otherwise meets the requirements
to be measured at amortised cost or at FVTOCI or at FVTPL if
doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.

Financial assets at FVTPL are measured at fair value at the end of

each reporting period, with any gains and losses arising on
remeasurement recognized in statement of profit or loss. The net
gain or loss recognized in statement of profit or loss incorporates
any dividend or interest earned on the financial asset and is
included in the ’other income’ line item. Dividend on financial
assets at FVTPL is recognized when:

a. The Company’s right to receive the dividends is
established,

b. It is probable that the economic benefits associated
with the dividends will flow to the entity,

The dividend does not represent a recovery of part of cost of the
investment and the amount of dividend can be measured reliably.

iii) Impairment: The Company assesses at each reporting date
whether a financial asset (or a group of financial assets) is
impaired based on evidence or information that is available
without undue cost or effort. Expected credit losses are
assessed and loss allowances recognised if the credit
quality of the financial asset has deteriorated significantly
since initial recognition.

Ind AS 109 requires expected credit losses to be measured
through a loss allowance. The Company recognizes lifetime
expected losses for all contract assets and / or all trade
receivables that do not constitute a financing transaction. For all
other financial assets, expected credit losses are measured at an
amount equal to the 12-month expected credit losses or at an
amount equal to the life time expected credit losses, if the credit
risk on the financial asset has increased significantly since initial
recognition.

B. Financial liabilities and equity instruments

Financial liabilities are classified as at FVTPL when the
financial liability is either held for trading or it is designated as
at FVTPL.

(i) Recognition and initial Measurement:

A financial liability is classified as held for trading if:

i) It has been incurred principally for the purpose of
repurchasing it in the near term; or

ii) on initial recognition it is part of a portfolio of identified
financial instruments that the Company manages
together and has a recent actual pattern of short-term
profit-taking; or

iii) it is a derivative that is not designated and effective as a
hedging instrument.

A financial liability other than a financial liability held for trading
may be designated as at FVTPL upon initial recognition if:

i) such designation eliminates or significantly reduces a
measurement or recognition inconsistency that would
otherwise arise;

ii) the financial liability forms part of a group of financial
assets or financial liabilities or both, which is managed
and its performance is evaluated on a fair value basis, in
accordance with the Company’s documented risk
management or investment strategy, and information
about the grouping is provided internally on that basis; or

iii) it forms part of a contract containing one or more
embedded derivatives, and Ind AS 109 permits the entire
combined contract to be designated as at FVTPL in
accordance with Ind AS 109.

Financial liabilities at FVTPL are stated at fair value, with any
gains or losses arising on remeasurement recognised in
Statement of Profit and Loss. The net gain or loss recognised in
Statement of Profit and Loss incorporates any interest paid on the
financial liability and is included in the ’other gains and losses’ line
item in the Statement of Profit and Loss. The Company
derecognises financial liabilities when, and only when, the
Company’s obligations are discharged, cancelled or they expire.
The difference between the carrying amount of the financial
liability derecognised and the consideration paid and payable is
recognised in Statement of Profit and Loss.

(ii) Subsequent measurement

The measurement of financial liabilities depends on their
classification, as described below:

a. Loans and borrowings

After initial recognition, interest-bearing loans and borrowings
are subsequently measured at amortized cost using the
Effective Interest Rate (EIR) method. Gains and losses are
recognized in profit or loss when the liabilities are de¬
recognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortization is included as
finance costs in the statement of profit and loss.

b. Trade and other payables

These amounts represent liabilities for goods or services
provided to the Company which are unpaid at the end of the
reporting period. Trade and other payables are presented as
current liabilities when the payment is due within a period of 12
months from the end of the reporting period.

For all trade and other payables classified as current, the
carrying amounts approximate fair value due to the short
maturity of these instruments. Other payables falling due after

12 months from the end of the reporting period are presented
as non-current liabilities and are measured at amortized cost
unless designated as fair value through profit and loss at the
inception.

c. Other financial liabilities at fair value through profit or
loss:

Financial liabilities at fair value through profit or loss include
financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through
profit or loss. Gains or losses on liabilities held for trading are
recognized in the statement of profit and loss.

Other financial liabilities: Other financial liabilities (including
borrowings and trade and other payables) are subsequently
measured at amortised cost using the effective interest
method.

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

Significant accounting judgements, estimates and
assumptions:

The preparation of financial statements in conformity with the
recognition and measurement principles of Ind AS requires
management to make judgments, estimates and assumptions
that affect the reported balances of revenues, expenses, assets
and liabilities and the accompanying disclosures, and the
disclosure of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes that require
a material adjustment to the carrying amount of assets or liabilities
affected in future periods.

The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognized
in the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future period, if
the revision affects current and future period.

The following are the areas of estimation uncertainty and critical
judgments that the management has made in the process of
applying the Company’s accounting policies:

i. Useful Lives of Property, Plant and Equipment:

Management reviews the useful lives of property, plant and
equipment at least once a year. Such lives are dependent
upon an assessment of both the technical lives of the assets
and also their likely economic lives based on various internal
and external factors including relative efficiency and operating
costs. Accordingly, depreciable lives are reviewed annually
using the best information available to the Management.

ii. Impairment: Determining whether the assets are impaired
requires an estimate in the value in use of the assets. The
value in use calculation requires the Management to estimate
the future cash flows expected to arise from the asset and a
suitable discount rate in order to calculate present value.
When the actual cash flows are less than expected, a material
impairment loss may arise.

iii. Provisions and Contingencies: Provisions and liabilities are
recognized in the period when it becomes probable that there
will be a future outflow of funds resulting from past operations
or events that can reasonably be estimated. The timing of
recognition requires application of judgement to existing facts
and circumstances which may be subject to change. The
amounts are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific
to the liability.

iv. Taxes: Deferred tax assets are recognized for unused tax
losses to the extent that it is probable that taxable profit will be

available against which the losses can be utilized. Significant
management judgement is required to determine the amount
of deferred tax assets that can be recognised, based upon the
likely timing and the level of future taxable profits together with
future tax planning strategies.

v. Defined Benefit Obligation: The costs of providing Gratuity
and other post-employment benefits are charged to the
Statement of Profit and Loss in accordance with Ind AS 19
’Employee benefits’ over the period during which benefit is
derived from the employees’ services. The costs are assessed
on the basis of assumptions selected by the management.
These assumptions include salary escalation rate, discount
rates, expected rate of return on assets and mortality rates.
The same is disclosed in Note 35, ’Employee benefits ’.

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

vii. Leases : Significant judgments are required in the assumption
and estimates in order to determine the ROU Asset and lease
liability. The assumption and estimates include application of
practical expedients, selection of accounting policy choices,
assessment of lease terms, applicable incremental borrowing
rate, among others.

b. Security details:

Note 1 : Second ranking pari-passu charge by way of hypothecation of the company''s entire stock of raw materials,

semi finished & finished goods, consumable stores & spares ,book debts, bills receivable, outstanding
monies & other receivables of the company , both present & future, ranking pari-passu with other participating
banks and Second raking pari-passu charge on entire fixed assets of the company ranking pari-passu with
other participating banks.

Note 2 : Pari passu second charge on entire movable and immovable fixed assets and pari passu second charge on

Current Assets and exclusive charge on Promoter''s Residential property.

Note 3 : Extension of charges on stocks and receivables and pari-passu second charge on the entire fixed assets of

the company.

Note 4 : Pari passu second charge on current and fixed Assets of the Company.

Note 5 : Pari passu second charge with the existing credit facilities in terms of cash flows (including repayments) and

securities.

Note 6 : Paripassu second charge on the entire Current Assets of the Company and Paripassu second charge on the

entire Fixed Assets of the Company.

Note 7 : Second Pari passu charge on the entire current Assets of the Company, both present and future and second

Pari passu charge on the collateral securities offered for the existing facilities of the Company.

Note 8 : Charge on the assets purchased out of the term loan. Paripassu first charge on the assets situtaed at Pollachi

Unit, Paripassu second charge on the entire current assets of the Company along with other capital working
lenders.

Note 9 : First charges on immovable properties situated at Kanjikode unit.

Note 10 : First charges on assets created out of the loan.

II - Hire purchase loans from financial institution of ? 286.63 Lakhs (March 31,2024 : ?83.86 Lakhs) carries interest
@ 7.63% to 9.55% p.a. The loans are repayable in 60 monthly instalments starting from the respective date of
finance. The loan is secured by specific assets financed (Vehicle).

38. DISCONTINUED OPERATIONS

The Board of Directors at their meeting held on 27^th February 2025 have decided to close the operations of one of the Spinning
units located at Hindupur, Andhra Pradesh, considering the unsustainable losses over the past several years and with no
visibility of any significant improvement in the near future.

Consequently, the working results of the unit has been disclosed in Discontinued Operations with comparative / prior periods
being re-presented / restated in Standalone and Consolidated Financial Statements. The assets and liabilities for the year
ended 31^st March 2025 have been reclassified as Non Current Assets / Liabilities pertaining to Disposal Group for which
comparatives have not been restated.

40. Employee Benefit Plans

(a) Defined contribution plans - Provident Fund

In accordance with The Employees Provident Funds
Act, 1952 employees are entitled to receive benefits
under the provident fund. Both the employee and
the employer make monthly contributions to the plan
at a predetermined rate (12% for fiscal year 2025
and 2024) of an employee’s basic salary. All
employees have an option to make additional
voluntary contributions. These contributions are
made to the fund administered and managed by the
Government of India (GOI). The Company has no
further obligations under the fund managed by the
GOI beyond its monthly contributions which are
charged to the statement of profit and loss in the
period they are incurred.

The expense recognised during the period towards
this defined contribution plan is '' 380.83 Lakhs
(March 31,2024 - '' 337.99 Lakhs).

(b) Defined contribution plans - Employee State
Insurance

In accordance with Employees'' State Insurance Act,
1948, the eligible employees are entitled to receive
benefits under the ESI Scheme. The employer
contributes 3.25 percent and employee contributes
0.75 percent, total share 4 percent. This fund is
managed by the ESI Corporation (ESIC) according
to rules and regulations stipulated there in the ESI
Act 1948, which oversees the provision of medical
and cash benefits to the employees and their family.

The Company has no further obligations under the
fund managed by the GOI beyond its monthly
contributions which are charged to the statement of
profit and loss in the period they are incurred.

The expense recognised during the period towards
this defined contribution plan is '' 63.44 Lakhs
(March 31,2024 - '' 60.55 Lakhs).

(c) Defined Benefit Plans - Gratuity

The company has defined benefit gratuity plan for
its employees, which requires contributions to be
made to a separately administered fund. It is
governed by the Payment of Gratuity Act, 1972. The
plan provides for a lump-sum payment to vested
employees at retirement, death, while in
employment or on termination of employment of an
amount equivalent to 26 days salary payable for
each completed year of service. Under the Act,
employee who has completed five years of service
is entitled to specific benefit. The level of benefits
provided depends on the member’s length of
service and salary at retirement age. The fund has
the form of a trust and it is governed by the Board of
Trustees. The Board of Trustees is responsible for
the administration of the plan assets including
investment of the funds in accordance with the
norms prescribed by the Government of India.

Each year, the Board of Trustees and the Company
review the level of funding in the India gratuity plan.
Such a review includes the asset-liability matching
strategy and assessment of the investment risk.
The Company decides its contribution based on the
results of this annual review.

The most recent actuarial valuation of the plan
assets and the present value of the defined benefit
obligation were carried out at 31 March 2025 by
Mr.Srinivasan Nagasubramanian, Armstrong
International Employee Benefits Solution, Fellow of
the Institute of Actuaries of India . Company’s
liability towards gratuity (funded) is actuarially
determined at each reporting date using the
projected unit credit method.

(i) Risk Exposure:

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

Investment risk The present value of the defined
benefit plan liability is calculated by

reference to the future salaries of the
plan participants. As such, an increase
in the salary of the plan participants will
increase the plan''s liability.

Interest risk A decrease in the bond interest rate will
increase the plan liability; however, this
will be partially offset by an increase in
the return on the plan’s debt
investments.

Longevity risk The present value of the defined
benefit plan liability is calculated by
reference to the best estimate of the

mortality of plan participants both
during and after their employment.
An increase in the life expectancy of
the plan participants will increase
the plan’s liability.

Salary risk The present value of the defined
benefit plan liability is calculated by
reference to the future salaries of
plan participants. As such, an
increase in the salary of the plan
participants will increase the plan’s
liability.

The Company has not disclosed the fair values for short term / current financial instruments (such as short term trade receivables, short
term trade payables, Current Loans and Short term borrowings etc.,) because their carrying amounts are a reasonable approximation of
Fair value.

(c) Measurement of fair values:

The basis of measurement in respect of each class of financial assets and liabilities are disclosed in significant accounting policies.
43. CAPITAL MANAGEMENT:

The Company’s capital management strategy is to effectively determine, raise and deploy capital so as to create value for its
shareholders. The same is done through a mix of either equity and/or preference and/or convertible and/or combination of short term /
long term debt as may be appropriate.

The Company determines the amount of capital required on the basis of its product, capital expenditure, operations and strategic
investment plans. The same is funded through a combination of capital sources be it either equity and/or preference and/or convertible
and/or combination of short term/long term debt as may be appropriate.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and
elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects and
strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans
and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents and current investments.

44. FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES

The Company''s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company''s financial assets
comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

In course of its business, the Company is exposed to certain financial risks that could have significant influence on the Company''s
business and operational / financial performance. These include market risk (including currency risk, interest rate risk and other price
risk), credit risk and liquidity risk.

The Board of Directors reviews and approves risk management framework and policies for managing these risks and monitors suitable
mitigating actions taken by the management to minimise potential adverse effects and achieve greater predictablity to earnings.

In line with the overall risk management framework and policies, the treasury function provides services to the business, monitors and
manages through an analysis of the exposures by degree and magnitude of risks.

The Company uses derivative financial instruments to hedge risk exposures in accordance with the Company''s policies as approved by
the board of directors.

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 risk comprises three types of risks: interest rate risk, currency risk and other price risk. Financial instruments affected by market
risk includes borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments.

a) Interest Rate Risk

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. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest
rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally
denominated in rupees and US dollars with a mix of fixed and floating rates of interest.

The sensitivity analyses below have been determined based on the exposure to interest rates for floating rate liabilities, assuming the
amount of the liability outstanding at the year-end was outstanding for the whole year.

If interest rates had been 100 basis points higher / lower and all other variables were held constant, the Company''s profit/ (loss) for the
year ended 31 March 2025 would decrease / increase by '' 326.53 Lakhs (for the year ended 31 March 2024 : decrease / increase by
'' 369.69 Lakhs). This is mainly attributable to the Company''s exposure to interest rates on its variable rate borrowings.

b) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange
rates. The Company enters into forward exchange contracts with average maturity of less than 6 month to hedge against its foreign
currency exposures relating to the recognised underlying liabilities and firm commitments. The Company''s policy is to hedge its
exposures above predefined thresholds from recognised liabilities and firm commitments that fall due in 20-30 days. The Company does
not enter into any derivative instruments for trading or speculative purposes.

c) Commodity Price Risk

The Company''s revenue is exposed to the market risk of price fluctuations related to its raw material i.e., Cotton. Market forces generally
determine prices for the cotton procured by the Company. These prices may be influenced by factors such as supply and demand,
production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes
in any of these factors may increase the Cost of Production that the Company incurs for manufacture of Yarn.

The following table details the Company''s sensitivity to a 5% movement in the input price of Cotton. The sensitivity analysis includes only
5% change in commodity prices for quantity consumed during the year, with all other variables held constant. A positive number below
indicates an increase in profit where the commodity prices reduces by 5%. For a 5% increase in commodity prices, there would be a
comparable impact on profit, and the balances below would be negative.

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk
arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial instruments, other
balances with banks, loans and other receivables. To manage the credit risk, the company periodically assesses the financial reliability of
customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of
account receivables. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in
credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the
company compares the risk of default occuring on the asset as at the reporting date with the risk of default as at the date of initial
recognition. The company considers reasonable and supportive forward-looking information.

The average credit period on sales of products is 21 to 60 days. Credit risk arising from trade receivables is managed in accordance with
the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is
assessed based on a detailed study of credit worthiness and accordingly individual credit limits are defined/modified. The concentration
of credit risk is limited due to the fact that the customer base is large.

3) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial
instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset
quickly at close to its fair value.

The Group''s treasury department is responsible for maintenance of liquidity (including quasi liquidity), continuity of funding as well as
timely settlement of debts. In addition, policies related to mitigation of risks are overseen by senior management. Management monitors
the Group''s net liquidity position on the basis of expected cash flows vis a vis debt service fulfillment obligation.

The table below analysis derivative and non-derivative financial liabilities of the Company into relevant maturity groupings based on the
remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual
undiscounted cash flows.

57. The Code on Social Security 2020 has been notified in the Official Gazette on 29^th Septemeber 2020. the effective date from
which the changes are applicable is yet to be notified and the rules are yet to be framed. Impact, if any, of the change will be
assessed and accounted in the period in which the said code becomes effective and the rules framed thereunder are
published.

58. Events after the reporting period

The Board of Directors, in its meeting held on 23^rd May 2025 has recommended a dividend of 30% ('' 3 per fully paid up Equity
Shares '' 10/- each)for the year ended 31^st March 2025 subject to the approval of the shareholders at the ensuing Annual
General Meeting.

60. Additional disclosure relating to Schedule III Amendment of Companies Act , 2013

(i) Details of Benami property:

No proceedings have been initiated or are pending against the company for holding any Benami property under
the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder

(ii) Utilisation of borrowed funds and share premium:

A) The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including
foreign entities (intermediaries) with the understanding that the intermediary shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner, whatsoever by or
on behalf of the Company (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

B) The company has not received any funds 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 invest in other persons or entities identified in any manner whatsoever by or
on behalf of the Funding Party (Ultimate Beneficiaries) or

b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(iii) Compliance with number of layers of companies:

The company has complies with the number of layers prescribed under the Companies Act, 2013.

(iv) Undisclosed income:

There is no income surrendered or disclosed as income during the current or previous year in the tax
assessments under the Income tax Act,1961, that has not been recorded in the books of account.

(v) Details of crypto currency or virtual currency:

The company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(vi) Valuation of Property, Plant and Equipment, intangible asset and investment property:

The company has not revalued its property, plant and equipment (including Right of use Assets) or intangible
assets or both during the current of previous year.

(vii) Struck off Companies:

The company does not have any transaction with companies struck off.

(viii) Wilful Defaulter:

The company had not been declared a wilful defaulter by any bank or financial institution or other lender (as
defined under the Companies Act, 2013) or consortium thereof. In accordance with the guidelines on wilful
defaulters issued by the Reserve Bank of India.

(ix) The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of
Companies (ROC) beyond the statutory period.

61 The amounts and disclosures included in the financial statements of the previous year have been reclassified
wherever necessary to conform to the current year classification.

62. All figures are in lakhs unless otherwise stated and rounded off to the nearest two decimals.

Vide our report of even date attached For and on behalf of the Board of Directors

For VKS Aiyer & Co

Chartered Accountants ™ C^handra" _t “¦* _f^Ravmdra, KT^ar

ICAI Firm Reg.No.: 000066S ^Chairma(ⁿD and Man^a|ⁱnga^{rector Chief Financial Officer}

Prashanth Chandran S Kavitha

C.S.Sathyanarayanan Vice Chairman and Managing Director Company Secretary

Partner (DIN : 01909559) (FCS No. 8710)

M.No. : 028328

Place : Coimbatore
Date :23-May-2025

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Mar 31, 2024

(ii) Terms / rights attached to equity shares :

a. The company has only one class of issued shares referred to as equity shares having a par value of Rs. 10 each. Each holder of equity shares is entitled to one vote per share.

b. The dividend (except in case of interim dividend) proposed by the Board of Directors, if any, is subject to the approval of shareholders in the ensuing Annual General Meeting.

c. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amount. The distribution will be in proportion to the number of equity shares held by the share holders.

a. General reserve:

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations.

Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.

b. Capital Redemption Reserve:

i) An amount of '' 55 Lacs was transferred to capital redemption reserve consequent to the buy back of 5,50,000 equity shares in July ''2002 as per the statutory requirement and

ii) '' 300 Lacs has been transferred from Meridian Industries Limited in 2006-07 to the Company in the course of business combination and can be utilized in accordance with the provisions of the Companies Act, 2013.

C. Securities Premium:

Security premium has been created consequent to issue of shares at premium. The reserve shall be utilized in accordance with the provisions of the Companies Act,2013.

b. Security details:

Note 1 : Second ranking pari-passu charge by way of hypothecation of the company''s entire stock of raw materials, semi finished & finished goods, consumable stores & spares ,book debts, bills receivable, outstanding monies & other receivables of the company , both present & future, ranking pari-passu with other participating banks and Second raking pari-passu charge on entire fixed assets of the company ranking pari-passu with other participating banks.

Note 2 : Pari passu second charge on entire movable and immovable fixed assets and pari passu second charge on Current Assets and exclusive charge on Promoter''s Residential property

Note 3 : Extension of charges on stocks and receivables and pari-passu second charge on the entire fixed assets of the company.

Note 4 : Pari passu second charge on current and fixed Assets of the Company.

Note 5 : Hypothecation of plant & machinery of proposed solar project & first charge over factory land and building at Hindpur, second charge over the entire fixed assets of the Company on Pari passu basis with other Multiple Banking Arrangement banks excluding fixed assets exclusively charged to other banks including Land and Building at various locations, hyphothecation of fixed asset and personal guarantee of promoter directors.

Note 6 : Hypothecation of plant & machinery of proposed solar project & first charge over factory land and building at Kanjikode, Kerala and personal guarantee of promoter directors.

Note 7 : Pari passu second charge with the existing credit facilities in terms of cash flows (including repayments) and securities

Note 8 : Paripassu first charge on the entire Current Assets of the Company and Paripassu second charge on the entire Fixed Assets of the Company.

Note 9 : Second Pari passu charge on the entire current Assets of the Company, both present and future and second Pari passu charge on the collateral securities offered for the existing facilities of the Company.

Note 10 : Charge on the assets purchased out of the term loan. Paripassu first charge on the assets situtaed at Pollachi Unit, Paripassu second charge on the entire current assets of the Company along with other capital working lenders.

II - Hire purchase loans from financial institution of ? 83.86 Lakhs (March 31,2023 : ?114.67 Lakhs) carries interest

@ 7.63% to 10.65% p.a. The loans are repayable in 60 monthly instalments starting from the respective date of

finance. The loan is secured by specific assets financed (Vehicle).

III - Debentures represents 12% 700 Non-convertible debentures of ? 10,00.000/- each issued for cash at par to ICICI

Prudential Corporate Credit Opportunities Fund -1. The interest is payable on quarterly basis.

(a) Terms of Repayment:

The debentures are redeemable at a premium of 0.50% per annum on the principal amount and are repayable as

follows:

- At the end of 12 months from the deemed date of allotment - 7.5% of the principal amount

- At the end of 18 months from the deemed date of allotment - 7.5% of the principal amount

- At the end of 24 months from the deemed date of allotment - 7.5% of the principal amount

- At the end of 30 months from the deemed date of allotment - 7.5% of the principal amount

- At the end of 36 months from the deemed date of allotment - 10% of the principal amount

- At the end of 42 months from the deemed date of allotment - 10% of the principal amount

- At the end of 45 months from the deemed date of allotment - 50% of the principal amount.

(b) Security details:

- First charge on Technical Textile Plant and all assets thereof, identified land parcels and on the identified Spinning Unit Plant (Land, Building and Machinery) located at Walayar, Kerala.

1 Working capital loan from banks are secured by pari passu first charge on all the current assets of the Company and pari passu second charge on fixed assets of the Company and are repayable on demand.

2 In respect of the above, working capital rupee loans carry interest rate ranging from 8.60% p.a. to 9.25% p.a. and working capital foreign currency loans carry interest rate ranging from 1.60 % p.a. to 2.01 % p.a. plus applicable SOFR.

3 The quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of accounts of the Company of the respective quarters.

39. Employee Benefit Plans

(a) Defined contribution plans - Provident Fund

In accordance with The Employees Provident Funds Act, 1952 employees are entitled to receive benefits under the provident fund. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (12% for fiscal year 2024 and 2023) of an employee’s basic salary. All employees have an option to make additional voluntary contributions. These contributions are made to the fund administered and managed by the Government of India (GOI). The Company has no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the statement of profit and loss in the period they are incurred.

The expense recognised during the period towards this defined contribution plan is '' 337.99 Lakhs (March 31,2023 - '' 307.07 Lakhs).

(b) Defined contribution plans - Employee State Insurance

In accordance with Employees'' State Insurance Act, 1948, the eligible employees are entitled to receive benefits under the ESI Scheme. The employer contributes 3.25 percent and employee contributes 0.75 percent, total share 4 percent. This fund is managed by the ESI Corporation (ESIC) according to rules and regulations stipulated there in the ESI Act 1948, which oversees the provision of medical and cash benefits to the employees and their family.

The Company has no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the statement of profit and loss in the period they are incurred.

The expense recognised during the period towards this defined contribution plan is '' 60.55 Lakhs (March 31,2023 - '' 70.16 Lakhs).

(c) Defined Benefit Plans - Gratuity

The company has defined benefit gratuity plan for its employees, which requires contributions to be made to a separately administered fund. It is governed by the Payment of Gratuity Act, 1972. The plan provides for a lump-sum payment to vested employees at retirement, death, while in employment or on termination of employment of an amount equivalent to 26 days salary payable for each completed year of service. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets including investment of the funds in accordance with the norms prescribed by the Government of India.

Each year, the Board of Trustees and the Company review the level of funding in the India gratuity plan. Such a review includes the asset-liability matching strategy and assessment of the investment risk. The Company decides its contribution based on the results of this annual review.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31 March 2024 by Mr.Srinivasan Nagasubramanian, Armstrong International Employee Benefits Solution, Fellow of the Institute of Actuaries of India . Company’s liability towards gratuity (funded) is actuarially determined at each reporting date using the projected unit credit method.

(i) Risk Exposure:

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

Investment risk The present value of the defined benefit plan liability is calculated by

reference to the future salaries of the plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

Interest risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.

Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of the

mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

The management assessed that the fair value of cash and cash equivalents, trade receivables, loans,other financial assets, trade payables and other financial liabilities approximate the carrying amount largely due to short-term maturity of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Investments in subsidiaries are carried at cost.

Investements in unquoted equity shares are carried at FVTOCI.

Investements through Portfolio Management scheme is carried at FVTPL.

41. FAIR VALUE MEASUREMENT (a) Fair value hierarchy

Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:

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 asset or liability that are not based on observable market data (unobservable inputs)

The Company has not disclosed the fair values for short term / current financial instruments (such as short term trade receivables, short term trade payables, Current Loans and Short term borrowings etc.,) because their carrying amounts are a reasonable approximation of Fair value.

(c) Measurement of fair values:

The basis of measurement in respect of each class of financial assets and liabilities are disclosed in significant accounting policies.

42. CAPITAL MANAGEMENT:

The Company’s capital management strategy is to effectively determine, raise and deploy capital so as to create value for its shareholders. The same is done through a mix of either equity and/or preference and/or convertible and/or combination of short term /long term debt as may be appropriate.

The Company determines the amount of capital required on the basis of its product, capital expenditure, operations and strategic investment plans. The same is funded through a combination of capital sources be it either equity and/or preference and/or convertible and/or combination of short term/long term debt as may be appropriate.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents and current investments.

43. FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES

The Company''s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company''s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

In course of its business, the Company is exposed to certain financial risks that could have significant influence on the Company''s business and operational / financial performance. These include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Board of Directors reviews and approves risk management framework and policies for managing these risks and monitors suitable mitigating actions taken by the management to minimise potential adverse effects and achieve greater predictablity to earnings.

In line with the overall risk management framework and policies, the treasury function provides services to the business, monitors and manages through an analysis of the exposures by degree and magnitude of risks.

The Company uses derivative financial instruments to hedge risk exposures in accordance with the Company''s policies as approved by the board of directors.

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 risk comprises three types of risks: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments.

a) Interest Rate Risk

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. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees and US dollars with a mix of fixed and floating rates of interest.

The sensitivity analyses below have been determined based on the exposure to interest rates for floating rate liabilities, assuming the amount of the liability outstanding at the year-end was outstanding for the whole year.

If interest rates had been 100 basis points higher / lower and all other variables were held constant, the Company''s profit/ (loss) for the year ended 31 March 2024 would decrease / increase by '' 369.69 Lakhs (for the year ended 31 March 2023 : decrease / increase by '' 378.68 Lakhs). This is mainly attributable to the Company''s exposure to interest rates on its variable rate borrowings.

b) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company enters into forward exchange contracts with average maturity of less than 6 month to hedge against its foreign currency exposures relating to the recognised underlying liabilities and firm commitments. The Company''s policy is to hedge its exposures above predefined thresholds from recognised liabilities and firm commitments that fall due in 20-30 days. The Company does not enter into any derivative instruments for trading or speculative purposes.

At the time of borrowing decisions, appropriate sensitivity analysis is carried out for domestic borrowings vis-a-vis overseas borrowings.

The below table demonstrates the sensitivity to a 5% increase or decrease in the respective currency against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents management''s assessment of reasonably possible change in foreign exchange rate. A positive number below indicates an increase in profit or equity where INR strengthens 5% against the relevant currency. For a 5% weakening of INR against the relevant currency, there would be a comparable impact on profit or equity, and the balances below would be negative.

c) Commodity Price Risk

The Company''s revenue is exposed to the market risk of price fluctuations related to its raw material i.e., Cotton. Market forces generally determine prices for the cotton procured by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may increase the Cost of Production that the Company incurs for manufacture of Yarn.

The following table details the Company''s sensitivity to a 5% movement in the input price of Cotton. The sensitivity analysis includes only 5% change in commodity prices for quantity consumed during the year, with all other variables held constant. A positive number below indicates an increase in profit where the commodity prices reduces by 5%. For a 5% increase in commodity prices, there would be a comparable impact on profit, and the balances below would be negative.

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial instruments, other balances with banks, loans and other receivables. To manage the credit risk, the company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of account receivables. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occuring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The company considers reasonable and supportive forward-looking information.

The average credit period on sales of products is 21 to 60 days. Credit risk arising from trade receivables is managed in accordance with the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on a detailed study of credit worthiness and accordingly individual credit limits are defined/modified. The concentration of credit risk is limited due to the fact that the customer base is large.

3) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Group''s treasury department is responsible for maintenance of liquidity (including quasi liquidity), continuity of funding as well as timely settlement of debts. In addition, policies related to mitigation of risks are overseen by senior management. Management monitors the Group''s net liquidity position on the basis of expected cash flows vis a vis debt service fulfillment obligation.

The table below analysis derivative and non-derivative financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

45. Contingent Liabilities:	As at 31st	As at 31st
Contingent liabilities in respect of :	March 2024	March 2023
Bills discounted	1,684.93	1,144.19
Guarantees	433.38	261.23
Letters of credit outstanding	2,548.47	1,423.13
Claims not acknowledged as debts (Refer note below) Contingent liabilities under litigation :	7,829.51
Disputed Statutory Liabilities not provided for	523.78	393.06
Disputed Other Liabilities not provided for	1,224.09	65.41

Note :Electricity bills of Southern Power Distribution Company of Andhra Pradesh Limited reflects an amount aggregating to '' 7,829.51 lakhs as “Court Case Arrears”. This is a unilaterally arrived at figure, with no details made available to the Company. Further this amount is not mentioned as the amount payable in the bill but under “Court Case Arrears”. This could be consequent to various litigations pending with regard to Andhra Pradesh Gas Power Corporation Limited as reflected in the earlier Annual Reports.

46. Exceptional items :

a. A parcel of land measuring 3.40 acres was under dispute, for which a suit was filed before the subordinate judge at Palakkad seeking nullification of the conveyance of property. The said dispute was dismissed by the court vide judgement dated 5^th December 2002, thereby granting absolute ownership of the property to the company.

The above order was challenged by way of an appeal by the appellant before the Kerala High Court. The High Court allowed the appeal and set aside the order of the subordinate judge of Palakkad vide court order dated 16^th June 2023.

Aggrieved by the order, an appeal by way of a Special Leave Petition was preferred by the company before the Honourable Supreme Court of India, which was dismissed. Consequently the carrying value of the land amounting to ? 183.60 Lakhs has been written off.

b. The Company, as a shareholder and power consumer, has several pending litigations against Andra Pradesh Gas Power Corporation Limited (APGCL) before various judicial forums. The disputes range from monthly consumption of units, tariff related issues, wheeling charges, peak hour energy allocation, restriction and control measurement charges, surplus allocation charges, peak hour penalty and load factor incentive. These disputes relate to various periods from 2003 to 2020 against which the Company, Southern Power Distribution Company Limited (SPDCL) and APGPCL are litigants at various forums. The company''s efforts to obtain full details and the basis of claims of SPDCL and APGPCL from their various offices of SPDCL and APGPCL were futile. Various other shareholders of APGPCL and power consumers are also before various judicial forums on one or more of the above-mentioned issues. The company had in the past, based on then available data, made provisions in the books of accounts in respect of these issues in various years. The carrying value of these liabilities as at 31.03.2024 was ? 806.75 Lakhs.

During September 2022, APGPCL had suspended its operations and had declared layoff of their employees effective 01 November 2022. Considering the layoff and the long pending litigations over several years, the ability of APGPCL to timely represent the pending legal cases, the company has reviewed the issue in totality and has written back an amount of ? 806.75 Lakhs as an exceptional item.

47. Power and Fuel is net of wind power income of '' 220.44 lakhs (PY '' 208.64 lakhs) representing power supplied to the grid against which equivalent consumption was made in house.

The Company has disclosed the suppliers who have registered themselves under "Micro, Small and Medium Enterprises Development Act, 2006" to the extent they have identified on the basis of information available with the Company in respect of the registration status of its vendors.

57. The Code on Social Security 2020 has been notified in the Official Gazette on 29^th September 2020. the effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in the period in which the said code becomes effective and the rules framed thereunder are published.

58. Events after the reporting period

The Board of Directors, in its meeting held on 23^rd May, 2024, has recommended a dividend of 15% (''1.50 per fully paid up equity shares of '' 10 each) for the year ended 31^st March, 2024 subject to the approval of the shareholders at the ensuing Annual General Meeting.

60. Additional disclosure relating to Schedule III Amendment of Companies Act , 2013

(i) Details of Benami property:

No proceedings have been initiated or are pending against the company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder

(ii) Utilisation of borrowed funds and share premium:

A) The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding that the intermediary shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner, whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

B) The company has not received any funds 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 invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(iii) Compliance with number of layers of companies:

The company has complies with the number of layers prescribed under the Companies Act, 2013.

(iv) Undisclosed income:

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income tax Act,1961, that has not been recorded in the books of account.

(v) Details of crypto currency or virtual currency:

The company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(vi) Valuation of Property, Plant and Equipment, intangible asset and investment property:

The company has not revalued its property, plant and equipment (including Right of use Assets) or intangible assets or both during the current of previous year.

(vii) Struck off Companies:

The company does not have any transaction with companies struck off.

(viii) Wilful Defaulter:

The company had not been declared a wilful defaulter by any bank or financial institution or other lender (as defined under the Companies Act, 2013) or consortium thereof. In accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

(ix) The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies (ROC) beyond the statutory period.

61 The amounts and disclosures included in the financial statements of the previous year have been reclassified wherever necessary to conform to the current year classification.

62. All figures are in lakhs unless otherwise stated and rounded off to the nearest two decimals.

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Mar 31, 2023

The other investments included in investments are valued at cost approach to arrive at the fair value as there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range considering the purpose of the investments.

(i) For method of valuation of inventories, refer note no. 1.

(ii) Inventory held at net realizable value amounting to '' 4,428.34 lakhs. (PY '' 88.53 Lakhs).

The amount of write down of inventory recognised as an expense during the current year is '' 309.82 Lakhs (PY '' 13.49 Lakhs).

(iii) There has been no reversal of such write down in current and previous years.

(iv) Inventories have been given as security against certain bank borrowings of the Company - (Refer note nos. 18 & 23)

The credit period on sales of goods ranges from 21 to 60 days without security. No interest is charged on trade receivables upto the end of the credit period.

Trade receivables have been given as collateral towards borrowings (Refer security note no. 18 & 23).

The Company’s exposure to credit and currency risk related to trade receivable are given in note no.44.

Expected credit losses are estimated after taking into account historical credit loss experiences of the Company.

(ii) Terms / rights attached to equity shares :

a. The company has only one class of issued shares referred to as equity shares having a par value of '' 10 each. Each holder of equity shares is entitled to one vote per share.

b. The dividend (except in case of interim dividend) proposed by the Board of Directors, if any, is subject to the approval of shareholders in the ensuing Annual General Meeting.

c. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amount. The distribution will be in proportion to the number of equity shares held by the share holders.

a. General reserve:

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations.

Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.

b. Capital Redemption Reserve:

i) An amount of '' 55 Lacs was transferred to capital redemption reserve consequent to the buy back of 5,50,000 equity shares in July ''2002 as per the statutory requirement and

ii) '' 300 Lacs has been transferred from Meridian Industries Limited in 2006-07 to the Company in the course of business combination and can be utilized in accordance with the provisions of the Companies Act, 2013.

C. Securities Premium:

Security premium has been created consequent to issue of shares at premium. The reserve shall be utilized in accordance with the provisions of the Companies Act,2013.

b. Security details:

Note 1: Second ranking pari-passu charge by way of hypothecation of the company''s entire stock of raw materials, semi finished & finished goods, consumable stores & spares ,book debts, bills receivable, outstanding monies & other receivables of the company, both present & future, ranking pari-passu with other participating banks and Second raking pari-passu charge on entire fixed assets of the company ranking pari-passu with other participating banks.

Note 2: Pari passu second charge on entire movable and immovable fixed assets and pari passu second charge on Current Assets and exclusive charge on Promoter''s Residential property

Note 3: Extension of charges on stocks and receivables and pari-passu second charge on the entire fixed assets of the company.

Note 4: Pari passu second charge on current and fixed Assets of the Company.

Note 5 : Hypothecation of plant & machinery of proposed solar project & first charge over factory land and building at Hindupur and personal guarantee of promoter directors.

Note 6 : Hypothecation of plant & machinery of proposed solar project & first charge over factory land and building at Kanjikode, Kerala and personal guarantee of promoter directors.

Note 7: Pari passu second charge with the existing credit facilities in terms of cash flows (including repayments) and securities

Note 8: Pari passu first charge on the entire Current Assets of the Company and Pari passu second charge on the entire Fixed Assets of the Company.

Note 9: Second Pari passu charge on the entire current Assets of the Company, both present and future and second Pari passu charge on the collateral securities offered for the existing facilities of the Company.

II Hire purchase loans from financial institution of '' 114.67 Lakhs (March 31, 2022 : '' 68.46 Lakhs) carries interest @ 7.63% to 10.65% p.a. The loans are repayable in 60 monthly instalments starting from the respective date of finance. The loan is secured by specific assets financed (Vehicle)

III Debentures represents 11.55% 700 Non-convertible debentures of '' 10,00.000/- each issued for cash at par to ICICI Prudential Corporate Credit Opportunities Fund -1. The interest is payable on quarterly basis.

(a) Terms of Repayment :

The debentures as on 31-03-2023 are redeemable at a premium of 0.50% per annum on the principal amount and are repayable as follows:

- At the end of 12 months from the deemed date of allotment - 7.50% of the principal amount

- At the end of 18 months from the deemed date of allotment - 7.50% of the principal amount

- At the end of 24 months from the deemed date of allotment - 7.50% of the principal amount

- At the end of 30 months from the deemed date of allotment - 7.50% of the principal amount- At the end of 36 months from the deemed date of allotment - 10% of the principal amount

- At the end of 42 months from the deemed date of allotment - 10% of the principal amount

- At the end of 45 months from the deemed date of allotment - 50% of the principal amount.

(b) Security details:

- First charge on Technical Textile Plant and all assets thereof, identified land parcels and on the identified Spinning Unit Plant (Land, Building and Machinery) located at Walayar, Kerala.

40. Employee Benefit Plans

(a) Defined contribution plans - Provident Fund

In accordance with The Employees Provident Funds Act, 1952 employees are entitled to receive benefits under the provident fund. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (12% for fiscal year 2023 and 2022) of an employee’s basic salary. All employees have an option to make additional voluntary contributions. These contributions are made to the fund administered and managed by the Government of India (GOI). The Company has no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the statement of profit and loss in the period they are incurred.

The expense recognised during the period towards this defined contribution plan is '' 307.07 Lakhs (March 31,2022 - '' 288.84 Lakhs).

(b) Defined contribution plans - Employee State Insurance

In accordance with Employees'' State Insurance Act, 1948, the eligible employees are entitled to receive benefits under the ESI Scheme. The employer contributes 3.25 percent and employee contributes 0.75 percent, total share 4 percent. This fund is managed by the ESI Corporation (ESIC) according to rules and regulations stipulated there in the ESI Act 1948, which oversees the provision of medical and cash benefits to the employees and their family.

The Company has no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the statement of profit and loss in the period they are incurred.

The expense recognised during the period towards this defined contribution plan is '' 70.16 Lakhs (March 31,2022 - '' 70.20 Lakhs).

(c) Defined Benefit Plans - Gratuity

The company has defined benefit gratuity plan for its employees, which requires contributions to be made to a separately administered fund. It is governed by the Payment of Gratuity Act, 1972. The plan provides for a lump-sum payment to vested employees at retirement, death, while in employment or on termination of employment of an amount equivalent to 26 days salary payable for each completed year of service. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets including investment of the funds in accordance with the norms prescribed by the Government of India.

Each year, the Board of Trustees and the Company review the level of funding in the India gratuity plan. Such a review includes the asset-liability matching strategy and assessment of the investment risk. The Company decides its contribution based on the results of this annual review.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31 March 2023 by Mr. Srinivasan Nagasubramanian, Armstrong International Employee Benefits Solution, Fellow of the Institute of Actuaries of India. Company’s liability towards gratuity (funded) is actuarially determined at each reporting date using the projected unit credit method.

(i) Risk Exposure:

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

Investment risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of the plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

Interest risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.

Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

The management assessed that the fair value of cash and cash equivalents, trade receivables, loans,other financial assets, trade payables and other financial liabilities approximate the carrying amount largely due to short-term maturity of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Investments in subsidiaries are carried at cost.

Investements in unquoted equity shares are carried at FVTOCI.

Investements through Portfolio Management scheme is carried at FVTPL.

42. FAIR VALUE MEASUREMENT (a) Fair value hierarchy

Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:

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 asset or liability that are not based on observable market data (unobservable inputs)

The Company has not disclosed the fair values for short term / current financial instruments (such as short term trade receivables, short term trade payables, Current Loans and Short term borrowings etc.,) because their carrying amounts are a reasonable approximation of Fair value.

(c) Measurement of fair values:

The basis of measurement in respect of each class of financial assets and liabilities are disclosed in significant accounting policies.

43. CAPITAL MANAGEMENT:

The Company’s capital management strategy is to effectively determine, raise and deploy capital so as to create value for its shareholders. The same is done through a mix of either equity and/or preference and/or convertible and/or combination of short term /long term debt as may be appropriate.

The Company determines the amount of capital required on the basis of its product, capital expenditure, operations and strategic investment plans. The same is funded through a combination of capital sources be it either equity and/or preference and/or convertible and/or combination of short term/long term debt as may be appropriate.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents and current investments.

44. FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES

The Company''s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company''s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

In course of its business, the Company is exposed to certain financial risks that could have significant influence on the Company''s business and operational / financial performance. These include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Board of Directors reviews and approves risk management framework and policies for managing these risks and monitors suitable mitigating actions taken by the management to minimise potential adverse effects and achieve greater predictability to earnings.

In line with the overall risk management framework and policies, the treasury function provides services to the business, monitors and manages through an analysis of the exposures by degree and magnitude of risks. The Company uses derivative financial instruments to hedge risk exposures in accordance with the Company''s policies as approved by the board of directors.

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 risk comprises three types of risks: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments.

a) Interest Rate Risk

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. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees and US dollars with a mix of fixed and floating rates of interest.

The sensitivity analyses below have been determined based on the exposure to interest rates for floating rate liabilities, assuming the amount of the liability outstanding at the year-end was outstanding for the whole year.

If interest rates had been 100 basis points higher / lower and all other variables were held constant, the Company''s profit/ (loss) for the year ended 31 March 2023 would decrease / increase by '' 378.68 Lakhs (for the year ended 31 March 2022 : decrease / increase by '' 360.00 Lakhs). This is mainly attributable to the Company''s exposure to interest rates on its variable rate borrowings.

b) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company enters into forward exchange contracts with average maturity of less than 6 month to hedge against its foreign currency exposures relating to the recognised underlying liabilities and firm commitments. The Company''s policy is to hedge its exposures above predefined thresholds from recognised liabilities and firm commitments that fall due in 20-30 days. The Company does not enter into any derivative instruments for trading or speculative purposes.

The below table demonstrates the sensitivity to a 5% increase or decrease in the respective currency against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents management''s assessment of reasonably possible change in foreign exchange rate. A positive number below indicates an increase in profit or equity where INR strengthens 5% against the relevant currency. For a 5% weakening of INR against the relevant currency, there would be a comparable impact on profit or equity, and the balances below would be negative.

c) Commodity Price Risk

The Company''s revenue is exposed to the market risk of price fluctuations related to its raw material i.e., Cotton. Market forces generally determine prices for the cotton procured by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may increase the Cost of Production that the Company incurs for manufacture of Yarn.

The following table details the Company''s sensitivity to a 5% movement in the input price of Cotton. The sensitivity analysis includes only 5% change in commodity prices for quantity consumed during the year, with all other variables held constant. A positive number below indicates an increase in profit where the commodity prices reduces by 5%. For a 5% increase in commodity prices, there would be a comparable impact on profit, and the balances below would be negative.

2) Credit Risk

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial instruments, other balances with banks, loans and other receivables. To manage the credit risk, the company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of account receivables. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occuring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The company considers reasonable and supportive forward-looking information.

The average credit period on sales of products is 21 to 60 days. Credit risk arising from trade receivables is managed in accordance with the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on a detailed study of credit worthiness and accordingly individual credit limits are defined/modified. The concentration of credit risk is limited due to the fact that the customer base is large.

3) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Group''s treasury department is responsible for maintenance of liquidity (including quasi liquidity), continuity of funding as well as timely settlement of debts. In addition, policies related to mitigation of risks are overseen by senior management. Management monitors the Group''s net liquidity position on the basis of expected cash flows vis a vis debt service fulfillment obligation.

The table below analysis derivative and non-derivative financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

46. Contingent Liabilities:	As at 31st	As at 31st
Contingent liabilities in respect of :	March 2023	March 2022
Bills discounted	1144.19	2,868.25
Guarantees	261.23	242.81
Letters of credit outstanding Contingent liabilities under litigation :	1423.13	377.45
Disputed Statutory Liabilities not provided for	393.06	412.34
Disputed Other Liabilities not provided for	65.41	65.41

59. Additional disclosure relating to Schedule III Amendment of Companies Act , 2013

(i) Details of Benami property:

No proceedings have been initiated or are pending against the company for holding any Benami property under the Benami Transactions

(ii) Utilisation of borrowed funds and share premium:

A) The company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding that the intermediary shall:

a) Directly or indirectly lend or invest in other persons or entities identified in any manner, whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

B) The company has not received any funds 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 invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(iii) Compliance with number of layers of companies:

The company has complies with the number of layers prescribed under the Companies Act, 2013.

(iv) Undisclosed income:

There is no income surrendered or disclosed as income during the current or previus year in the tax assessments under the Income tax Act,1961, that has not been recorded in the books of account.

(v) Details of crypto currency or virtual currency:

The company has not traded or invested in crypto currency or virtual currency during the current or previous year

(vi) Valuation of Property, Plant and Equipment, intangible asset and investment property:

The company has not revalued its property, plant and equipment (including Right of use Assets) or intangible assets or both during the current of previous year.

(vii) Struck off Companies:

The company does not have any transaction with companies struck off.

(viii) Wilful Defaulter:

The company had not been declared a wilful defaulter by any bank or financial institution or other lender (as

defined under the Companies Act, 2013) or consortium thereof. In accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

(ix) The Company does not have any charges or satisfaction which is yet to be register the Registrar of Companies (ROC) beyond the statutory period.

60. The amounts and disclosures included in the financial statements of the previous year have been reclassified wherever necessary to conform to the current year classification.

61. All figures are in lakhs unless otherwise stated and rounded off to the nearest two decimals.

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Mar 31, 2021

b. Security details:

Note 1 : Exclusive first charge on Machineries acquired out of the loan.

Note 2: Pari passu first charge on entire movable and immovable assets of the company and pari passu second

charge on current assets of the company.

Note 3: First charge on the entire moveable and immovable fixed assets of the company, present and future. Second

Charge on the current assets of the company, both present and future. Promoters shall offer 3.60 million shares in Precot Limited, currently representing 30% of total shareholding in the company to Indusind Bank Limited (IBL) under Non-Disposal Undertaking (NDU) -Power of Attorney (POA) and 2.52 million shares currently representing 21% of total shareholding in the company to IBL under NDU.

Note 4: Paripassu first charge on Current Assets of the Company and Paripassu second charge on Fixed Assets of the

Company.

Note 5: Primary and Collateral - Extension of charges on stocks and receivables

Note 6: First charge on entire movable and immovable fixed assets and pari passu second charge on Current Assets

and exclusive charge on Promoter''s Residential property

II Hire purchase loans from financial institution of '' 9.44 Lakhs (March 31,2020 : '' 15.40 Lakhs) carries interest @ 8.73% to 10.65 % p.a. The loans are repayable in 36 monthly instalments starting from the respective date of finance. The loan is secured by specific assets financed (vehicle).

1 Working capital loan from banks are secured by pari passu first charge on all the current assets of the Company and pari passu second charge on entire immovable assets of the Company and are repayable on demand.

2 In respect of the above, working capital rupee loans carry interest ranging from 8.35 % p.a. to 13.35% p.a. and working capital foreign currency loans carry interest ranging from 2.21 % p.a. to 3.50 % p.a. plus applicable LIBOR.

3 Unsecured loan from banks carries interest @ 9.40% p.a. and is repayable on demand.

4 Loan from related party have been obtained pursuant to stipulations from IndusInd Bank vide letter dated 9th December 2019. It carries an interest rate of 12.50% p.a.

5 Unsecured loan from others represents inter corporate loan and it carries interest @ 14% p.a. and is repayable on demand.

(a) Defined contribution plans - Provident Fund

In accordance with The Employees Provident Funds Act, 1952 employees are entitled to receive benefits under the provident fund. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (12% for fiscal year 2021 and 2020) of an employee’s basic salary. All employees have an option to make additional voluntary contributions. These contributions are made to the fund administered and managed by the Government of India (GOI). The Company has no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the statement of profit and loss in the period they are incurred.

The expense recognised during the period towards this defined contribution plan is '' 270.31 Lakhs (March 31,2020 - '' 310.29 Lakhs).

(b) Defined contribution plans - Employee State Insurance

"In accordance with Employees'' State Insurance Act, 1948, the eligible employees are entitled to receive benefits under the ESI Scheme. The employer contributes 3.25 percent and employee contributes 0.75 percent, total share 4 percent. This fund is managed by the ESI Corporation (ESIC) according to rules and regulations stipulated there in the ESI Act 1948, which oversees the provision of medical and cash benefits to the employees and their family. The Company has no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the statement of profit and loss in the period they are incurred.The expense recognised during the period towards this defined contribution plan is '' 64.16 Lakhs (March 31, 2020 - '' 90.47 Lakhs)."

The company has defined benefit gratuity plan for its employees, which requires contributions to be made to a separately administered fund. It is governed by the Payment of Gratuity Act, 1972. The plan provides for a lump-sum payment to vested employees at retirement, death, while in employment or on termination of employment of an amount equivalent to 26 days salary payable for each completed year of service. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets including investment of the funds in accordance with the norms prescribed by the Government of India.

Each year, the Board of Trustees and the Company review the level of funding in the India gratuity plan. Such a review includes the asset-liability matching strategy and assessment of the investment risk. The Company decides its contribution based on the results of this annual review. The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31 March 2021 by Mr. Srinivasan Nagasubramanian, Armstrong International Employee Benefits Solution, Fellow of the Institute of Actuaries of India . Company’s liability towards

gratuity (funded) is actuarially determined at each reporting date using the projected unit credit method.

(i) Risk Exposure:

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

Investment risk	The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.
Interest risk	A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.
Longevity risk	The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.
Salary risk	The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

The fair value of Mutual funds is determined based on quoted market prices in active markets. The employee benefit plans do not hold any securities issued by the Company.

* In the absence of detailed information regarding plan assets which is funded with Insurance Companies, the composition of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets has not been disclosed.

The management assessed that the fair value of cash and cash equivalents, trade receivables, loans,other financial assets, trade payables and other financial liabilities approximate the carrying amount largely due to short-term maturity of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Investments in subsidiaries are carried at cost.

37. FAIR VALUE MEASUREMENT (a) Fair value hierarchy

Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:

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).

The Company has not disclosed the fair values for short term / current financial instruments (such as short term trade receivables, short term trade payables, Current Loans and Short term borrowings etc.,) because their carrying amounts are a reasonable approximation of Fair value.

(c) Measurement of fair values:

The basis of measurement in respect of each class of financial assets and liabilities are disclosed in significant accounting policies.

38. CAPITAL MANAGEMENT:

The Company’s capital management strategy is to effectively determine, raise and deploy capital so as to create value for its shareholders. The same is done through a mix of either equity and/or preference and/or convertible and/or combination of short term /long term debt as may be appropriate.

The Company determines the amount of capital required on the basis of its product, capital expenditure, operations and strategic investment plans. The same is funded through a combination of capital sources be it either equity and/or preference and/or convertible and/or combination of short term/long term debt as may be appropriate.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents and current investments.

39. FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES

The Company''s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company''s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

In course of its business, the Company is exposed to certain financial risks that could have significant influence on the Company''s business and operational / financial performance. These include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Board of Directors reviews and approves risk management framework and policies for managing these risks and monitors suitable mitigating actions taken by the management to minimise potential adverse effects and achieve greater predictablity to earnings.

In line with the overall risk management framework and policies, the treasury function provides services to the business, monitors and manages through an analysis of the exposures by degree and magnitude of risks. The Company uses derivative financial instruments to hedge risk exposures in accordance with the Company''s policies as approved by the board of directors.

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 risk comprises three types of risks: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments.

a) Interest Rate Risk

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. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees and US dollars with a mix of fixed and floating rates of interest.

The sensitivity analyses below have been determined based on the exposure to interest rates for floating rate liabilities, assuming the amount of the liability outstanding at the year-end was outstanding for the whole year.If interest rates had been 100 basis points higher / lower and all other variables were held constant, the Company''s profit for the year ended 31 March 2021 would decrease / increase by '' 330.06 Lakhs (for the year ended 31 March 2020: decrease / increase by '' 313.74 Lakhs). This is mainly attributable to the Company''s exposure to interest rates on its variable rate borrowings.

b) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company enters into forward exchange contracts with average maturity of less than 6 month to hedge against its foreign currency exposures relating to the recognised underlying liabilities and firm commitments. The Company''s policy is to hedge its exposures above predefined thresholds from recognised liabilities and firm commitments that fall due in 20-30 days. The Company does not enter into any derivative instruments for trading or speculative purposes.

c) Commodity Price Risk

The Company''s revenue is exposed to the market risk of price fluctuations related to its raw material i.e., Cotton. Market forces generally determine prices for the cotton procured by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may increase the Cost of Production that the Company incurs for manufacture of Yarn.

The following table details the Company''s sensitivity to a 5% movement in the input price of Cotton. The sensitivity analysis includes only 5% change in commodity prices for quantity consumed during the year, with all other variables held constant. A positive number below indicates an increase in profit where the commodity prices reduces by 5%. For a 5% increase in commodity prices, there would be a comparable impact on profit, and the balances below would be negative.

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial instruments, other balances with banks, loans and other receivables. To manage the credit risk, the company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of account receivables. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occuring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The company considers reasonable and supportive forward-looking information.

The average credit period on sales of products is 21 to 70 days. However, it has been extended to 90 days due to the Global pandemic. Credit risk arising from trade receivables is managed in accordance with the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on a detailed study of credit worthiness and accordingly individual credit limits are defined/modified. The concentration of credit risk is limited due to the fact that the customer base is large.

3) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Group''s treasury department is responsible for maintenance of liquidity (including quasi liquidity), continuity of funding as well as timely settlement of debts. In addition, policies related to mitigation of risks are overseen by senior management. Management monitors the Group''s net liquidity position on the basis of expected cash flows vis a vis debt service fulfillment obligation.The table below analysis derivative and non-derivative financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

45. Corporate Social Responsibility:

The average net profit of the immediately proceeding three financial years is negative, accordingly, the company is not mandated to spend any amount towards CSR activitities for the financial year 2020-21.

46. Foreign Exchange gain / (loss) (net) includes foreign exchange gain / (loss) arising out of restatement of foreign currency assets / liabilities / derivatives amounting to ''. 288.77 lakhs (PY - ''. (20.67 lakhs) )

49. Operating Segments

The company is in the business of manufacturing textile products which are regularly reviewed by the Chief Financial Officer for assessment of company''s performance and resource allocation.

The information relating to revenue from Cotton yarn and Technical Textile product sale and location of non current assets of its single reportable segment has been disclosed below:

52. The Code on Social Security 2020 has been notified in the Official Gazette on 29^th September 2020. the effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in the period in which the said code becomes effective and the rules framed thereunder are published.

53. The companies operations were adversely impacted with outbreak of Covid-19 pandemic during the first half of the financial year 2020-21. The situation is continuously evolving, the impact assessed may be different from the estimates made as at the date of approval of these financial statements. The management will continue to monitor the material changes arising due to the impact of this pandemic on financial and operational performance of the company and take necessary measures to address the situation.

54. The amounts and disclosures included in the financial statements of the previous year have been reclassified whenever necessary to conform to the current year''s classification.

55. All figures are in lakhs unless otherwise stated and rounded off to the nearest two decimals.

---

Mar 31, 2018

B) Security details:

Note 1: Term loan from SBI, ICICI, Andhra Bank, SIB and Export Import Bank of India are secured by way of pari passu first charge on entire movable and immovable assets of the company and pari passu second charge on current assets of the company.

Note 1a: Exclusive first charge on Machineries acquired out of the loan.

Note 2: Corporate Loan from Axis Bank is secured by way of subservient charge over the movable fixed assets of the company and exclusive charge on land and building of the corporate office.

Note 3: Term loan from ICICI Bank is secured by way of exclusive first charge on the assets of the Technical Textile unit at Hassan, Karnataka and Second charge on the entire movable fixed asset of the unit at Hassan, ranking pari passu charge with ICICI bank''s derivative limits for the unit at Hassan.

Note 4: First charge on the entire movable and immovable fixed assets of the company, present and future. Second Charge on the current assets of the company, both present and future. Promoters shall offer 3.60 million shares in Precot Meridian Limited, currently representing 30% of total shareholding in the company to Indusind Bank Limited (IBL) under Non-Disposal Undertaking (NDU) -Power of Attorney (POA) and 2.52 million shares currently representing 21% of total shareholding in the company to IBL under NDU.

1. Working capital loans from SBI, Andhra Bank, Corporation Bank, IDBI,ICICI, and SIB are secured by way of pari passu first charge on current assets of the company and pari passu second charge on entire immovable assets of the company and are repayable on demand.

2. In respect of the above, working capital rupee loans carry interest ranging from 8.55 % p.a. to 13.35% p.a. and working capital foreign currency loans carry interest ranging from 1.60% p.a. to 5% p.a. plus applicable LIBOR.

3. Unsecured short term loans from ICICI & IDBI Bank carrry interest at 8.40% and 8.35% p.a. respectively.

1. Working capital loans from SBI, Andhra Bank, Corporation Bank, IDBI,ICICI, and SIB are secured by way of pari passu first charge on current assets of the company and pari passu second charge on entire immovable assets of the company and are repayable on demand.

2. In respect of the above, working capital rupee loans carry interest ranging from 8.55 % p.a. to 13.35% p.a. and working capital foreign currency loans carry interest ranging from 1.60% p.a. to 5% p.a. plus applicable LIBOR.

3. Unsecured short term loans from ICICI & IDBI Bank carrry interest at 8.40% and 8.35% p.a. respectively.

1. FIRST-TIME ADOPTION OF IND AS

These are the Company’s first financial statements prepared in accordance with Ind AS. The accounting policies set out in note 1 have been applied constantly in preparing the financial statements for the year ended March 31, 2018 and the comparative period information.

The Company has prepared the opening Standalone Balance Sheet as per Ind AS as of April 01, 2016 (the transition date) by,

a. recognising all assets and liabilities whose recognition is required by Ind AS,

b. not recognising items of assets or liabilities which are not permitted by Ind AS,

c. by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and

d. applying Ind AS in measurement of recognised assets and liabilities.

Exemptions availed and mandatory exception

Ind AS 101 First-time Adoption of Indian Accounting Standards allows first-time adopters certain exemptions from retrospective application of certain requirements under Ind AS. Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A) Ind AS optional exemptions

i) Deemed cost for Property, Plant and Equipment, Capital Work in Progress and Intangible Assets

Ind AS 101 permits and entity to elect to measure an item of property, plant and equipment at the date of transition to Ind AS at:

a. Retrospective application of Cost Model;

b. Previous GAAP carrying amount as deemed cost; (and)

c. Fair value as deemed cost.

Accordingly, the company has elected to measure items of PPE and intangible assets at its previous GAAP carrying value at the date of the transition except for certain class of assets which are measured at fair value as deemed cost.

ii) Designation of previously recognised financial instruments

The Company has designated financial liabilities and financial assets at fair value through profit or loss and investments in equity instruments at fair value through other comprehensive income on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

iii) Long Term Foreign Currency Monetary Items

The Company has elected the option under Ind AS 101 ‘First-time Adoption of Indian Accounting Standards’ and has continued the policy adopted for accounting of exchange differences arising from translation of long term foreign currency monetary items recognised in the financial statements upto March 31, 2016. Accordingly, exchange difference on translation or settlement of long term foreign currency monetary items at rates different from those at which they were initially recorded, in so far as it relates to acquisition of depreciable assets are adjusted to the cost of the assets.

iv) Investments in subsidiaries, associates and joint ventures

Carrying value for all of its investment in subsidiaries as at the date of transition to IND AS, measured as per previous GAAP are treated as their deemed costs as at the date of transition

v) Past Business Combination:

The Company has elected not to apply Ind AS 103- Business Combinations, retrospectively to past business combinations that occurred before 1st April, 2016. Pursuant to which Goodwill / Capital Reserve arising from business combination has been stated at the carrying amount prior to the date of transition under IGAAP.

vi) Investment Property

Carrying value for its investment property as at the date of transition to IND AS, measured as per previous GAAP are treated as their deemed costs as at the date of transition.

B Ind AS mandatory exemptions

i) Accounting estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP.

ii) De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the derecognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

iii) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets bases on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

(e) Notes to reconciliation

(i) To comply with the Companies (Accounting Standard) Rules, 2006, certain account balances have been regrouped as per the format prescribed under Division II of Schedule III to the Companies Act, 2013.

(ii) Fair Value as deemed Cost - Freehold Land

Ind AS 101 permits an entity to elect and measure an item of PPE at the transition date at its fair value and use the fair value as its deemed cost. Accordingly, the company has elected to use the fair value of certain items of PPE on the date of transition and designate the same as deemed cost.

(iii) Government grant relating to acquisition of Property, plant and equipment:

Under previous GAAP, Grant received from the Government relating to the purchase of fixed asset was deducted from the carrying amount of corresponding fixed asset. As per IND AS 20 - grants related to depreciable assets are usually recognised in profit or loss over the periods and in the proportions in which depreciation expense on those assets is recognised. The adjustments related to the government grants should be recognised retrospectively as deferred government grant account (liability) with corresponding adjustments in the Property, Plant & Equipment on the date of transition.

(iv) Government grant in the nature of Promoter''s Contribution

This has been recognised as deferred government grant with corresponding adjustments with PPE as on the transition date and would be released to the statement of profit and loss over the period in which depreciation is recognised.

(v) Other comprehensive income:

Under IND AS, all items of income and expense recognized in the period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss and “other comprehensive income” includes remeasurements of defined benefit plans and fair value gain or losses on FVTOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP.

(vi) Lease Rentals on Lands:

Under Previous GAAP, Lease Agreements to use a Land was outside the purview of AS 19, Leases. Hence, the upfront fees paid to use the land was capitalised under PPE. Under IND AS, these have been treated as operating lease and charged to Statement of Profit and Loss on a straight line basis over the term of the Lease.

(vii) Useful life of Buildings:

Under the previous GAAP, improvements to lease hold buildings were depreciated over the useful lives as determined by the management. Under IndAS these are depreciated over the lease period and the impact upto the date of transition has been adjusted with reserves, being the earliest of the period.

(viii) Financial Assets and Liabilities:

Under the Previous GAAP, Financial Assets and Liabilities were carried at book value. Under IND AS 109, all financial assets and financial liabilities are required to be initially carried at Fair Value. The Fair Value changes are taken to Statement of Profit and Loss Account. In respect of Financial Assets and Liabilities, carried at amortised cost.

(ix) Borrowing Cost:

Under the Previous GAAP, the Transaction Costs in respect of Borrowings were charged off to the Statement of Profit and Loss as and when incurred. Under IND AS, these transaction costs incurred are deducted from the carrying amount of the Borrowings on Initial Recognition. These costs are recognised in the statement of Profit and Loss over the tenor of the borrowings as part of Interest Expense by applying the Effective Interest Rate method.

(x) Defined benefit liabilities:

Under IND AS, Remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined liability, are recognized in other comprehensive income instead of profit or loss in previous GAAP.

(xi) Fair valuation of investments in equity instrument

Under previous GAAP, long term investments were measured at cost less diminution in value which is other than temporary. Under Ind AS, non-current investments (other than investments in equity instruments of subsidiaries) are measured at fair value through other comprehensive income. Any subsequent measurement including on account of disposal are also through FVOCI.

(xii) Unused tax Losses and Tax credits:

As on the date of Ind AS Transition, the company assessed the following criteria in assessing the probability that taxable profit will be available against which the unused tax losses or unused tax credits can be utilised and has accordingly adjusted the same with the retained earnings as at the transition date

(xiii) Reclassification under IndAS:

Assets and Liabilities have been regrouped / reclassified wherever required to confirm to the requirement of IndAS.

2. Merger of Subsidiary Companies with the Company

The Company and Multiform Processing (Coimbatore) Limited, Supreme Textiles Processing Limited and Precot Meridian Energy Limited (Subsidiary Companies), had initially announced a scheme of merger between the companies on 4^th November 2016 (“Scheme”). As per the terms of the Scheme, the subsidiary companies were to merge into Precot Meridian Limited and upon the merger becoming effective:

As the Company held 100% of the issued, subscribed and paid-up capital of the Subsidiary Companies, the entire share capital of the Transferor Companies held by the Transferee Company and / or its nominees shall stand cancelled without any further application, act or deed and without allotment of any new shares by the Transferee Company.

The authorised share capital of the Company was increased to '' 2,130 Lakhs divided into 213 Lakhs Equity Shares of '' 10 each.

All substantive approvals for effecting the merger of the Subsidiary Companies with the company were received by September 19, 2017 with the appointed date of the amalgamation as April 01, 2016 and therefore the same has been accounted for in the current financial year ending March 31, 2018.

Since the amalgamating entities were 100% subsidiaries of the Company, the transaction has been accounted for in accordance with the Appendix C to Ind AS 103 “Common Control Business Combination”, which requires retroactive accounting of the merger from the date common control was established. Accordingly, financial information as on April 1, 2016, being the earliest period presented in the annual standalone financial statements of the Company, and all periods thereafter, have been restated to give effect of the merger.

The accounting effects arising out of merger are explained below:

The carrying value of the assets, liabilities and reserves of the subsidiary companies as appearing in the books of accounts of transferee company have been recognised in the standalone financial statements of the company as adjusted in other equity, now current investments and financial assets loans.

3. Employee Benefit Plans

(a) Defined contribution plans - Provident Fund

In accordance with The Employees Provident Funds Act, 1952 employees are entitled to receive benefits under the provident fund. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (12% for fiscal year 2018 and 2017) of an employee’s basic salary. All employees have an option to make additional voluntary contributions. These contributions are made to the fund administered and managed by the Government of India (GOI). The Company has no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the statement of profit and loss in the period they are incurred. The expense recognised during the period towards this defined contribution plan is '' 367.48 Lakhs (March 31, 2017 -'' 382.27 Lakhs).

(b) Defined contribution plans - Employee State Insurance In accordance with Employees’ State Insurance Act, 1948, the eligible employees are entitled to receive benefits under the ESI Scheme. The employer contributes 4.75 percent and employee contributes 1.75 percent, total share 6.5 percent. This fund is managed by the ESI Corporation (ESIC) according to rules and regulations stipulated there in the ESI Act 1948, which oversees the provision of medical and cash benefits to the employees and their family. The Company has no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the statement of profit and loss in the period they are incurred.The expense recognised during the period towards this defined contribution plan is Rs, 148.09 Lakhs (March 31, 2017 - Rs, 127.52 Lakhs).

(c) Defined Benefit Plans - Gratuity

The company has defined benefit gratuity plan for its employees, which requires contributions to be made to a separately administered fund. It is governed by the Payment of Gratuity Act, 1972. The plan provides for a lump-sum payment to vested employees at retirement, death, while in employment or on termination of employment of an amount equivalent to 26 days salary payable for each completed year of service. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets including investment of the funds in accordance with the norms prescribed by the Government of India.Each year, the Board of Trustees and the Company review the level of funding in the India gratuity plan. Such a review includes the asset-liability matching strategy and assessment of the investment risk. The Company decides its contribution based on the results of this annual review.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31^stMarch 2018 by Mr. Srinivasan Nagasubramanian, Armstrong International Employee Benefits Solution, Fellow of the Institute of Actuaries of India. Company’s liability towards gratuity (funded) is actuarially determined at each reporting date using the projected unit credit method.

(i) Risk Exposure:

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

Investment risk The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bond yields; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.

Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

The fair value Mutual funds is determined based on quoted market prices in active markets. The employee benefit plans do not hold any securities issued by the Company.

* In the absence of detailed information regarding plan assets which is funded with Insurance Companies, the composition of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets has not been disclosed.

(iv) Sensitivity analysis

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

4. FAIR VALUE MEASUREMENT (a) Fair value hierarchy

Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels: 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 asset or liability that are not based on observable market data (unobservable inputs)

There have been no transfers between Level 1 and Level 2 during the period.

(c) Financial Instrument measured at Amortised Cost:

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

5. CAPITAL MANAGEMENT:

The Company’s capital management strategy is to effectively determine, raise and deploy capital so as to create value for its shareholders. The same is done through a mix of either equity and/or preference and/or convertible and/or combination of short term /long term debt as may be appropriate.

The Company determines the amount of capital required on the basis of its product, capital expenditure, operations and strategic investment plans. The same is funded through a combination of capital sources be it either equity and/or preference and/or convertible and/or combination of short term/long term debt as may be appropriate.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

6. FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES

The Company''s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company''s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

In course of its business, the Company is exposed to certain financial risks that could have significant influence on the Company''s business and operational / financial performance. These include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Board of Directors reviews and approves risk management framework and policies for managing these risks and monitors suitable mitigating actions taken by the management to minimise potential adverse effects and achieve greater predictability to earnings.

In line with the overall risk management framework and policies, the treasury function provides services to the business, monitors and manages through an analysis of the exposures by degree and magnitude of risks.

The Company uses derivative financial instruments to hedge risk exposures in accordance with the Company''s policies as approved by the board of directors.

1) 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 risk comprises three types of risks: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments.

a) Interest Rate Risk

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. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees and US dollars with a mix of fixed and floating rates of interest.

The sensitivity analyses below have been determined based on the exposure to interest rates for floating rate liabilities, assuming the amount of the liability outstanding at the year-end was outstanding for the whole year.

If interest rates had been 100 basis points higher / lower and all other variables were held constant, the Company''s profit for the year ended 31^st March 2018 would decrease / increase by '' 40.79 Lakhs (for the year ended 31^st March 2017: decrease / increase by '' 40.73 Lakhs). This is mainly attributable to the Company''s exposure to interest rates on its variable rate borrowings.

b) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company enters into forward exchange contracts with average maturity of less than 6 month to hedge against its foreign currency exposures relating to the recognised underlying liabilities and firm commitments. The Company''s policy is to hedge its exposures above predefined thresholds from recognised liabilities and firm commitments that fall due in 20-30 days. The Company does not enter into any derivative instruments for trading or speculative purposes. At the time of borrowing decisions, appropriate sensitivity analysis is carried out for domestic borrowings vis-a-vis overseas borrowings.

The below table demonstrates the sensitivity to a 5% increase or decrease in the respective currency against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents management''s assessment of reasonably possible change in foreign exchange rate. A positive number below indicates an increase in profit or equity where INR strengthens 5% against the relevant currency. For a 5% weakening of INR against the relevant currency, there would be a comparable impact on profit or equity, and the balances below would be negative.

c) Commodity Price Risk

The Company''s revenue is exposed to the market risk of price fluctuations related to its raw material i.e., Cotton. Market forces generally determine prices for the cotton procured by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may increase the Cost of Production that the Company incurs for manufacture of Yarn.

The following table details the Company''s sensitivity to a 5% movement in the input price of Cotton. The sensitivity analysis includes only 5% change in commodity prices for quantity consumed during the year, with all other variables held constant. A positive number below indicates an increase in profit where the commodity prices reduces by 5%. For a 5% increase in commodity prices, there would be a comparable impact on profit, and the balances below would be negative.

2) Credit Risk

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial instruments, other balances with banks, loans and other receivables. To manage the credit risk, the company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of account receivables. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an on-going basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The company considers reasonable and supportive forward-looking information.

The average credit period on sales of products is less than 30 days. Credit risk arising from trade receivables is managed in accordance with the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on a detailed study of credit worthiness and accordingly individual credit limits are defined/modified. The concentration of credit risk is limited due to the fact that the customer base is large. There is no customer representing more than 5% of the total balance of trade receivables.

3) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Group''s treasury department is responsible for maintenance of liquidity (including quasi liquidity), continuity of funding as well as timely settlement of debts. In addition, policies related to mitigation of risks are overseen by senior management. Management monitors the Group''s net liquidity position on the basis of expected cash flows vis a vis debt service fulfilment obligation.

The table below analysis derivative and non-derivative financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

7. The amounts and disclosures included in the financial statements of the previous year have been reclassified wherever necessary to conform to the current year’s classification.

8. All figures are in lakhs unless otherwise stated and rounded off to the nearest two decimals.

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Mar 31, 2016

1. Term loan from SBI, ICICI, Andhra Bank and Export Import Bank of India are secured by way of pari passu first charge on entire movable and immovable assets of the company and pari passu second charge on current assets of the company.

2. Term loan from ICICI Bank is secured by way of exclusive first charge on the assets of the Technical Textile unit at Hassan, Karnataka and Second charge on the entire moveable fixed asset of the unit at Hassan, ranking paripassu charge with ICICI bank''s derivative limits for the unit at Hassan.

3. Corporate Loan from Axis Bank is secured by way of subservient charge over the movable fixed assets of the company and exclusive charge on land and building of the corporate office and pledge of shares of Pricol Limited shares held by the company.

4. In respect of the above, Rupee Term Loans carry interest ranging from 8.85% p.a. to 13.35% p.a.

5. The outstanding balance of :

Rupee term loan of Rs. 562.50 Lacs from Andhra Bank is repayable in 3 equal quarterly installments.

Rupee Tuf loan - IX of Rs. 123.64 Lacs from EXIM Bank is repayable in 3 equal quarterly installments.

Rupee Tuf loan - X of Rs. 500.76 Lacs from EXIM Bank is repayable in 5 equal quarterly installments.

Rupee Tuf loan - XI of Rs. 901.63 Lacs from EXIM Bank is repayable in 12 quarterly installments of varying amounts.

Rupee Tuf loan - XII of Rs. 1567.63 Lacs from SBI is repayable in 7 quarterly installments of varying amounts.

Rupee Tuf loan XIII of Rs. 9504.00 Lacs from ICICI Bank is repayable in 11 half yearly installments of varying amounts.

Rupee Tuf Loan - XIV of Rs. 1275.00 Lacs from EXIM Bank is repayable in 17 equal quarterly installments.

Rupee Tuf Loan - XV of Rs. 1680.00 Lacs from Andhra Bank is repayable in 20 equal quarterly installments commencing from October ''16.

Rupee Corporate Loan of Rs. 2500.00 Lacs from ICICI Bank is repayable in 20 equal quarterly installments commencing from September ''16.

Rupee Corporate Loan of Rs. 2000.00 Lacs from Axis Bank is repayable in 20 equal quarterly installments commencing from December ''17.

6. Working capital loans from SBI, Andhra Bank, Corporation Bank, IDBI,ICICI, and The South Indian Bank are secured by way of pari-passu first charge on current assets of the company and pari passu second charge on entire immovable assets of the company.

7. In respect of the above, working capital rupee loans carry interest ranging from 10.45% p.a. to 12.50% p.a. and working capital foreign currency loans carry interest ranging from 1.50% p.a. to 2.75% p.a. plus applicable LIBOR.

8. Unsecured short term loans from ICICI & IDBI Bank carrry interest at 9.60% and 9.75% p.a. respectively.

9. Trade Payables

There are no interest amounts paid / payable to Micro and Small Enterprises. The information in relation to dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information available with the company, which has been relied upon by the auditors.

10. Power and utilities is net of wind power of Rs. 348.72 lacs (previous year Rs. 478.66 lacs) representing power supplied to the grid against which equivalent consumption was made in house.

11. The Ministry of Corporate Affairs, through its notification dated March 31,2009 has relaxed the provisions of Accounting Standard (AS) 11 “The Effects of Changes in Foreign Exchange Rates” for treating the exchange gain/loss arising on restatement of long term foreign currency monetary items. Accordingly, companies are permitted to adjust in their carrying cost of depreciable assets, the exchange differences arising out of exchange rate fluctuations with corresponding adjustments in Statement of Profit & Loss and general reserve in order to give effect to the aforesaid amendment, companies are required to exercise their option. The company has exercised the option and the following adjustments have been made.

12. Subsidy receivable from government (net of provisions) represents Rs. 145.04 lacs (previous year Rs. 2051.08 lacs) of interest subsidy on TUF scheme loans and Rs. 75 lacs (previous year Rs. 75 lacs) of grant receivable for reimbursement of expenditure from Karnataka Government.

13. Net Deferred tax asset has not been recognized considering prudence.

14. Exceptional item represents :

a) Provision for TUF Interest receivable - Rs. 1945.18 lacs (previous year Nil)

b) Profit on sale of long term investment - Nil (Previous year Rs. 1014.06 lacs)

c) Impact on account of discontinuation of AS 30 & 32 - Nil (Previous year - Rs. 458.57 lacs)

14. Foreign Exchange loss (net) includes foreign exchange loss arising out of restatement of foreign currency assets / liabilities / derivatives amounting to Rs. 992.53 lacs (previous year - Rs. 150.68 lacs)

16. Related Party Disclosure :

List of related parties with whom transactions have taken place

Holding Co : Nil, Subsidiaries : Suprem Textiles Processing Limited, Multiflora Processing (CBE) Limited, Precot Meridian Energy Limited, Suprem Associates (Partnership firm)

Key Management Personnel (KMP) : Mr. D Sarath Chandran, Mr. Ashwin Chandran and Mr. Prashanth Chandran

Others: Pricol Limited, Pricol Packaging Limited, Premier Spinning & Weaving Mills Pvt Ltd and Mr. Vijay Mohan .

17. Disclosure as required under section 186(4) of the Companies Act, 2013 :

Loans given and Guarantees given by the company : Nil (Previous year : Nil)

Investments made are given under the respective head.

18. The amounts and disclosures included in the financial statements of the previous year have been reclassified where ever necessary to conform to the current year''s classification.

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Mar 31, 2015

1) Terms/rights attached to equity shares :

The company has only one class of issued shares referred to as equity shares having a par value of Rs 10 each. Each holder of equity shares is entitled to one vote per share. The dividend (except in case of interim dividend) proposed by the Board of Directors, if any, is subject to the approval of shareholders in the Annual General Meeting.

ii) The reconciliation of the number of shares outstanding is set out below.

2. a) Term loan from SBI, ICICI Bank, Andhra Bank, Export Import Bank of India and IDBI Bank are secured by way of pari passu first charge on entire movable and immovable assets of the company and pari passu second charge on current assets of the company.

b) Term loan from IDBI Bank, Dubai Branch is secured by way of exclusive first charge on the windmills and related equipments, systems and assets located at Eragampatti and Manurpalayam Village in Tirupur district.

3. In respect of the above, Rupee Term Loans carry interest ranging from 8.5% p.a. to 13.61% p.a. and Foreign Currency Term Loans carry interest @ 3% p.a. plus applicable LIBOR.

4. Term loan from ICICI Bank for Rs.12,000 Lacs is secured by way of exclusive first charge on the assets of the Technical Textile unit at Hassan, Karnataka and second charge on the entire moveable fixed assets of the unit at Hassan, ranking paripassu charge with ICICI bank's derivative limits for the unit at Hassan.

5. The outstanding balance of :

Rupee term loan of Rs 1,312.50 Lacs from Andhra Bank is repayable in 7 equal quarterly installments.

Rupee Tuf loan - IV of Rs 28.50 Lacs from IDBI Bank is repayable in 3 equal quarterly installments.

Rupee Tuf loan - VIII of Rs 60.00 Lacs from IDBI Bank is repayable in 1 quarterly installment.

Rupee Tuf loan - IX of Rs 288.48 Lacs from EXIM Bank is repayable in 7 equal quarterly installments.

Rupee Tuf loan - X of Rs 901.36 Lacs from EXIM Bank is repayable in 9 equal quarterly installments.

Rupee Tuf loan - XI of Rs 1,480.00 Lacs from EXIM Bank is repayable in 20 quarterly installments of varying amounts.

Rupee Tuf loan - XII of Rs 2,250.13 Lacs from SBI is repayable in 10 quarterly installments of varying amounts.

Rupee Tuf loan XIII of Rs 10,752.00 Lacs from ICICI Bank is repayable in 13 half yearly installments of varying amounts commencing from July 2014.

Rupee TufLoan - XIV of Rs 1,500.00 Lacs from EXIM Bank is repayable in 20 equal quarterly installments commencing from September 2015.

Rupee TufLoan - XV of Rs 943.81 Lacs from Andhra Bank is repayable in 20 equal quarterly installments commencing from September 2016.

Rupee Corporate Loan of Rs 2,500.00 Lacs from ICICI Bank is repayable in 20 equal quarterly installments commencing from September 2016.

Foreign Currency loan from IDBI Bank of USD 9.45 Lacs is repayable in 3 equal half yearly installments.

6. Working capital loans from SBI, Andhra Bank, Corporation Bank, IDBI,ICICI,Yes Bank and The South Indian Bank are secured by way of pari passu first charge on current assets of the company and pari passu second charge on entire immovable assets of the company.

7. In respect of the above, working capital rupee loans carry interest ranging from 10.45% p.a. to 14.35% p.a. and working capital foreign currency loans carry interest ranging from 1.65% p.a. to 2.70% p.a. plus applicable LIBOR.

8. Unsecured short term loans from ICICI & IDBI Bank carrry interest @ 10.25% p.a.

9. Contingent liabilities in respect of :

Bills discounted 1,939.66 1,449.18

Guarantees 288.00 4,784.28

Letters of credit outstanding - 71.57

As at the Balance Sheet date, the Company's net foreign currency exposures that are not hedged by a derivative instrument or otherwise is Rs 8,086.51 Lacs (Rs 3,074.41 Lacs as at 31st March 2014).

10. The company has opted out of levy of Excise duty from July 2004

11. The Ministry of Corporate Affairs, through its notification dated March 31,2009 has relaxed the provisions of Accounting Standard (AS) 11 "The Effects of Changes in Foreign Exchange Rates" for treating the exchange gain/loss arising on restatement of long term foreign currency monetary items. Accordingly, companies are permitted to adjust in their carrying cost of depreciable assets, the exchange differences arising out of exchange rate fluctuations with corresponding adjustments in Statement of Profit & Loss and general reserve in order to give effect to the aforesaid amendment, companies are required to exercise their option. The company has exercised the option and the following adjustments have been made.

12. The company has been following the guidance given under AS 30 "Financial Instruments; Recognition and Measurement". During the year, ICAI had issued exposure draft on guidance note on "Accounting for Derivative Contracts" and subsequently notified it on 12th May 2015 to be effective from 1st April 2016. An announcement was also issued in this regard wherein ICAI took cognizance of issues raised with respect to accounting treatment of financial instruments owing to global financial crisis and clarified that AS 30 was not expected to be continued in its present form since it is based on International Accounting Standard (IAS) 39, Financial Instruments: Recognition and Measurement, issued by the International Accounting Standards Board (IASB), which was under revision by the IASB. Considering the uncertainty in the matter, the Company has decided to discontinue the accounting policy adopted under AS 30. Accordingly, the company has reversed the hedging reserve and applied the principles of notified Accounting Standards 11. The company will revisit the accounting treatment on effective date of applicability of relevant guidance/accounting standards and appropriate treatment will be made. Had the Company continued with the existing accounting policy, investment would have been higher by Rs 742.98 lacs; the Reserves & Surplus would have been higher by Rs 783.23 lacs, the current assets would have been higher by Rs 20.33 lacs, Non-current assets would have been higher by Rs 1018.99 lacs and the loss for the year would have been higher by Rs 1008.06 lacs.

13. Subsidy receivable from government (net of provisons) represents '2051.07 lacs (previous year Rs1496.23 lacs) of interest subsidy on TUF scheme loans and Rs1145.82 (previous year Rs 1145.82 lacs) of capital subsidy on investments and ' 75 lacs of grant receivable for reimbursement of expenditure from Karnataka Government.

14. During the year the company has received capital & revenue subsidy from Government of Karnataka under the "Suvarna Vastra Neethi" 2008-13 scheme. The Details of the subsidy received are as under:

a) State Investment Subsidy of Rs 700 lacs.

b) Effluent Treatment Plant & Hazardous waste disposal facility -Rs 300 Lacs.

c) Reimbursement of Expenditure in relation to ESI, PF & power -Rs 75 Lacs.

The amount of state investment subsidy received towards reimbursement of promoter's contribution relating to technical textiles project at Hassan has been classified as capital reserve under reserves and surplus. The amount received in respect of specific fixed asset has been shown as a deduction from the respective fixed asset and the amount received towards reimbursement of expenses has been credited to natural head of accounts.In the event of the conditions not being met the above subsidy shall be refundable.

15. Depreciation is provided on straight line method based on the useful life as specified in schedule II of the Companies Act, 2013, except in respect of plant and machinery where the useful life is estimated to be 20 years (10 years on triple shift basis) based on technical assessment.

Consequent to the above, depreciation for the year is lower by Rs 557.34 lacs.

In respect of assets whose remaining useful life is already exhausted as at 1st April 2014, depreciation of Rs 27.88 lacs has been adjusted against the opening balance of surplus in statement of profit and loss as on that date.

16. Benwood Corporation Sdn Bhd, the Malaysian subsidiary of the company had filed an application for Members' Voluntary Winding Up on 28th May 2013 and an order for winding up has been passed on 29th December 2014. The excess of amount realised over the cost of investment has been appropriately considered.

17. Net Deferred tax asset has not been recognised considering prudence.

18. Exceptional items represents profit on sale of long term investments and the impact on account of Discontinuation of AS 30 & 32 as specified in note no. 2.34

19. Related Party Disclosure :

List of related parties with whom transactions have taken place Holding Co : Nil

Subsidiary Cos. : Suprem Textiles Processing Limited, Multiflora Processing Coimbatore Limited, Precot Meridian Energy Limited, Benwood Corporation Sdn Bhd*

Key Management Personnel (KMP) : Mr D Sarath Chandran, Mr Ashwin Chandran and Mr Prashanth Chandran.

Others : Suprem Associates (Partnership firm), Pricol Limited, Pricol Packaging Limited and Mr Vijay Mohan

20. The amount and disclosure included in the financial statements of the previous year have been regrouped and reclassified wherever necessary to conform to the current year's classification.

21. The amount and disclosure included in the financial statements of the previous year have been regrouped and reclassified wherever necessary to conform to the current year’s classification.

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Mar 31, 2014

1. Contingent liabilities in respect of :

Bills discounted 1,449.18 2,752.43

Guarantees 4,784.28 213.01

Letters of credit outstanding 71.57 1,225.80

As of the Balance Sheet date, the Company''s net foreign currency exposures that are not hedged by a derivative instrument or otherwise is Rs. 3,074.41 Lacs (Rs. 5,353.15 Lacs as at March 31,2013).

2. The amounts and disclosures included in the financial statements of the previous year have been reclassified where ever necessary to conform to the current year''s classification.

3. The Company has opted out of levy of ExcisedutyfromJuly2004.

4. The Ministry of Corporate Affairs, through its notification dated March 31,2009 has relaxed the provisions of Accounting Standard (AS) 11 "The Effects of Changes in Foreign Exchange Rates" for treating the exchange gain/loss arising on restatement of long term foreign currency monetary items. Accordingly, companies are permitted to adjust in their carrying cost of depreciable assets, the exchange differences arising out of exchange rate fluctuations with corresponding adjustments in Statement of Profit & Loss and general reserve .In order to give effect to the aforesaid amendment, companies are required to exercise their option. The company has exercised the option and the following adjustments have been made.

5. The company, having adopted AS30 with effect from 1st April 2008, continues to comply with its requirements. There is no outstanding amount of forward contracts not recognised in the books of accounts as on the balance sheet date. (Previous year - Rs. 136.70 lacs)

6. The term loans from bank includes loan of Rs. 12,000 lakhs from ICICI Bank to fund its technical textiles project in Hassan, which is a 100% export oriented project. In order to hedge the interest rate and currency risks, the company has entered into a INR-Euro swap with the INR term loan as the underlying asset. The said transaction involves exchange of interest on a monthly basis and exchange of principal on a semi-annual basis and is intended to be held till the maturity date of 30" July, 2021. The Company has adopted the accounting treatment and disclosures in accordance with the principles laid down in AS 30 and AS 32 on foreign currency derivative contracts. These instruments meet the management''s foreign exchange risk management objectives and also qualify for hedge accounting as per the principles of hedge accounting. Accordingly, as on the Balance Sheet date, the fair value of the hedge resulting in a notional loss amounting to Rs. 1671.59 lakhs and the realised gain on the interest swap of the transaction amounting to Rs. 293.91 lakhs have been appropriately reflected in the hedge reserve.

7. Subsidy receivable from Government represents Rs. 1496.23 lacs (previous year Rs. 714.54 lacs) of interest subsidy on TUF scheme loans and Rs. 1145.82 (previous year Rs. 1145.82 lacs) of capital subsidy on investments in its Technical Textiles project at SEZ, Hassan.

8. The technical textile project at Hassan, with a capital expenditure of Rs. 18,157 lakhs, commenced its commercial production on 12th June 2013.

The borrowing cost capitalized during the year is Rs. 164.24 Lacs (previous year-Rs. 937.64 Lacs).

9. Benwood Corporation Sdn Bhd, the Malaysian subsidiary of the company has filed an application for Members'' Voluntary Winding Up on 28th May 2013 and is awaiting the winding up order.

10. The Company has obtained an approval from the share holders under section 293(1 )(a) of the Companies Act, 1956 to dispose off the weaving and processing division. Effect is being given in the financial statements as and when disposal happens. The effect of disposal of the weaving division during the year has been shown underthe extra ordinary items.

11. The company has recognized deferred tax asset ofRs. 1681.19 lacs in line with the requirements of AS 22. The said deferred tax asset has been recognized on the unabsorbed depreciation and carry forward of losses under tax laws to the extent that there is virtual certainty supported by convincing evidence based on the nature of business that sufficient future taxable income will be available against which such deferred tax assets can be realized.

12 Related Party Disclousure:

List of related parties with whom transactions have taken place

Holding Co: Nil, Subsidiary Co: Suprem Textiles Processing Limited, Multiflora Processing (CBE) Limited,

Precot Meridian Energy Limited, Benwood Corporation Sdn Bhd.

Key Management Personnel (KMP): Mr. D Sarath Chandran, Mr. Ashwin Chandran and Mr. Prashanth Chandran.

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Mar 31, 2013

1.1 The amounts and disclosures included in the financial statements of the previous year have been reclassified wherever necessary to conform to the current year''s classification.

1.2 The Company has opted out of levy of Excise duty from July 2004.

1.3 The Ministry of Corporate Affairs, through its notification dated March 31,2009 has relaxed the provisions of Accounting Standard (AS) 11 " The Effects of Changes in Foreign Exchange Rates” for treating the exchange gain/loss arising on restatement of long term foreign currency monetary items. Accordingly, companies are permitted to adjust in their carrying cost of depreciable assets, the exchange differences arising out of exchange rate fluctuations with corresponding adjustments in Statement of Profit & Loss and general reserve .In order to give effect to the aforesaid amendment, companies are required to exercise their option. The company has exercised the option and the following adjustments have been made.

1.4 The company, having adopted AS30 with effect from 1st April 2008, continues to comply with its requirements. The outstanding amount of forward contracts not recognised in the books of accounts as on the balance sheet date is Rs. 136.70 lacs.

1.5 During the year the company has entered in to a INR to EURO total currency swap transaction with ICICI Bank Limited, for an amount of Rs. 10,000 lacs under which the company would receive INR notional, interest and inturn would pay equivalent EURO notional interest determined by the EUR/INR spot prevailing at the time of executing the trade. The total currency swap transaction has an effect of transforming the INR denominated liability to a EURO denominated liability. The tenor of the swap repayments is 15 unequal semi annual instalments commencing from 31.7.2014 with the maturity date of 30.07.2021.

1.6 The proceeds from the preferential issue of convertible share warrants to the directors are utilised as below:

1.7 The Company has obtained an approval from the share holders under section 293(1)(a) of the Companies Act 1956 to dispose off the weaving and processing division. Effect is being given in the financial statements as and when disposal happens. The effect of the disposal of some of the assets during the year has been shown under extraordinary items.

1.8 Related Party Disclosure :

List of related parties with whom transactions have taken place

Holding Company : Nil

Subsidiary Company : Suprem Textiles Processing Ltd

Multiflora Processing (CBE) Ltd Precot Meridian Energy Ltd Benwood Corporation Sdn Bhd

Key Management Personnel (KMP) : Mr D Sarath Chandran

Mr. Ashwin Chandran and Mr. Prashanth Chandran

Others : Suprem Associates (Partnership firm)

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Mar 31, 2012

1. As notified by Minstry of Corporate Affairs, Revised Schedule VI under the Companies Act 1956 is applicable to the Financial Statements for the financial year commencing on or after 1st April, 2011.

Accordingly the financial statements for the year ended March 31st, 2012 are prepared in accordance with the Revised Schedule VI. The amounts and disclosures included in the financial statements of the previous year have been reclassified to conform to the requirements of revised Schedule VI.

1.1 Share Capital

i) Terms/rights attached to equity shares:

The company has only one class of issued shares referred to as equity shares having a par value of Rs. 10 each. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors, if any, is subject to the approval of shareholders in the Annual General Meeting.

1. a) Term loan from SBI, ICICI, Andhra Bank, Export Import Bank of India and IDBI Bank are secured by

way of pari passu first charge on entire movable and immovable assets of the company and pan passu second charge on current assets of the company.

b) Term loan from Yes Bank is secured by way of pari passu first charge on entire movable fixed assets.

c) Term loan from IDBI Bank, Dubai Branch is secured by way of exclusive first charge on the windmills and related equipments, systems and assets located at Eragampatti and Manurpalayam Village in Tirupur district.

2. The loans are repayable in monthly/quarterly/half-yearly installments.

3. In respect of the above, Rupee Term Loans carry interest ranging from 7.5% p.a. to 14% p.a. and Foreign Currency Term Loans carry interest ranging from 1.6% p.a. to 3% p.a. plus applicable LIBOR.

1.2 Short Term Borrowings

1. Working capital loans from SBI, Andhra Bank, Corporation Bank, IDBI, ICICI, Yesbank and The South Indian bank are secured by way of pari passu first charge on current assets of the company and pari passu second charge on entire immovable assets of the company.

2. In respect of the above, working capital rupee loans carry interest ranging from 11.25% p.a. to 15.25% p.a. and working capital foreign currency loan and buyer's credit foreign currency loans carry interest ranging from 1.4% p.a. to 3.5% p.a. plus applicable LIBOR.

3. Unsecured short term loan from Axis Bank carries interest at 11% p.a. for which the company has extended a corporate guarantee.

1.3 Contingent liabilities in respect of :

2011-12 2010-11 Rs. Lacs Rs. Lacs

I) Claims against the company not acknowledged as debts:

Disputed Statutory Liabilities not provided for 2,663.59 1,244.82

Disputed Other Liabilities not provided for 285.96 265.14

Guarantees 123.39 122.38

Bills discounted 2,904.13 1,692.92

Letters of credit outstanding 9,389.31 Nil

ii) Commitments

Estimated amount of contracts remaining to be 1,456.55 37.63 executed on capital account and not provided for

1.4 The Company has opted out of levy of Excise duty from July 2004.

1.5 Disclosures regarding Gratuity Plan:

a) Description of the company's defined benefit plan

The company operates a defined benefit plan for payment of post employment benefits in the form of gratuity.

Benefits under the plan are based on pay and years of service and are vested on completion of five years of service, as provided for in the payment of Gratuity Act, 1972. The terms of the benefits are common for all the employees of the company.

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Mar 31, 2011

1 Security for Borrowings:

a Term Loans from ICICI bank, Andhra Bank, State Bank of India, Export Import Bank of India and IDBI Bank are secured by way of pari passu first charge on entire movable and immovable fixed assets of the company and pari passu second charge on current assets of the company.

b Term Loan from YES Bank is secured by way of pari passu first charge on entire movable fixed assets.

c Working capital loans / Short Term Loans from State Bank of India, Andhra Bank, Corporation Bank, ICICI Bank, IDBI Bank, YES Bank and The South Indian Bank are secured by way of pari passu first charge on current assets of the company and pari passu second charge on entire immovable assets of the company.

d Term loan to an extent of Rs.14.23 crores from IDBI Bank, Dubai branch is secured by way of Exclusive First charge on the Windmills and related equipments, systems and accessories located at Eragampatti and Manurpalayam villages in Tirupur district.

2 a Loans and advances include an amount of Rs.71.62 lacs advanced to Suprem Associates, a partnership firm in which the company is a partner.

b Advances includes an amount of Rs.20.65 lacs due from subsidiaries.

c Other Liabilities include an amount of Rs.85.63 lacs due to subsidiaries.

3 Income Tax assessments have been completed upto Assessment Year 2008-2009.

4 Previous year's figures have been regrouped whereever necessary to conform to current year's classification.

5 The Company has opted out of levy of Excise duty from July 2004.

6 Voluntary retirement compensation paid amounting to Rs.17.97 Lacs has been written off during the year.

7 The Ministry of Corporate Affairs, through its notification dated March 31,2009 has relaxed the provisions of Accounting Standard (AS) 11 " The Effects of Changes in Foreign Exchange Rates" for treating the exchange gain/loss arising on restatement of long term foreign currency monetary items. Accordingly, companies are permitted to adjust in their carrying cost of depreciable assets, the exchange differences arising out of exchange rate fluctuations with corresponding adjustments in Profit & Loss account and general reserve. In order to give effect to the aforesaid amendment, companies are required to exercise their option. The company has exercised the option and the following adjustments have been made.

8 The company having adopted AS 30 "Financial Instruments - Recognition and Measurment" with effect from 1st April 2008, continues to comply with its requirements. The outstanding amount of forward contracts not recognised in the books of accounts as on the balance sheet date is Rs. 1724.88 Lacs.

9 The company has initiated the process of obtaining confirmation from suppliers who have registered themselves under the "Micro, Small and Medium Enterprises Development Act, 2006". Based on the information and evidence available with the company, there are no dues to micro,small and medium enterprises, outstanding as on 31st March 2011.

10 Disclosures regarding Gratuity Plan:

a) Description of the company's defined benefit plan

The company operates a defined benefit plan for payment of post employment benefits in the form of gratuity.

Benefits under the plan are based on pay and years of service and are vested on completion of five years of service, as provided for in the payment of Gratuity Act,1972. The terms of the benefits are common for all the employees of the company.

11 Related Party Disclousure :

List of related parties with whom transactions have taken place Holding Company: Nil

Subsidiary Company: 1. Suprem Textiles Processing Limited, 2. Multiflora Processing (CBE) Limited, 3. Precot Meridian Energy Limited, 4. Benwood Corporation Sdn Bhd Key Management Personnel: 1. Mr D Sarath Chandran, 2. Mr Ashwin Chandran and 3. Mr Prashanth Chandran. Others : Suprem Associates.

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Mar 31, 2010

1 Security for Borrowings:

a Term Loans from ICICI bank, Andhra Bank.State Bank of India,Export Import Bank of India and IDBI Bank banks are secured by way of paripassu first charge on the entire movable and immovable fixed assets of the company and parri passu second charge on the current assets of the company.

b Term Loan from YES bank is secured by way of parri passu first charge on the entire movable fixed assets only.

c Working capital loans / Short term Loans from State bank of India, Andhra Bank .Corporation bank, ICICI Bank, IDBI and YES Bank are secured by way of parripassu first charge on the current assets of the company and paripassu second charge on the entire immovable assets of the company.

2 a Loans and advances also include an amount of Rs.71.62 lacs advanced to Suprem Associates, a partnership firm in which the company is a partner.

b Advances includes an amount of Rs.210.61 lacs due from subsidiaries

c Other Liabilities includes an amount of Rs.285.98 lacs due to subsidia -ries

3 a Income Tax assessments have been completed upto Assessment Year 2007-2008.

b Based on recent judicial pronouncements relating to claim of certain expenses as revenue expenditure, the company, as a prudent measure, has provided a sum of Rs 1000 lacs towards Income tax provision for earlier years.

4 Previous years figures have been regrouped whereever necessary to confirm to current years classification.

5 The Company has opted out of levy of Excise duty from July 2004.

6 Voluntary retirement compensation paid amounting to Rs.123.54 Lacs has been written off during the year.

7 The Ministry of Corporate Affairs, through its notification dated March 31,2009 has relaxed the provisions of Accounting Standard (AS) 11 " The Effects of Changes in Foreign Exchange Rates" for treating the exchange gain/loss arising on restatement of long term foreign currency monetary items. Accordingly, companies are permitted to adjust in their carrying cost of depreciable assets, the exchange differences arising out of exchange rate fluctuations with corresponding adjustments in Profit & Loss account and general reserve. In order to give effect to the aforesaid amendment, companies are required to exercise their option. The company has exercised the option and the following adjustments have been made.

8 Pursuant to The Institute of Chartered Accountants of Indias (ICAI) Announcement "Accounting for Derivatives", the Company had early adopted AS 30 "Financial Instruments: Recognition and Measurement", with effect from 1stApril, 2008. The outstanding amount of forward contracts not recognised in the books of accounts as on the balance sheet date is Rs.2398.76 Lacs.

9 The company has initiated the process of obtaining confirmation from suppliers who have registered themselves under the "Micro, Small and Medium Enterprises Development Act, 2006". Based on the information and evidence available with the company, there are no dues to micro, small and medium enterprises, outstanding as on 31.03.2010.

10 Disclosures regarding Gratuity Plan:

a) Description of the companys defined benefit plan

The company operates a defined benefit plan for payment of post employment benefits in the form of gratuity.

Benefits under the plan are based on pay and years of service and are vested on completion of five years of service, as provided for in the payment of Gratuity Act, 1972. The terms of the benefits are common for all the employees of the company.

11 Related Party Disclousure :

List of related parties with whom transactions have taken place Holding Company : Nil

Subsidiary Company :

1. Suprem Textiles Processing Limited

2. Multiflora Processing (CBE) Limited

3. Precot Meridian - Energy Limited and

4. Benwood Corporation Sdn Bhd