Notes to Accounts of Surat Trade and Mercantile Ltd.

Mar 31, 2025

Note 2.2 Fair Value measurement of the Company''s investment properties

The fair value of the Company''s investment properties as at 31^st March, 2025 have been arrived at on the basis of a valuation carried out by Shubh Lakshmi Valuers, independent valuer not related to the Company. Shubh Lakshmi Valuers is registered with the authority which governs the valuers in India, and has appropriate qualifications and experience in the valuation of properties in the relevant locations. The fair value was determined based on the market enquiry approach that reflects recent land rates for similar properties. Details of the Company''s investment properties and information about the fair value hierarchy as at 31^st March, 2025 is as follows: *There are two parcels of land at Vareli. One is classified as ''Freehold Land'' under the Property, Plant & Equipment head, as there is no intention to sell it, and it is valued at cost. The second parcel is shown under the ''Investment Property'' head, as it is held solely for capital appreciation, and it is also valued at cost. Therefore, the fair value mentioned above pertains to the land valued at cost under the head ''Investment Property''.

* There was no change in Issued, Subscribed and Paid up share capital of the Company during the year and the immediately preceding financial year.

11.01 Rights, Preferences and Restrictions Equity Shares

i. The Company has only one class of equity shares referred to as equity shares having a par value of Rs. 1. Each holder of equity shares is entitled to one vote per share.

ii. In the event of liquidation, the equity shareholders are eligible to receive the residual assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. At present, there is no outstanding Preference Shares.

11.04 For the period of five years immediately preceding the date as at which the balance sheet is prepared, no shares are

i) Allotted any equity shares for consideration other than cash.

ii) Allotted as fully paid shares by way of bonus shares.

iii) Bought back.

Nature and Purpose of Reserves

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

Capital Reserve: The excess of fair value of net assets acquired over consideration paid in a common control transaction is recognised as capital reserve. The Company had recognised capital reserve representing the difference between the net identifiable assets acquired and consideration paid, on amalgamation of Vareli Trading Company Limited with the Company.

Other Comprehensive income: Other comprehensive income comprises items of income and expense (including reclassification adjustments) that are not recognised in profit or loss as required or permitted by other Ind AS.

Items of Other Comprehensive Income

i) Remeasurements of Net Defined Benefit Plans: Differences between the interest income on plan assets and the return actually achieved, and any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised in ''Other comprehensive income'' and subsequently not reclassified to the Statement of Profit and Loss.

(a) Defined Contribution Plan:

The Company has Recognized Rs.8.35 Lakhs for Provident Fund contribution in the Statement of Profit and Loss for

the year ended March 31, 2025 (Previous Year Rs.7.32 Lakhs)

(b) Defined Benefit Plan:

The present value of obligation is determined based on actuarial valuation. These plans typically expose the

Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

i) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. Plan investment is a mix of investments in government securities, and other debt instruments.

ii) 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 investments.

iii) 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.

iv) 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

A description of methods used for sensitivity analysis and its Limitations:

Sensitivity analysis is performed by varying a single parameter while keeping all the other parameters unchanged. Sensitivity analysis fails to focus on the interrelationship between underlying parameters.

Hence, the results may vary if two or more variables are changed simultaneously.

The method used does not indicate anything about the likelihood of change in any parameter and the extent of the change if any.

(a) In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility (CSR) Committee of the Board. The CSR Committee of the Company has laid down the policy to meet the Corporate Social Responsibility. The CSR Policy includes any activity that may be prescribed as CSR activity as per the Rules of the Companies Act, 2013.As per section 135 of the Companies Act, 2013 (''Act''), a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities.

(b) For the F.Y. 2024-25, the provisions of Section 135 (1) of the Companies Act, 2013 were applicable.The amount has been spent by the Company during the Financial year 2024-25 Rs.10.60 Lacs (Previous year: Rs. NIL) towards the CSR activities.

(c) The Company has spent an aggregate amount of Rs.10.60 Lakhs (Previous Year NIL) for promotion of national heritage, art and culture, Conservation of natural resources and Education etc.

Note: 29 Contingent Liabilities:

The Company does not have any claims or contingent Liabilities for the year. (Previous year: NIL)

Note: 30 Capital Management:

The Company''s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may issue new shares or sell assets to reduce debt. The capital structure of the Company consists of debt and total equity of the Company.

The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity, External-commercial borrowings and short-term borrowings. The Company''s policy is aimed at combination of short-term and long-term borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

The Company is not subject to any externally imposed capital requirements.

Note: 31 Financial Instruments:

31.01 Categories of Financial Instruments and Fair Value Measurement:

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the Ind AS 113 - Fair Value Measurement. An explanation of each level is as follows:

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

Level 2 - Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Unobservable inputs for the asset or liability.

Market Risk: The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk:

Currency Risk: The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

Interest Rate Risk: The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

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

Credit Risk: The risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Outstanding customer receivables are regularly monitored. The Company maintains its cash and cash equivalents and deposits with banks having good reputation and high quality credit ratings.

In addition, the Company is exposed to credit risk in relation to deposits related to lease premises. These deposits are not past due or impaired.

Liquidity Risk: The risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

"The Company does not have any sanctioned borrowing facilities as of the reporting date"

Foreign Currency Risk Management:

The Company undertakes transactions denominated in foreign currencies and consequently, exposures to exchange rate fluctuations arise. Exposure to currency risk relates primarily to the company''s operating activities and borrowings when transactions are denominated in a different currency from the Company''s functional currency.

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.

Foreign Currency Exposure:

The Company does not have Foreign Currency exposure as on reporting date.

Note: 32 Leases:

The Company has elected below practical expedients on transition to Ind AS 116:

a) Applied a single discount rate to a portfolio of leases with reasonably similar characteristics.

b) Applied the exemption not to recognise right of use assets and lease liabilities with less than 12 months of lease term on the date of initial application.

c) Excluded the initial direct costs from the measurement of right of use asset at the date of initial application.

d) Elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date, the Company relied on its assessment made applying Ind AS 17 Leases.

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified assets for a period of time in exchange for consideration.

e) The Company has elected not to apply the requirements of Ind AS 116 to short term leases of all the assets that have a lease term of twelve months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight line basis over the lease term.

f) The weighted average incremental borrowing rate applied to lease liabilities as at 1st January, 2024 is 9.15%.

(ii) The carrying value of the Rights-of-use Assets and depreciation charged during the year

For details pertaining to the carrying value of right of use of assets as on 31st March, 2025 is Rs. 157.02 Lakhs and previous year is Rs. 177.50 Lakhs and depreciation charged thereon during the year of Rs 20.48 Lakhs. (Previous year Rs.18.46 Lakhs).

Refer note -1 "Property, Plant & Equipments & Intangible Assets".

Note: 36

There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at 31^st March, 2025.

Note: 37

Contribution to Political parties during the year 2024-25 is Rs.Nil (Previous Year Rs.Nil).

Note: 38

The Company has No borrowings from banks or financial institutions on the basis of security of current assets.

Note: 39 Additional Regulatory Information

Additional Regulatory Information pursuant to Clause 6L of General Instructions for preparation of Balance Sheet as given in Part I of Division II of Schedule III to the Companies Act, 2013, are given hereunder to the extent relevant and other than those given elsewhere in any other notes to the Financial Statements.

i. The Company has not advanced any loans or advances in the nature of loans to specified persons viz. promoters, directors, KMPs, related parties, which are repayable on demand or where the agreement does not specify any terms or period of repayment.

ii. There are no proceeding initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

iii. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

iv. Ratios - Refer Note 33.

v. 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.

vi. The Company has not received any funds from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding, 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.

vii. The Company has not been declared Wilful Defaulter by any bank or financial institutions or any other lender.

viii. The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013.

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

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

xi. The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India.

Additional Information

Additional Information pursuant to Clause 7(l) of General Instructions for preparation of Statement of Profit and Loss as given in Part II of Division II of Schedule III to the Companies Act, 2013, are given hereunder to the extent relevant and other than those given elsewhere in any other notes to the Financial Statements.

i. The Company does not have any transaction which is not recorded in the books of accounts but has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

ii. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

Note: 40 Code on Social Security

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

Note: 41

The proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) AmendmentRules 2021 requires companies, which uses accounting software for maintaining its books of accounts, to use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of accounts along with the date when such changes were made and ensuring that the audit trail cannot be disabled.The Company has used accounting software for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software. Further, where the audit trail (edit log) facility was enabled and operated, the audit trail feature has not been tampered with. Additionally, the audit trail has been preserved by the company as per the statutory requirements for record retention .

Note: 42

Figures for the previous year have been regrouped/reclassified/restated wherever necessary.

Note: 43

The financial statements are approved for issue by the Company''s Board of Directors on 27^th May, 2025.

Mar 31, 2024

B.13. Provisions and Contingent Liabilities:

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognized as provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, 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 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 it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

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

B.14. Financial Instruments:

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments and are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or liabilities on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit and loss.

(A) Financial Assets

a) Initial Recognition and Measurement

All financial assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial asset. However, trade receivables that do not contain a significant financing component are measured at transaction price.

b) Subsequent Measurement

(i) Financial Assets Carried at Amortised Cost (AC)

A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and 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.

(ii) Financial Assets at Fair Value through Other Comprehensive Income (FVTOCI)

A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and 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.

(iii) Financial Assets at Fair Value through Profit or Loss (FVTPL)

A financial asset which is not classified in any of the above categories are measured at FVTPL.

(iv) Investment in Subsidiaries, Associates and Joint Ventures

The Company accounts for its investments in subsidiaries, associates and joint venture at cost as per requirements of Ind AS 27.

c) Other Equity Investments

All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income''.

d) Derivative Financial Instruments

Derivative financial instruments such as forward contracts, option contracts and cross currency swaps, to hedge its foreign currency risks are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value with changes in fair value recognised in the Statement of Profit and Loss in the period when they arise.

e) Impairment of Financial Assets

In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).

Expected credit losses are measured through a loss allowance at an amount equal to:

* The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); OR

* Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).

For trade receivables Company applies ''simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward booking estimates are analysed.

For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.

f) Derecognition of Financial Assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109 - Financial Instruments.

For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment and exchange difference, if any, (on debt instrument) are recognised in Profit or Loss and changes in fair value (other than on account of above income or expense) are recognised in Other Comprehensive Income and accumulated in Other equity. On disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in Other equity is reclassified to Profit and Loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to Profit and Loss on disposal of investments.

(B) Financial Liabilities

a) Initial Recognition and Measurement

All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.

b) Subsequent Measurement

Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments. Financial Assets Carried at Amortised Cost (AC).

c) De-Recognition

Financial liabilities are derecognized when, and only when, the obligations are discharged, cancelled or have expired. An exchange with a lender of a debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability 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 a financial liability derecognized and the consideration paid or payable is recognized in the Statement of Profit and Loss.

d) Foreign Exchange Gains and Losses

Financial liabilities denominated in a foreign currency and are measured at amortized cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortized cost of the instruments and are recognized in the Statement of Profit and Loss.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognized in the Statement of Profit and Loss.

Cash and cash equivalents comprise cash in hand and unencumbered, highly liquid bank and other balances (with original maturity of three months or less) that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

B.16. Statement of Cash Flow:

Cash flow statement is prepared segregating the cash flows from operating, investing and financing activities. Cash flow from operating activities is reported using indirect method, adjusting the net profits for the effects of:

(i) Transactions of a non-cash nature.

(ii) Any deferrals or accruals of past or future operating cash receipts or payments.

(iii) Items of income or expense associated with investing or financing cash flows.

(iv) Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as on the date of Balance Sheet.

B.17. Events after Reporting Date:

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date only of material size or nature are disclosed.

B.18. Earnings per Share:

The Company reports basic and diluted earnings per share (EPS) in accordance with Indian Accounting Standard 33 "Earnings per Share". Basic EPS is computed by dividing the net profit or loss attributable to ordinary equity holders of the parent entity by the weighted average number of equity shares outstanding during the period. Diluted EPS is computed by dividing the net profit or loss attributable to ordinary equity holders of the parent entity by weighted average number of equity shares outstanding during the year as adjusted for the effects of the effects of all dilutive potential ordinary shares dilutive potential equity shares (except where the results are anti-dilutive).

C. Recent Accounting Pronouncements

New Standards, Interpretations and Amendments Adopted by the Company : Ministry of Corporate Affairs (''MCA'') notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31st March, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

Note 2.2 Fair Value measurement of the Company''s investment properties

The fair value of the Company''s investment properties as at 31^st March, 2024 have been arrived at on the basis of a valuation carried out as on the respective date by Shubh Lakshmi Valuers, independent valuer not related to the Company. Shubh Lakshmi Valuers is registered with the authority which governs the valuers in India, and has appropriate qualifications and experience in the valuation of properties in the relevant locations. The fair value was determined based on the market enquiry approach that reflects recent land rates for similar properties.Details of the Company''s investment properties and information about the fair value hierarchy as at 31^st March, 2024 is as follows:

Nature and Purpose of Reserves

Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general

reserve, dividends or other distributions paid to shareholders.

Items of Other Comprehensive Income

ii) Equity Instruments through Other Comprehensive Income: The fair value change of the equity instruments measured at fair value through other comprehensive income is recognised in Equity instruments through Other Comprehensive Income. Upon de-recognition, the cumulative fair value changes on the said instruments will not be reclassified to the Statement of Profit and Loss. Based on this on derecognition by way of extinguishment of equity shares of GSML has not been reclassified to Statement of Profit and Loss and cumulative impact given to OCI reserve in previous years has been transferred to accumulated surplus.

iii) Capital Reserve: The excess of fair value of net assets acquired over consideration paid in a common control transaction is recognised as capital reserve. The Company has recognised capital reserve representing the difference between the net identifiable assets acquired and consideration paid, on amalgamation of Vareli Trading Company Limited with the Company.

(b) For the F.Y. 2023-24, the provisions of Section 135 (1) of the Companies Act, 2013 were not applicable since the Company is not falling under the criteria as prescribed with respect to net worth or turnover or net profit during the immediately preceding financial year. Hence, no amount has been spent by the Company during the Financial year 2024 (Previous year: Rs. Nil Lakhs) towards the CSR activities.

Note: 30 Capital Management:

The Company is not subject to any externally imposed capital requirements.

Note: 31 Financial Instruments:

31.01 Categories of Financial Instruments and Fair Value Measurement:

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

Level 2 - Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Unobservable inputs for the asset or liability.

Market Risk: The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk:

Currency Risk: The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

Interest Rate Risk: The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

In addition, the Company is exposed to credit risk in relation to deposits related to lease premises. These deposits are not past due or impaired.

Foreign Currency Risk Management:

Foreign Currency Exposure:

The Company does not have Foreign Currency exposure as on reporting date.

Note: 32 Leases:

The Company has elected below practical expedients on transition to Ind AS 116:

a) Applied a single discount rate to a portfolio of leases with reasonably similar characteristics.

b) Applied the exemption not to recognise right of use assets and lease liabilities with less than 12 months of lease term on the date of initial application.

c) Excluded the initial direct costs from the measurement of right of use asset at the date of initial application.

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified assets for a period of time in exchange for consideration.

There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at 31^st March, 2024.

Note: 38

Contribution to Political parties during the year 2023-24 is Rs.Nil (Previous Year Rs.Nil).

Note: 39

The Company has No borrowings from banks or financial institutions on the basis of security of current assets.

Note: 40

Hon''ble National Company Law Tribunal (''NCLT''), Ahmedabad Bench had vide its order dated 7^th September, 2022 (Ref.: CP (CAA) No. 61 / AHM / 2021 in CA (CAA) No. 58 / AHM / 2021), under Sections 230-232 and read with Section 66 of the Companies Act, 2013 and other applicable provisions of the companies Act, 2013 read with the Companies (Compromise, Arrangement and Amalgamations) Rules, 2016 has approved the Scheme of Amalgamation of Vareli Trading Company Limited (VTCL) (Transferor Company"") with Surat Textile Mills Limited (STML) (""Transferee Company"") and their respective shareholders and creditors. Pursuant to the order, the appointed date of the scheme is fixed at April 01, 2019 and the scheme has become effective from September 26, 2022 i.e., the day on which the certified copy of the order was filed with the Registrar of Companies by both Companies.

The amalgamation has been accounted by applying ""Pooling of Interest Method"" as set out in Appendix C of IND AS 103 "Business Combinations"" by combining the assets, liabilities and reserves of the VTCL at their carrying amounts with only such adjustments which are required to harmonize the accounting policies.

Accordingly, the Company has prepared its financial statements for the year ended March 31, 2023 after giving effect to the aforesaid Scheme for the period from April 01, 2022 to September 26, 2022 of Rs. (0.20) lakhs (net) have been given in current reporting period and corresponding figures for the previous year ended March 31, 2022 have been restated to give effect to the Scheme with effect from April 01, 2019. The said effects are based on the special purpose financial statements audited by the auditors of transferor company. The difference between the net identifiable assets acquired and consideration paid on merger has been accounted for as Capital reserve amounting to Rs (6.90) Lakhs. On the Scheme becoming effective and with effect from the Appointed Date:

a) The Board of Directors of the Company at its meeting held on 30th September, 2022 took note of the order dated 7th September, 2022 of Hon''ble NCLT Ahmedabad bench in the matter of Scheme of Amalgamation of VTCL with STML. At the said meeting the Board of Directors approved the allotment of equity shares of face value of Rs. 1/-(Rupee one) each credited as fully paid up of STML in the ratio of 521 equity shares of the face value Rs. 1/- (Rupee one) each of STML for every 1 equity share of Rs. 10/- (Rupees 10) of VTCL credited as fully paid up held on the record date by such equity shareholders or their respective legal heirs, executors or administrators or, as the case may be, successors in VTCL (the "New Equity Shares").

b) On the amalgamation of VTCL with STML, all the investment (including 7,75,80,026 number of the equity shares of STML), being held by VTCL, stands cancelled off and the same shall amount to Reduction of Share Capital of STML to that extent". Accordingly, the issued, subscribed and paid-up share capital of STML stands reduced from Rs. 22,20,64,440/- to Rs. 14,44,84,414/-. However, considering the issue of 7,75,80,026 equity shares to the shareholders of VTCL (the transferor company) in the exchange ratio as approved under the Scheme under Clause 18(vi) of NCLT Order, there will not be any net reduction in the Issued, Subscribed and Paid-up share capital of STML and the issued subscribed and paid-up share capital of STML will remain unchanged at Rs. 22,20,64,440/-.

ii. There are no proceeding initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

iii. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

iv. Ratios - Refer Note 34.

v. The Company has not advanced or given loan 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.

vi. The Company has not received any funds from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding, 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 on behalf of the Ultimate Beneficiaries.

vii. The Company has not been declared Wilful Defaulter by any bank or financial institutions or any other lender.

viii. The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013.

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

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

xi. "The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India." Additional Information

ii. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Group will assess the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in the period in which the Code becomes effective and the related rules to determine the financial impact are published.

Note: 43

As per the Ministry of Corporate Affairs (MCA) notification, proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, for the financial year commencing April 1, 2023, every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled. The interpretation and guidance on what level edit log and audit trail needs to be maintained evolved during the year and continues to evolve.

The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software.

Note: 44

Figures for the previous year have been regrouped/reclassified/restated wherever necessary.

Note: 45

The financial statements are approved for issue by the Company''s Board of Directors on 24^th May, 2024.

For and on behalf of Board of Directors

Alok P. Shah Paresh V. Chothani

Managing Director Wholetime Director

DIN: 00218180 DIN: 00218632

Chandresh S. Punjabi Mahek Gaurav Jaju

Chief Financial Officer Company Secretary

Surat, 24^th May, 2024

Mar 31, 2018

A. Corporate Information

Surat Textile Mills Limited (the âCompanyâ) is domiciled in India. The Companyâs registered office is at Tulsi Krupa Arcade, Puna-Kumbharia Road, Dumbhal, Surat-395010. The Company is engaged in the business of manufacturing Polyester Chips and Partially Oriented Yarn (POY).

B. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Companyâs accounting policies, which are described in Note 2.1, the Management of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. 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 periods if the revision affects both current and future periods.

B.1. I mpairment of property, plant and equipment

Determining whether property, plant and equipment is impaired requires an estimation of the value in use of the cash-generating unit. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. When the actual future cash flows are less than expected, a material impairment loss may arise.

B.2. Useful lives of property, plant and equipment

The Company reviews the estimated useful lives of property, plant and equipment at the end of each reporting period. During the currently year, the directors have determined that no changes are required to the useful lives of assets.

B.3. Provision for litigations and contingencies

The provision for litigations and contingencies are determined based on evaluation made by the management of the present obligation arising from past events the settlement of which is expected to result in outflow of resources embodying economic benefits, which involves judgements around estimating the ultimate outcome of such past events and measurement of the obligation amount. Due to the judgements involved in such estimations the provisions are sensitive to the actual outcome in future periods.

C. Recent Indian Accounting Standards (Ind AS)

Ministry of Corporate Affairs (âMCAâ) through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the following new and amendments to Ind ASs which the Group has not applied as they are effective for annual periods beginning on or after April 1, 2018:

Ind AS 115 Revenue from Contracts with Customers Ind AS 21 the Effect of Changes in Foreign Exchange Rates Ind AS 115 - Revenue from Contracts with Customers

Ind AS 115 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition standard Ind AS 18 - Revenue,

Ind AS 11 - Construction Contracts when it becomes effective.

The core principle of Ind AS 115 is that an entity should recognised revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition:

Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligation in contract Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when âcontrolâof the goods or services underlying the particular performance obligation is transferred to the customer.

The Company is currently evaluating the requirements of Ind AS 115 and its impact on the financial statements

Ind AS 21 - The Effect of Changes in Foreign Exchange Rates

The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Group is evaluating the impact of this amendment on its financial statements.

D. First time adoption of Ind AS - Mandatory exceptions and optional exemptions:

The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2016 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets and liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognized assets and liabilities. However, this principle is subject to certain exceptions and certain optional exemptions availed by the company as detailed below:

E.1. De-recognition of financial assets and financial liabilities

The Company has applied the de-recognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2016 (the transition date).

E.2. Classification of debt instruments

The Company has determined that classification of debt instruments in terms of whether they meet the amortized cost criteria or the fair value through profit or loss criteria based on facts and circumstances that existed as of the transition date.

E.3. Deemed cost for property, plant and equipment and intangible assets

The Company has elected to continue with the carrying value of all its plant and equipment assets recognized as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

E.4. Impairment of financial assets

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognized in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there has been significant increase in credit risk since the initial recognition, as permitted by Ind AS 101.

1 Term loan from Kotak Mahindra Prime Limited aggregating to Rs.21.59 Lakhs (Previous year Rs.51.17 Lakhs) under vehicle finance scheme are secured by an exclusive charge by way of hypothecation of specific vehicles purchased under the arrangements. Interest rate on term loan are 10.93 %.

2 Cash Credit facilities availed from Bank of Baroda is secured by hypothecation by way of first pari passu charge on all its current assets and by way of pari passu charge on immovable and all movable properties (excluding current assets) of the Company. Rate of Interest on Cash Credit facility is 11.90% (31-03-2017 : 12.35%), (01-04-2016 : 12.40%)

1.1 Effective July 01, 2017, sales are recorded net of GST whereas earlier sales were recorded gross of excise duty which formed part of expenses. Hence revenue (gross) from operations for the year ended March 31, 2018 are not comparable with the previous year corresponding figures.

(a) Defined Contribution Plan

The Company has recognized Rs.7.08 lakh for provident fund contribution in the Statement of Profit a nd Loss for the year ended March 31, 2018 (March 31, 2017 - Rs.5.65 lakh).

(b) Defined Benefit Plan

The present value of obligation is determined based on actuarial valuation.

As per Ind AS 19 âEmployee benefitsâ, the disclosures as defined in the Accounting Standards are given below:

A description of methods used for sensitivity analysis and its Limitations:

Sensitivity analysis is performed by varying a single parameter while keeping all the other parameters unchanged Sensitivity analyse is fails to focus on the interrelationship between underlying parameters.

Hence, the results may vary if two or more variables are changed simultaneously.

The method used does not indicate anything about the likelihood of change in any parameter and the extent of the change if any.

2.1 Corporate Social Responsibility

(a) As per section 135 of the Companies Act, 2013 (âthe Actâ), a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. A CSR committee has been formed by the Company as per the Act.

(b) Gross amount required to be spent by the Company during the year is Rs.15.09 Lakhs (previous year Rs.6.59 Lakhs)

(c) Actual amount spent by the company during the year is Rs.10.53 Lakhs (Previous year Rs.4.78 Lakhs) towards Social welfare and Education Programmes.

(d) The CSR activities carried / to be carried out by the company is driven by the expertise of management. Additionally the company gives preference to the local area(s) of its operations for CSR activities. The company believes that CSR should be in the filled(s) which have substantial social impact and which co-relate with philosophy of the company to improve the quality of Life. The CSR committee will further identify the project which can covered under the CSR guild lines in compliance with the CSR objectives and policy of the Company.

* The weighted average number of shares ta kes into account the changes in equity shares of the Company pursuant to Share purchase during the year under section 391 of the Companies Act, 1956.

Additional information to financial statements and disclosures under Accounting Standards:

3. Contingent liabilities:

(i) Disputed liabilities for Income Tax not acknowledged as debts Rs.Nil (Previous year: Rs.NIL Lakhs)

(ii) Disputed liabilities for Excise Duty not acknowledged as debts Rs.35.22 Lakhs (Previous year: Rs.35.22 Lakhs)

4. Capital Management:

The Companyâs objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may issue new shares or sell assets to reduce debt. The capital structure of the Company consists of debt and total equity of the Company.

The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity, External-commercial borrowings and short-term borrowings. The Companyâs policy is aimed at combination of short-term and long-term borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

The Company is not subject to any externally imposed capital requirements.

Total debt includes all long and short term debts as disclosed in notes 13 to the financial statements.

The gearing ratio at the end of the reporting period was as follows

5. Financial Instruments:

5.1. Categories of financial instruments and Fair Value Measurement:

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

Level 2 - Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 - Unobservable inputs for the asset or liability.

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

5.2. Financial Risk management framework:

Market Risk:

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates and other market changes. The Companyâs exposure to market risk is primarily on account of foreign currency exchange rate risk

Credit Risk:

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Outstanding customer receivables are regularly monitored. The Company maintains its cash and cash equivalents and deposits with banks having good reputation and high quality credit ratings.

In addition, the Company is exposed to credit risk in relation to deposits related to lease premises. These deposits are not past due or impaired.

Liquidity Risk:

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

Following is the summary of undrawn borrowing facilities that the company has at its disposal to further reduce liquidity risk:

6. Segment Reporting

The Company has only one reportable segment viz. âTextilesâ as per Ind As 108 operating segments

7. Disclosures as required by the Ind AS 24 âRelated Party Disclosuresâ are given below:

(I) List of related parties with whom transactions have taken place and relationships:

8. There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2018.

9. Contribution to political parties during the year 2017-18 is Rs.Nil (previous yea r Rs.Nil).

10. Figures for the previous year have been regrouped/reclassified wherever necessary.

11.1. Effect of Ind AS adoption on the total Comprehensive income for year ended March 31, 2017.

The Reconciliation of Net Profit / (Loss) reported under previous General Accepted Accounting Principles (GAAP) to Total Comprehensive Income in accordance with Ind AS is given below:

Notes:

1. Investments in equity instruments and mutual funds:

Under previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than Investments in Garden Silk Mills Ltd equity instruments designated as at FVTPL) have been recognized in retained earnings as at date of transition and subsequently in the profit or loss (for instruments designated at FVTPL, such changes is such for the year ended 31st March 2017. This increased the retained earnings by Rs. 2.49 Lakhs as at 31st March 2017. (1st April 2016 - Rs.NIL)

Fair value changes with respect to investments in equity instruments designated as at FVTPL have been recognized in FVTPL - Equity investments reserve as at the date of transition and subsequently in the other comprehensive income for the year ended 31st March 2017. This increased the other reserves by Rs.50.25 Lakhs as at 31st March 2017 (1st April 2016 - Rs.NIL)

2. Re-measurements of defined benefit obligations:

Under previous GAAP, actuarial gains and losses were recognized in profit and loss. Under Ind AS, the actuarial gains and losses forming part of remeasurement of the net defined benefit plan asset/obligation, are recognized in the Other Comprehensive Income under Ind AS instead of profit or loss. The actuarial loss for the year 22.40 Lakhs, Under Ind AS, the actuarial loss for the year ended 31st March 2017 were Rs. 6.31 Lakhs, with deferred tax asset of Rs.NIL, ended 31st March 2017 under Previous GAAP were Rs.NIL, with deferred tax asset of Rs. NIL.

3. Current/Deferred Tax Impact:

Deferred tax impacts for the above adjustments, as at 1st April 2016 is of Rs.NIL, Additional deferred tax asset of Rs.NIL has been created as at 1^st April 2016. During the year 2016-17, Decrease in provision for Deferred Tax Asset is Rs.14.36 Lakhs.

Current tax impacts for the above adjustments, as at 1st April 2016 is of Rs.NIL, Additional Current tax asset of Rs.NIL has been created as at 1^st April 2016. During the year 2016-17, increase in provision for Current Tax Asset is Rs.72.24 Lakhs.

Mar 31, 2017

1. Rights, Preferences and Restrictions attached to Shares Equity Shares:

The Company has one class of shares referred to as equity shares having a par value of Rs.1 each. Each shareholder is entitled to one vote per share held. The dividend as and when proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting. In the event of liquidation, Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Nature of Security and terms of repayment for Long Term secured borrowings: Note:

2. Term loan from Kotak Mahindra Prime Limited aggregating to Rs.21.59 Lacs (Previous year Rs.51.16 Lacs) under vehicle finance scheme are secured by an exclusive charge by way of hypothecation of specific vehicles purchased under the arrangements. Interest rate on term loan is 10.93 %.

3. Cash Credit facilities availed from Bank of Baroda is secured by hypothecation by way of first pari passu charge on all its current assets and by way of second pari passu charge on immovable and all movable properties (excluding current assets) of the Company. Rate of Interest on Cash Credit facility is 12.35% (Previous year: 12.40%).

4. The Company had recognized liability based on substantial degree of estimation for excise duty payable on clearance of goods lying in stock as on 31st March, 2016 of Rs.42.67 Lacs as per the estimated pattern of dispatches. During the year, Rs.42.67 Lacs was utilized for clearance of goods. Provision recognized under this class for the year is Rs.25.98 Lacs, which is outstanding as on 31st March, 2017. Actual outflow is expected in the next Financial Year.

Notes:

5. During the year, the Company converted 22637 Sq.mtrs. of Land at Varachha Road from "Property under development to "Fixed Assets" at Book Value, and Land at Vareli from "stock in trade" to "Fixed Assets".

6. Total of depreciation fund as on 31/03/2017 amounting to Rs.13166.48 Lacs includes Impairment Loss of Rs.6747.22 Lacs (Previous year Rs.6747.22 Lacs)

7. Diminution in value of Investments is in respect of Investment in Equity Shares of Garden Silk Mills Limited.

8. Details of Investment in Partnership Firm:

The Company is a partner in M/s.Isha Enterprises. The other partners are Armorax Business Centre Pvt. Ltd., Intro Scope Properties Pvt. Ltd. and Praful Amichand Shah. The share of each partners in the firm is 49%, 2%, 39% and 10% respectively. The total capital of the firm is Rs.1402.92 Lacs (Previous year Rs.1402.93 Lacs)

* Specified Bnak Notes (SBNs) mean the bank notes of denominations of the exisiting series of the value of five hundred rupees and one thousand rupees as defined under the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs no. S.0.3407(E), dated the 8th November, 2016

Note 9 : Contingent Liabilities

Disputed liabilities for Income Tax not acknowledged as debts Rs. Nil (Previous year: Rs.856.74 Lacs)

Disputed liabilities for Excise Duty not acknowledged as debts Rs.35.22 Lacs (Previous year: Rs.35.22 Lacs)

Note 10 :

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

Mar 31, 2016

1 Rights, Preferences and Restrictions attached to Shares Equity Shares:

Nature of Security and terms of repayment for Long Term secured borrowings:

2 Term loans from HDFC Bank and Kotak Mahindra Prime Limited aggregating to Rs.51.16 Lacs (Previous year Rs.90.22 Lacs) under vehicle finance scheme are secured by an exclusive charge by way of hypothecation of specific vehicles purchased under the arrangements. Interest rate on term loans are 10 % and 10.93 % respectively.

3 Cash Credit facilities availed from Bank of Baroda is secured by hypothecation by way of first pari passu charge on all its current assets and by way of second pari passu charge on immovable and all movable properties (excluding current assets) of the Company. Rate of Interest on Cash Credit facility is 12.40% (Previous year: 13%).

4 The Company had recognized liability based on substantial degree of estimation for excise duty payable on clearance of goods lying in stock as on 31st March, 2015 of Rs.21.86 Lacs as per the estimated pattern of dispatches. During the year, Rs.21.86 Lacs was utilized for clearance of goods. Provision recognized under this class for the year is Rs.42.67 Lacs, which is outstanding as on 31st March, 2016. Actual outflow is expected in the next Financial Year.

5 During the previous year, the Company converted 22637 Sq.mtrs. of Land at Varachha Road from Fixed Assets to "Property under development at Book Value.

6 Consequent to the applicability of the Companies Act, 2013 with effect from 1st April, 2014, during the year ended 31st March, 2015, the depreciation was required to be provided as per the useful life specified in the Act or as re-assessed by the Company. Consequently, the Company having followed useful life specification as per Schedule II to the Companies Act, 2013, resultant depreciation for the year ended 31st March, 2015, was higher by Rs.46.88 Lacs . Carrying value of the assets whose useful life had already exhausted as on 1st April, 2014, amounting to Rs.7.01 Lacs has been adjusted in the opening balance of Retained Earnings.

7 The Company has reversed the amount of impairment, during the year aggregating to Rs.375.28 Lacs (Previous year Rs.584.41 Lacs) on the assets which have been sold and such reversal has been credited to the Profit and Loss statement under the head Other Income.

8 Total of depreciation fund as on 31/03/2016 amounting to Rs.13087.55 Lacs includes Impairment Loss of Rs.6747.22 Lacs (Previous year Rs.7122.50 Lacs)

9 Diminution in value of Investments is in respect of Investment in Equity Shares of Garden Silk Mills Limited.

10 Details of Investment in Partnership Firm:

11 The management is of the view that there is virtual certainty supported by evidence that only 25% of the above amount will result in absorption or unabsorbed depreciation in near-term to long-term. Accordingly, the deferred tax assets have been recognized to that extent only.

12 Net surplus on disposal of fixed assets includes reversal of impairment of Rs.375.28 Lacs (Previous year Rs. 584.41 lacs) related to assets which were sold during the year and on which impairment was provided in earlier years.

Note : Figures in bracket represents previous year''s amount.

Note 13 :

Disputed liabilities for Income Tax not acknowledged as debts Rs.856.74 Lacs (Previous year: Rs. Nil).

Disputed liabilities for Excise Duty not acknowledged as debts Rs.35.22 Lacs (Previous year: Rs. Nil).

Note 14 :

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

Mar 31, 2015

1. Rights, Preferences and Restrictions attached to Shares Equity Shares:

The Company has one class of shares referred to as equity shares having a par value of Rs. 1 each. Each shareholder is entitled to one vote per share held. The dividend as and when proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting. In the event of liquidation, Equity Shareholders are eligible to receive the remaining assets ofthe Company after distribution of all preferential amounts, in proportion to their shareholding.

2. Term loans from HDFC Bank and Kotak Mahindra Prime Limited aggregating to Rs. 137.28 Lacs (Previous year Rs. 179.68 Lacs) under vehicle finance scheme are secured by an exclusive charge by way of hypothecation of specific vehicles purchased under the arrangements. Interest rate on term loans are 10 % and 10.93 % respectively.

3. Cash Credit facilities availed from Bank of Baroda is secured by hypothecation by way offirst pari passu charge on all its current assets and by way of second pari passu charge on immovable and all movable properties (excluding current assets) of the Company. Rate of Interest on Cash Credit facility is 13% (Previous year: 13.5%).

4. The Company had recognised liability based on substantial degree of estimation for excise duty payable on clearance of goods lying in stock as on 31st March, 2014 of Rs. 51.74 Lacs as per the estimated pattern of dispatches. During the year, Rs. 51.74 Lacs was utilised for clearance of goods. Provision recognised under this class for the year is Rs. 21.86 Lacs, which is outstanding as on 31st March, 2015. Actual outflow is expected in the next Financial Year.

5. During the year, the Company has converted 22637 Sq.mtrs. of Land at Varachha Road from Fixed Assets to "Property under development at Book Value.

6. Consequent to the applicability of the Companies Act, 2013 with effect from 1st April, 2014, during the year ended 31st March, 2015, the depreciation is required to be provided as per the useful life specified in the Act or as re-assessed by the Company. Consequently, the Company having followed useful life specification as per Schedule II to the Companies Act, 2013, resultant depreciation for the year ended 31st March, 2015, is higher by Rs. 46.88 Lacs . Carrying value of the assets whose useful life is already exhausted as on 1st April, 2014, amounting to Rs. 7.01 Lacs has been adjusted in the opening balance of Retained Earnings.

7. The Company has reversed the amount of impairment, during the year aggregating to Rs. 584.41 Lacs on the assets which have been sold and such reversal has been credited to the Profit and Loss statement under the head Other Income.

8. Total of depreciation fund as on 31/03/2015 amounting to Rs. 14172.57 Lacs includes Impairment Loss of Rs. 7122.50 Lacs.

9. Diminution in value of Investments is in respect of Investment in Equity Shares of Garden Silk Mills Limited.

10. Details of Investmentin Partnership Firm:

The Company is a partner in M/s.Isha Enterprises. The other partners are Armorax Business Centre Pvt. Ltd., Intro Scope Properties Pvt. Ltd. and Praful Amichand Shah. The share of each partners in the firm is 49%, 2%, 39% and 10% respectively. The total capital of the firmis Rs. 1402.95 Lacs (Previous year Rs.1402.98 Lacs)

11. The management is of the view that there is virtual certainty supported by evidence that only 25% of the above amount will result in absorption or unabsorbed depreciation in near-term to long-term. Accordingly, the deferred tax assets have been recognised to that extent only

12. Net surplus on disposal of fixed assets includes reversal of impairment of Rs. 584.41 lacs related to assets which were sold during the year and on which impairment was provided in earlier years.

13. Related Party Disclosures:

As per the Accounting Standard 18 on "Related Party Disclosures" (AS 18) issued by the Institute of Chartered Accountants of India (ICAI), the disclosures oftransactions with the related parties as defined in the Accounting Standard are given below:

(i) List of related parties with whom transactions have taken place and relationships:

Sr. Name of Related Party Relationship No.

1 Garden Silk Mills Limited Group Company

2 M/s Isha Enterprises Partnership Firm

3 (1)ShriSanjayS.Shah* Key Management Personnel

(2) Shri M. R. Momaya ** Key Management Personnel

(3) Shri Yogesh C. Papaiya *** Key Management Personnel * Managing Director upto 31/05/2014

** Appointed as Managing Director w.e.f 01/06/2014

*** Appointed as Wholetime Director & CFO w.e.f. 11/08/2014

4 ShriRajenP.Shah Relatives of key Management

5 Amika Indian Textiles & Personnel where Art Museum Pvt. Ltd. transactions have taken place.

Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

14. During the year under review, the Company has discontinued the manufacturing activity at itsSynthetic Fibre Spinning (SFS) plant at Village Vareli,Taluka Palsana,Dist. Surat, which had become unviable due to competitive market conditions. The Company earned a pre-tax profit of Rs.74.23 Lacs for the year ended 31st March, 2015, from its discontinued operations. The tax implication on the same amounted Rs.14.84 Lacs. The financial impact of the discontinuance can not estimated by the Company presently.

15. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

Mar 31, 2012

Nature of Security and terms of repayment for Long-Term secured borrowings:

1.1 Term loan from a bank amounting to Rs 93.15 Lacs (Rs 75.90 lacs due after one year; Rs 17.25 lacs due within one year) represents loan from HDFC Bank Ltd. under Vehicle Finance Scheme is secured by an exclusive charge by way of hypothecation of specific vehicle purchased under the arrangement. The loan is repayable in 60 monthly installments commencing from 13.10.2011. Last installment is due on 07.09.2016. Rate of interest is 10% per annum.

2.1 Loan of Rs 2900.00 Lacs from promoters was secured by way of first charge on all the movable plants and machinery and by way of first mortgage on the immovable properties situated in the State of Gujarat and in the Union Territory of Dadra & Nagar Haveli together with immovable plant and machinery of the Company in favour of the Lender.

3.1 Includes advance received against sale of fixed assets: Rs 165.65 lacs (Previous Year Rs Nil)

4.1 The Company had recognised liability based on substantial degree of estimation for excise duty payable on clearance of goods lying in stock as on 31st March, 2011 of Rs 167.00 lacs as per the estimated pattern of despatches. During the year, Rs 167.00 lacs was utilised for clearance of goods. Provision recognised under this class for the year is Rs 125.99 lacs, which is outstanding as on 31st March, 2012. Actual outflow is expected in the next financial year.

5.1 With the on-going capital expansion plans of Garden Silk Mills Limited (the Company) and the expected increase in capacities, reduction in costs and increase in operational efficiencies, the financial performance and position of the Company is expected to significantly improve. Therefore, the decline in value of investments of the Company in Garden Silk Mills Limited is considered to be temporary.

6.1 Balances with banks in deposit accounts amounting to Rs 2.95 lacs (Previous Year Rs 2.95 lacs) have maturities of more than 12 months.

Note 7 : Micro and Medium scale business entities:

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

Note 8 :

The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification/disclosure.

Mar 31, 2011

1. Excise duty deducted from sales represents excise duty collected on sale of goods. Variation in Excise duty on opening and closing uncleared stocks of finished goods has been disclosed separately in Schedule 9.

2. Segment Reporting

The Company has identified two business segments viz. ÃYarnsÃ and ÃArt & ArtifactsÃ as per Accounting Standard 17 of ICAI. There being no revenue generation from Art & Artifacts segment during the year, disclosure of segment revenue and segment results are not made. Besides, the total amount of segment liabilities, total cost incurred to acquire fixed assets, total amount of expense incurred for depreciation, amortisation and the total amount of significant non-cash expenses for the Art & Artifacts segment were Nil. Hence, Segment Asset, being the only effectively reportable item of the Segment.

No revenue was generated from Art & Artifacts segment during the year. Consequentially, disclosure of segment revenue and segment results is not applicable. The total amount of segment liabilities, total cost incurred to acquire fixed assets, total amount of expense incurred for depreciation, amortisation and the total amount of significant non-cash expenses for the Art & Artifacts segment were Nil.

3. Micro and Medium scale business entities

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2011. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

4. With the on-going capital expansion plans of Garden Silk Mills Limited (GSML) and the expected increase in capacities, reduction in costs and increase in operational effciencies, the financial performance and position of GSML is expected to significantly improve. The current capital market conditions in the country do not also refects the current value of GSML and its potential. Therefore, the decline in value of investments by the Company in GSML is considered to be temporary.

5. There was no further impairment loss on Fixed Assets on the basis of review carried out by the Management in accordance with Accounting Standards 28.

6. Employee Benefits

(a) Liability for employee benefits has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the Accounting Standard 15.

7. Related parties disclosures

As per Accounting Standard 18, the disclosures of transactions with the related parties as defined in the Accounting Standards are given below:

(a) List of related parties with whom transactions have taken place and relationships:

Sr. No. Name of Related Party Relationship

1. Garden Silk Mills Associate Company Limited

2. Mr. M. R. Momaya Managing Director Key Managerial Personnel Mrs. Shilpa P. Shah* Wholetime Director

3. Mr. Alok P. Shah Relatives of Key

Managerial Personnel * w.e.f. 01.06.2010

Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

8. Previous yearÃs figures have been regrouped wherever necessary to conform to current years classification.

Mar 31, 2010

1. With the implementation of the sanctioned Rehabilitation Scheme, during the year, the Company has generated sufficient returns to wipe out all its accumulated losses and to make its net worth positive.

2. The Company has unabsorbed depreciation & carried forward losses under Tax laws. In absence of virtual certainty of sufficient future taxable income, net deferred tax assets has not been recognized by way of prudence in accordance with Accounting Standard (AS) 22 - "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India.

3. During the previous year ended 31st March, 2009, 73664 Sq. Mtrs. of land at Village Vareli, Taluka Palsana, Dist. Surat was converted to stock in trade at book value. The Company had also converted 22637 Sq.Mtrs. of land at Varachha Road from "Property under development" to Fixed Assets at book value.

4. Excise duty deducted from sales and job charges represents excise duty collected on sale of goods. Excise duty shown under expenditure represents the difference between excise duty on opening and closing uncleared stocks of finished goods.

5. The Company has identified only one product - segment viz, yarns as per Accounting standard 17 of ICAI, and has not identified any geographical segment, where risks & returns are materially different.

6. Micro and Medium scale business entities:

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2010. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act. 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

7. In response to the Companys Misc. Application, a review hearing was held on 16th December, 2009 before the Bench-I of Board for Industrial And Financial Reconstruction (BIFR). The Honble Bench of BIFR, on successful implementation of Sanctioned Scheme, the Net Worth being positive & the accumulated losses of the Company completely wiped out as on 31.03.2009. vide its order dated 18th December, 2009 inter alia directed that the Company has ceased to be a sick industrial company, within the meaning of Section 3(1 )(o) of the Sick Industrial Companies Act (SICA) and is therefore, discharged from the purview of SICA / BIFR.

8. With the on-going capital expansion plans of Garden Silk Mills Limited (the Company) and the expected increase in capacities reduction in costs and increase in operational efficiencies, the financial performance and position of the Company is expected to significantly improve. The current capital market conditions in the country do not also reflects the current value of the Company and its potential. Therefore, the decline in value of investments of the Company in Garden Silk Mills Limited is considered to be temporary.

9. Liability for employer benefits has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the accounting standard 15 (Revised) the details of which are as under.

The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules

10. Previous years figures have been regrouped wherever necessary to conform to current years classification.

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