Notes to Accounts of Kovalam Investment and Trading Co. Ltd.

Mar 31, 2024

k) Provisions, contingent assets and contingent liabilities

Provisions are recognized only when there is a present obligation, as a result of past events,
and when a reliable estimate of the amount of obligation can be made at the reporting date.
These estimates are reviewed at each reporting date and adjusted to reflect the current best
estimates. Provisions are discounted to their present values, where the time value of money is
material.

Contingent liability is disclosed for:

• Possible obligations which will be confirmed only by future events not wholly within the
control of the Company or

• Present obligations arising from past events where it is not probable that an outflow of
resources will be required to settle the obligation or a reliable estimate of the amount of
the obligation cannot be made.

Contingent assets are neither recognised nor disclosed except when realisation of income is
virtually certain, related asset is disclosed.

l) Financial instruments

A Financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the Company becomes a party
to the contractual provisions of the financial instrument and are measured initially at fair
value adjusted for transaction costs. Subsequent measurement of financial assets and
financial liabilities is described below.

Non-derivative financial assets

Subsequent measurement

i. Financial assets carried at amortised cost - a financial asset is measured at the
amortised cost if both the following conditions are met:

• The asset is held within a business model whose objective is to hold assets for
collecting contractual cash flows, and

• Contractual terms of the asset give rise on specified dates to cash flows that are
solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at
amortised cost using the effective interest rate (EIR) method. Amortised 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 amortisation is included in interest
income in the Statement of Profit and Loss.

ii. Investments in equity instruments - Investments in equity instruments which are
held for trading are classified as at fair value through profit or loss (FVTPL). For all other
equity instruments, the Company makes an irrevocable choice upon initial recognition,
on an instrument by instrument basis, to classify the same either as at fair value
through other comprehensive income (FVOCI) or fair value through profit or loss
(FVTPL). Amounts presented in other comprehensive income are not subsequently
transferred to profit or loss. However, the Company transfers the cumulative gain or loss
within equity. Dividends on such investments are recognised in profit or loss unless the
dividend clearly represents a recovery of part of the cost of the investment.

iii. Investments in mutual funds/venture capital funds/alternative investment funds
(AIF) - Investments in mutual funds, venture capital funds and AIF are measured at fair
value through profit and loss (FVTPL).

iv. Investments held for trading purposes - The Company has investments in equity
instruments, mutual funds, debentures, bonds etc. which are held for trading purposes
and therefore, classified as at fair value through profit or loss (FVTPL).

De-recognition of financial assets

Financial assets (or where applicable, a part of financial asset or part of a group of similar
financial assets) are derecognised (i.e. removed from the Company’s balance sheet) when the
contractual rights to receive the cash flows from the financial asset have expired, or when the
financial asset and substantially all the risks and rewards are transferred. Further, if the
Company has not retained control, it shall also derecognise the financial asset and recognise
separately as assets or liabilities any rights and obligations created or retained in the
transfer.

Non-derivative financial liabilities

Subsequent measurement

Subsequent to initial recognition, all non-derivative financial liabilities are measured at
amortised cost using the effective interest method.

De-recognition of financial liabilities

A financial liability is de-recognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the de-recognition of the original
liability and the recognition of a new liability. The difference in the respective carrying
amounts is recognised in the Statement of Profit and Loss.

Offsetting of financial instruments

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

m) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period
attributable to equity shareholders (after deducting attributable taxes) by the weighted
average number of equity shares outstanding during the period. The weighted average
number of equity shares outstanding during the period is adjusted for events including a
bonus issue.

For the purpose of calculating diluted earnings per share, the net profit or loss (interest and
other finance cost associated) for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period are adjusted for the effects
of all dilutive potential equity shares.

n) Segment reporting

The Company identifies segment basis the internal organization and management structure.
The operating segments are the segments for which separate financial information is available
and for which operating profit/loss amounts are regularly by the executive committee (‘chief
operating decision maker’) in deciding how to allocate resources and in assessing
performance. The accounting policies adopted for segment reporting are in line with the
accounting policies of the Company. Segment revenue, segment expenses, segment assets
and segment liabilities have been identified to segments on the basis of their relationship with
the operating activities of the segment.

o) Significant management judgement in applying accounting policies and estimation
uncertainty

The preparation of the Company’s financial statements requires management to make
judgements, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the related disclosures. Actual results may differ from
these estimates.

Significant management judgements

Recognition of deferred tax assets - The extent to which deferred tax assets can be
recognized is based on an assessment of the probability of the future taxable income against
which the deferred tax assets can be utilized.

Evaluation of indicators for impairment of assets - The evaluation of applicability of
indicators of impairment of assets requires assessment of several external and internal
factors which could result in deterioration of recoverable amount of the assets.

Provisions - At each balance sheet date basis the management judgment, changes in facts
and legal aspects, the Company assesses the requirement of provisions against the
outstanding contingent liabilities. However, the actual future outcome may be different from
this judgement.

Significant estimates

Useful lives of depreciable/amortisable assets - Management reviews its estimate of the
useful lives of depreciable/amortisable assets at each reporting date, based on the expected
utility of the assets. Uncertainties in these estimates relate to technical and economic
obsolescence that may change the utility of assets.

Defined benefit obligation (DBO) - Management’s estimate of the DBO is based on a
number of underlying assumptions such as standard rates of inflation, mortality, discount
rate and anticipation of future salary increases. Variation in these assumptions may
significantly impact the DBO amount and the annual defined benefit expenses.

Fair value measurements - Management applies valuation techniques to determine the fair
value of financial instruments (where active market quotes are not available). This involves
developing estimates and assumptions consistent with how market participants would price
the instrument.

13.1 General reserve

The Mandatory transfer to general reserve is not required under the Companies Act, 2013.

13.2 Retained earnings

All the profits made by the Company are transferred to retained earnings from statement of profit and loss.

13.3 Reserve Fund u/s 45-IC of RBI Act 1934

The Company creates a reserve fund in accordance with the provisions of section 45-IC of the Reserve Bank of India Act, 1934 and transfers therein
an amount of euqal to/more than twenty per cent of its net profit of the year, before declaration of dividend. Accordingly, during the year, the Company
has created Statutory Reserve Fund amounting to Rs. 20.46 Lakhs (March 31, 2022: Rs.36.19 Lakhs).

13.4 Other comprehensive income

(i) The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These
changes are accumulated within the FVOCI reserve within equity. The Group transfers amounts from this reserve to retained earnings when the
relevant equity securities are derecognised.

Valuation methodologies of financial instruments not measured at fair value

Below are the methodologies and assumptions used to determine fair values for the above financial instruments which are not recorded and measured at fair value in the
Company’s financial statements. These fair values were calculated for disclosure purposes only. The below methodologies and assumptions relate only to the instruments in the
above tables:

Financial assets and liabilities

For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying amounts, which are net of impairment, are a reasonable
approximation of their fair value. Such instruments include: cash and balances, balances other than cash and cash equivalents, loans, trade payables, short term borrowings,
inter company loan and contract liability without a specific maturity.

In order to avoid excessive concentrations of risk, the Group’s policies and procedures include specific guidelines to focus on maintaining a diversified portfolio. Identified
concentrations of credit risks are controlled and managed accordingly.

Credit risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company''s exposure to credit risk is influenced mainly by cash and cash
equivalents, other bank balances, investments, loan assets, trade receivables and other financial assets. The Company continuously monitors defaults of customers and other
counterparties and incorporates this information into its credit risk controls.

Credit risk management

The Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different
characteristics. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial
assets.

(i) Low credit risk

(ii) Moderate credit risk

(iii) High credit risk

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different
banks across the country.

Loans

Credit risk related to borrower''s are mitigated by considering collateral''s/bank guarantees/letter of credit, from borrower''s. The Company closely monitors the credit-worthiness of
the borrower''s through internal systems and project appraisal process to assess the credit risk and define credit limits of borrower, thereby, limiting the credit risk to pre-calculated
amounts. These processes include a detailed appraisal methodology, identification of risks and suitable structuring and credit risk mitigation measures. The Company assesses
increase in credit risk on an ongoing basis for amounts loan receivables that become past due and default is considered to have occurred when amounts receivable become one

C) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash
or another financial asset. The Company''s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities
when they are due.

The Company maintains felxibility in funding by maintaining availability under committed credit lines. Management monitors the Company''s liquidity positions (also comprising the
undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. The Company also takes into account liquidity of the market in which the entity
operates.

(i) Maturities of financial liabilities

The tables below analyses the Company financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the
contractual undiscounted cash flows:

Note : 34 Capital management

The Company’s capital management objectives are

- to ensure the Company’s ability to continue as a going concern

- to cmply with externally imposed capital requirement and maintain strong credit ratings

- to provide an adequate return to shareholders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet. Management assesses
the Company’s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels
of the Company’s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares, or sell assets to reduce debt.

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

(ii) The Company has not been declared a wilful defaulter by any bank or
financial institution or government or any government authority.

(iii) The company has not incurred any transactions with the companies struck
off under section 248 of the Companies Act, 2013 or section 560 of Companies
Act, 1956 for the year ended as at 31 March 2024.

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

(v) The Company has complied with the number of layers prescribed under
clause (87) of section 2 of the Act read with the Companies (Restriction on
number of Layers) Rules, 20I7.

(vi) The Company has not entered into any scheme of arrangement which has
an accounting impact on current or previous financial year.

(vii) The Company has not surrendered or disclosed any transactions,
previously unrecorded as income in the books of account, in the tax
assessments under the Income Tax Act, 1961 as at year ended 31 March 2024.

(viii) The Company has not traded or invested in crypto currency or virtual
currency during the current or previous year.

(ix) The title deeds of immovable properties disclosed in the standalone
financial statements are held in the name of the Company.

As per our Report of even date

For YAPL & Company Kovalam Investments and Trading Co Limited

Chartered Accountants
FRN No.017800N

Sakshi Garg Navdeep Sharma Komal Jain

Partner Director Director

M.No.553997 DIN: 00454285 DIN:00399948

UDIN : 24553997BKBZLK6276

Place: Ludhiana

Date: 23.05.2024 Jyoti Sud Jai Karan Singh

Company Secretary cum CFO Manager

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Mar 31, 2014

1. RELATED PARTY DISCLOSURES

INFORMATION RELATED TO RELATING PARTY TRANSACTION AS PER ACCOUNTING STANDARD — 18 ISSUED BY INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA IS GIVEN BELOW

A) ASSOCIATES

Oswal Woollen Mills Ltd. Nahar Capital and Financial Services Ltd, Nahar Spinning Mills Ltd, Nahar Industrial Enterprises Ltd. Nahar Poly Films Ltd, Oswal Leasing Ltd, Vardhman Investment Ltd, Atam Vallabh Financiers Ltd,

2. Earning per Shares

The calculation of Earning Per Share (EPS) as disclosed in the "Statement of Profit and Loss has been made in accordance with Accounting Standard (AS)-20 "Earning Per Share" issued by Companies (Accounting Standards) Rules, 2006.

3. Transfer to Statutory Reserve Fund

A sum of Rs.41,83,000/- (Previous Year Rs.24,25,000/-) transferred from P & L Appropriation A/c to Statutory Reserve Fund A/c in compliance with the provisions of Section 45- IC of RBI Act for the year ending 31.03.2014.

4. A Statement of disclosure in terms of paragraph 13 of Non - Banking Finance Companies (Non-deposit accepting or holding) Prudential Norms (Reserve Bank) Directions 2007 is annexed

5. Provision for Standard Asset

As per RBI Guidelines a Provision of 0.25% of Standard Asset has been created.

6. Provision for Doubtful Debt

As per RBI Guideline a Provision of 10% of Doubtful Debt has been created.

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Mar 31, 2013

Note No. 1 RELATED PARTY DISCLOSURES

INFORMATION RELATED TO RELATING PARTY TRANSACTION AS PER ACCOUNTING STANDARD - 18 ISSUED BY INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA IS GIVEN BELOW : M ASSOCIATES OSWAL WOOLLEN MILLS LIMITED

B) KEY MANAGEMENT PERSONNEL

1. SH. SAT PAUL NIJHAWAN.

2. SH. GAGNISH KUMAR BHALLA

3. SH. NAVDEEP SHARMA

Note No. 2 Transfer to Statutory Reserve Fund

A sum of Rs.24,25,000/- (Previous Year Rs.23,26,000/-) transferred from P & L Appropriation A/c to Statutory Reserve Fund A/c in compliance with the provisions of Section 45- IC of RBI Act for the year ending 31.03.2013.

Note: 3

A Statement of disclosure in terms of paragraph 13 of Non - Banking Finance Companies (Non-deposit accepting or holding) Prudential Norms (Reserve Bank) Directions 2007 is annexed

Note: 4 Provision for Standard Asset

As per RBI Guidelines a Provision of 0.25% of Standard Asset has been created.

Note No. 5

Notes 1 To 22 form an integral part of the Balance Sheet and Profit and Loss Account have been duly authenticated as such.

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Mar 31, 2012

A) Segment Revenue includes Income directly identifiable with/allocable to the segment including intersegment revenue.

b) Expenses that are directly identifiable with/allocable to segments are considered for determining the Segment Result. The expenses which relate to the Company as a whole and not allocable to segments, are included under "other unallocable expenditure."

c) Segment assets includes all operating assets I.e. investment and current assets used by the segment.

d) Segment Liabilities consists of creditors and other liabilities directly attributable to segment but does not include tax & financial liabilities.

Note No. 1 RELATED PARTY DISCLOSURES

INFORMATION RELATED TO RELATING PARTY TRANSACTION AS PER ACCOUNTING STANDARD - 18 ISSUED BY INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA IS GIVEN BELOW :

A) ASSOCIATES

OSWAL WOOLLEN MILLS LIMITED

Note: 2 Provision for Standard Asset

As per RBI Guidelines a Provision of 0.25% of Standard Asset has been created.

Note: 3

In compliance with the Ministry of Corporate Affairs Notification No.2/6/2008 - C L dated 30 March 2011, the financial statements of the company for the year ended 31 March 2012 have been drawn up in accordance with the terms of the revised Schedule VI to the Companies Act. The adoption of the revised Schedule VI does not impact the measurement and recognition principles followed for the preparation of financial statements. However, it has significant impact on the presentation of and disclosures made in the financial statements. The company has also recast the previous year's figures to meet the requirements of the revised Schedule VI.

Note No. 4

Notes 1 To 23 form an integral part of the Balance Sheet and Profit and Loss Account have been duly authenticated as such.

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Mar 31, 2011

1) SEGIMENT REPORTING.

As per Accounting Standard 17 issued by the of Chartered Accountants of India, regarding Segment.

SIGMENT ACCOUNTING POLICIES:

a) Segment Revenue Includes Income directly identifiable with/allocable to the segment including incensement revenue.

b) Expenses that are directly identifiable with/allocable to segments are considered for determining the Segment Result The expenses which relate to the Company as a whole and not allocable to segments, are included under "otter unallowable expenditure."

c) Segment assets includes all operating assets I.e. investment and current assets used by the segment

d) Segment Liabilities consists of creditors and other liabilities directly attributable to segment but does not include tax & financial liabilities.

2. RELATED PARTY DISCLOSURES

INFORMATION RELATED TO RELATING PARTY TRANSACTION AS P'6H ACCOUNTING STANDARD - 18 ISSUED BY INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA IS GIVEN BELOW :

3. DEFERRED TAX ASSETSLIABILITY

As per accounting standard 22. of the Institute of chartered Accounts of India, is as under.

1 Companies In the same group means companies under the same management as per Section 370 (1B) of the Companies Act, 1956.

2. for investments In case of unquoted shares, it is assumed that market value Is same as book value.

4) Previous year figures have been re-grouped/re-arranged wherever considered necessary.

5) Schedule I to VIII form an integral part of the Balance Sheet and Profit and Loss Account and have been duly authenticated as such.