Notes to Accounts of Maral Overseas Ltd.

Mar 31, 2025

2.12. Provisions, Contingent Liabilities & Contingent
Assets

Provisions are recognised for present obligation (legal
or constructive) of certain timing or amount arising as
a result of past event where a reliable estimate can be
made and it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation.

When it is not probable that an outflow of resources
embodying economic benefits will be required or the
amount cannot be estimated reliably the obligation
is disclosed as a contingent liability unless the
possibility of outflow of resources embodying
economic benefit is remote.

Possible obligations, whose existence will only be
confirmed by the occurrence or nonoccurrence of
one or more uncertain future events, not wholly
with in the control of entity are also disclosed as
contingent liabilities.

Contingent liabilities are not recognized but are
disclosed in notes.

Contingent assets are not recognised. However, when
the realization of income is virtually certain, then the
related asset is no longer a contingent asset, but it is
recognised as an asset.

2.13. Segment reporting

The Company''s operating segments are established
on the basis of those components of the company
that are evaluated regularly by the Board of Directors
(the ''Chief Operating Decision Maker'' as defined in
Ind AS 108 - ''Operating Segments''), in deciding how
to allocate resources and in assessing performance.
Segment performance is evaluated based on profit or

loss and is measured consistently with the profit or
loss in the financial statements.

The Operating Segments have been identified on the
basis of the nature of products/services.

a) Segment revenue includes sales and other
income directly identifiable with/allocable to the
segment including inter segment revenue.

b) Expenses that are directly identifiable with/
allocable to segments are considered
for determining the segment results.
Expenses which relate to the Company as a whole
and not allocable to segments are included under
unallocable expenditure.

c) Income which relates to the Company as a whole
and not allocable to segments are included under
unallocable income.

d) Segment result includes margin on inter segment
sales which are reduced in arriving at the profit
before tax of the Company.

e) Segment assets & liabilities include those
directly identifiable with the respective segments.
Unallocable assets & liabilities represent the
assets and liabilities that relate to the Company
as a whole and not allocable to any segment.

Inter-Segment transfer pricing

Segment revenue resulting from transactions with
other business segments is accounted on the basis
of transfer price agreed between the segments.
Such transfer prices are either determined to yield a
desired margin or agreed on a negotiated basis and
are on an arm''s length basis in a manner similar to
transactions with third parties.

2.14. Earnings per share

Basic earnings per share are calculated by dividing the
net profit or loss for the period attributable to the equity
shareholders by the weighted average number of equity
shares outstanding during the period. The weighted
average number of equity shares outstanding during
the period and for all periods presented is adjusted for
events, such as bonus issue, bonus element in a rights

issue and shares split that have changed the number
of equity shares outstanding, without a corresponding
change in resources. For the purpose of calculating
Diluted Earnings per share, the net profit or loss for
the period attributable to the equity shareholders and
the weighted average number of shares outstanding
during the period is adjusted for the effects of all
dilutive potential equity shares.

2.15. Cash flow statement

Cash flows are reported using the indirect method,
whereby profit for the year is adjusted for the effects
of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or
payments and item of income or expenses associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities of the
Company are segregated. The Company considers all
highly liquid investments that are readily convertible to
known amounts of cash to be cash equivalents.

2.16. Borrowing

Borrowings are initially recognised at net of
transaction costs incurred and measured at amortised
cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is
recognised in the Statement of Profit and Loss over
the period of the borrowings using the effective
interest method.

Preference shares, which are mandatorily redeemable
on a specific date are classified as liabilities.
The dividend on these preference shares is recognised
in Statement of Profit and Loss as finance costs.

Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which
are assets that necessarily take a substantial period
of time to get ready for their intended use or sale, are
added to the cost of the assets, until such time as
the assets are substantially ready for their intended
use or sale. Borrowing costs consist of interest and
other costs that an entity incurs in connection with
the borrowing of funds. Borrowing cost also includes
exchange differences to the extent regarded as an
adjustment to the borrowing costs.

All other borrowing costs are recognised in Statement
of profit and loss in the period in which they are incurred.

2.17. Fair Value Measurement

The Company measures financial instruments, such
as, derivatives at fair value at each balance sheet date.

Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in most
advantageous market for the asset or liability and
the Company has access to the principal or the
most advantageous market.

The fair value of an asset or a liability is measured
using the assumptions that market participants would
use when pricing the asset or liability, assuming that
market participants act in their economic best interest.

A fair value measurement of a non-financial asset
takes into account a market participant''s ability to
generate economic benefits by using the asset in
its highest and best use or by selling it to another
market participant that would use the asset in its
highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs and
minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is
measured or disclosed in the financial statements are
categorized within the fair value hierarchy, described
as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:

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

Level 2 - Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is directly or indirectly observable.

Level 3 - Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is unobservable.

For assets and liabilities that are recognised in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by reassessing categorisation
(based on the lowest level input that is significant to
the fair value measurement as a whole) at the end of
each reporting period.

For the purpose of fair value disclosures, the Company
has determined classes of assets & liabilities on the
basis of the nature, characteristics and the risks of
the asset or liability and the level of the fair value
hierarchy as explained above. This note summarizes
accounting policy for fair value. Other fair value related
disclosures are given in the relevant notes.

2.18. Cash and cash equivalents

The Company considers all highly liquid financial
instruments, which are readily convertible into known
amounts of cash that are subject to an insignificant
risk of change in value and having original maturities
of three months or less from the date of purchase,
to be cash equivalents. Cash and cash equivalents
consist of balances with banks which are unrestricted
for withdrawal and usage.

For the purposes of the presentation of cash flow
statement, cash and cash equivalents include
cash on hand, in banks and demand deposits with
banks, net of outstanding bank overdrafts that are
repayable on demand, book overdraft as they being
considered as integral part of the Company''s cash
management system.

2.19. 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.

A. Financial assets

Initial recognition and measurement

All financial assets and liabilities are initially
measured at fair value except for trade receivables
which are initially measured at transaction price.
Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial
liabilities, which are not classified as subsequently
measured at fair value through profit or loss, are
adjusted to the fair value on initial measurement.

Subsequent measurement

For purposes of subsequent measurement, financial
assets are classified in following categories:

a) 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.

b) 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. Interest income
for these financial assets is included in other
income using the effective interest rate method.

c) 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.

B. Equity investments

All equity investments in scope of Ind AS 109 are
measured at fair value. Where the company decided to
make an irrevocable election to present the fair value

gain and loss (excluding dividend) on non-current
equity investments in other comprehensive income,
there is no subsequent reclassification of fair value gain
and loss to profit and loss even on sale of investments.
However, the group may transfer the cumulative gain
or loss within equity. The group makes such election
on an instrument-by-instrument basis.

The company elected to measure the investment in
subsidiary, associate and joint venture at cost.

C. Impairment of financial assets

The company assesses on a forward- looking basis
the expected credit losses associated with the
assets carried at amortised cost and FVOCI debt
instruments. The impairment methodology applied
depends on whether there has been a significant
increase in credit risk. If credit risk has increased
significantly, lifetime ECL is used. If, in a subsequent
period, credit quality of the instrument improves such
that there is no longer a significant increase in credit
risk since initial recognition, then the entity reverts
to recognising impairment loss allowance based on
12-month Expected Credit Loss (ECL) Note No.41.6
details how the group determines whether there has
been significant increase in credit risk.

For trade receivables, the company applies the
simplified approach permitted by Ind AS 109
"Financial Instruments" which requires expected life
time losses to be recognised from initial recognition
of 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 looking estimates are analysed

D. Financial liabilities

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.

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.

E. Derecognition of financial instruments:

The Company derecognizes 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.
A financial liability (or a part of a financial liability)
is derecognized from the Company''s Balance Sheet
when the obligation specified in the contract is
discharged or cancelled or expires.

F. Reclassification of financial assets

The company determines classification of financial
assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial
assets which are equity instruments and financial
liabilities. For financial assets which are debt
instruments, a reclassification is made only if there is
a change in the business model for managing those
assets. Changes to the business model are expected
to be infrequent. The company''s senior management
determines change in the business model as a result
of external or internal changes which are significant
to the company''s operations. Such changes are
evident to external parties. A change in the business
model occurs when the company either begins or
ceases to perform an activity that is significant to
its operations. If the company reclassifies financial
assets, it applies the reclassification prospectively
from the reclassification date which is the first day
of the immediately next reporting period following
the change in business model. The company does
not restate any previously recognised gains, losses
(including impairment gains or losses) or interest.

G. 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.

2.20. Use of estimates

The preparation of the financial statement in
conformity with Ind AS requires the Management to
make estimates and assumptions considered in the
reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and
expenses during the year. The Management believes
that the estimates used in preparation of the financial
statements are prudent and reasonable. Future results
could differ due to these estimates and the differences
between the actual results and the estimates are
recognised in the periods in which the results are
known / materialize.

Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimates are revised and current and / or future
periods are affected.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other
post-employment medical benefits and the present
value of the gratuity obligation are determined using
actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from
actual developments in the future. These include
the determination of the discount rate, future salary
increases and mortality rates. Due to the complexities
involved in the valuation and its long-term nature,
a defined benefit obligation is highly sensitive to
changes in these assumptions. All assumptions are
reviewed at each reporting date. (Refer note 2.10)

Fair value measurement of financial instruments

When the fair values of financial assets and financial
liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets,
their fair value is measured using valuation techniques
including the DCF model. The inputs to these models
are taken from observable markets where possible, but
where this is not feasible, a degree of judgement is
required in establishing fair values. Judgements include
considerations of inputs such as liquidity risk, credit
risk and volatility. Changes in assumptions about
these factors could affect the reported fair value of
financial instruments. (Refer note 2.17)

2.21. Critical accounting judgements and key sources
of estimation uncertainty

The Preparation of the Company''s financial statements
requires management to make judgments, estimates
and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure of
contingent liabilities.

2.21.1. Critical accounting judgements in applying
accounting policies

The following are the critical judgements, apart from
those involving estimations that the Management
have made in the process of applying the
Company''s accounting policies and that have most
significant effect on the amounts recognised in the
financial statements.

Valuation of Deferred tax assets

Deferred tax assets are recognised only to the extent
it is considered probable that those assets will be
recoverable. This involves an assessment of when
those deferred tax assets are likely to reverse and a
judgment as to whether or not there will be sufficient
taxable profits available to offset the tax assets when
they do reverse. The Company reviews the carrying
amount of deferred tax assets at the end of each
reporting period. Any change in the estimates of
future taxable income may impact the recoverability
of deferred tax assets (Refer note 2.11.).

Key Source of estimation uncertainty

Key source of estimation uncertainty at the date of
the financial statements, which may cause a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, is in respect
of impairment of investments, provisions and
contingent liabilities.

The areas involving critical estimates are:

Useful lives and residual values of property, plant
and equipment

Useful life and residual value of property, plant and
equipment are based on management''s estimate of
the expected life and residual value of those assets.
These estimates are reviewed at the end of each

reporting period. Any reassessment of these may
result in change in depreciation expense for future
years (Refer note no 2.5).

Impairment of Property Plant and Equipment

The recoverable amount of the assets has been
determined on the basis of their value in use.
For estimating the value in use it is necessary to project
the future cash flow of assets over its estimated useful
life. If the recoverable amount is less than its carrying
amount, the impairment loss is accounted for in
statement of profit or loss. (Refer note no 2.5).

Provisions and contingencies

Provisions and liabilities are recognized in the period
when it becomes probable that there will be a future
outflow of funds resulting from past operations or
events and the amount of cash outflow can be reliably
estimated. The timing of recognition and quantification
of the liability requires the application of judgement
to existing facts and circumstances, which can be
subject to change. The carrying amounts of provisions
and liabilities are reviewed regularly and revised to
take account of changing facts and circumstances.

(ii) Rights, Preferences and restriction attached to equity shares

Company has only one class of Equity shares having a face value of C10/-. Each holder of Equity shares is entitled to one
vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors
is subject to approval of shareholders in the ensuing Annual General Meeting. The holder of equity shares is entitled to
receive dividend only after distribution of dividend to the holders of Preference Shares, if any.

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

Note 17.7 Nature and Purpose of Reserves
Retained earnings

This reserve represents undistributed accumulated earnings of the Company as on the balance sheet date.

General reserve

This represents appropriation of profit after tax by the company.

Securities premium reserve

Amount received on issue of shares in excess of the par value has been classified as securities premium. The reserve is
utilised in accordance with the provision of the companies Act, 2013.

Preference share capital redemption reserve

Preference Share Capital Redemption reserve is created against the redemption of Cumulative Preference Shares.
Capital reserve

Capital reserve arises from erstwhile amalgamation of Asian Knitwear''s Limited with the Company.

Cash flow hedge reserve

This reserve represents the cumulative effective portion of changes in Fair Value of derivatives that are designated as
Cash Flow Hedges. It will be reclassified to profit or loss or included in the carrying amount of the non-financial asset in
accordance with the Company''s accounting policy.

(iii) All secured loans are repayable in quarterly installments except ECLGS 1,2 and 2 (extention) which are repayable on
monthly installments basis.

(iv) Unsecured loan from related party, carries a rate of interest of 9.25% per annum on mutually agreed terms between
both the parties, repayable in 6 years by way of twelve(12) equal quarterly installments after a moratorium period of
3 years (previous year loan is repayable in 5 years by way of eight (8) equal quarterly installments after a moratorium
period of 3 years).

(v) Some of the lenders follow the practice to recover suo motto, payment of both principal as well as interest repayable
on credit facilities from the working capital facilities availed by the company, under instructions from the Company. It is
regarded as accepted practice that the due date for payment shall be the date next following the date when interest
is charged. Any delay on part of the lender to recover payment, either in line with past practice or specific instructions
given in this regard by the Company, is not attributable to default on part of the Company Accordingly, there is no
default in repayment of the principal and interest repayable on credit facilities.

(vi) Working capital loan from banks, repayable on demand, are secured by way of hypothecation through first charge,
ranking pari-passu, on stocks of raw material, stock in process, finished goods, book debts / receivables and all current
assets stored in the company''s factory premises, at all plants and / or elsewhere including those in transit covered by
documents of title thereto, local and export usance bills and second charge on pari-passu basis on the entire movable
and immovable assets of the Company (fixed assets), both present and future.

(vii) Working capital facilities from banks, are secured by pledge of stipulated promoter''s equity shareholding, constituting
36% of the issued equity capital, in favour of lenders on pari-passu basis.

(viii) Due to Covid-19 pandemic, Govt. notified the scheme of ECLGS 1, 2 & 2 (extension) to mitigate the working capital
crisis and as per scheme, during the year company have been sanctioned and received a Loan of C NIL. (previous year
C337.00 Lakh )

Basic earnings per equity share has been computed by dividing net profit after tax by the weighted average number of
equity shares outstanding for the year.

Note 35: Segment Reporting

The Company is currently operating into three business segments i.e., Yarn, Fabric and Garment. These segments offer
different products and require different technology and marketing strategies.

Identification of Segments

The Board of Directors has been identified as Chief Operation Decision Maker who monitors the operating results of its
business segments separately for the purpose of making decisions about resource allocation and performance assessment.
Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial
statements. Accounting policy in respect of segments is in conformity with accounting policy of the company as a whole.

Inter segment Transfer

Segment revenue resulting from transactions with other business segments is accounted for on the basis of transfer
price agreed between the segments. Transfer prices between operating segments are on arm''s length basis in a manner
similar to transactions with third parties.

Segment Revenue & Results

The Revenue and Expenditures in relation to the respective segments have been identified and allocated to the extent
possible. Other revenue and expenditures non allocable to specific segments are disclosed separately as unallocated and
adjusted directly against total income of the Company.

Segment Assets & Liabilities

Segment Assets includes all operating assets used by the operating segment and mainly consists of property, plant &
equipment, trade receivables, inventory and cash & cash equivalents etc. Segment Liabilities primarily include trade payables
and other liabilities. Common assets & liabilities which can not be allocated to specific segments are shown as a part of
net unallocable assets/liabilities.

Note 39: Employee Benefits
A Defined Contribution plans

The Company makes contributions towards provident fund and superannuation fund, to defined contribution retirement
benefit plans for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner
and the Superannuation fund is administered by Trustees of ''Maral Overseas Limited Senior Executive Superannuation
Fund''. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement
benefit schemes to fund the employee benefits.

B Defined Benefit Plans

The Company makes annual contributions towards funding the defined benefit plans for qualifying employees and also
contributes towards the insurance scheme of ICICI Prudential Life Insurance Co. Ltd. The scheme provides for lump sum
payment to vested employees on retirement, death while in employment or on termination of employment, an amount
equivalent to 15 days salary (last drawn monthly salary) payable for each completed year of service or part thereof in excess
of six months. Vesting occurs upon completion of five years of service.

Note 41.3.2 Valuation techniques used to determine Fair value

The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most
relevant data available. The fair values of the financial assets and liabilities are recognised at the amount that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date.

The following methods and assumptions were used to estimate the fair values:

1) Fair value of cash and deposits, trade receivables, trade payables, and other current financial assets and liabilities
measured at amortised cost is approximate to their carrying amounts largely due to the short-term maturities of
these instruments. The fair value of other non-current financial assets and liabilities (security deposit taken/given
and advance to employees) carried at amortized cost is approximately equal to fair value. Hence carrying value and
fair value is taken same.

2) Long-term fixed-rate and variable-rate receivables / borrowings are evaluated by the Company based on parameters
such as interest rates, specific country risk factors, credit risk and other risk characteristics. Fair value of variable
interest rate borrowings approximates their carrying values. For fixed interest rate borrowing fair value is determined
by using the discounted cash flow (DCF) method using discount rate that reflects the issuer''s borrowings rate. Risk of
non-performance for the company is considered to be insignificant in valuation.

3) The fair values of derivatives are estimated by using pricing models, where the inputs to those models are based
on readily observable market parameters basis contractual terms, period to maturity, and market parameters such
as interest rates, foreign exchange rates, and volatility. These models do not contain a high level of subjectivity as
the valuation techniques used do not require significant judgement, and inputs thereto are readily observable from
actively quoted market prices. Management has evaluated the credit and non-performance risks associated with its
derivative counterparties and believe them to be insignificant and not warranting a credit adjustment.

4) The fair values of the quoted equity shares have been done on quoted price of stock exchange as on reporting date.

41.4 Financial risk management

The Company''s activities expose it to a variety of financial risks which includes market risk (including currency risk, interest
rate risk and other price risk), credit risk and liquidity risk.

The Company''s focus is to ensure liquidity which is sufficient to meet the Company''s operational requirements.
The Company monitors and manages key financial risks so as to minimize potential adverse effects on its financial
performance. The Company has a risk management policy which covers the risks associated with the financial assets
and liabilities. The details for managing each of these risks are summarised ahead.

41.5 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, which comprises of three types of risk: currency rate risk, interest rate risk and other price risks, such as
equity price risk and commodity price risk. Financial instruments affected by market risk include loans and borrowings,
deposits, investments, and derivative financial instruments.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks.

41.5.1 Foreign currency risk

Foreign exchange risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of
changes in foreign exchange rate.

The Company derives significant portion of its revenue in foreign currency, exposing it to fluctuations in currency
movements. The Company has laid down a foreign exchange risk policy as per which senior management team reviews
and manages the foreign exchange risks in a systematic manner, including regular monitoring of exposures, proper advice
from market experts, hedging of exposures, etc.

The Company uses derivative financial instruments, such as foreign exchange forward contracts, to mitigate foreign
exchange related risk exposures. Derivative financial instruments relating to a firm commitment or a highly probable
forecast transaction, are marked to market at every reporting date. The company does not use forward contracts for
speculative purposes.

In management''s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the
exposure at the end of the reporting period does not reflect the exposure during the year.

41.5.2 Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. In order to optimize the Company''s position with regard to interest income and interest
expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management
by balancing the proportion of the fixed rate and floating rate financial instruments in its total portfolio .

41.5.3 Price risks

The company''s exposure to price risk arises from the investment held by the company . To manage its price risk arising from
investments in marketable securities, the company has very limited exposure and is done in accordance with the company''s
policy. The company''s major investments are actively traded in markets. Therefore no sensivity is provided for the same.

41.6 Credit Risk

Credit risk arises from the possibility that the counterparty will default on its contractual obligations resulting in financial
loss to the company. To manage this, the Company periodically assesses the financial reliability of customers, taking
into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of
accounts receivable.

The Company considers the probability of default upon initial recognition of assets and whether there has been a significant
increase in credit risk on an ongoing basis through each reporting period. To assess whether there is significant increase
in credit risk, it considers reasonable and supportive forward looking information such as:

i) Actual or expected significant adverse changes in business;

ii) Actual or expected significant changes in the operating results of the counterparty;

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet
its obligation;

iv) Significant increase in credit risk and other financial instruments of the same counterparty;

v) Significant changes in the value of collateral supporting the obligation or in the quality of third party guarantees or
credit enhancements.

41.7 Liquidity risk

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate
liquidity risk management framework for the management of the company''s short, medium, and long-term funding and
liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching
the maturity profiles of financial assets and liabilities.

41.9 Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk of
changes in exchange rates on foreign currency exposures. The objective of hedges is to minimize the volatility of Ccash
flows of highly probable forecast transaction. The Company''s risk management policy is to hedge around 70% to 90% of
net exposure with forward exchange contract, having a maturity up to 12 months.

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness
assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including
whether the hedging instrument is expected to offset changes in cash flows of hedged items.

Note 43: Recent Accounting Pronouncements

The Ministry of Corporate Affairs (MCA), The MCA notified Ind AS 117 on 9 September 2024 to be applicable from 1
April 2024. However, the same was withdrawn vide notification dated 28 September2024 wherein the applicability of Ind
AS 117 was made subject to notification of IRDAI. IRDAI has not notified Ind AS 117. Therefore, as of now, Ind AS 117 has
been issued but from when it will be applicable is uncertain. The company is evaluating the impactof the standard on its
balance sheet, statement of profit and loss and statement of cash flows.

Ministry of Corporate Affairs vide its notification no. G.S.R. 291(E) dated 7^th May 2025 has issued an amendment to Ind
AS 21 providing guidance on determining exchange rate in case of lack of exchangeability. The amendment is effective
from 1 April 2025. In accordance with the amendment to Ind AS 21 - Lack of Exchangeability, the Company is required to
estimate the exchange rate using the most reliable inputs available in case there is lack of exchangeability. The currencies
in which the company has transacted during the current year or previous year were exchangeable into another currency
within a time frame that allows for a normal administrative delay and through a market or exchange mechanism.
Accordingly, the amendment to Ind AS 21 has no material impact on the financial position, financial performance and
cash flows of the company.

Note 44 :

1 In terms of the Master Restructuring Agreement under the CDR Scheme, if, in the opinion of the Lenders, the profitability
and cash flows of the Company so warrant, the Lenders shall be entitled to right of recompense (ROR) for the reliefs
and sacrifices extended by lenders within the CDR mechanism. Since the company has paid recompense amount to
the lenders now there is no recompense amount payable.

2 Rights, Preferences and restriction attached to Preference Shares

The Company had only one class of Cumulative Redeemable Preference Shares (CRPS) having a par value of C100/-.
There were two series of CRPS, carrying differential dividend coupon rates.

First series of Preference Shares carrying a dividend coupon rate of 8% per annum, allotted to lending banks and
financial institutions, pursuant to the Corporate Debt Restructuring (''CDR'') Package, were redeemed in four equal
annual tranches during 2016-2019.

Second series of Preference Shares carrying a dividend coupon rate of 3% per annum, allotted to promoters, against
infusion of funds, pursuant to the Corporate Debt Restructuring (''CDR'') Package were redeemable in March 2019.
The company has taken necessary approvals from board of directors and shareholders for redemption of aforesaid
Preference Shares in two equal tranches during 2019-2020. First tranche of C600 Lakh were redeemed in March 2019
and for second tranche which was becoming due in March 2020, approval for extension of one (1) year towards
redemption was taken, from the board of directors on 08^th August 2019 and from shareholders in the annual general
meeting held on 19^th September 2019. consequently the same were to be redeemed in March 2021. The maturity period
of redemption of second tranche of aforesaid CRPS was further extended for a period of one year i.e. from March 2021

to 31 March 2022 after approval was obtained from board of directors in their meeting held on 07^th August 2020 and
shareholders accorded approval in the annual general meeting held on 29^th September 2020. In the 2021-22, the
second tranche of aforesaid CRPS of C600.00 Lakh was redeemed.

The Company declares and pays dividend in Indian rupees only. The dividend proposed by the Board of Directors is
subject to the approval of shareholders in the ensuing Annual General Meeting. Each holder of Preference Shares is
entitled to one vote per share only on resolutions placed before the company which directly affect the rights attached
to Preference Shares. The holders of Preference Shares are entitled to a preferential right of repayment of capital
on winding up vis-a-vis the holders of equity shares. The distribution will be in proportion to the number of shares
held by the Preference shareholders.

The Board of Directors in meeting held on 28^th October, 2021, had approved the accumulated Preference dividend on
Cumulative Redeemable Preference Shares amounting to C377.08 Lakh and C185.21 Lakh aggregating to C562.29
Lakh to the lenders and promoters & their associates respectively after setting off the accumulated losses of the
previous years. The aforesaid Preference dividend was paid within the stipulated time.

Note 45 : Dividend

In the Financial Year 2021-22, Board of Directors had recommended a dividend of C2/- per Equity share of the face value
of C10/- each amounting to C830.16 Lakh, which was subsequently approved by the Shareholders of the Company in the
Annual General Meeting. As on 31^st March 2025 out of above declared dividend, C12.43 Lakh remained unpaid/unclaimed
and is lying in an account with scheduled bank under unpaid/unclaimed account.

Note 46 : Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.

(ii) The Company does not have any transactions with struck off companies.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period,

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

(v) Title Deeds of all the immovable properties disclosed in the financial statement are held in the name of company.

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) Directly or indirectly lend or 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 no subsidiary, associates and joint venture downward.

(viii) The lender of the company has not declared company as willful defaulter and also company has not defaulted in loan
repayment of loan to the lenders.

(ix) Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in
agreement with the books of accounts.

(x) There is no transaction which are not recorded in the books of account that has been surrendered or disclosed as
income during the year in the tax assessments under the Income Tax Act, 1961

(xi) The company has used two integrated accounting softwares 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 softwares. Further, at database level log was enabled throughout the year, the audit trail has been
preserved by the company as per statutory requirements for record retention.

Note 47: Approval of financial statements

The financial statements for the period ended 31^st March 2025 were approved by the Board of Directors and authorises
to issue on 08^th May 2025.

For S S Kothari Mehta & Co. LLP For and on behalf of the Board of Directors

Chartered Accountants MARAL OVERSEAS LIMITED

Firm Registration No.000756N/N500441

Vivek Raut Shekhar Agarwal Shantanu Agarwal

Partner Chairman & Managing Director and CEO Joint Managing Director

Membership No. 097489 DIN: 00066113 DIN: 02314304

UDIN: 25097489BNUISQ3709

Place: Noida (U.P) Manoj Gupta Sandeep Singh

Date: 8^th May, 2025 Chief Financial Officer Company Secretary

FCA- 500020 FCS- 9877

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Mar 31, 2024

(ii) Rights, Preferences and restriction attached to equity shares

Company has only one class of equity shares having a face value of C10/-. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of shareholders in the ensuing Annual General Meeting. The holder of equity shares is entitled to receive dividend only after distribution of dividend to the holders of Preference Shares, if any.

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

Note 17.7 Nature and Purpose of Reserves Retained Earnings

This reserve represents undistributed accumulated earnings of the Company as on the balance sheet date.

General Reserve

This represents appropriation of profit after tax by the company.

Securities Premium Reserve

18 Summary of borrowing arrangements

(i) Term loans from lenders viz banks & financial institutions are secured by mortgage and first charge shared amongst the lenders on pari passu basis over fixed assets of the company (movable & immovable) and collateraly secured by second charge shared amongst the lenders on pari passu basis over current assets of the company. During the financial year 2020-21 pursuant to notification DOR.No.BPBC.47/21.04.048/2019-20 dated March 27, 2020 company had availed the extension in repayment of term loan installment including Interest.

Amounts received on issue of shares in excess of the par value has been classified as securities premium. The reserve is utilised in accordance with the provision of the companies Act, 2013.

Preference Share Capital Redemption Reserve

Preference Share Capital Redemption reserve is created against the redemption of Cumulative Preference Shares.

Capital Reserve

Capital reserve arises from erstwhile amalgamation of Asian Knitwear''s Limited with the Company.

Cash Flow Hedge Reserve

This reserve represents the cumulative effective portion of changes in Fair Value of derivatives that are designated as Cash Flow Hedges. It will be reclassified to profit or loss or included in the carrying amount of the non-financial asset in accordance with the Company''s accounting policy.

(iii) All secured loans are repayable in quarterly installments except ECLGS 1,2 and 2 (extention) which are repayable on monthly installments basis.

(iv) Unsecured loan from related party, carries a fixed rate of interest of 9.25% per annum on mutually agreed terms between both the parties, repayable in 5 years by way of eight (8) equal quarterly installments after a moratorium period of 3 years.

(v) Some of the lenders follow the practice to recover suo motto, payment of both principal as well as interest repayable on credit facilities from the working capital facilities availed by the company, where applicable, or from the current account under instructions from the Company. It is regarded as accepted practice that the due date for payment shall be the date next following the date when interest is charged. Any delay on part of the lender to recover payment, either in line with past practice or specific instructions given in this regard by the Company, is not attributable to default on part of the Company Accordingly, there is no continuing default in repayment of the principal and interest repayable on credit facilities.

(vi) Working capital loan from banks repayable on demand are secured by way of hypothecation through first charge, ranking pari-passu, on stocks of raw material, stock in process, finished goods, book debts / receivables and all current assets stored in the company''s factory premises, at all plants and / or elsewhere including those in transit covered by documents of title thereto, local and export usance bills and second charge on pari-passu basis on the entire movable and immovable assets of the Company (fixed assets), both present and future.

(vii) Working capital facilities from banks, are secured by pledge of stipulated promoter''s equity shareholding, constituting 36% of the issued equity capital, in favour of lenders on pari-passu basis.

(viii) Due to Covid-19 pandemic, Govt. notified the scheme of ECLGS 1, 2 & 2 (extension) to mitigate the working capital crisis and as per scheme, during the year company have been sanctioned and received a Loan of C337.00 Lakh. (previous year C421.00 Lakh )

Note 25.3 Revenue based on business segment

The Company does not have any remaining performance obligation as contracts entered for sale of goods are for a shorter duration. There are no contracts for sale of services wherein, performance obligation is unsatisfied to which transaction period has been allocated.

(i) The Company has contributed and expensed C42.49 Lakh ( 31^st March,2023 : C71.34 Lakh) and further an amount of C27.18 Lakh is transferred to designated bank account to be utilised exclusively for CSR project undertaken by the company against the total contributable amount of C69.67 Lakh for the year ended 31^st March, 2024 (31^st March, 2023 : C71.34 Lakh) in accordance with provisions of section 135 of Companies Act, 2013 to various trusts and social organization. The contributions have been made for promoting education and health care activities as per note (iii) below.

Note 35: Segment Reporting

The Company is currently operating into three business segments i.e, Yarn, Fabric and Garment. These segments offer different products and require different technology and marketing strategies.

Identification of Segments

The Board of Directors has been identified as Chief Operation Decision Maker who monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Accounting policy in respect of segments is in conformity with accounting policy of the company as a whole.

Inter segment Transfer

Segment revenue resulting from transactions with other business segments is accounted for on basis of transfer price agreed between the segments. Transfer prices between operating segments are on arm''s length basis in a manner similar to transactions with third parties.

Segment Revenue & Results

The Revenue and Expenditures in relation to the respective segments have been identified and allocated to the extent possible. Other revenue and expenditures non allocable to specific segments are disclosed separately as unallocated and adjusted directly against total income of the Company.

Segment Assets & Liabilities

Segment Assets includes all operating assets used by the operating segment and mainly consists of property, plant & equipment, trade receivables, cash and cash equivalents and inventory etc. Segment Liabilities primarily include trade payables and other liabilities. Common assets & liabilities which cannot be allocated to specific segments are shown as a part of net unallocable assets/liabilities.

Based on legal advice, discussions with the solicitors, professionals etc., the management believes that there are fair chances of decisions in favour of the company in respect of all the items listed above and hence no provision is considered necessary against the same. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company''s financial position and operations.

Note 39: Employee Benefits A Defined Contribution plans

The Company makes contributions towards provident fund and superannuation fund, to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the Superannuation fund is administered by Trustees of ''Maral Overseas Limited Senior Executive Superannuation Fund''. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the employee benefits.

B Defined Benefit Plans

The Company makes annual contributions towards funding the defined benefit plans for qualifying employees and also contributes towards the insurance scheme of ICICI Prudential Life Insurance Co. Ltd. The scheme provides for lump sum payment to vested employees on retirement, death while in employment or on termination of employment, an amount equivalent to 15 days salary (last drawn monthly salary) payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuations being carried out at each balance sheet date.

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

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

xi) The estimates of future salary increase is considered in actuarial valuation, and also considered inflation, seniority, promotion and other relevant factors.

xii) The employer ''s best estimate of contribution expected to be paid during the next year is C302.37 Lakh

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

viii) The estimates of future salary increase is considered in actuarial valuation, and also considered inflation, seniority, promotion and other relevant factors.

ix) The employer ''s best estimate of contribution expected to be paid during the next year is C209.57 Lakh

These plans typically expose the Company to actuarial risks such as Investment risk, salary risk, discount rate risk,

mortality risk, withdrawals risk.

Salary risk Actual salary increase will increase the Plan''s liability. Increase in assumption of salary

increase rate in future valuations will also increase the liability.

Investment risk If Plan is funded, then assets liabilities mismatch & actual return on investment assets is

lower than the discount rate assumed at the last valuation date, can impact the liability

Discount rate risk Reduction in discount rate in subsequent valuations can increase the plan''s liability.

Mortality & disability risk Actual deaths & disability cases proving lower or higher than assumed in the valuation

can impact the liabilities.

Withdrawals Actual withdrawals proving higher or lower than assumed withdrawals and change of

withdrawal rates at subsequent valuations can impact Plan''s liability.

B.3. Defined Benefit plans- Leave Obligations (Compensated Expenses)

The leave obligations cover the Company''s liability for sick and earned leave.

The amount of provision of C9.30 Lakh ( PY C6.63 Lakh) is presented as current liability, since the Company does not have

an unconditional right to defer settlement for any of these obligations.

Terms & Conditions

The transactions with the related parties are made on terms and conditions similar to those prevailing in arm''s length transactions. The assessment is under taken in each financial year through examining the financial position of the related party and in the market in which the related party operates and outstanding balances are unsecured.

Note 41: Financial Instruments

41.1 Capital Management

The primary objective of the Company''s Capital Management is to maximize the shareholder value and also maintain an optimal capital structure to reduce cost of capital. In order to manage the capital structure, the Company may adjust the amount of dividend to shareholders, return on capital to shareholders, issue new shares or sell assets to reduce debts.

The company monitors capital on the basis of following gearing ratio, which is net debt (net of cash and cash equivalents) divided by total equity plus net debt.

i) Debt is defined as long and short-term borrowings (excluding derivative, financial guarantee contracts), as described in notes Nos. 18 and 19.

ii) In order to achieve this overall objective, the Group''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to call loans and borrowings or charge some penal interest. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the current year and previous year.

41.3 Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value and measured at amortised cost and for which fair values are disclosed in financial statements. To provide an indication about the reliability of inputs used in determining fair values, the group has classified its financial instruments into three levels prescribed under the accounting standards.

The fair values of the financial assets and liabilities are recognised at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, other than in a forced or liquidation sale.

The following provides the fair value measurement hierarchy of Company''s asset and liabilities, for determining and disclosing the fair value of financial instruments by valuation techniques, grouped into Level 1 to Level 3 as described below:

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

Level 2: Other techniques for which all the inputs have a significant effect on the recorded fair values are observable, either directly or indirectly

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

Note 41.3.2 Valuation techniques used to determine Fair value

The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are recognised at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following methods and assumptions were used to estimate the fair values:

1) Fair value of cash and deposits, trade receivables, trade payables, and other current financial assets and liabilities measured at amortised cost is approximate to their carrying amounts largely due to the short-term maturities of these instruments. The fair value of other non-current financial assets and liabilities (security deposit taken/given and advance to employees) carried at amortized cost is approximately equal to fair value. Hence carrying value and fair value is taken same.

2) Long-term fixed-rate and variable-rate receivables / borrowings are evaluated by the Company based on parameters such as interest rates, specific country risk factors, credit risk and other risk characteristics. Fair value of variable interest rate borrowings approximates their carrying values. For fixed interest rate borrowing fair value is determined by using the discounted cash flow (DCF) method using discount rate that reflects the issuer''s borrowings rate. Risk of non-performance for the company is considered to be insignificant in valuation.

3) The fair values of derivatives are estimated by using pricing models, where the inputs to those models are based on readily observable market parameters basis contractual terms, period to maturity, and market parameters such as interest rates, foreign exchange rates, and volatility. These models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgement, and inputs thereto are readily observable from actively quoted market prices. Management has evaluated the credit and non-performance risks associated with its derivative counterparties and believe them to be insignificant and not warranting a credit adjustment.

4) The fair values of the quoted equity shares have been done on quoted price of stock exchange as on reporting date.

41.4 Financial risk management

The Company''s activities expose it to a variety of financial risks which includes market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company''s focus is to ensure liquidity which is sufficient to meet the Company''s operational requirements. The Company monitors and manages key financial risks so as to minimise potential adverse effects on its financial performance. The Company has a risk management policy which covers the risks associated with the financial assets and liabilities. The details for managing each of these risks are summarised ahead.

41.5 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, which comprises of three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and derivative financial instruments.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks.

41.5.1 Foreign currency risk

Foreign exchange risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of changes in foreign exchange rate.

The Company derives significant portion of its revenue in foreign currency, exposing it to fluctuations in currency movements. The Company has laid down a foreign exchange risk policy as per which senior management team reviews and manages the foreign exchange risks in a systematic manner, including regular monitoring of exposures, proper advice from market experts, hedging of exposures, etc.

The Company uses derivative financial instruments, such as foreign exchange forward contracts, to mitigate foreign exchange related risk exposures. Derivative financial instruments relating to a firm commitment or a highly probable forecast transaction, are marked to market at every reporting date. The company does not use forward contracts for speculative purposes.

In management''s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

41.5.2 Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regard to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of the fixed rate and floating rate financial instruments in its total portfolio.

41.5.3 Price risks

The company''s exposure to price risk arises from the investment held by the company . To manage its price risk arising from investments in marketable securities, the company has very limited exposure and is done in accordance with the company''s policy. The company''s major investments are actively traded in markets. Therefore no sensivity is provided for the same.

41.6 Credit Risk

Credit risk arises from the possibility that the counterparty will default on its contractual obligations resulting in financial loss to the company. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivable.

The Company considers the probability of default upon initial recognition of assets and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is significant increase in credit risk, it considers reasonable and supportive forward looking information such as:

i) Actual or expected significant adverse changes in business;

ii) Actual or expected significant changes in the operating results of the counterparty;

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligation;

iv) Significant increase in credit risk and other financial instruments of the same counterparty;

v) Significant changes in the value of collateral supporting the obligation or in the quality of third party guarantees or credit enhancements.

The company''s major exposure is from trade receivables, which are unsecured and derived from external customer Credit risk on cash and cash equivalents is limited as the company generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in quoted securities and certificates of deposit which are funds deposited with the bank for a specified time period etc. Other loans are majorly provided to the employees which have very minimal risk of loss.

41.7 Liquidity risk

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the company''s short, medium, and long-term funding and liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

The following table detail the company''s remaining contractual maturity for its financial liabilities with agreed repayment periods. The table have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the company may be required to pay.

41.9 Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The objective of hedges is to minimize the volatility of C cash flows of highly probable forecast transaction. The Company''s risk management policy is to hedge around 70% to 90% of net exposure with forward exchange contract, having a maturity up to 12 months.

Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.

Note 43: Recent Accounting Pronouncements

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 31^st March, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

Note 44 :

1 In terms of the Master Restructuring Agreement under the CDR Scheme, if, in the opinion of the Lenders, the profitability and cash flows of the Company so warrant, the Lenders shall be entitled to right of recompense (ROR) for the reliefs and sacrifices extended by lenders within the CDR mechanism. The company has provided recompense amount of C Nil in the current financial year (Previous year C Nil). in the previous year C207.54 Lakh was paid towards ROR. Recompense amount payable as on 31.03.24 is C NIL (as on 31.03.23 was C Nil). As per management''s best estimates

excess provision in the previous year towards lenders'' recompense amount payable under CDR, was written back and included under the head excess provision written back and disclosed in other income (note no. 26) and clubbed with other income. Company is in process of applying exit under CDR mechanism from lenders.

2 Rights, Preferences and restriction attached to Preference Shares

The Company had only one class of Cumulative Redeemable Preference Shares (CRPS) having a par value of C100/-. There were two series of CRPS, carrying differential dividend coupon rates.

First series of Preference Shares carrying a dividend of 8% per annum, allotted to various banks and financial institutions, pursuant to the Corporate Debt Restructuring (''CDR'') Package, were redeemed in four equal annual tranches during 2016-2019.

Second series of Preference Shares carrying a dividend of 3% per annum, allotted to promoters, against infusion of funds, pursuant to the Corporate Debt Restructuring (''CDR'') Package were redeemable in March 2019. The company has taken necessary approvals from board of directors and shareholders for redemption of aforesaid Preference Shares in two equal tranches during 2019-2020. First tranche of C600 Lakh were redeemed in March 2019 and for second tranche which was falling due in March 2020, approval for extension of one (1) year towards redemption was taken, from the board of directors on 08^th August 2019 and from shareholders in the annual general meeting held on 19^th September 2019. Consequently the same were to be redeemed in March 2021. The maturity period of redemption of second tranche of aforesaid CRPS was further extended for a period of one year i.e. from March 2021 to 31 March 2022 after approval was sought from board of directors in their meeting held on 07^th August 2020 and from shareholders approval was obtained in the annual general meeting held on 29^th September 2020. In the 2021-22, the second tranche of aforesaid CRPS of C600.00 Lakh was redeemed.

The Company declares and pays dividend in Indian rupees only. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting. Each holder of Preference Shares is entitled to one vote per share only on resolutions placed before the company which directly affect the rights attached to Preference Shares. The holders of Preference Shares are entitled to a preferential right of repayment of capital on winding up vis-a-vis the holders of equity shares. The distribution will be in proportion to the number of shares held by the Preference shareholders.

The Board of Directors in meeting held on 28^th October, 2021, had approved the accumulated Preference dividend on Cumulative Redeemable Preference Shares amounting to C377.08 Lakh and C185.21 Lakh aggregating to C562.29 Lakh to the lenders and promoters & their associates respectively after setting off the accumulated losses of the previous years. The aforesaid Preference dividend was paid within the stipulated time.

Note 45 : Dividend

In the Financial Year 2021-22, Board of Directors had recommended a dividend of C2/- per Equity Share of the face value of C10/- each amounting to C830.16 Lakh, which was subsequently approved by the Shareholders of the Company at the Annual General Meeting. As on 31^st March 2024 out of above declared dividend C12.89 Lakh remained unpaid and is lying in an account with scheduled bank under unpaid/unclaimed account.

Note 46 : Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any transactions with struck off companies.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,

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

(v) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) Directly or indirectly lend or 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.

(vi) The Company has no subsidiary, associates and joint venture downward.

(vii) The lender of the company has not declared company as willful defaulter and also company has not defaulted in loan repayment of loan to the lenders.

(viii) Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.

(ix) There is no transaction which are not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

(x) The company has used two integrated accounting softwares 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 softwares. Further, at database level log was enabled throughout the year and retention of these logs were for 3 days only.

Note 47: Approval of financial statements

The financial statements for the period ended 31^st March 2024 were approved by the Board of Directors and authorises to issue on 09^th May 2024.

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Mar 31, 2018

1. Corporate information

Maral Oveseas Limited (the Company) is a limited company incorporated and domiciled in India having its registered office at Maral Sarovar, V&P.O. Khalbujurg Tehsil Kasrawad, District Khargone, Madhya Pradesh, India. The Company has its primary listing on the BSE Limited and National Stock Exchange India Limited in India.

The Company is one of India’s largest vertically integrated textile companies, having multiple facilities to produce Grey Yarn, Dyed Yarn, Knitted Fabric and Garments. The manufacturing plants of the Company are located in India.

8% redeemable cumulative preference shares of Rs. 100 each (total face value of Rs. 1,414.05) are classified as financial liability (Refer Note 20).

3% redeemable cumulative preference shares of Rs. 100 each (total face value of Rs. 1,200.00) are classified as financial liability (Refer Note 20).

(ii) Rights, preferences and restriction attached to equity shares

Company has only one class of equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The holder of equity shares is entitled to receive dividend only after distribution of dividend to the holders of preference shares.

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

(iii) Rights, preferences and restriction attached to preference shares

For rights, preferences and restriction attached to both type of preference shares, classified as financial liability Refer Note 20.

2.1 Nature and Purpose of Reserves Securities Premium Reserves

Securities premium reserves is used to record the premium on issue of shares. The reserve is utilised in accordance with the provision of the Companies Act, 2013.

General Reserve

This represents appropriation of profit after tax by the company.

Retained Earnings

This comprise company’s undistributed profit after taxes.

Cash flow hedge reserve

The group uses hedging instrument as part of its management of foreign currency risk associated with borrowing in foreign exchange. For hedging the foreign currency risk, the group uses cross currency interest rate swap which is designated as cash flow hedge. Amounts recognised in cash flow hedge reserve is reclassified to profit and loss, when the hedge item affects profit and loss.

Equity Component of Financial Instruments

The Reserve is created due to the fair valuation of preference share capital in accordance of Ind As.

Preference Share Capital Redemption Reserve

Preference Share Capital Redemption reserve is created against the redemption of cumulative preference shares.

Summary of borrowing arrangements

(i) Term loans from both banks & financial institutions are secured by first mortgage and charge created / to be created on all the present and future immovable & movable properties (other than current assets) of the Company, ranking pari-passu, and second pari-passu charge on current assets of the company.

(ii) Term loans from both banks (except term loans from Central Bank of India Rs. 3,688 Lakhs and Union Bank of India Rs. 3,200 Lakhs and State Bank of India Rs. 2,844 Lakhs and Export-Import Bank of India Rs. 3,520 Lakhs) & financial institutions along with working capital facilities from banks, are secured by pledge of stipulated promoter’s equity shareholding, constituting 36% of the present equity capital, in favour of the lenders on pari-passu basis.

(iii) Maturity Profiles & Interest rate of secured loans

(iv) All secured loans are repayable in quarterly installments.

(v) Unsecured loan from related party, carries a fixed rate of interest of 8% and is repayable on 31st March, 2019.

(vi) The Company’s financial restructuring package was approved under the Corporate Debt Restructuring mechanism (CDR) by the CDR Empowered group vide their letter dated March 26, 2009 (‘CDR letter’) and subsequent approvals received from the various financial institutions and banks.

(vii) Some of the lenders follow the practice to recover sue motto, payment of both principal as well as interest from the working capital facility advanced by them, where applicable, or from the current account under instructions from the Company. It is regarded as accepted practice that the due date for payment shall be the date next following the date when interest is charged. Any delay on part of the lender to recover payment, either in line with past practice or specific instructions given in this regard by the Company, is not attributable to default on part of the Company Accordingly, there is no continuing default in repayment of the principal loan and interest amounts.

Notes:

(i) Rights, preferences and restriction attached to preference shares

Company has only one class of cumulative redeemable preference shares (CRPS) having a par value of Rs. 100/-. There are two series of CRPS, carrying differential dividend coupon rates.

First series of preference shares carrying a dividend coupon rate of 8%,allotted to the various banks and financial institutions, pursuant to the Corporate Debt Restructuring (‘CDR’) Package, are redeemable in four equal annual instalments from 2016 to 2019. In terms of the Master Restructuring Agreement executed with the Company’s bankers, premium of 5% on redemption is payable in case Company’s cash flows permit.

Second series of preference shares carrying a dividend coupon rate of 3%, allotted to promoters, against infusion of funds by them, pursuant to the Corporate Debt Restructuring (‘CDR’) Package are redeemable on 31st March, 2019.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Each holder of preference shares is entitled to one vote per share only on resolutions placed before the company which directly affect the rights attached to preference shares. The holders of preference shares are entitled to a preferential right of repayment of capital on winding up vis-a-vis the holders of equity shares. The distribution will be in proportion to the number of shares held by the shareholders.

Each holder of preference shares is entitled to one vote per share only on resolutions placed before the company which directly affect the rights attached to preference shares. Further, they shall have the right to vote on all resolutions placed before the Company if the dividend on such preference shares remain unpaid over a period of two years or more.

3.1 The information as required to be disclosed under The Micro, Small and Medium Enterprises Development Act, 2006 (“the Act”) has been determined to the extent such parties have been identified by the Company, on the basis of information and record available with them. This information has been relied upon by the auditors. Disclosures as required under section 22 of the Act, is as under. Disclosure in respect of interest due on delayed payments has been determined only in respect of payments made after the receipt of information, with regards to filing of memorandum, from the respective suppliers.

4. Earnings per share

Basic earnings per equity share has been computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the year.

Potential equity options may arise in the event of default in payment due on loan funds. Potential options also exist in the form of right of CDR lenders to convert 20% of their debt outstanding beyond seven years from the date of CDR Letter into equity capital.

5. Segment Reporting

The Company is currently organized into three business operating segments: Yarn, Fabric and Textile Made-ups. The Company’s business segments offer different products and require different technology and marketing strategies.

Identification of Segments

The Board of Directors of the Company has been identified as Chief Operation Decision Maker who monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Accounting policy in respect of segments is in conformity with accounting policy of the company as a whole.

Intersegment Transfer

Segment revenue resulting from transactions with other business segments is accounted for on basis of transfer price agreed between the segments. Transfer prices between operating segments are on arm’s length basis in a manner similar to transactions with third parties.

Segment Revenue & Results

The Revenue and Expenditures in relation to the respective segments have been identified and allocated to the extent possible. Other revenue and expenditures non allocable to specific segments are disclosed separately as unallocated and adjusted directly against total income of the Company.

Segment Assets & Liabilities

Segment Assets includes all operating assets used by the operating segment and mainly consisting property, plant & equipment, trade receivables, cash and cash equivalents and inventory etc. Segment Liabilities primarily include trade payables and other liabilities. Common assets & liabilities which can not be allocated to specific segments are shown as a part of unallocable assets/liabilities.

36. Operating lease

The Company has entered into operating lease arrangements for office space. The average lease term is 1 year. The minimum lease payment during non-cancellable period under foregoing arrangements in the aggregate for each of the following period as follows:

viii. Further, in terms of the Master Restructuring Agreement, if, in the opinion of the Lenders, the profitability and cash flows of the Company so warrant, the Lenders shall be entitled to receive recompense for the reliefs and sacrifices extended by them within the CDR Parameters, with the approval of the CDR Empowered Group. Pending determination by the lenders, same is neither quantifiable nor provided.

Based on legal advice, discussions with the solicitors, etc., the management believes that there is fair chance of decisions in the company’s favour in respect of all the items listed at (i) to (vi) above and hence no provision is considered necessary against the same. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company’s financial position and results of operations.

6. Employee Benefits

A Defined Contribution plans

The Company makes contributions towards provident fund and superannuation fund, to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the superannuation fund is administered by the Trustees of the ‘Maral Overseas Limited Senior Executive Superannuation Fund’. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

B Defined Benefit plans

The Company makes annual contributions towards funding the defined benefit plans for qualifying employees and also contributes towards the insurance scheme of ICICI Prudential Life Insurance Co. Ltd.The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuations being carried out at each balance sheet date.

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

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

xi. The estimates of future salary increase considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors. The above information is certified by the actuary and relied upon by the auditors.

xii. The employer ‘s best estimate of contribution expected to be paid during the next year is Rs. 128.81 lakhs.

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

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

viii. The estimates of future salary increase considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors. The above information is certified by the actuary and relied upon by the auditors.

ix. The employer ‘s best estimate of contribution expected to be paid during the next year is Rs. 77.47 lakhs

These plans typically expose the Company to actuarial risks such as Investment risk, salary risk, discount rate risk, mortality risk, withdrawals risk.

Salary risk Actual salary increases will increase the Plan’s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

Investment risk If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability

Discount rate risk Reduction in discount rate in subsequent valuations can increase the plan’s liability.

Mortality & disability risk Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

Withdrawals Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan’s liability.

B.3. Defined Benefit plans- Leave Obligations

The leave obligations cover the Company’s liability for sick and earned leave.

The amount of the provision Rs. 1.57 lakhs of (31st March, 2017- Rs. 1.77 lakhs, 1st April 2016- Rs. 23.15 lakhs ) is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations.

7.1 Terms and Conditions

The transactions with the related parties are made on term equivalent to those that prevail in arm’s length transactions. The assessment is under taken each financial year through examining the financial position of the related party and in the market in which the related party operates. Outstanding balances are unsecured and the settlement will be occured in cash.

8. Financial Instruments

8.1 Capital Management

The primary objective of the Company’s Capital Management is to maximize the shareholder value and also maintain an optimal capital structure to reduce cost of capital. In order to manage the capital structure, the Company may adjust the amount of dividend paid to shareholders, return on capital to shareholders, issue new shares or sell assets to reduce debts.

The Company monitors capital on the basis of following gearing ratio, which is net debt divided by total capital plus debt.

Note:

i. Debt is defined as long and short-term borrowings (excluding derivative, financial guarantee contracts), as described in notes 19 and 20.

ii. In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to call loans and borrowings or charge some penal interest. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the current years and previous years.

8.2 Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value and measured at amortised cost and for which fair values are disclosed in financial statements. To provide an indication about the reliability of inputs used in determining fair values, the group has classified its financial instruments into three levels prescribed under the accounting standards.

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

8.2.2 Valuation techniques used to determine Fair value

The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following methods and assumptions were used to estimate the fair values:

1) Fair value of cash and deposits, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The fair value of other non-current financial assets and liabilities (security deposit taken/given and advance to employees) carried at amortized cost is approximately equal to fair value. Hence carrying value and fair value is taken same.

2) Long-term fixed-rate and variable-rate receivables / borrowings are evaluated by the Company based on parameters such as interest rates, specific country risk factors, credit risk and other risk characteristics. Fair value of variable interest rate borrowings approximates their carrying values. For fixed interest rate borrowing fair value is determined by using the discounted cash flow (DCF) method using discount rate that reflects the issuer’s borrowings rate. Risk of non-performance for the company is considered to be insignificant in valuation.

3) The fair values of derivatives are estimated by using pricing models, where the inputs to those models are based on readily observable market parameters basis contractual terms, period to maturity, and market parameters such as interest rates, foreign exchange rates, and volatility. These models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgement, and inputs thereto are readily observable from actively quoted market prices. Management has evaluated the credit and non-performance risks associated with its derivative counterparties and believe them to be insignificant and not warranting a credit adjustment.

8.2.3 Fair Value Measurement Heirarchy

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following provides the fair value measurement hierarchy of Company’s asset and liabilities, grouped into Level 1 to Level 3 as described below:

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

Level 2: Other techniques for which all the inputs which have a significant effect on the recorded fair values are observable, either directly or indirectly

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

8.3 Financial risk management

The Company’s activities expose it to a variety of financial risks which includes market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company’s focus is to ensure liquidity which is sufficient to meet the Company’s operational requirements. The Company monitors and manages key financial risks so as to minimise potential adverse effects on its financial performance. The Company has a risk management policy which covers the risks associated with the financial assets and liabilities. The details for managing each of these risks are summarised ahead.

8.4 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. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and derivative financial instruments.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks.

8.4.1 Foreign currency risk

Foreign exchange risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of changes in foreign exchange rate.

The Company derives significant portion of its revenue in foreign currency, exposing it to fluctuations in currency movements. The Company has laid down a foreign exchange risk policy as per which senior management team reviews and manages the foreign exchange risks in a systematic manner, including regular monitoring of exposures, proper advice from market experts, hedging of exposures, etc.

The Company uses derivative financial instruments, such as foreign exchange forward contracts, to mitigate foreign exchange related risk exposures. Derivative financial instruments relating to a firm commitment or a highly probable forecast transaction, are marked to market at every reporting date.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

8.4.2 Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the Company’s position with regard to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of the fixed rate and floating rate financial instruments in its total portfolio .

Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the company’s: profit for the year ended 31 March, 2018 would decrease/increase by Rs. 18.63 lakhs (31 March, 2017: decrease/increase by Rs. 17.22 lakhs). This is mainly attributable to the company’s exposure to interest rates on its variable rate borrowings.

8.4.3 Price risks

The company’s exposure to price risk arises from the investment held by the company . To manage its price risk arising from investments in marketable securities, the company diversifies its portfolio and is done in accordance with the company policy. The company’s major investments are actively traded in markets and are held for short period of time. Therefore no sensitive is provided for the same.

8.5 Credit Risk

Credit risk arises from the possibility that the counterparty will default on its contractual obligations resulting in financial loss to the company. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivable.

The Company considers the probability of default upon initial recognition of assets and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is significant increase in credit risk, it considers reasonable and supportice forward looking information such as:

(i) Actual or expected significant adverse changes in business.

(ii) Actual or expected significant changes in the operating results of the counterparty.

(iii) Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligation

(iv) Significant increase in credit risk anf other financial instruments of the same counterparty

(v) Significant changes in the value of collateral supporting the obligation or in the quality of third party guarantees or credit enhancements

The company’s major exposure is from trade receivables, which are unsecured and derived from external customers. Credit risk on cash and cash equivalents is limited as we generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units, quoted securities and certificates of deposit which are funds deposited at a bank for a specified time period. Other loans are majorly provided to the subsidiaries and employee which have very minimal risk of loss.

Credit risk is managed through credit approvals, establishing credit limits, continuous monitoring of creditworthiness of customers to which the company grants credit terms in the normal course of business. The Company also assesses the financial reliability of customers taking into account the financial condition, current economic trends and historical bad debts and ageing of accounts receivables.

8.6 Liquidity risk

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the company’s short, medium, and long-term funding and liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the company’s remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the company can be required to pay.

8.7 Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The objective of hedges is to minimize the volatility of INR cash flows of highly probable forecast transaction. The Company’s risk management policy is to hedge around 70% to 90% of net exposure with forward exchange contract, having a maturity upto 12 months.

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.

Sensitivity Analysis

The Following table demonstrate the sensitivity in the foreign exchange rate ( USD & EURO) to the Indian Rupees wit all other variable held constant. The Impact on the other component of Equity arises from foreign forward exchange contract designated as cash flow hedge reserve is given below:

Notes to the reconciliaiton

1 Under previous GAAP, long term investments were measured at cost less diminution in value which is other than temporary.Under Ind AS, these financial assets have been classifies as FVTPL. On the date of transition to Ind AS, these financial assets have been measured at their fair value which is lower than the cost as per previous GAAP, resulting in an (decrease)/increase in the carrying amount by ‘ (5.48) lakhs (as at March 31, 2017: Rs. 21.99 lakhs and as at April 1, 2016: Rs. 27.71 lakhs).

2 Under previous GAAP, actuarial gains and losses were recognised in the statement of profit and loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability/ asset which is recognised in other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive income under Ind AS instead of the statement of profit and loss.

3 Under the previous GAAP, revenue from sale of products was presented exclusive of exise duty. Under Ind AS, revenue from sale of goods is presented inclusve of excise duty. Th excise duty paid is presented on the face of statement of profit and loss as part of expenses. There is no impact on the total equity and profit.

4 Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deffered taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences, which was not required under previous GAAP.

5 Under Ind AS, effective portion of the cash flow hedge to be recognised in other comprehensive income and however in the previous GAAP same has been recognised under Reserve and Surplus under the head “ Cash Flow Hedge Reserve”.

6 The Company has isssued Cummulative redeemable preference shares. Under previous GAAP, the Preference shares were classifed as equity and dividend payable thereon was treated as distribution of profit. Under Ind AS, these prefeence shares are separated in to liability and equity component based on the terms of the contract. Interest on liability component is recognised using the effective interest method. These shares are classiifed as debt and dividend on shares along with dividend distribution tax has been recognised to statement of profit & loss as interest cost.

7 Under Previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expenses, gains, or losses ae required to be presented in other comprehensive income.

9. Recent Accounting Pronouncements

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28, 2018, Ministry of Corporate Affairs (“MCA”) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company is evaluating the effect of this on the financial statements.

Ind AS 115- Revenue from Contract with Customers: On March 28, 2018, Ministry of Corporate Affairs (“MCA”) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize 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. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers.

The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors.

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach).

The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.

The Company will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The company is evaluatng the effect on adoption of Ind AS 115.

10. Approval of financial statements

The financial statements for the year ended 31 March, 2018 were approved by the Board of Directors and authorise for issue on 9th May, 2018

11. Previous Period’s Figures have been regrouped/ recast whereever considered necessary.

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Mar 31, 2016

b) Terms/rights attached to equity shares

Company has only one class of equity shares having a par value of Rs.10/-. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The holder of equity shares is entitled to receive dividend only after distribution of dividend to the holders of preference shares.

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

c) Terms/rights attached to preference shares

Company has only one class of cumulative redeemable preference shares (CRPS) having a par value of Rs. 100/-. There are two series of CRPS, carrying differential dividend coupon rates.

First series of preference shares carrying a dividend coupon rate of 8%, allotted to the various banks and financial institutions, pursuant to the Corporate Debt Restructuring (''CDR'') Package, are redeemable in four equal annual installments from 2016 to 2019. In terms of the Master Restructuring Agreement executed with the Company''s bankers, premium of 5% on redemption is payable in case Company''s cash flows permit.

Second series of preference shares carrying a dividend coupon rate of 3%, allotted to promoters, against infusion of funds by them, pursuant to the Corporate Debt Restructuring (''CDR'') Package are redeemable on 31st March, 2019.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Each holder of preference shares is entitled to one vote per share only on resolutions placed before the company which directly affect the rights attached to preference shares. The holders of preference shares are entitled to a preferential right of repayment of capital on winding up vis-a-vis the holders of equity shares. The distribution will be in proportion to the number of shares held by the shareholders.

d) Details of shareholders holding more than 5% shares in the company

The aforesaid disclosure is based upon percentages computed separately for each class & series of shares outstanding, as at the balance sheet date. As per records of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

e) The Company has not allotted any fully paid up shares pursuant to contract(s) without payment being received in cash nor has allotted any fully paid up shares by way of bonus shares nor has bought back any class of shares during the period of five years immediately preceding the balance sheet date.

f) The CDR package grants a right to the various banks and financial institutions to convert 20% of their debt outstanding beyond seven years from the date of CDR Letter i.e March 26, 2009 into equity shares, as per SEBI guidelines / loan covenants, whichever is applicable.

1. Long Term Borrowings

Notes:

a. Term loans from both banks & financial institutions are secured by first mortgage and charge created / to be created on all the present and future immovable & movable properties (other than current assets) of the Company, ranking pari-passu, and second pari-passu charge on current assets of the company.

Forex derivative loss loan is secured by way of residual charge on the fixed assets and current assets of the company.

Term loans from both banks (except term loans from Central Bank of India Rs.3688 lakh and Union Bank of India Rs.3200 lakh) & financial institutions along with working capital facilities from banks, are secured by pledge of stipulated promoter''s equity shareholding, constituting 36% of the present equity capital, in favour of the lenders on pari-passu basis.

2 Carry a fixed rate of interest of 11.75% to be reset on an annual basis

3 Carry floating interest rate of Base Rate 1.25% to 1.50%

4 Carry a fixed rate of interest of 9.25%

All secured loans are repayable in quarterly installments.

c) Unsecured loan from related party, carries a fixed rate of interest of 8% and is repayable on 31st March, 2019

d) The Company''s financial restructuring package was approved under the Corporate Debt Restructuring mechanism (CDR) by the CDR Empowered group vide their letter dated March 26, 2009 (''CDR letter'') and subsequent approvals received from the various financial institutions and banks.

e) Some of the lenders follow the practice to recover sue motto, payment of both principal as well as interest from the working capital facility advanced by them, where applicable, or from the current account under instructions from the Company. It is regarded as accepted practice that the due date for payment shall be the date next following the date when interest is charged. Any delay on part of the lender to recover payment, either in line with past practice or specific instructions given in this regard by the Company, is not attributable to default on part of the Company. Accordingly, there is no continuing default in repayment of the principal loan and interest amounts.

Based on schedule of reversal of timing differences of Deferred Tax liabilities, historical pre-tax earnings and projections for future taxable income over the periods in which the Deferred Tax assets are deductible, management believes it is more likely than not that the Deferred Tax assets would be realized

Loans repayable on demand, comprise of working capital facilities from banks and are secured by way of hypothecation first charge, ranking pari-passu, on stocks of raw material, stock in process, finished goods, book debts / receivables and all current assets stored in the company''s factory premises, at all plants and / or elsewhere including those in transit covered by documents of title thereto, local and export usance bills and second pari-passu charge on the entire movable and immovable assets of the Company (fixed assets), both present and future.

Loans repayable on demand from banks, along with term loans from both banks (except term loans from Central Bank of India Rs.3688 lakh and Union Bank of India Rs.3200 lakh) & financial institutions are secured by pledge of stipulated promoter''s equity shareholding, constituting 36% of the present equity capital, in favour of the lenders on pari-passu basis.

The information as required to be disclosed under The Micro, Small and Medium Enterprises Development Act, 2006 ("the Act") has been determined to the extent such parties have been identified by the company, on the basis of information and records available with them. This information has been relied upon by the auditors. Disclosure as required under section 22 of the Act, is as under. Disclosure in respect of interest due on delayed payment has been determined only in respect of payments made after the receipt of information, with regards to filing of memorandum, from the respective suppliers.

a. Buildings include Rs.0.02 lakh representing cost of unquoted fully paid shares held in co-operative housing society.

b. Buildings include certain portion given on operating lease. It is not practicable to give separate disclosure of gross block, depreciation charge for the year, accumulated depreciation and net block in respect of the same.

c. Opening balance of gross block, depreciation and net block are adjusted for reclassification of asset categories inter se. These do not have any impact on the aggregate depreciation charge / provision.

a) In respect of MAT credit entitlement, management, based on present profitability trend as well as future profit projections, is of the view that there is convincing evidence for utilization of MAT credit assets in future periods

b) Direct taxes refundable represent amounts recoverable from the Income Tax Department for various assessment years. In respect of disputed demands, company has filed appeals which are pending at various levels and for assessment years where the issues have been decided in favour of the company, company is in the process of reconciling / adjusting the same with the department. Necessary value adjustments shall be made on final settlement by the department.

5 a) Response to letters sent by the Company requesting confirmation of balances has been insignificant. In the management''s opinion, adjustments on reconciliation of the balances, if any required, will not be material in relation to the financial statements of the Company and the same will be adjusted in the financial statements as and when the confirmations are received and reconciliations completed.

b) Inventories, loans & advances, trade receivables and other current / non-current assets are reviewed annually and in the opinion of the management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.

6 Employee benefit obligations Defined contribution plans

The Company makes contributions towards provident fund and superannuation fund, to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the superannuation fund is administered by the Trustees of the ''Maral Overseas Limited Senior Executive Superannuation Fund''. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

Defined benefit plan

The Company makes annual contributions to the Employees'' Group Gratuity-cum-Life Insurance Scheme of ICICI Prudential Life Insurance Company Limited, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuations being carried out at each balance sheet date.

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

The Company evaluates these assumptions annually based on its long-term plans of growth and industry standards.

The discount rate is based on prevailing market yields of Indian government bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

The expected rate of return on plan assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

7 Segment information

The Company is currently organized into three business operating segments: Yarn, Fabric and Textile Made-ups. The Company''s business segments offer different products and require different technology and marketing strategies.

Yarn includes bought out yarn as well as production of yarn over a wide range of counts, which besides being sold, is also used for further value addition in fabric. It also includes surplus captive & standby power. Fabric includes both bought out fabric as well as the value added activities relating to knitting, dyeing and processing. Textile Made-ups, comprise of made-ups made for renowned international brands.

The accounting principles used in preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments and are as set out in the note on significant accounting policies.

Transfer prices for inter segment revenues are generally set on an arm''s length basis and are eliminated in consolidation.

Revenue and direct expenses in relation to segments are categorized based on items that are individually identifiable or allocable on a reasonable basis to that segment. Revenue and expenses, besides financial costs and taxes that are not allocated to operating segments, are included under "inter segment & unallocated items".

Assets and liabilities represent assets (both tangible and intangible) employed in operations and liabilities owed to third parties that are individually identifiable or allocable on a reasonable basis to that segment. Assets and liabilities excluded from allocation to operating segments, are included under "inter segment & unallocated items". Capital expenditure includes expenditure incurred during the period on acquisition of segment fixed assets.

The company''s secondary segments are the geographic distribution of activities. Revenue and receivables are specified by location of customers while the other geographic information is specified by location of the assets. North America comprises the United States of America, Canada and Mexico; Europe includes continental Europe (both the east and west), Ireland and the United Kingdom; Africa includes Mauritius; Asian continent has been segregated into the Middle East & Gulf countries while the rest of Asia, other than India has been covered under Far East & South East Asia; Rest of the World comprises all other places except those mentioned above and India.

8 Previous period''s figures have been regrouped and recast wherever considered necessary.

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Mar 31, 2015

A) Terms/rights attached to Equity Shares

Company has only one class of equity shares having a par value of '' 10/-. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The holder of equity shares is entitled to receive dividend only after distribution of dividend to the holders of preference shares.

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

B) Terms/rights attached to Preference Shares

Company has only one class of Cumulative Redeemable Preference Shares (CRPS) having a par value of Rs. 100/-. There are two series of CRPS, carrying differential dividend coupon rates.

First series of preference shares carrying a dividend coupon rate of 8%, allotted to the various banks and financial institutions, pursuant to the Corporate Debt Restructuring (''CDR'') Package, are redeemable in four equal annual installments from 2016 to 2019. Second series of preference shares carrying a dividend coupon rate of 3%, allotted to promoters, against infusion of funds by them, pursuant to the Corporate Debt Restructuring (''CDR'') Package, are redeemable on 31st March, 2019. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

Each holder of preference shares is entitled to one vote per share only on resolutions placed before the Company which directly affect the rights attached to preference shares.

The holders of preference shares are entitled to a preferential right of repayment of capital on winding up vis-a-vis the holders of equity shares. The distribution will be in proportion to the number of shares held by the shareholders.

1.1.2 Trade Payables

The information as required to be disclosed under The Micro, Small and Medium Enterprises Development Act, 2006 ("the Act") has been determined to the extent such parties have been identified by the Company, on the basis of information and records available with them. This information has been relied upon by the auditors. Disclosure as required under Section 22 of the Act, is as under. Disclosure in respect of interest due on delayed payment has been determined only in respect of payments made after the receipt of information, with regards to filing of memorandum, from the respective suppliers.

a) In respect of MAT credit entitlement, management, based on present profitability trend as well as future profit projections, is of the view that there is convincing evidence for utilization of MAT credit assets in future periods.

b) Direct taxes refundable represent amounts recoverable from the Income Tax Department for various assessment years. In respect of disputed demands, Company has filed appeals which are pending at various levels and for assessment years where the issues have been decided in favour of the Company, Company is in the process of reconciling / adjusting the same with the department. Necessary value adjustments shall be made on final settlement by the department.

1.1.2 Contingent Liabilities not provided for in respect of :

Rs. / Lacs

As at As at 31.03.2015 31.03.2014

a) Claims against the Company not acknowledged as debts 14.04 13.00

b) Income tax matters in dispute 392.64 72.64

c) Excise / customs / service tax matters in dispute 400.21 311.04

d) Non Solar renewable energy obligations - 108.50

e) Pending litigations

Miscellaneous labour cases involving claims for reinstatement, back wages etc 71.51 60.17

Based on legal advice, discussions with the solicitors, etc., the management believes that there is fair chance of decisions in the Company''s favour in respect of all the items listed at (a) to (e) above and hence no provision is considered necessary against the same. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations.

1.1.3 a) Response to letters sent by the Company requesting confirmation of balances has been insignificant. In the management''s opinion, adjustments on reconciliation of the balances, if any required, will not be material in relation to the financial statements of the Company and the same will be adjusted in the financial statements as and when the confirmations are received and reconciliations completed.

b) Inventories, loans & advances, trade receivables and other current / non-current assets are reviewed annually and in the opinion of the management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.

1.1.4 Employee Benefit Obligations Defined Contribution Plans

The Company makes contributions towards provident fund and superannuation fund, to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the superannuation fund is administered by the Trustees of the ''Maral Overseas Limited Senior Executive Superannuation Fund''. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

Defined Benefit Plan

The Company makes annual contributions to the Employees'' Group Gratuity-cum-Life Insurance Scheme of ICICI Prudential Life Insurance Company Limited, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuations being carried out at each balance sheet date.

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

The Company evaluates these assumptions annually based on its long-term plans of growth and industry standards.

The discount rate is based on prevailing market yields of Indian government bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

The expected rate of return on plan assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

1.1.5 Related Party Disclosures

Following information regarding related parties has been determined on the basis of criteria specified in AS-18 "Related Party Disclosures".

a) Related parties with whom transactions have taken place

i) Key Management Personnel

- Shri Ravi Jhunjhunwala, Chairman

- Shri Shekhar Agarwal, Managing Director

ii) Relatives of Key Management Personnel

- Smt Shashi Agarwal

- Shri Shantanu Agarwal

- Shekhar Agarwal (HUF)

iii) Enterprises in respect of which the reporting enterprise is an associate

- M/s Agarwal Trademart Private Limited

- M/s BMD Private Limited

iv) Enterprises owned or significantly influenced by key management personnel or their relatives

- M/s RSWM Limited

- M/s HEG Limited

- M/s BSL Limited

- M/s Cheslind Textiles Limited (Amalgamated with M/s RSWM Limited)

1.1.6 Segment Information

The Company is currently organized into three business operating segments: Yarn, Fabric and Textile Made-ups. The Company''s business segments offer different products and require different technology and marketing strategies.

Yarn includes bought out yarn as well as production of cotton yarn over a wide range of counts, which besides being sold, is also used for further value addition in fabric. It also includes surplus captive & standby power. Fabric includes both bought out fabric as well as the value added activities relating to knitting, dyeing and processing. Textile Made-ups, comprise of made-ups made for renowned international brands.

The accounting principles used in preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments and are as set out in the note on significant accounting policies.

Transfer prices for inter segment revenues are generally set on an arm''s length basis and are eliminated in consolidation.

Revenue and direct expenses in relation to segments are categorized based on items that are individually identifiable or allocable on a reasonable basis to that segment. Revenue and expenses, besides financial costs and taxes that are not allocated to operating segments, are included under "inter segment & unallocated items".

Assets and liabilities represent assets (both tangible and intangible) employed in operations and liabilities owed to third parties that are individually identifiable or allocable on a reasonable basis to that segment. Assets and liabilities excluded from allocation to operating segments, are included under "inter segment & unallocated items". Capital expenditure includes expenditure incurred during the period on acquisition of segment fixed assets.

The Company''s secondary segments are the geographic distribution of activities. Revenue and receivables are specified by location of customers while the other geographic information is specified by location of the assets. North America comprises the United States of America, Canada and Mexico; Europe includes continental Europe (both the east and west), Ireland and the United Kingdom; Africa includes Mauritius; Asian continent has been segregated into the Middle East & Gulf countries while the rest of Asia, other than India has been covered under Far East & South East Asia; Rest of the World comprises all other places except those mentioned above and India.

1.1.7 Previous period''s figures have been regrouped and recast wherever considered necessary.

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Mar 31, 2014

1 Basis of Preparation

The Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Financial Statements have been prepared to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The Financial Statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of Financial Statements are consistent with those of previous year.

a) Terms/rights attached to Equity Shares

Company has only one class of equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The holder of equity shares is entitled to receive dividend only after distribution of dividend to the holders of preference shares.

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

b) Terms/rights attached to Preference Shares

Company has only one class of Cumulative Redeemable Preference Shares (CRPS) having a par value of Rs. 100/-. There are two series of CRPS, carrying differential dividend coupon rates.

First series of preference shares carrying a dividend coupon rate of 8%, allotted to the various banks and financial institutions, pursuant to the Corporate Debt Restructuring (''CDR'') Package, are redeemable in four equal annual installments from 2016 to 2019. Second series of preference shares carrying a dividend coupon rate of 3%, allotted to promoters, against infusion of funds by them, pursuant to the Corporate Debt Restructuring (''CDR'') Package, are redeemable on 31st March, 2019. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

Each holder of preference shares is entitled to one vote per share only on resolutions placed before the company which directly affect the rights attached to preference shares.

The holders of preference shares are entitled to a preferential right of repayment of capital on winding up vis-a-vis the holders of equity shares. The distribution will be in proportion to the number of shares held by the shareholders.

The aforesaid disclosure is based upon percentages computed separately for each class & series of shares outstanding, as at the balance sheet date. As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

c) The Company has not allotted any fully paid up shares pursuant to contract(s) without payment being received in cash nor has allotted any fully paid up shares by way of bonus shares nor has bought back any class of shares during the period of five years immediately preceding the Balance Sheet date.

d) The CDR package grants a right to the various banks and financial institutions to convert 20% of their debt outstanding beyond seven years from the date of CDR Letter i.e March 26, 2009 into equity shares, as per SEBI guidelines / loan covenants, whichever is applicable.

Notes:

a. Term loans from both banks & financial institutions are secured by first mortgage and charge created / to be created on all the present and future immovable & movable properties (other than current assets) of the Company, ranking pari-passu, and second pari-passu charge on current assets of the Company.

Forex derivative loss loan is secured by way of residual charge on the fixed assets and current assets of the Company.

Term loans from both Banks & Financial Institutions, alongwith working capital facilities from banks, are secured by pledge of stipulated promoter''s equity shareholding, constituting 36% of the present equity capital, in favour of the lenders on pari- passu basis.

a) Unsecured loan from related party is repayable on 31st March, 2019.

b) The Company''s financial restructuring package was approved under the Corporate Debt Restructuring mechanism (CDR) by the CDR Empowered group vide their letter dated March 26, 2009 (''CDR letter'') and subsequent approvals from the various Financial Institutions and Banks received.

The CDR scheme included interalia reduction of interest rate on loans, rescheduling of loan repayments, conversion of interest payable into funded interest term loan, conversion of certain portion of the working capital into term loan and conversion of part term loan into preference shares. The restructuring package also stipulated conditions to be complied with by the Company and its promoters relating interalia to disposal of surplus assets, fresh infusion of additional equity by promoters, arrangement for additional infusion of term loan and working capital from existing lenders and bringing in funds by promoters to bridge shortfall of funding if any. The Company is confident that all the conditions as stipulated will be complied with in agreement with the CDR Monitoring Committee.

c) Some of the lenders follow the practice to recover suo motto, payment of both principal as well as interest from the working capital facility advanced by them, where applicable, or from the current account under instructions from the Company. It is regarded as accepted practice that the due date for payment shall be the date next following the date when interest is charged. Any delay on part of the lender to recover payment, either in line with past practice or specific instructions given in this regard by the Company, is not attributable to default on part of the Company. Accordingly, there is no continuing default in repayment of the principal loan and interest amounts.

Recognition of deferred tax assets has been restricted to the extent of deferred tax liabilities available. Based on schedule of reversal of timing differences giving rise to deferred tax liabilities, the management believes there is requisite degree of virtual certainty that the deferred tax assets, to the extent recognized, would be realised.

Loans repayable on demand, comprise of working capital facilities from banks and are secured by way of hypothecation first charge, ranking pari-passu, on stocks of raw material, stock in process, finished goods, book debts / receivables and all current assets stored in the Company''s factory premises, at all plants and / or elsewhere including those in transit covered by documents of title thereto, local and export usance bills and second pari-passu charge on the entire movable and immovable assets of the Company (fixed assets), both present and future.

Loans repayable on demand from Banks, along with term loans from both Banks & Financial Institutions are secured by pledge of stipulated promoter''s equity shareholding, constituting 36% of the present equity capital, in favour of the lenders on pari-passu basis.

The information as required to be disclosed under The Micro, Small and Medium Enterprises Development Act, 2006 ("the Act") has been determined to the extent such parties have been identified by the Company, on the basis of information and records available with them. This information has been relied upon by the auditors. Disclosure as required under Section 22 of the Act, is as under. Disclosure in respect of interest due on delayed payment has been determined only in respect of payments made after the receipt of information, with regards to filing of memorandum, from the respective suppliers.

a. Buildings include Rs. 0.02 lacs representing cost of unquoted fully paid shares held in co-operative housing society.

b. Buildings include certain portion given on operating lease. It is not practicable to give separate disclosure of gross block, depreciation charge for the year, accumulated depreciation and net block in respect of the same.

c. Opening balance of gross block, depreciation and net block are adjusted for reclassification of asset categories inter se. These do not have any impact on the aggregate depreciation charge / provision.

Direct taxes refundable represent amounts recoverable from the Income Tax Department for various assessment years. In respect of disputed demands, Company has filed appeals which are pending at various levels and for assessment years where the issues have been decided in favour of the Company, Company is in the process of reconciling / adjusting the same with the department. Necessary value adjustments shall be made on final settlement by the department.

After commissioning of captive thermal power plant in the year 2007, the HFO fuelled Wartsila Power Generators were retained as standby. In view of uneconomical cost of power generation, Company has during the year decided to retire them from active use with eventual disposal.

Resultant, loss of Rs. 416.90 lac being difference of WDV and estimated realisable value of these generators has been charged to Statement of Profit and Loss. Realisable value of the generators Rs. 166.25 lac has been shown under "Assets Held For Sale" as at year end, pending their final disposal.

a) The Company has been treating plant & machinery of spinning unit as continuous process plant and providing depreciation accordingly. This practice has consistently been a subject matter of audit observation. Review of industry practice indicates that such machinery are depreciated based on an estimated useful life corresponding to rates prescribed for triple shift operation.

Company has revised the estimated useful life of such plant & machinery to correspond to the rates prescribed, for triple shift operations, in Schedule XIV of the Companies Act, 1956. Accordingly, depreciation has been charged by depreciating the remaining unamortised depreciable amount prospectively over the remaining useful life.

Resultantly, charge on account of depreciation for the year is higher by Rs. 1765 lac and Profit before tax for the year is lower by even amount.

b) During the year, in order to align depreciation policy with the current replacement cycle, taking into consideration various factors such as technology up-gradation and industry best practices, the Company has revised the estimated useful life of the plant & machinery deployed in the garment division to 10 years.

Consequent to above, charge on account of depreciation for the year is higher by Rs. 112 lac and Profit before tax for the year is lower by even amount.

Potential equity options may arise in the event of default in payment due on loan funds. Potential options also exist in the form of right of CDR lenders to convert 20% of their debt outstanding beyond seven years from the date of CDR Letter into equity capital, more fully explained in Note 2.1.1.

2. Contingent Liabilities not provided for in respect of : (Rs. Lacs)

As at As at 31.03.2014 31.03.2013

a) Claims Against the Company not Acknowledged as debts 13.00 13.00

b) Income Tax Matters in Dispute 72.64 27.64

c) Excise / Customs / Service Tax Matters in Dispute 311.04 392.81

d) Non Solar Renewable Energy Obligations 108.50 60.33

Based on legal advice, discussions with the solicitors, etc., the management believes that there is fair chance of decisions in the Company''s favour in respect of all the items listed at (a) to (d) above and hence no provision is considered necessary against the same. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations.

3. a) The response to letters sent by the Company requesting confirmation of balances has been insignificant. In the management''s opinion, adjustments on reconciliation of the balances, if any required, will not be material in relation to the Financial Statements of the Company and the same will be adjusted in the Financial Statements as and when the confirmations are received and reconciliations completed.

b) Inventories, loans & advances, trade receivables and other current / non-current assets are reviewed annually and in the opinion of the management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.

4. Employee Benefit Obligations

Defined Contribution Plans

The Company makes contributions towards Provident Fund and Superannuation Fund, to defined contribution retirement benefit plans for qualifying employees. The Provident Fund Plan is operated by the Regional Provident Fund Commissioner and the Superannuation Fund is administered by the Trustees of the ''Maral Overseas Limited Senior Executive Superannuation Fund''. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

Defined Benefit Plan

The Company makes annual contributions to the Employees'' Group Gratuity-cum-Life Insurance Scheme of ICICI Prudential Life Insurance Company Limited, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuations being carried out at each Balance Sheet date.

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

The Company evaluates these assumptions annually based on its long-term plans of growth and industry standards.

The discount rate is based on prevailing market yields of Indian government bonds, as at the Balance Sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

The expected rate of return on plan assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

5. Segment Information

The Company is currently organized into three business operating segments: Yarn, Fabric and Textile Made-ups. The Company''s business segments offer different products and require different technology and marketing strategies.

Yarn includes bought out yarn as well as production of cotton yarn over a wide range of counts, which besides being sold, is also used for further value addition in fabric. It also includes surplus captive & standby power. Fabric includes both bought out fabric as well as the value added activities relating to knitting, dyeing and processing. Textile Made-ups, comprise of made-ups made for renowned international brands.

The accounting principles used in preparation of the Financial Statements are consistently applied to record revenue and expenditure in individual segments and are as set out in the note on significant accounting policies.

Transfer prices for inter segment revenues are generally set on an arm''s length basis and are eliminated in consolidation.

Revenue and direct expenses in relation to segments are categorized based on items that are individually identifiable or allocable on a reasonable basis to that segment. Revenue and expenses, besides financial costs and taxes that are not allocated to operating segments, are included under "inter segment & unallocated items".

Assets and Liabilities represent assets (both tangible and intangible) employed in operations and liabilities owed to third parties that are individually identifiable or allocable on a reasonable basis to that segment. Assets and Liabilities excluded from allocation to operating segments, are included under "inter segment & unallocated items". Capital expenditure includes expenditure incurred during the period on acquisition of segment fixed assets.

The Company''s secondary segments are the geographic distribution of activities. Revenue and receivables are specified by location of customers while the other geographic information is specified by location of the assets. North America comprises the United States of America, Canada and Mexico; Europe includes continental Europe (both the east and west), Ireland and the United Kingdom; Africa includes Mauritius; Asian continent has been segregated into the Middle East & Gulf countries while the rest of Asia, other than India has been covered under Far East & South East Asia; Rest of the World comprises all other places except those mentioned above and India.

6. Previous period''s figures have been regrouped and recast wherever considered necessary.

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Mar 31, 2013

1. Basis of Preparation

The Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP).The fnancial statements have been prepared to comply in all material respects with the accounting standards notifed under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The Financial Statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of Financial Statements are consistent with those of previous year.

2.1.1 a) The response to letters sent by the Company requesting confrmation of balances has been insignifcant. In the management''s opinion, adjustments on reconciliation of the balances, if any required, will not be material in relation to the Financial Statements of the Company and the same will be adjusted in the Financial Statements as and when the confrmations are received and reconciliations completed.

b) Inventories, loans & advances, trade receivables and other current / non-current assets are reviewed annually and in the opinion of the management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.

2.1.2 lease commitments

a) The Company leases space for offce and other facilities under various operating leases for periods ranging between three to fve years along with options that permit renewals for additional periods. There were no future minimum commitments in respect of the operating leases.

b) The Company has taken motor cars on operating lease, which are non-cancelable for tenure of four years. The total amount recognised in the Statement of Proft and Loss on account of rental expense for these operating leases, for the year, is Rs. Nil (Previous period - Rs. 1.93 Lacs). There were no future minimum commitments in respect of the operating lease.

2.1.3 Employee Beneft Obligations

Defned Contribution Plans

The Company makes contributions towards Provident Fund and Superannuation Fund, to defned contribution retirement beneft plans for qualifying employees. The Provident Fund plan is operated by the Regional Provident Fund Commissioner and the Superannuation Fund is administered by the Trustees of the ‘Maral Overseas Limited Senior Executive Superannuation Fund''. Under the schemes, the Company is required to contribute a specifed percentage of payroll cost to the retirement beneft schemes to fund the benefts.

Defned Beneft Plan

The Company makes annual contributions to the Employees'' Group Gratuity-cum-Life Insurance Scheme of ICICI Prudential Life Insurance Company Limited, a funded defned beneft plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of fve years of service.

The present value of the defned beneft obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuations being carried out at each Balance Sheet date.

2.1.4 Related Party Disclosures

Following information regarding related parties has been determined on the basis of criteria specifed in AS-18 "Related Party Disclosures".

a) Related Parties with whom transactions have taken place:

i) Key Management Personnel

Shri Ravi Jhunjhunwala, Chairman

Shri Shekhar Agarwal, Managing Director ii) Relatives of Key Management Personnel

Smt. Shashi Agarwal

Shri Shantanu Agarwal

Shekhar Agarwal (HUF) iii) Enterprises in respect of which the reporting enterprise is an associate

Agarwal Trademart Private Limited

BMD Private Limited iv) Enterprises owned or signifcantly infuenced by Key Management Personnel or their relatives

RSWM Limited

HEG Limited

BSL Limited

2.1.5 Segment information

The Company is currently organized into three business operating segments: Yarn, Fabric and Textile Made-ups. The Company''s business segments offer different products and require different technology and marketing strategies.

Yarn includes bought out yarn as well as production of cotton yarn over a wide range of counts, which besides being sold, is also used for further value addition in fabric. It also includes surplus captive & standby power. Fabric includes both bought out fabric as well as the value added activities relating to knitting, dyeing and processing. Textile Made-ups, comprise of made-ups made for renowned international brands.

The accounting principles used in preparation of the fnancial statements are consistently applied to record revenue and expenditure in individual segments and are as set out in the note on signifcant accounting policies.

Transfer prices for inter segment revenues are generally set on an arm''s length basis and are eliminated in consolidation.

Revenue and direct expenses in relation to segments are categorized based on items that are individually identifable or allocable on a reasonable basis to that segment. Revenue and expenses, besides fnancial costs and taxes that are not allocated to operating segments, are included under "inter segment & unallocated items".

Assets and liabilities represent assets (both tangible and intangible) employed in operations and liabilities owed to third parties that are individually identifable or allocable on a reasonable basis to that segment. Assets and liabilities excluded from allocation to operating segments, are included under "Inter Segment & Unallocated Items". Capital expenditure includes expenditure incurred during the period on acquisition of segment fxed assets.

The Company''s secondary segments are the geographic distribution of activities. Revenue and receivables are specifed by location of customers while the other geographic information is specifed by location of the assets. North America comprises the United States of America, Canada and Mexico; Europe includes continental Europe (both the east and west), Ireland and the United Kingdom; Africa includes Mauritius; Asian continent has been segregated into the Middle East & Gulf countries while the rest of Asia, other than India has been covered under Far East & South East Asia; Rest of the World comprises all other places except those mentioned above and India.

2.1.6 Previous period''s fgures have been regrouped and recast wherever considered necessary.

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Mar 31, 2012

1. Basis of Preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared to comply in all material respects with the accounting standards notified under the Companies Accounting Standards (AS) Rules, 2006 (as amended), and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

Background for preparation of amended financial statements

The Board of Directors had adopted the financial statements for the year ended 31st March 2012 in their meeting held on 3rd May 2012 and the statutory auditors' had issued their report dated 3rd May 2012 on those financial statements. The Company subsequently applied for and received approval under section 205A(3) of the Companies Act, 1956 from the Central Government vide their letter dated 25th October, 2012 for withdrawing Rs. 370.61 lacs from the accumulated profits earned in previous years and transferred to the free reserves, for declaring preference dividend for current year on the 8 per cent Cumulative Redeemable Preference Shares as well as to set off current year losses. Accordingly, the Board of Directors of the Company have proposed declaration of dividend on the 8 per cent Cumulative Redeemable Preference Shares allotted to the various banks and financial institutions, pursuant to the Corporate Debt Restructuring (‘CDR') Package.

Necessary appropriations / adjustments under the main head ‘Reserves and Surplus' have accordingly been recorded. Consequential amendments to the above recognition of provision for proposed dividend relate to short term provisions, disclosure of contingent liabilities not provided for and disclosure on segment reporting. These financial statements represent the amended version of the financial statements adopted by the Board of Directors earlier.

a) terms / rights attached to equity Shares

Company has only one class of equity shares having a par value of Rs.10/-. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The holder of equity shares is entitled to receive dividend only after distribution of dividend to the holders of preference shares.

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

b) terms / rights attached to Preference Shares

Company has only one class of Cumulative Redeemable Preference Shares (CRPS) having a par value of Rs.100/-. There are two series of CRPS, carrying differential dividend coupon rates.

First series of preference shares carrying a dividend coupon rate of 8%, allotted to the various banks and financial institutions, pursuant to the Corporate Debt Restructuring (‘CDR') Package, are redeemable in four equal annual installments from 2016 to 2019. Second series of preference shares carrying a dividend coupon rate of 3%, allotted to promoters, against infusion of funds by them, pursuant to the Corporate Debt Restructuring (‘CDR') Package, are redeemable on 31st March, 2019. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

Each holder of preference shares is entitled to one vote per share only on resolutions placed before the Company which directly affect the rights attached to preference shares.

The holders of preference shares are entitled to a preferential right of repayment of capital on winding up vis-à-vis the holders of equity shares. The distribution will be in proportion to the number of shares held by the shareholders.

The aforesaid disclosure is based upon percentages computed separately for each class & series of shares outstanding, as at the balance sheet date. As per records of the Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

e) The Company has not allotted any fully paid-up shares pursuant to contract(s) without payment being received in cash nor has allotted any fully paid-up shares by way of bonus shares nor has bought back any class of shares during the period of five years immediately preceding the balance sheet date.

f) The CDR package grants a right to the various banks and financial institutions to convert 20% of their debt outstanding beyond seven years from the date of CDR Letter i.e March 26, 2009 into equity shares, as per SEBI guidelines / loan covenants, whichever is applicable.

vi) Project Term Loans, Corporate Term Loans, Working Capital Term Loans from both banks & financial institutions are secured by

first mortgage and charge created / to be created on all the present and future immovable & movable properties (other than current assets) of the Company, ranking pari-passu and second pari-passu charge on current assets of the Company.

Forex derivative loss loan is secured by way of residual charge on the fixed assets and current assets of the Company.

Project Term Loans, Corporate Term Loans, Working Capital Term Loans from both banks & financial institutions, alongwith working capital facilities from banks, are secured by pledge of stipulated promoters' equity shareholding, constituting 36% of the present equity capital, in favour of the lenders on pari-passu basis.

c) The Company's financial restructuring package was approved under the Corporate Debt Restructuring mechanism (CDR) by the CDR Empowered group vide their letter dated March 26, 2009 (‘CDR letter') and subsequent approvals from the various financial institutions and banks received .

The CDR scheme included inter-alia reduction of interest rate on loans, rescheduling of loan repayments, conversion of interest payable into funded interest term loan, conversion of certain portion of the working capital into term loan and conversion of part term loan into preference shares. The restructuring package also stipulated conditions to be complied with by the Company and its promoters relating inter-alia to disposal of surplus assets, fresh infusion of additional equity by promoters, arrangement for additional infusion of term loan and working capital from existing lenders and bringing in funds by promoters to bridge shortfall of funding if any. The Company is confident that all the conditions as stipulated will be complied with in agreement with the CDR Monitoring Committee.

d) The Company has incorporated impact of the CDR scheme in these financial statements, as approved vide the CDR letter dated March 26, 2009 and accepted by the lenders. Impact of the CDR scheme and related accounts as reflected in these financial statements are subject to final adjustments that may arise on settlement of pending issues and reconciliation of accounts with the lenders.

e) Some of the lenders follow the practice to recover suo-motto, payment of both principal as well as interest from the working capital facility advanced by them, where applicable or from the current account under instructions from the Company. It is regarded as accepted practice that the due date for payment shall be the date next following the date when interest is charged. Any delay on part of the lender to recover payment, either in line with past practice or specific instructions given in this regard by the Company, is not attributable to default on part of the Company. Accordingly, there is no continuing default in repayment of the principal loan and interest amounts.

2.1.1 Discontinued operation

In July, 2006, the Board of Directors resolved substantive downsizing of the Company's manufacturing facility at Jammu in the State of Jammu & Kashmir. After obtaining necessary approval for closure from the state regulatory authorities in March, 2007, the Board of Directors formally approved closure of the unit and relocation / disposal of its assets in May, 2007.

Jammu unit's operations have been shown under unallocated items in the segment information. Company has completed the process of disposing the unit's remaining assets during the current financial year.

The carrying value of fixed assets (net block) as at March 31, 2011 pending disposal was Rs. 120.28 Lac. During the year Company has disposed all these assets and recognised a profit of Rs. 575.31 Lac on disposal.

2.1.2 contingent liabilities not Provided for in respect of :

As at As at 31.03.2012 31.03.2011

a) Claims Against the Company not Acknowledged as Debts 13.00 14.56

b) Income Tax Matters in Dispute 27.64 28.29

c) Sales Tax Matters in Dispute 1.85 0.55

d) Excise / Customs / Service Tax Matters in Dispute 378.81 322.07

e) Entry Tax Matters in Dispute 74.45 74.45

f) The Government of Madhya Pradesh had imposed electricity cess on captive generation 408.01 408.01 of electricity vide the Madhya Pradesh Upkaar (Dwitiya Sanshodhan) Adhiniyam, 2005.

The imposition of cess was challenged by the Company along with other industrial units before the Hon'ble High Court of Madhya Pradesh. In the meanwhile the State Government passed legislation revoking imposition of the cess effective 17.8.2007. The Hon'ble High Court dismissed the petition and matter is now pending before the Supreme Court for final decision. The entire amount involved has been paid.

g) The Madhya Pradesh Government imposed renewable energy obligation on power produced 50.80 13.80 from captive power plants vide their Notification dated 09.11.2010. The same has been

challenged by Company in the Hon'ble High Court of Madhya Pradesh, as being violative of Article 14 and 19 (1) (g) of the Constitution so far as these provisions relate to captive power plants. Liability estimated on a tentative basis.

h) Arrears of dividends on Cumulative Preference Shares, excluding tax thereon (note 2.1.2) 36.00 –

Based on legal advice, discussions with the solicitors, etc., the management believes that there is fair chance of decisions in the Company's favour in respect of all the items listed at (a) to (g) above and hence no provision is considered necessary against the same. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company's financial position and results of operations.

2.1.3 a) The response to letters sent by the Company requesting confirmation of balances has been insignificant. In the management's opinion, adjustments on reconciliation of the balances, if any required, will not be material in relation to the financial statements of the Company and the same will be adjusted in the financial statements as and when the confirmations are received and reconciliations completed.

b) Inventories, loans & advances, trade receivables and other current / non-current assets are reviewed annually and in the opinion of the management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.

2.1.4 lease commitments

a) The Company leases space for office and other facilities under various operating leases for periods ranging between three to five years along with options that permit renewals for additional periods.

b) The Company has taken motor cars on operating lease, which are non-cancelable for tenure of four years. The total amount recognised in the Statement of Profit & Loss on account of rental expense for these operating leases, for the year, is Rs. 1.93 Lacs (Previous period - Rs. 2.90 Lacs).

2.1.5 employee Benefit obligations

Defined contribution Plans

The Company makes contributions towards provident fund and superannuation fund, to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the superannuation fund is administered by the Trustees of the ‘Maral Overseas Limited Senior Executive Superannuation Fund'. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

Defined Benefit Plan

The Company makes annual contributions to the Employees' Group Gratuity-cum-Life Insurance Scheme of ICICI Prudential Life Insurance Company Limited, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.

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

The Company evaluates these assumptions annually based on its long-term plans of growth and industry standards.

The discount rate is based on prevailing market yields of Indian government bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

The expected rate of return on plan assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

2.1.6 Related Party Disclosures

Following information regarding related parties has been determined on the basis of criteria specified in AS-18 "Related Party Disclosures”.

a) Related Parties with whom transactions have taken place :

i) Key Management Personnel

- Shri Ravi Jhunjhunwala, Chairman

- Shri Shekhar Agarwal, Managing Director ii) Relatives of Key Management Personnel

- Smt. Shashi Agarwal

- Shri Shantanu Agarwal

- Shekhar Agarwal (HUF)

iii) Enterprises Owned or Significantly Influenced by Key Management Personnel or their Relatives

- RSWM Limited

- HEG Limited

- BMD Private Limited

- Agarwal Trademart Private Limited

- Ultramarine Impex Private Limited

- Apeksha Vyapar Private Limited

- BSL Limited

- Cheslind Textiles Limited

- Pawanputra Trading Private Limited

- Sita Nirman Private Limited

2.1.7 Segment information

The Company is currently organized into three business operating segments: Yarn, Fabric and Textile Made-ups. The Company's business segments offer different products and require different technology and marketing strategies.

Yarn includes bought out yarn as well as production of cotton yarn over a wide range of counts, which besides being sold, is also used for further value addition in fabric. It also includes surplus captive & standby power. Fabric includes both bought out fabric as well as the value added activities relating to knitting, dyeing and processing. Textile Made-ups, comprise of made-ups made for renowned international brands.

The accounting principles used in preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments and are as set out in the note on significant accounting policies.

Transfer prices for inter-segment revenues are generally set on an arm's length basis and are eliminated in consolidation.

Revenue and direct expenses in relation to segments are categorized based on items that are individually identifiable or allocable on a reasonable basis to that segment. Revenue and expenses, besides financial costs and taxes that are not allocated to operating segments, are included under "Inter Segment & Unallocated Items”.

Assets and liabilities represent assets (both tangible and intangible) employed in operations and liabilities owed to third parties that are individually identifiable or allocable on a reasonable basis to that segment. Assets and liabilities excluded from allocation to operating segments, are included under "Inter-Segment & Unallocated items”. Capital expenditure includes expenditure incurred during the period on acquisition of segment fixed assets.

The Company's secondary segments are the geographic distribution of activities. Revenue and receivables are specified by location of customers while the other geographic information is specified by location of the assets. North America comprises the United States of America, Canada and Mexico; Europe includes continental Europe (both the east and west), Ireland and the United Kingdom; Africa includes Mauritius; Asian continent has been segregated into the Middle East & Gulf countries while the rest of Asia, other than India has been covered under Far East & South East Asia; Rest of the World comprises all other places except those mentioned above and India.

2.1.8 Till the year ended 31st March 2011, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31st March, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year's classification.

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Mar 31, 2010

As at 31.03. 2010 As at 30.09. 2009 Rs / Lac Rs / Lac

1) Contingent liabilities not provided for in respect of :

i) Counter guarantees given in respect of Guarantees given by the Companys bankers 203.75 230.41

ii) Duties & tax liabilities disputed by the Company 396.78 377.53

iii) Claims not acknowledged by the Company 50.40 41.15

iv) Unexpired Letters of Credit, for which counter guarantee given by the Company 418.26 452.10

2) The Government of Madhya Pradesh had imposed electricity cess on captive generation of electricity vide the Madhya Pradesh Upkaar (Dwitiya Sanshodhan) Adhiniyam, 2005. The imposition of cess was challenged by the Company along with other industrial units before the Honble High Court of Madhya Pradesh. In the meanwhile the State Government passed legislation revoking imposition of the cess effective 17.8.2007. The Honble High Court dismissed the petition and issue is now pending before the Supreme Court for final decision. Pending disposal of the case, Company feels that no provision is considered necessary in respect of above matter. Amount involved Rs.408 lacs (Previous year Rs.408 lacs), not included under note no. B (1) (ii) of this Schedule.

3) Upto financial year 1999-2000, Company was treating plant & machinery of spinning unit as continuous process plant and accordingly charging depreciation based on an estimated useful life of 18 years. The estimated useful life was then revised to 13 years on basis of the then available technology indicators.

From 2008-2009, based on usage, technology and efficiency parameters, the Company, in order to reflect a more appropriate preparation/ presentation of financial statements, revised the estimated useful life of such plant & machinery by reinstating the same to 18 years. Had the depreciation been provided at rates applicable for triple shift operations, the depreciation charge for the period would have been higher by Rs.112.20 lacs (Previous year - Rs.360.29 lacs)

4) (i) The Companys financial restructuring package was approved under the Corporate Debt Restructuring mechanism (CDR) by the CDR Empowered group vide their letter dated March 26, 2009 (CDR letter) and subsequent approvals from the various financial institution and banks received .

The CDR scheme included interalia reduction of interest rate on loans with effect from July 1, 2008 (Cut Off Date), rescheduling of loan repayments, conversion of interest payable into funded interest term loan, conversion of certain portion of the working capital into term loan and conversion of part term loan into preference shares. The restructuring package also stipulated conditions to be complied with by the Company and its promoters relating interalia to disposal of surplus assets, fresh infusion of additional equity by promoters, arrangement for additional infusion of term loan and working capital from existing lenders and bringing in funds by promoters to bridge shortfall of funding if any.

The Company has initiated necessary action to ensure compliance with the above conditions, and is confident that all the conditions as stipulated will be complied with in agreement with the CDR Monitoring Committee of the lenders. Since some of the lenders were yet to give full effect to the CDR package as at end of the year, the Company has incorporated impact of the CDR scheme, as approved vide the aforesaid CDR letter and subsequently accepted by the various lenders, in these financial statements as below.

This has been relied upon by the auditors. The impact of the CDR scheme and related accounts as reflected in these financial statements are subject to final adjustments that may arise on settlement of pending issues and reconciling items with the various lenders.

Profit and Loss Account

a) Interest to banks and financial institutions has been accounted for at the rates as per the restructuring package with effect from the cut off date.

Balance Sheet

b) Interest payable from the cut off date upto March 31, 2009 to the various lenders has been transferred to funded interest term loan.

c) 8 per cent Cumulative Redeemable Preference Shares (8%CRPS) of Rs. 100 each, aggregating Rs. 1885.40 lakhs have been allotted on 30th September, 2009 to the various banks and financial institutions.

d) Forex derivative loss payable to Yes Bank Ltd has been transferred to term loan of Rs. 9.50 crore with residual charge on the fixed assets and current assets of the Company.

e) Unsecured loan aggregating to Rs 1975 Lacs, from a promoter group company, has been converted into equity capital, on a preferential basis at a price of Rs 10/- per share.

f) 3 per cent Cumulative Redeemable Preference Shares (3%CRPS) of Rs. 100 each, aggregating Rs. 800 lakhs have been allotted to the promoters against infusion of capital, as required under the CDR package.

The CDR package also grants a right to lenders to convert defaulted interest / principal into equity, as well as the right to CDR lenders to convert 20% of their debt outstanding beyond seven years from the date of CDR Letter into equity shares, as per SEBI guidelines/ loan covenants, whichever is applicable. (ii) Some of the lenders have been following the practice to recover suo motto, payment of both principal as well as interest from the working capital facility advanced by them, where applicable, or from the current account under instructions from the Company. It is regarded as accepted practice that the due date for payment shall be the date next following the date when interest is charged. Any delay on part of the lender to recover payment, either in line with past practice or specific instructions given in this regard by the Company, is not attributable to default on part of the Company.

5) Miscellaneous expenses include provision for diminution in value of investments made of Rs. Nil (Previous Period - Rs.0.46 lacs). Miscellaneous income includes provision for diminution in value of investments written back during the year of Rs. 2.86 lacs (Previous Period - Rs. Nil).

6) The information as required to be disclosed under The Micro, Small and Medium Enterprises Development Act, 2006 ("the Act") has been determined to the extent such parties have been identified by the Company, on the basis of information and records available with them. This information has been relied upon by the auditors. Disclosure as required under section 22 of the Act, is as under. Disclosure in respect of interest due on delayed payment has been determined only in respect of payments made after the receipt of information, with regards to filing of memorandum, from the respective suppliers.

7) During 2007-08, the Company closed its garment division at the Sarovar unit. Major part of the machinery has since been relocated to another manufacturing facility.

Company had closed the garment division as per provisions of the Industrial Disputes Act, 1947 after ensuring due compliance with all stipulated regulatory provisions. The Companys action for closure was challenged by the District Labour Officer before the local civil court. Company in the meanwhile obtained stay from the Honble High Court of Madhya Pradesh precluding the local authorities from initiating any action for recovery of wages after the date of closure. The Honble High Court has referred matter to the Industrial Tribunal. The Companys petition before the Honble High Court challenging the terms of reference to the Industrial Tribunal was dismissed. The Company filed a Special Leave Petition before the Honble Supreme Court and obtained stay on further proceedings of the Industrial Tribunal Court. Company does not foresee any further liability on the above accounts.

8) In July, 2006, the Board of Directors had resolved substantive downsizing of the Companys manufacturing facility at Jammu in the State of Jammu & Kashmir. After obtaining necessary approval for closure from the state regulatory authorities in March, 2007, the Board of Directors formally approved closure of the unit and relocation/disposal of its assets in May, 2007.

9) Adjustment relating to previous year includes Expenses Rs.3.22 lacs and Income Rs. Nil (Previous period Expenses Rs.202.20 lacs and Income Rs.10.44 lacs).

10) Deferred Taxes

Deferred taxes arise because of difference in treatment between financial accounting and tax accounting, known as "Timing differences". The tax effect of these timing differences is recorded as "deferred tax assets" (generally items that can be used as a tax deduction or credit in future periods) and "deferred tax liabilities" (generally items for which the Company has received a tax deduction, but have not yet been recorded in the statement of income).

Recognition of deferred tax assets has been restricted to the extent of deferred tax liabilities available. Based on schedule of reversal of timing differences giving rise to deferred tax liabilities, the management believes there is requisite degree of virtual certainty that the deferred tax assets, to the extent recognized, would be realised.

11) Lease Commitments

a) The Company leases space for office and other facilities under various operating leases for periods ranging between three to five years along with options that permit renewals for additional periods.

b) The Company has taken motor cars on operating lease, which are non-cancelable for tenure of four years. The total amount recognised in the profit & loss account on account of rental expense for these operating leases, for the period, is Rs. 2.14 Lacs (Previous year - Rs. 8.81 Lacs).

12) Employee benefit obligations

Defined contribution plans

The Company makes contributions towards provident fund and superannuation fund, to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner and the superannuation fund is administered by the Trustees of the Maral Overseas Limited Senior Executive Superannuation Fund. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

Defined benefit plan

The Company makes annual contributions to the Employees Group Gratuity-cum-Life Insurance Scheme of ICICI Prudential Life Insurance Company Limited, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary (last drawn salary) payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuations being carried out at each balance sheet date.

The Company evaluates these assumptions annually based on its long-term plans of growth and industry standards.

The discount rate is based on prevailing market yields of Indian government bonds, as at the balance sheet date, consistent with the currency and estimated term of the post employment benefit obligations.

The expected rate of return on plan assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

The Company adopted AS 15 (Revised) from April 1, 2007 and has accordingly given the following disclosure prospectively from this date:

13) Earnings Per Share

Basic earning per share is computed by dividing the net profit or loss for the year available to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit or loss for the year by the weighted average number of equity shares in issue, adjusted for the effect of all dilutive potential equity shares that were outstanding during the year. Dilutive potential equity shares are weighted for the period they were outstanding and are deemed converted as of beginning of the year, unless they have been issued at a later date.

Potential equity options exist in the form of right of CDR lenders to convert 20% of their debt outstanding beyond seven years from the date of CDR Letter into equity capital, more fully explained in Note 5 of this schedule. Potential options may also arise in the event of default in payment due on loan funds.

14) Related Party Disclosures

Following information regarding related parties has been determined on the basis of criteria specified in AS-18 "Related Party Disclosures". a) Related parties

i) Key management personnel

- Mr. Ravi Jhunjhunwala, Chairman

- Mr. Shekhar Agarwal, Managing Director

ii) Relatives of key management personnel

- Mr. L.N. Jhunjhunwala

- Mrs. Shashi Agarwal

- Mr. Shantanu Agarwal

- Shekhar Agarwal (HUF)

iii) Enterprises over which any person described in (i) & (ii) above is able to exercise significant influence

- RSWM Ltd.

- HEG Ltd.

- BMD (P) Ltd

- Agarwal Trademart (P) Ltd.

- Mayur Knits (P) Ltd.

- Ultramarine Impex (P) Ltd

- Apeksha Vyapar (P) Ltd

- Indo Canadian Consultancy Services Ltd

- BSL Ltd

- Bhilwara Spinners Ltd

15) Segment Information

The Company is currently organized into three business operating segments: Yarn, Fabric and Textile Made-ups. The Companys business segments offer different products and require different technology and marketing strategies.

Yarn includes bought out yarn as well as production of cotton yarn over a wide range of counts, which besides being sold, is also used for further value addition in fabric. It also includes surplus captive & standby power. Fabric includes both bought out fabric as well as the value added activities relating to knitting, dyeing and processing. Textile Made-ups, comprise of made-ups made for renowned international brands.

The accounting principles used in preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments and are as set out in the note on significant accounting policies.

Transfer prices for inter segment revenues are generally set on an arms length basis and are eliminated in consolidation.

Revenue and direct expenses in relation to segments are categorized based on items that are individually identifiable or allocable on a reasonable basis to that segment. Revenue and expenses, besides financial costs and taxes that are not allocated to operating segments, are included under "inter segment & unallocated items".

Assets and liabilities represent assets (both tangible and intangible) employed in operations and liabilities owed to third parties that are individually identifiable or allocable on a reasonable basis to that segment. Assets and liabilities excluded from allocation to operating segments, are included under "inter segment & unallocated items".

Segment assets employed in the Companys various business segments are all located in India. Capital expenditure includes expenditure incurred during the period on acquisition of segment fixed assets.

Geographical revenues are segregated based on location of the customer who is invoiced. North America comprises the United States of America, Canada and Mexico; Europe includes continental Europe (both the east and west), Ireland and the United Kingdom; Africa includes Mauritius; Asian continent has been segregated into the Middle East & Gulf countries while the rest of Asia, other than India has been covered under Far East & South East Asia; Rest of the World comprises all other places except those mentioned above and India.

16) Additional information pursuant to Schedule VI to the Companies Act, 1956: a) Installed Capacity*

* As certified by the Management. Since the Companys installations can technically be considered as multi-purpose plants, their capacity is variable in line with process improvements and the product mix adopted from time to time. The figures given in relation to installed capacities, are therefore, approximate and refer to an assumed product mix.

17) a) Figures in brackets, wherever given, are in respect of previous year.

b) Figures for the Current Period are of six months ended 31st March, 2010 and hence are not strictly comparable with those of previous period, which were of eighteen months ended 30th September, 2009

c) Previous years figures have been regrouped and recast wherever considered necessary.

The Schedules referred to in Balance Sheet and Profit & Loss Account form an integral part of the accounts.