Notes to Accounts of Modella Woollens Ltd.

Mar 31, 2024

S) Provisions and Contingent Liabilities and Assets:

A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past
events and it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation, in respect of which a reliable estimate can be made of the amount of obligation. Provisions
(excluding gratuity and compensated absences) are determined based on management''s estimate required to
settle the obligation at the Balance Sheet date. In case the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used,
the increase in the provision due to the passage of time is recognised as a finance cost. These are reviewed at
each Balance Sheet date and adjusted to reflect the current management estimates.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose
existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company. A contingent liability also arises, in rare cases, where a liability
cannot be recognised because it cannot be measured reliably.

Contingent asset is not recongnised unless it becomes virtually certain that an flow of econimic benefits will
arise.

T) Employee Benefits

i) Defined Contribution Plan

Contributions to defined contribution schemes such as provident fund, employees’ state insurance, labour
welfare are charged as an expense based on the amount of contribution required to be made as and when

services are rendered by the employees. The above benefits are classified as Defined Contribution Schemes as
the Company has no further obligations beyond the monthly contributions.

ii) Defined Benefit Plan

The Company also provides for gratuity which is a defined benefit plan, the liabilities of which is determined
based on valuations, as at the balance sheet date, made by an independent actuary using the projected unit
credit method. Re-measurement, comprising of actuarial gains and losses, in respect of gratuity are recognised
in the OCI, in the period in which they occur. Re-measurement recognised in OCI are not reclassified to the
Statement of Profit and Loss in subsequent periods. Past service cost is recognised in the Statement of Profit
and Loss in the year of plan amendment or curtailment. The classification of the Company’s obligation into
current and non-current is as per the actuarial valuation report.

iii) Leave entitlement and compensated absences

Accumulated leave which is expected to be utilised within next twelve months, is treated as short-term
employee benefit. Leave entitlement, other than short term compensated absences, are provided based on a
actuarial valuation, similar to that of gratuity benefit. Re-measurement, comprising of actuarial gains and
losses, in respect of leave entitlement are recognised in the Statement of Profit and Loss in the period in which
they occur.

iv) Short-term Benefits

Short-term employee benefits such as salaries, wages, performance incentives etc. are recognised as expenses
at the undiscounted amounts in the Statement of Profit and Loss of the period in which the related service is
rendered. Expenses on non-accumulating compensated absences is recognised in the period in which the
absences occur.

v) Termination benefits

Termination benefits are recognised as an expense as and when incurred.

U) Accounting for Taxes of Income: -

i) Current Taxes

Current income tax is recognised based on the estimated tax liability computed after taking credit for
allowances and exemptions in accordance with the Income Tax Act, 1961. Current income tax assets and
liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax
rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the
reporting date.

ii) Deferred Taxes

Deferred tax is determined by applying the Balance Sheet approach. Deferred tax assets and liabilities are
recognised for all deductible temporary differences between the financial statements’ carrying amount of
existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities are measured
using the enacted tax rates or tax rates that are substantively enacted at the Balance Sheet date. The effect on
deferred tax assets and liabilities of a change in tax rates is recognised in the period that includes the enactment
date. Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be
available against which the temporary differences can be utilised. Such assets are reviewed at each Balance
Sheet date to reassess realisation.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset. Current tax
assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to
settle on a net basis, or to realise the asset and settle the liability simultaneously.

In view of uncertainty of income in future, deferred tax is not created

iii) Minimum Alternative Tax

MAT is recongnised as deferred Tax Assets in the Balance Sheet when the asset can be measured reliably and
it is probable that the furure econimic benefit associated with asset will be realised

C. Financial Risk Management
C. i. Risk management framework

A wide range of risks may affect the Company’s business and operational / financial performance. The risks
that could have significant influence on the Company are market risk, credit risk and liquidity risk. The
Company’s Board of Directors reviews and sets out policies for managing these risks and monitors suitable
actions taken by management to minimize potential adverse effects of such risks on the company’s operational
and financial performance.

C. ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Company’s trade and other receivables,
cash and cash equivalents and other bank balances. To manage this, the Company periodically assesses
financial reliability of customers, taking into account the financial condition, current economic trends and
analysis of historical bad debts and ageing of accounts receivable. The maximum exposure to credit risk in
case of all the financial instruments covered below is restricted to their respective carrying amount.

(a) Trade and other receivables from customers

Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit
limits and monitoring the creditworthiness of customers to which the Company grants credit terms in the
normal course of business.

The Company considers the probability of default upon initial recognition of asset and whether there has been
a significant increase in the credit risk on an on-going basis through each reporting period. To assess whether
there is a significant increase in credit risk the Company compares the risk of default occurring on assets as at
the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and
supportive forwarding-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 counterparties
ability to meet its obligation

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

Financial assets are written off when there is a no reasonable expectations of recovery, such as a debtor failing
to engage in a repayment plan with the Company. When loans or receivables have been written off, the
Company continues to engage in enforcement activity to attempt to recover the receivable due, when
recoverable are made, these are recognised as income in the statement of profit and loss.

The Company measures the expected credit loss of trade receivables and loan from individual customers based
on historical trend, industry practices and the business environment in which the entity operates. Loss rates are
based on actual credit loss experience and past trends. Based on the historical data, loss on collection of
receivable is not material hence no additional provision considered.

(b) Cash and cash equivalents and Other Bank Balances

The Company held cash and cash equivalents and other bank balances of Rs. 3,609.21/- at 31st March 2024
(31st March 2023: Rs. 3,286.59). The cash and cash equivalents are held with bank with good credit ratings
and financial institution counterparties with good market standing. Also, Company invests its short term
surplus funds in bank fixed deposit, which carry no / low mark to market risks for short duration therefore does
not expose the Company to credit risk.

C.iii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset.

Liquidity risk is managed by Company through effective fund 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 other borrowing facilities, by continuously monitoring
forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

C.iv. 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 risk comprises three types of risk: currency risk, interest rate risk and other
price risk.

C.iv.a Currency risk

The Company is exposed to currency risk on account of its operating and financing activities. The functional
currency of the Company is Indian Rupee. Our exposure are mainly denominated in U.S. dollars. The USD
exchange rate has changed substantially in recent periods and may continue to fluctuate substantially in the
future. The Company’s business model incorporates assumptions on currency risks and ensures any exposure is
covered through the normal business operations. This intent has been achieved in all years presented. The
Company has put in place a Financial Risk Management Policy to Identify the most effective and efficient
ways of managing the currency risks.

C.iv.b Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company is exposed to interest rate risk through the impact of
rate changes on interest-bearing liabilities and assets. The Company manages its interest rate risk by
monitoring the movements in the market interest rates closely.

The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern
and to optimise returns to its shareholders. Management monitors the return on capital as well as the debt
equity ratio and make necessary adjustments in the capital structure for the development of the business. The
capital structure of the Company is based on management''s judgement of the appropriate balance of key
elements in order to meet its strategic and day - to - day needs. In order to maintain or adjust the capital
structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders
or issue new shares.

Gearing Ratio- There is Debts in the company of Rs NIL as on 31.03.2024 of Rs NIL as on 31.03.2023. The
company is having negative shareholding fund as on 31.3.2024 and 31.3.2023

Note 22: Contingent Liability- NIL

Note 23:

The information about the amount dues to small / micro undertaking are closed to the extent confirmation from
parties received, there is no interest due to be paid during the year and immediate previous period.

Note 24:

Balances are relied upon as per books of accounts wherever the confirmations from debtors /creditors /Loans
/Advances are not available in the opinion of the Management the same are stated at the value which is
receivable / payable in such accounts and does not require any restatement.

Note 25:

In the opinion of the Management there is no obligation in respect of gratuity and leave encashment during the
year.

Note 26:

Rent including society charges for the office premises debited to the profit & loss account for the year is
Rs.197,004/- (Rs.147,753/-). Provision for rent payable upto 31st March 2024 Rs.52,18,319/-
(Rs.50,21,315/-) includes cheques paid but not encashed by the landlord.

Note 27:

Previous year figures have been regrouped and rearranged wherever necessary to confirm with the current year
presentation.

In term of our report of even date For and behalf of Board of Directors

MODELLA WOOLLENS LIMITED

For Kochar & Associates

Chartered Accountants
Firm Regn No. 105256W

Sd/- sd/- sd/-

CA Ravi Khandelwal Sandeep Shah Alpa Shah

Partner Director Director

M. No. 146480 DIN No.- 00368350 DIN No.- 09388780

Place: Mumbai
Dated: 15/05/2024

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Mar 31, 2015

(1) The Company during the year has changed the method of providing depreciation from Written Down Value (WDV) rates as prescribed in erstwhile Schedule XIV of the Companies Act, 1956 to Straight line method of depreciation as per Schedule II of Companies Act, 2013. Consequent to the said change the charge for depreciation and loss for the year is lower by Rs. 11,466/- and accumulated losses are higher by Rs. 19,620/-.

(2) (i) Rent including society charges for office premises debited to the profit & loss account for the year is Rs.2,30,544/- (Rs.2,30,544/-).

(ii) Provision for rent payable up to 31st March, 2015 Rs. 34,45,283/- (Rs. 32,48,279/-) includes cherubs paid but not encased by the landlord.

(3) (i) No provisions of income tax has been made in the books in the absence of taxable income as per Income Tax Act, 1961.

(ii) The Company has not created, deferred tax asset on tax losses and depreciation, that are available for set off against future taxable income, in view of significant uncertainty regarding reliability of the same.

(4) There are no dues to enterprises as defined under the Micro & Small Enterprises Development Act, 2006, which are outstanding for more than 45 days as at March 31", 2015 which is on the basis of such party having been identified by the management & relied upon by the auditor.

(5) In the opinion of the Board, current assets, loans and advances other than those disclosed as doubtful, have a value at least equal to the amounts as shown in the Balance Sheet if realized in ordinary course of the business. The provision for all the liabilities except legal cost is adequate and not in excess of the amount reasonably necessary.

(6) Figures of previous year have been re-grouped/rearranged wherever necessary to confirm to current year.

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Mar 31, 2014

1) Gratuity is provided on the basis of premium computed by the Life Insurance Corporation of India.

2) Under the LIC Scheme, the Company has to bear a part of actual payment to an employee except on death or retirement at sixty. The liability cannot be ascertained.

3) In the case of employees not covered by the Scheme, provision of liability for gratuity is estimated and based on the assumption that the amount is payable to employees at the end of the year.

4) Provision of liability for earned leave estimated and based on the assumption that the accumulated leave to the credit of the employees is payable at the end of the year.

6. Rentals under operating leases are charged to the Profit and Loss account on the straight line basis over the term of the lease.

7. Legal expenses are provided only on receipt of lawyer''s memo of fees as the same cannot be estimated. Advances given to lawyer is adjusted on receipt of final memo of fees.

8. 1. Rent including society charges for office premises debited to the profits loss account for the period is Rs.2,30,544/- (Rs.2.30,544/-)

2. Provision for rent payable upto 31stMarch, 2014 Rs. 32,48,279/-(Rs.30,51,275/-) includes cheques paid but not encashed by the landlord.

9. The Company has not created deferred tax asset on tax losses and depreciation, that are available for set off against future taxable income, in view of significant uncertainty regarding reliability of the same.

10. There are no dues to enterprises as defined under the Micro & Small Enterprises Development Act, 2006, which are outstanding for more than 45 days as at March 31st, 2014 which is on the basis of such party having been identified by the management & relied upon by the auditor.

11. In the opinion of the Board, current assets, loans and advances other than those disclosed as doubtful, have a value at least equal to the amounts as shown in the Balance Sheet if realized in ordinary course of the business. The provision for all the liabilities except legal cost is adequate and not in excess of the amount reasonably necessary.

12. The Company has not accepted any "Public Deposit" as defined in para 2(1)(xi) of Non-Banking Financial Companies Acceptance of Public Deposits(Reserve Bank) Direction, 1998 as at March 31st,2014.

13. Figures of previous period have been re-grouped/rearranged wherever necessary to confirm to current period.

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Mar 31, 2013

1. Related Party Disclosure:

1. Borrowing from parties in which Directors are interested 51 Rent including society charges for office premises debited to the profit & loss account for the period is Rs.2,30,5447- (Rs.2,41,544/-)

2. Provision for rent payable upto 31 st March, 2013 Rs. 30,51,275/- (Rs. 28,05,020/-) includes cheques paid but not encashed by the landlord.

3 The Company has not created deferred tax asset on tax losses and depreciation, that are '' available for set off against future taxable income, in view of significant uncertainty regarding reliability of the same. - 7 There are no dues to enterprises as defined under the Micro & Small Enterprises Development Act 2006 which are outstanding for more than 45 days as at March 31st. 2013 which is on the''basis of such party having been identified by the management & relied upon by the auditor.

4 In the opinion of the Board, current assets, loans and advances other than those disclosed as doubtful have a value at least equal to the amounts as shown in the Balance Sheet if realized in ordinary course of the business. The provision for all the liabilities except legal cost is adequate and not in'' excess of the amount reasonably necessary.

5 The Company has not accepted any "Public Deposit" as defined in para 2(1 ){xi) of Non-Banking FinandaT Companies Acceptance of Public Deposits(Reserve Bank) Direct, 1998 as as at March 31st , 2013.

6. Figures of previous period have been re-grouped/rearranged wherever necessary to confirm to current period.

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Mar 31, 2012

SHARE CAPITAL

(A) The rights, preferences and restrictions attaching to each class of share including restrictions on the distribution of dividends and the repayment of capital

Equity shares-The Company has only class of equity shares. Each holder of equity shares is entitled to one vote per share. The equity shareholders are entitled to dividend only if dividend in a particular financial year is recommended by the Board of Directors and approved by the members at the annual general meeting of that year. In case of winding up, if the assets available for distribution are less than the paid up share capital, then the shortfall will be borne by the members proportionately. Where there is an excess the same shall be distributed proportionately among the members.

(B) Shares in respect of each class in the company held by its holding company or its ultimate holding company including shares held by or by subsidiaries or associates of the holding company or the ultimate holding company in aggregate-Not Applicable

(C) Shares reserved for issue under options and contracts/commitments for the sale of shares disinvestment, including the terms and amounts

Nil

(D) Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash.

Nil

(E) Aggregate number and class of shares allotted as fully paid up by way of bonus shares.

Nil

(F) Aggregate number and class of shares bought back.

Nil

(G) Terms of any securities convertible into equity/preference shares issued along with the earliest date of conversion in descending order starting from the farthest such date

N.A.

(H) Calls unpaid (showing aggregate value of calls unpaid by directors and officers)

Nil

(E) Forfeited shares (amount originally paid up)

NOTE 1

INVESTMENTS

(A) The basis of valuation of individual investments-At lower of cost & market value

(B) Aggregate amount of quoted investments and market value thereof:

Rs. 18,46,027/-(Rs.11,73,641/-) and market value of quoted invt. Rs.18,47,004/- (Rs. 12,17,305/-)

(C) Aggregate amount of unquoted investments- Nil

(D) Aggregate provision made for diminution in value of investments- Nil

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Mar 31, 2011

1. Claim against Rajesh Industries was adjudicated for Rs. 25,00,000/- as per minutes of order dated 24.4.2008 of the Hon'ble Bombay High Court. The default was pursued in the Hon'ble Bombay High Court and the Suit has been disposed off for full & final settlement for Rs. 5,00,000/- by the way of new consent terms dated 26.04.2010. The amount was considered as income for the year ended 31.03.2010

2.1. Rent including society charges for office premises debited to the profit & loss account for the period is Rs.2,42,544/- (Rs.2,42,544/-).

2.2. Rent for the year Rs.2,42,544/- (Rs.2,42,544/-) also include Rs.12,000/- (Rs. 12,000/-) paid as lease rent of office premises to the Official Liquidator of Modella Textile Industries Pvt. Ltd.

2.3. Provision for rent payable upto 31st March, 2011 is Rs. 26,08,016/- (Rs. 24,11,012/-) being cheques paid but not cashed by the land lord.

3. The Company has not created deferred tax asset on tax losses and depreciation, that are available for set off against future taxable income, in view of significant uncertainty regarding readability of the same.

4. The Company has paid minimum alternate Tax (MAT) under section 115JB of the Income- tax Act, 1961 for Assesment Year 2007-08. The amount paid as MAT is allowed to be carried forward for being set off against the future tax liabilities computed in accordance with the provisions of the Income-tax Act other than section 115JB in next seven years.

5. There are no dues to enterprises as defined under the Micro & Small Enterprises Development Act, 2006, which are outstanding for more than 45 days as at March 31st, 2011 which is on the basis of such party having been identified by the management and relied upon by the auditor.

6. In the opinion of the Board, current assets, loans and advances other than those disclosed as doubtful, have a value at least equal to the amounts as shown in the Balance Sheet if realized in ordinary course of the business. The provision for all the liabilities except legal cost(refer note #7 of Schedule # 10) is adequate and not in excess of the amount reasonably necessary.

7. The Company has not accepted any "Public Deposit" as defined in para 2(1)(xi) of Non-Banking Financial Companies Acceptance of Public Deposits(Reserve Bank) Direction, 1998 as at 31st March, 2011

8. Figures of previous year have been re-grouped/rearranged wherever necessary to confirm to current year.

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Mar 31, 2010

1. Claim against Rajesh Industries was adjudicated for Rs. 25,00,000/- as per minutes of order dated 24.4.2008 of the Honble Bombay High Court. Against this upto 31st March, 2009 Rs. 5,00,000/- was received. The default was pursued in the Honble Bombay High Court and the Suit has been disposed off for full & final settlement for Rs. 5,00,000/- by the way of new consent terms dated 26.04.2010. The amount has been reflected in other income.

2. Vide its order dated 5th March, 2009 the Honble Bombay High Court directed the Official Liquidator to pay interest on compensation amounting Rs. 76,34,490/- refunded to the company in financial year ended 31st March, 2007. The Official Liquidator has paid interest of Rs. 17,67,025/- on 23rd April, 2009 towards full and final settlement of interest

3. Related Party Disclosure:

4. Managerial Remuneration

4.1 In view of the loss as computed in accordance with Section 309(5) of the Companies Act, 1956 no commission is payable to the Managing Director.

6. .1. Rent including society charges for office premises debited to the profit & loss account for the period is Rs.2,42,544/- (Rs.2,42,544/-).

2. Rent for the year Rs.2,42,544/- (Rs.2,42,544/-) also include Rs. 12,000/- (Rs. 12,000/-) paid as lease rent of office premises to the Official Liquidator of Modella Textile Industries Pvt. Ltd.

3. Provision for rent payable upto 31st March, 2010 is Rs. 24,11,012/- (Rs. 21,64,757/-) being cheques paid but not cashed by the land lord.

7. .1. The Companys primary business is trading in textiles. In absence of suitable trading partners commercial activity continued to be suspended during the current financial year.

2. In the absence of trading activity the Company has invested surplus funds in liquid funds.

8. The Company has not created deferred tax asset on tax losses and depreciation, that are available for set off against future taxable income, in view of significant uncertainty regarding readability of the same.

9. As trading activity, continued to be suspended during the year, the amount due to micro, small and medium enterprises as at 31st March, 2010 is Nil.

10. In the opinion of the Board, current assets, loans and advances other than those disclosed as doubtful, have a value at least equal to the amounts as shown in the Balance Sheet if realized in ordinary course of the business. The provision for all the liabilities except legal cost(refer note#6 of Schedule # 11) is adequate and not in excess of the amount reasonably necessary.

11. The Company has not accepted any "Public Deposit" as defined in para 2(1 )(xi) of Non-Banking Financial Companies Acceptance of Public Deposits(Reserve Bank) Direction, 1998 as at 31st March, 2010

12. Figures of previous year have been re-grouped/rearranged wherever necessary to confirm to current year.