Notes to Accounts of Sanrhea Technical Textiles Ltd.

Mar 31, 2024

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for verifying periods of between one day to three months, depending on the immediate cash requirements of the company and earn interest at the respective short term deposit rates.

During the financial year ended March 31, 2022, the Company has issued to its Promoters Group 12,10,000 warrants at a price of '' 20.75 each entitling them for subscription of equivalent number of Equity Shares of '' 10 each (including premium of '' 10.75 each share) under Regulation 28(1) of the SEBI (LODR) Regulations, 2015. The holder of the warrants would need to exercise the option to subscribe to equity shares before the expiry of 18 months from the date of allotment. During the financial year ended March 31, 2023, the promoter Group has excercised the option to convert the 7,00,000 warrants into 7,00,000 equity shares.

b. Terms/rights attached to Equity Shares

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

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 legal ownerships of shares.

Nature and Purpose of Reserves:

Securities Premium:

Securities Premium represents the surplus of proceeds received over the face value of shares, at the time of issue of shares.

Retained Earnings:

Retained earnings are the profit/ (loss) that the Company has earned/ incurred till date less any transfer to general reserve, dividends or other distribution paid to Shareholders. Retained earnings include remeasurement loss/ (gain) on defined benefit plans (net of taxes) that will not be reclassified to Statement of Profit and Loss.

b. Vehicle Loan obligations are secured by hypothecation of vehicles taken on hire purchase.

c. Term loan from bank is secured against mortgage of Plant & machine.

d. Term loans were applied for the purpose for which the loans were obtained.

e. The Company has not been declared as a willful defaulter by any bank or financial institution or other lender in accordance with the guidelines on willful defaulters issued by the Reserve Bank of India.

f. The Company do not have any charges or satisfaction which is yet to be registered with Registrar of companies beyond the statutory period.

(i) Cash credit from banks:

a. Indian rupee Working Capital loan from a nationalised bank carries interest @ 10.75 % p.a. The loan is secured by hypothecation of Stock, Book Debts, Plant & Machineries, security of personal assets of Managing Director, a group company guarantee & guranteed by Managing Director of the Company.

b. Indian rupee Working Capital loan from Co operative bank carries interest @ 11 % p.a. The loan is secured by hypothecation of Twister machines.

(ii) Quarterly statements filed with banker for the borrowed funds from banks on the basis of securities of current assets are majorly in agreement with books of account.

24.2 Segment :

Segment reporting as defined in Indian Accounting Standard 108 is not applicable since the entire operation of the Company relates to only one segment i.e. Industrial fabrics. Similarly, revenue of international segment does not exceed 10 % of the total revenue and hence there is also no reportable geographical segment.

24.4 Perfomance obligation

Information about the Company''s performance obligations are summarised below:

Industrial Fabrics

The performance obligation is satisfied upon delivery of the goods and payment is generally due within 0 to 180 days from delivery, usually backed up by financials arrangements.

31 Contingencies and Commitments (Refer Note No. 1.12) a. Contingent liabilities not provided for in respect of:		'' in Lakhs
Sr. Particulars	31st March,	31st March,
No.	2024	2023
(1) Claims against the Company / disputed liabilities not acknowledged as debts	-	-
(2) Disputed Statutory Claims	-	-
total	-	-

b. Commitments

Commitments on account of estimated amount of contracts remaining to be executed on capital account and not provided for relating to Tangible Assets is '' 274.40 Lakhs (PY '' Nil)

32 Fair Value Measurement

Financial Instrument by category and hierarchy

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

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

1. Fair Value of Cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amount largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rate are evaluated by the company based on parameters such as interest rates and individual credit worthiness of the counter party. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair values of such instruments is not materially different from their carrying amounts:-

For the financial assets and liabilities that are measured at fair values, the carrying amount are equal to the fair value.

• Fair value Hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

• Level 2 : Other techniques for which all inputs which have a significant effect on the recoded fair value are observable, either directly or indirectly.

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

33 Capital risk Management

Equity Share capital and other equity are considered for the purpose of company''s capital management.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The Capital structure of the company is based on management''s judgment of its strategic and day-to-day needs with a focus on total equity to maintain investor, creditors and market confidence and to sustain future development and growth of its business.

The management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

34 Financial risk management

The Company''s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risks. The company''s senior management has the overall responsibility for establishing and governing the company''s risk management framework. The company has constituted a Risk management committee, which is responsible for developing and monitoring the company''s risk management policies. The company''s risk management policies are established to identify and analyse the risks faced by the company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the company.

A. Management of Liquidity Risk

Liquidity risk is the risk that the company will face in meeting its obligation associated with its financial liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this management considers both normal and stressed conditions.

Due to dynamic nature of the underlying businesses, company treasury maintains flexibility in funding by maintaining availability of under committed credit lines. Management monitors rolling forecasts of the company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows.

The following table shows the maturity analysis of the company''s financial liabilities based on the contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.

(ii) Price Risk

The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet at fair value through profit and loss. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

Sensitivity Analysis

The table below summarizes the impact of increases/decreases of the BSE index on the Company''s equity and Gain/Loss for the period. The analysis is based on the assumption that the index has increased by 5 % or decreased by 5 % with all other variables held constant, and that all the Company''s equity instruments moved in line with the index.

The above referred sensitivity pertains to quoted equity investments. Profit for the year would increase/decrease as a result of gains/losses on equity securities as at Fair Value through Other Comprehensive Income(FVTOCI).

(iii) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards 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 fixed rate and floating rate financial instruments in its total portfolio.

According to the Company interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, the analysis is prepared assuming that 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 is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

C Management of Credit Risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. 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. Individual risk limits are set accordingly.

The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through out each reporting period. To assess whether there is a significant increase in credit risk, the company compares the risk of default occurring on asset 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 counterparty''s ability to meet its obligations,

iv) Significant increase in credit risk on other financial instruments of the same counterparty,

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

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.

Revenue of INR 2,514.25 Lakhs (P.Y: INR 2,065.18 Lakhs) is derived from two (PY:two) major customers (accounting for 10% or more of the Company''s revenue).

35 Earnings per Share (EPS) as per Indian Accounting Standard 33:

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders (after adjusting for interest on the convertible preference shares) by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

Note: * Key Managerial Personnel and Relatives of Promoters who are under the employment of the Company are entitled to post employment benefits and other long term employee benefits recognised as per Ind AS 19 - ''Employee Benefits'' in the financial statements. Post-employment gratuity benefits of Key Managerial Personnel has not been included in (b) above.

37 Segment Information as per Indian Accounting Standard 108:

Segment reporting as defined in Indian Accounting Standard 108 is not applicable since the entire operation of the Company relates to only one segment i.e. Industrial fabrics. Similarly, revenue of international segment does not exceed 10 % of the total revenue and hence there is also no reportable geographical segment.

38 Post Retirement Benefit Plans as per Indian Accounting Standard 19:

As per Actuarial Valuation as on March 31, 2024 and March 31, 2023 and recognised in the financial statements in respect of Employee Benefit Schemes:

E. Assumptions

With the objective of presenting the plan assets and plan liabilities of the defined benefits plans and post retirement medical benefits at their fair value on the balance sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the method (Projected Unit Credit Method) used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

Risk Exposure - Asset Volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk derivatives to minimize risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments % which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit.

Leave obligations

The leave obligations cover the Company''s liability for sick and earned leave. The amount of the provision of '' 19.56 lakhs [March 31, 23: '' 14.04 lakhs] is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations.

Defined contribution plans

The Company also has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan is '' 30.58 lakhs (P.Y '' 24.95 lakhs).

39 The Code on Social Security, 2020 (''Code'') has been notified in the Official Gazatte of India on September 29, 2020, which could impact the contributions of the Company towards certain employement benefits. The effective date from which changes are applicable is yet to be notified and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in the period of notification of the relevant provisions.

41 Other Statutory Information

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

(II) The Company do not have any transactions with companies struck off.

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

(IV) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(V) The Company have 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 have no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961

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

(VIII) The quarterly returns or statements of Receivables, inventories and creditors for goods filed by the company with banks or financial institutions are in agreement with the books of accounts.

(IX) The Company has been maintaining its books of accounts in the accounting software which has feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled, throughout the year as required by proviso to sub rule (1) of rule 3 of The Companies (Accounts) Rules, 2014 known as the Companies (Accounts) Amendment Rules, 2021.

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Mar 31, 2023

1.13 Provisions, Contingent Liabilities and Contingent Assets

a Provisions are recognised when the Company has present obligation (legal or constructive) as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation.

Contingent Liabilities are disclosed by way of notes to Financial Statements. Contingent assets are not recognised in the financial statements but are disclosed in the notes to the financial statements where an inflow of economic benefits is probable. Provisions and contingent liabilities are reviewed at each Balance Sheet date.

b If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability.

1.14 Employee benefits

a Short Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, short term compensated absences etc., and the expected cost of bonus, ex-gratia are recognised in the period in which the employee renders the related service.

b Post-Employment Benefits

i) Defined Contribution Plans

State governed Provident Fund Scheme and Employees State Insurance Scheme are defined contribution plans.

The contribution paid / payable under the schemes is recognised during the period in which the employees render the related services.

ii) Defined Benefit Plans

The Employee''s Gratuity Fund Scheme and compensated absences is Company''s defined benefit plans. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government Securities as at the Balance Sheet date, having maturity periods approximating to the terms of related obligations.

For defined benefit plans, the amount recognised as ''Employee benefit expenses'' in the Statement of Profit and Loss is the cost of accruing employee benefits promised to employees over the year and the costs of individual events such as past/future service benefit changes and settlements (such events are recognised immediately in rate to the net defined benefit liability or asset is charged or credited to ''Finance costs'' in the Statement of Profit and Loss. Any differences between the interest income on plan assets and the return actually achieved, and any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised immediately in ''Other comprehensive income'' and subsequently not reclassified to the Statement of Profit and Loss.

All defined benefit plans obligations are determined based on valuations, as at the Balance Sheet date, made by independent actuary using the projected unit credit method. The classification of the Company''s net obligation into current and non-current is as per the actuarial valuation report.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligations under the defined benefit plans, to recognise the obligation on net basis.

Gains or losses on the curtailment or settlement of any defined benefits plans are recognised when the curtailment or settlement occurs. Past service cost is recognised as expense on a straight-line basis over the average period until the benefits become vested.

c Long Term Employee Benefits

The employees'' long term compensated absences are company''s defined benefit plans. The present value of the obligation is determined based on the actuarial valuation using the projected unit credit method as at the date of the balance sheet. In case of funded plans, the full value of plan assets is reduced from the gross obligation to recognise the obligation on the net basis.

d Employee Separation Costs

Compensation to employees who have opted for retirement under the voluntary retirement scheme of the Company is payable in the year of exercise of option by the employee. The Company recognises the employee separation cost when the scheme is announced and the Company is demonstrably committed to it.

1.15 Financial instruments

Initial recognition and measurement

The company recognizes a financial asset in its balance sheet when it becomes party to the contractual provisions of the instrument. All financial assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss(FVTPL), transaction cost that are attributable to the acquisition of the financial asset.

Where the fair value of a financial asset at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that users data from observable markets (i.e. level 2 input).

In case the fair value in not determined using a level 1 or level 2 inputs as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain in the Statement of Profit and Loss only to the extent the such gain or loss arises due to a change in factor that market participants take into account when pricing the financial asset.

However trade receivables that do not contain a significant financing component are measured at transaction price.

Investments and other financial assets

(i) Classification

The Company classifies its financial assets in the following measurement categories:

(1) those to be measured subsequently at fair value (either through other comprehensive income, or through the Statement of Profit and Loss), and

(2) those measured at amortised cost.

The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash flows.

(ii) Measurement

At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of financial assets carried at fair value through the Profit and Loss are expensed in the Statement of Profit and Loss.

Debt instruments

Subsequent measurement of debt instruments depends on the Company''s business model for managing the asset and the cash flow characteristics of the asset. The Company classifies its debt instruments into following categories:

(1) Amortised cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in other income using the effective interest rate method.

(2) Fair value through other comprehensive Income

Assets that do not meet the criteria for amortised cost are measured at fair value through Other Comprehensive Income. Interest income from these financial assets is included in other income.

Equity instruments

The Company measures its equity investment other than in subsidiaries, joint ventures and associates at fair value through profit and loss. However where the Company''s management makes an irrevocable choice on initial recognition to present fair value gains and losses on specific equity investments in other comprehensive income (Currently no such choice made), there is no subsequent reclassification, on sale or otherwise, of fair value gains and losses to the Statement of Profit and Loss.

Derecognition

A financial asset ( or, where applicable, a part of a financial asset or part of a group of similar financial assets ) is derecognized (i.e.removed from the company''s balance sheet) when any of the following occurs:

i. The contractual rights to cash flows from the financial asset expires;

ii. The company transfers its contractual rights to receive cash flows of the financial assets and has substantially transferred all the risk and rewards of ownership of the financial assets;

iii. The company retains the contractual rights to receive cash flows but assumes a contractual obligations to pay the cash flows without material delay to one or more recipients under a ''pass-through'' arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);

iv. The company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.

In cases where company has neither transferred nor retained substantially all of the risks and rewards of the financial asset, but retains control of the financial assets, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognizes an associated liability. The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

On De-recognition of a financial asset, (except as mentioned in ii above for financial assets measured a FVTOCI), the difference between the carrying amount and the consideration received is recognized in the Statement of Profit and Loss.

Financial liabilities

Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are classified as fair value through profit and loss. Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method.

1.16 Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

1.17 Cash flow statement

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

i. changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature;

ii. non-cash items such as depreciation, provisions, and unrealized foreign currency gains and losses etc.; and

iii. all other items for which the cash effects are investing or financing cash flows.

1.18 Key accounting estimates and judgements

The preparation of the Company''s Financial Statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Critical accounting estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below:

A. Property, plant and equipment

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company''s assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.

B. Defined Benefit Obligation

The costs of providing pensions and other post-employment benefits are charged to the Statement of Profit and Loss in accordance with IND AS 19 ''Employee benefits'' over the period during which benefit is derived from the employees'' services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates. The same is disclosed in Note 28 & 38 of Financial statement.

1.19 Recent Accounting Pronouncements Issued But Not Yet Effective

In March 2023, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) Amendment Rules, 2023 which amended certain Ind AS as explained below:

a. Ind AS 1 - Presentation of Financial Statements - the amendment prescribes disclosure of material accounting policies instead of significant accounting policies. The impact of the amendment on the Financial Statements is expected to be insignificant basis the preliminary evaluation.

b. Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - the amendment added definition of accounting estimate and clarifies what is accounting estimate and treatment of change in the accounting estimate and accounting policy. There is no impact of the amendment on the Financial Statements basis the preliminary evaluation.

c. Ind AS 12 - Income taxes - the definition of deferred tax asset and deferred tax liability is amended to apply initial recognition exception on assets and liabilities that does not give rise to equal taxable and deductible temporary differences. There is no impact of the amendment on the Financial Statements basis the preliminary evaluation. The above amendments are effective from annual periods beginning on or after 1st April, 2023.

32 Fair Value Measurement

Financial Instrument by category and hierarchy

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

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

1. Fair Value of Cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amount largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rate are evaluated by the company based on parameters such as interest rates and individual credit worthiness of the counter party. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair values of such instruments is not materially different from their carrying amounts:-

For the financial assets and liabilities that are measured at fair values, the carrying amount are equal to the fair value.

• Fair value Hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

• Level 2 : Other techniques for which all inputs which have a significant effect on the recoded fair value are observable, either directly or indirectly.

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

33 Capital risk Management

Equity Share capital and other equity are considered for the purpose of company''s capital management.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The Capital structure of the company is based on management''s judgment of its strategic and day-to-day needs with a focus on total equity to maintain investor, creditors and market confidence and to sustain future development and growth of its business.

The management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

34 Financial risk management

The Company''s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risks. The company''s senior management has the overall responsibility for establishing and governing the company''s risk management framework. The company has constituted a Risk management committee, which is responsible for developing and monitoring the company''s risk management policies. The company''s risk management policies are established to identify and analyse the risks faced by the company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the company.

A. Management of Liquidity Risk

Liquidity risk is the risk that the company will face in meeting its obligation associated with its financial liabilities. The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this management considers both normal and stressed conditions.

Due to dynamic nature of the underlying businesses, company treasury maintains flexibility in funding by maintaining availability of under committed credit lines. Management monitors rolling forecasts of the company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows.

The following table shows the maturity analysis of the company''s financial liabilities based on the contractually agreed undiscounted cash flows along with its carrying value as at the Balance sheet date.

(ii) Price Risk

The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet at fair value through profit and loss. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

Sensitivity Analysis

The table below summarizes the impact of increases/decreases of the BSE index on the Company''s equity and Gain/Loss for the period. The analysis is based on the assumption that the index has increased by 5 % or decreased by 5 % with all other variables held constant, and that all the Company''s equity instruments moved in line with the index.

A change of 5% in market index would have following Impact on profit before tax

(iii) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards 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 fixed rate and floating rate financial instruments in its total portfolio.

C Management of Credit Risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. 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. Individual risk limits are set accordingly.

The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through out each reporting period. To assess whether there is a significant increase in credit risk, the company compares the risk of default occurring on asset 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 counterparty''s ability to meet its obligations,

iv) Significant increase in credit risk on other financial instruments of the same counterparty,

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

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.

35 Earnings per Share (EPS) as per Indian Accounting Standard 33:

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders (after adjusting for interest on the convertible preference shares) by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

Risk Exposure - Asset Volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk derivatives to minimize risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments % which have low correlation with equity securities. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit.

Leave obligations

The leave obligations cover the Company''s liability for sick and earned leave. The amount of the provision of '' 14.04 lakhs [31st March, 22: '' 14.44 lakhs] is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations.

Defined contribution plans

The Company also has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan is '' 24.95 lakhs (P.Y '' 20.44 lakhs).

39 The Code on Social Security, 2020 (''Code'') has been notified in the Official Gazatte of India on September 29, 2020, which could impact the contributions of the Company towards certain employement benefits. The effective date from which changes are applicable is yet to be notified and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in the period of notification of the relevant provisions.

41 Other Statutory Information

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

(II) The Company do not have any transactions with companies struck off.

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

(IV) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries."

(V) The Company have 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 have no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(VII) The Company do not have any subsidiary so there is no requirement to comply with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

(VIII) The quarterly returns or statements of Receivables, inventories and creditors for goods filed by the company with banks or financial institutions are in agreement with the books of accounts.

As per our report of even date For and on behalf of the Board of Directors

For KANTILAL PATEL & CO

CHARTERED ACCOUNTANTS Tushar Patel Tejal Patel

Firm Registration No.: 104744W Managing Director Director

DIN: 00031632 DIN: 01130165

Jinal A. Patel Dharmesh Patel Jasubhai Patel

Partner Company Secretary Chief Financial Officer

Membership No.: 153599 Membership No.: F11150

Place : Ahmedabad Place : Ahmedabad

Date: May 30, 2023 Date: May 30, 2023

---

Mar 31, 2015

1. Corporate information :

SANRHEA TECHNIAL TEXTILES LIMITED is public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay & Ahmedabad stock exchanges in India. The company is engaged in the Manufacturing of Industrial Fabrics like Conveyor Belting fabrics, Chafer fabrics for Tyres , Diaphragm fabrics for Auto industries, Liners etc. The company caters to both domestic and international markets.

2. Terms/rights attached to equity shares

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

During the year ended 31-3-15, the amount of per Share Dividend recognised as distribution to equity Shareholders was Rs. Nil ( PY. Nil)

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.

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.

3. The Company has not issued any bonus shares or shares for consideration other than cash or bought back equity shares during the year or for the period of five years immediately preceding the date of Balance Sheet.

(i) Cash credit from banks are secured against

a Indian rupee Working Capital loan from a nationalised bank carries interest @ 14.25 % p.a. The loan is secured by hypothecation of Stock, Book Debts, Plant & Machineries , a group company guarantee & guranteed by Managing Director of the company b Indian rupee Working Capital loan from Co operative bank carries interest @ 13.00 % p.a. The loan is secured by hypothecation of Twister machines.

(ii) Inter Corporate Borrowing to the tune of 45.00 lacs carries interest @ 13.00 % p.a.

4. NOTE : Fixed Assets -

[1] Vehicles include vehicles amounting to Rs. 1,63,36,4344 (P.Y. Rs. 1,43,09,374 ) which held in the name of Director/ officer of the Company.

[2] Pusuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II, except in case of certain assets as disclosed in Accounting policy on Depreciation and Amortisation. Accordingly the unamortised carrying value is being depreciated / amortised over the revised / remaining useful lives. The written down value of Fixed Assets whose lives have expired as at 1st April 2014 have been adjusted (net of deferred tax 728,805) in the opening balance of General Reserve amounting to 764,416.

Margin money deposits given as security

Margin money deposits with a carrying amount of Rs. 2710000 (31 March 2014: Rs. '27,10,000) are subject to lien to secure non fund based limits from the company's bankers.

5. Additional information to the Financial Statements

6 Contingent Liabilities in respect of: As at As at 31-03-2015 31-03-2014 Rupees Rupees

Disputed demands of Income tax in respect of earlier years for which appeals 0 0 have been preferred before higher authorities.

Note: A future cash outflow in respect of above depends on ultimate settlement/conclusions with the relevant authorities.

7. The Company has accepted fixed deposit from promoters/shareholders by way of unsecured loans pursuant to requirement of nationalized bank of disbursing secured loans, so long as such loans are outstanding. Such fixed deposit falls under the purview of exempted borrowings under section 73 to 76 of the Companies Act, 2013 and the rules framed there under.

8. No provision for diminution of Rs. 3,89,457/- in value of long term quoted investments has been made individually since in the opinion of the management such diminution is of temporary nature and do not represent a permanent fall in the value of individual investment.

9. (a) The balances of Trade Receivables/ Trade Payables are subject to confirmation. Adjustments, if any will be made in accounts on subsequent confirmation/reconciliation.

(b) Trade Receivables over six months old amounting Rs. 97,15,691/- (P.Y. Rs. 13,41,369/-) are being pursued by the Company. In the opinion of the management they are considered good and fully recoverable.

10. Based on the information available with the Company, there are no suppliers who are registered under Micro, Small & Medium Enterprises Development Act, 2006 as at 31st March , 2015. Hence, the disclosure relating to amounts unpaid as at the year ended together with interest paid/ payable under this act have not been given. This is relied upon by auditors.

11. Segment information as per Accounting Standard 17:

Segment reporting as defined in Accounting Standard 17 is not applicable since the entire operation of the Company relates to only one segment i.e. Industrial fabrics. Similarly, revenue of international segment does not exceed 10 % of the total revenue and hence there is also no reportable geographical segment.

12. Related Party Transaction as per Accounting Standard 18:

A) Name of related party & description of relationship with whom transactions taken place:

a. Key Management Personnel:

1. T.M. Patel

2. Tejal T. Patel

b. Relatives of key Management person:

1. M.A. Patel

2. M.A. Patel HUF

c. Enterprises owned or significantly influenced by key management personnel or their relatives:

1. Mahendra Credit & Investments Co.P.Ltd.

2. Avantika Investments Pvt.Ltd.

3. Tejal Trading Pvt.Ltd.

Note:

a) Loan taken from Key Management person, relatives of key Management persons and enterprises owned or significantly influenced by key management personnel or their relatives are interest free. Interest bearing loan taken from enterprises owned by Key management personnel do not stipulate any repayment schedule.

b) Payment to Key Management personnel in form of Managing Director's remuneration is shown in Note No. 25.6

c) Figures in brackets relate to previous year

13. Disclosure as per Accounting Standard 19: Lease

Lease rent agreement of land and building has expired on 1st November 2007. However the company is hopeful to get renewal and to extend the use of land and building thereon. Hence, depreciation on original Building and additional building constructed on leasehold land is calculated at the rates and in the manner specified in schedule II of the Companies Act, 2013. ( Refer Note-9). Rent paid for such property for the year amounts to Rs. 4,19,587 (P.Y. Rs. 4,19,587)

14. Earnings Per Share as per accounting standard 20

a) The amount used as the numerator in calculating basic and diluted EPS is the Net Profit for the year disclosed in the statement of profit and loss.

b) The weighed average number of the equity shares used, as the denominator in calculating both basic and diluted earning per share is 30,00,000 shares.

15. The figure of previous year has been re-grouped/ re-cast as far as possible to make them comparable with those of the current vear.

---

Mar 31, 2014

1. Corporate information :

SANRHEA TECHNIAL TEXTILES LIMITED is public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay & Ahmedabad stock exchanges in India. The company is engaged in the Manufacturing of Industrial Fabrics like Conveyor Belting fabrics, Chafer fabrics for Tyres , Diaphragm fabrics for Auto industries, Liners etc. The company caters to both domestic and international markets.

2 a. Terms/rights attached to equity shares

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

During the year ended 31-3-14, the amount of per Share Dividend recognised as distribution to equity Shareholders was Rs. Nil (PY. Nil)

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. The Company has not issued any bonus shares or shares for consideration other than cash or bought back equity shares during the year or for the period of five years immediately preceding the date of Balance Sheet.

3. a Term loan from a nationalised Bank was taken during the financial year 2011-12 and carries interest @ 14.25 % p.a. The loan is repayable in 13 monthly installments of Rs. 2.04 lacs plus interest. The loan is secured by hypothecation of new & existing plant & machineries except twister machines of the company. Further, the loan has been guaranteed by a group company & personal gurantee of the Managing Director of the company

b Finance lease obligation is secured by hypothecation of vehicles taken on lease.

c Inter Corporate Borrowing to the tune of Rs. 6.62 lacs carries interest @ 16.00 % p.a. & Deposits to the tune of Rs. 14.00 lacs carries interest @ 15.00 p.a. Balance borrowings are interest free.

4. Additional information to the Financial Statements

4.1 Contingent Liabilities in respect of: As at As at 31-03-2014 31-03-2013 Rupees Rupees

Disputed demands of Income tax in respect of earlier years for which 0 0 appeals have been preferred before higher authorities.

Note: A future cash outflow in respect of above depends on ultimate settlement/conclusions with the relevant authorities.

4.2 The Company has accepted fixed deposit from promoters/shareholders by way of unsecured loans pursuant to requirement of nationalized bank of disbursing secured loans, so long as such loans are outstanding. Such fixed deposit falls under the purview of exempted borrowings under section 58A of the Companies Act, 1956 and the rules framed there under.

4.3 No provision for diminution of Rs. 3,89,457/- in value of long term quoted investments has been made individually since in the opinion of the management such diminution is of temporary nature and do not represent a permanent fall in the value of individual investment.

4.4 (a) The balances of Trade Receivables/ Trade Payables are subject to confirmation. Adjustments, if any will be made in accounts on subsequent confirmation/reconciliation.

(b) Trade Receivables over six months old amounting Rs. 13,41,369/- (P.Y. Rs. 2,66,724/-) are being pursued by the Company. In the opinion of the management they are considered good and fully recoverable.

4.5 Based on the information available with the Company, there are no suppliers who are registered under Micro, Small & Medium Enterprises Development Act, 2006 as at 31st March , 2014. Hence, the disclosure relating to amounts unpaid as at the year ended together with interest paid/ payable under this act have not been given. This is relied upon by auditors.

5. Segment information as per Accounting Standard 17:

Segment reporting as defined in Accounting Standard 17 is not applicable since the entire operation of the Company relates to only one segment i.e. Industrial fabrics. Similarly, revenue of international segment does not exceed 10 % of the total revenue and hence there is also no reportable geographical segment.

i. Related Party Transaction as per Accounting Standard 18:

A) Name of related party & description of relationship with whom transactions taken place:

a. Key Management Personnel:

1. T.M. Patel

b. Relatives of key Management person:

1. Tejal T. Patel

2. M.A. Patel

3. M.A. Patel HUF

c. Enterprises owned or significantly influenced by key management personnel or their relatives:

1. Mahendra Credit & Investments Co.P.Ltd.

2. Avantika Investments Pvt.Ltd.

3. Tejal Trading Pvt.Ltd.

4. Exel Chemicals (India) Pvt.Ltd. (up to 30-6-2012)

6. Earnings Per Share as per accounting standard 20

a) The amount used as the numerator in calculating basic and diluted EPS is the Net Profit for the year disclosed in the statement of profit and loss.

b) The weighed average number of the equity shares used, as the denominator in calculating both basic and diluted earning per share is 30,00,000 shares.

7. The figure of previous year has been re-grouped/ re-cast as far as possible to make them comparable with those of the current year.

---

Mar 31, 2013

Corporate information :

SANRHEA TECHNIAL TEXTILES LIMITED is public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay, Vadodara, Rajkot & Ahmedabad stock exchanges in India. The company is engaged in the Manufacturing of Industrial Fabrics like Conveyor Belting fabrics, Chafer fabrics for Tyres , Diaphragm fabrics for Auto industries, Liners etc. The company caters to both domestic and international markets.

1. Additional information to the Financial Statements

1.1 Contingent Liabilities in respect of:

As at As at 31-03-2013 31-03-2012 Rupees Rupees

Disputed demands of Income tax in respect of earlier years 0 0 for which appeals have been preferred before higher authorities.

Note: A future cash outflow in respect of above depends on ultimate settlement/conclusions with the relevant authorities.

1.2 The Company has accepted fixed deposit from promoters/shareholders by way of unsecured loans pursuant to requirement of nationalized bank of disbursing secured loans, so long as such loans are outstanding. Such fixed deposit falls under the purview of exempted borrowings under section 58A of the Companies Act, 1956 and the rules framed there under.

1.3 No provision for diminution of Rs. 3,89,457/- in value of long term quoted investments has been made individually since in the opinion of the management such diminution is of temporary nature and do not represent a permanent fall in the value of individual investment.

1.4 (a) The balances of Trade Receivables/ Trade Payables are subject to confirmation. Adjustments, if any will be made in accounts on subsequent confirmation/reconciliation. (b) Trade Receivables over six months old amounting Rs. 2,66,724/- (P.Y. Rs. 48,368/-) are being pursued by the Company. In the opinion of the management they are considered good and fully recoverable.

1.5 Based on the information available with the Company, there are no suppliers who are registered under Micro, Small & Medium Enterprises Development Act, 2006 as at 31st March , 2013. Hence, the disclosure relating to amounts unpaid as at the year ended together with interest paid/ payable under this act have not been given. This is relied upon by auditors.

2.1 Segment information as per Accounting Standard 17:

Segment reporting as defined in Accounting Standard 17 is not applicable since the entire operation of the Company relates to only one segment i.e. Industrial fabrics. Similarly, revenue of international segment does not exceed 10 % of the total revenue and hence there is also no reportable geographical segment.

2.2 Related Party Transaction as per Accounting Standard 18:

A) Name of related party & description of relationship with whom transactions taken place:

a. Key Management Personnel: 1. T.M. Patel

b. Relatives of key Management person:

1. M.A. Patel

2. Tejal T. Patel

3. M.A. Patel HUF

c. Enterprises owned or significantly influenced by key management personnel or their relatives:

1. Mahendra Credit & Investments Co.P.Ltd.

2. Avantika Investments Pvt.Ltd.

3. Tejal Trading Pvt.Ltd.

4. Exel Chemicals (India) Pvt.Ltd. ( up to 30-6-2012)

2.3 Earnings Per Share as per accounting standard 20 -:

a) The amount used as the numerator in calculating basic and diluted EPS is the Net Profit for the year disclosed in the statement of profit and loss.

b) The weighed average number of the equity shares used, as the denominator in calculating both basic and diluted earning per share is 30,00,000 shares.

---

Mar 31, 2012

SANRHEA TECHNIAL TEXTILES LIMITED is public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay, Vadodara, Rajkot & Ahmedabad stock exchanges in India. The company is engaged in the Manufacturing of Industrial Fabrics like Conveyor Belting fabrics, Chafer fabrics for Tyres , Diaphragm fabrics for Auto industries, Liners etc. The company caters to both domestic and international markets.

Presentation and disclosure of financial statements :

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. The company has reclassifies previous year figures to conform to this year''s classification. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does hot impact recognition . and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements particularly presentation of balance sheet.

a. Terms/rights attached to equity shares

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

During the year ended 31-3-12, the amount of per Share Dividend recognised as distribution to equity Shareholders was Rs. Nil ( PY. Nil)

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.

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.

b. The Company has not issued any bonus shares or shares for consideration other than cash or bought back equity shares during the year or for the period of five years immediately preceding the date of Balance Sheet.

a Term loan-1 from a nationalised Bank was taken during the financial year 2005-06 and carries interest @ 14.25 % p.a. The balance loan is repayable in 2 monthly installment of Rs. 3.60 lacs & balance of Rs 1.52 lacs by last instalment, plus interest. The loan is secured by hypothecation of new & existing plant & machineries except twister machines of the company.Further, the loan has been guaranteed by a group company & personal gurantee of the Managing Director of the company

b Term loan- 2 from a nationalised Bank was taken during the financial year 2011-12 and carries interest @ 14.25 % p.a. The loan is repayable in 25 monthly installments of Rs.2.04 lacs & balance of Rs 0.99 lacs by last instalment, plus interest. The loan is secured by hypothecation of new & existing plant & machineries except twister machines of the company. Further, the loan has been guaranteed by a group company & personal gurantee of the Managing Director of the company

c Finance lease obligation is secured by hypothecation of vehicles taken on lease.

Cash credit from banks are secured against

a Indian rupee Working Capital loan from a nationalised bank carries interest @ 14.25 % p.a. The loan is secured by hypothecation of Stock, Book Debts, Plant & Machineries , a group company guarantee & guranteed by Managing Director of the company b Indian rupee Working Capital loan from Co operative bank carries interest @ 14.00 % p.a. The loan is secured by hypothecation of Twister machines.

# Excise duty on sales amounting to Rs. 26977852 (31 March 2011: Rs. 26732895/-) has been reduced from sales in statemnt of profit & loss and excise duty on (increase) /decrease in stock amounting to Rs. 174810 (31 March 2011: Rs. (287458)) has been considered as (income)/ expense in note 21 of financial statements.

1. Additional information to the Financial Statements

1.1 Contingent Liabilities in respect of: As at As at 31-03-2012 31-03-2011 Rupees Rupees

Disputed demands of Income tax in respect of earlier years 0 9,39,112 for which appeals have been preferred before higher authorities.

Note: A future cash outflow in respect of above depends on ultimate settlement/conclusions with the relevant authorities.

1.2 The Company has accepted fixed deposit from promoters/shareholders by way of unsecured loans pursuant to requirement of nationalized bank of disbursing secured loans, so long as such loans are outstanding. Such fixed deposit falls under the purview of exempted borrowings under section 58A of the Companies Act, 1956 and the rules framed there under:

1.3 No provision for diminution of Rs. 3,89,457/- in value of long term quoted investments has been made individually since in the opinion of the management such diminution is of temporary nature and do not represent a permanent fall in the value of individual investment.

1.4 (a) The balances of Trade Receivables are subject to confirmation. Adjustments, if any will be made in accounts on subsequent confirmation/reconciliation. ''

(b) Trade Receivables over six months old amounting Rs. 48,368/- (P.Y. Rs. 49,636/-) are being pursued by the Company. In the opinion of the management they are considered good and fully recoverable.

1.5 Based on the information available with the Company, there are no suppliers who are registered under Micro, Small & Medium Enterprises Development Act, 2006 as at 31st March , 2012. Hence, the disclosure relating to amounts unpaid as at the year ended together with interest paid/payable under this act have not been given. This is relied upon by auditors.

Notes : The company provides retirement benefits in the form of Provident Fund, Gratuity and Leave Encashment. Provident fund contributions made to " Government Administrated provident Fund" are treated as defined contribution plan since the company has no further obligations beyond its monthly contributions. Gratuity is treated as defined benefit plan and remains unfunded.

1.6 Segment information as per Accounting Standard 17:

Segment reporting as defined in Accounting Standard 17 is not applicable since the entire operation of the Company relates to only one segment i.e. Industrial fabrics. Similarly, revenue of international segment does not exceed 10 % of the total revenue and hence there is also no reportable geographical segment.

1.7 Related Party Transaction as per Accounting Standard 18:

A) Name of related party & description of relationship with whom transactions taken place:

a. Key Management Personnel:

1. T.M. Patel

b. Relatives of key Management person:

1. M.A. Patel

2. Tejal T. Patel

3. M.A. Patel HUF

c. Enterprises owned or significantly influenced by key management personnel ot their relatives:

1. Mahendra Credit & Investments Co.P.Ltd.

2. Avantika Investments Pvt.Ltd.

3. Tejal Trading Pvt.Ltd.

4. Exel Chemicals (India) Pvt.Ltd. (From 15-7-2011)

Note :

a) Loan taken from Key Management person, relatives of key Management persons and enterprises owned or significantly influenced by key management personnel or their relatives are interest free. Interest bearing loan taken from enterprises owned by Key management personnel do not stipulate any repayment schedule.

b) Payment to Key Management personnel in form of Managing Director''s remuneration is shown in Note No. 24.6

c) Figures in brackets relate to previous year

(4b) Operating lease: company as lessee

The company has entered into commercial leases on certain items of machinery. These leases have an average life of three years with no renewal option included in the contracts. There are no restrictions placed upon the company by entering into these leases.

(4c) Lease rent agreement of land and building has expired on 1st November 2007. However the company is hopeful to get renewal and to extend the use of land and building thereon. Hence, depreciation on original Building and additional building constructed on leasehold land is calculated at the rates and in the manner specified in schedule XIV of the Companies Act, 1956. ( Refer Note-9). Rent paid for such property for the year amounts to Rs. 4,19,587 (P.Y. Rs. 4,19,587)

1.8 Earnings Per Share as per accounting standard 20

a) The amount used as the numerator in calculating basic and diluted EPS is the Net Profit for the year disclosed in the statement of profit and loss.

b) The weighed average number of the equity shares used, as the denominator in calculating both basic and diluted earning per share is 30,00,000 shares.

---

Mar 31, 2011

(1) Contingent Liabilities in respect of As at As at 31-3-2011 31-3-2010 Rupees Rupees

Disputed demands of Income tax in respect of earlier years for which 9,39,112 9,39,112 appeals have been preferred before higher authorities.

Note: A future cash outflow in respect of above depends on ultimate settlement / conclusions with the relevant authorities.

(2) Estimated amounts of contracts remaining to be executed on capital — — account and not provided for ( Net of Advances)

(3) The Company has accepted fixed deposit from promoters by way of unsecured loans pursuant to requirement of nationalized bank for disbursing secured loans, so long as such loans are outstanding. Such fixed deposit falls under the purview of exempted borrowings under section 58A of the Companies Act, 1956 and the rules framed there under.

(4) No provision for diminution of Rs. 3,89,457/- in value of long term quoted investments has been made individually since in the opinion of the management such diminution is of temporary nature and do not represent a permanent fall in the value of individual investment.

(5) (a) The balances of Sundry Debtors are subject to confirmation. Adjustments, if any will be made in accounts on subsequent confirmation/reconciliation.

(b) Sundry Debtors over six months old amounting to Rs. 49,636/- (P.Y. Rs. 69,900/-) are being pursued by the Company. In the opinion of the management they are considered good and fully recoverable.

(6) Based on the information available with the company, there are no suppliers who are registered under Micro, Small & Medium Enterprises Development Act, 2006 as at 31ST March,2011. Hence the disclosure relating to amounts unpaid as at the year end together with interest paid/ payable under this act have not been given. This is relied upon by auditors.

(7) Employee Benefit obligations

(i) Defined Contribution Plans :

Amount of Rs. 10,13,889/- (P.Y. Rs. 7,34,751/-) is recognized as expenses and included in "Employee''s expenses" ( Schedule 17) in the Profit & Loss Account.

Notes : The company provides retirement benefits in the form of Provident Fund, Gratuity and Leave Encashment. Provident fund contributions made to "Government Administrated Provident Fund" are treated as defined contribution plan since the company has no further obligations beyond its monthly contributions. Gratuity is treated as defined benefit plan and remains unfunded.

(8) Segment Reporting:Segment reporting as defined in Accounting Standard 17 is not applicable since the entire operation of the company relates to only one segment i.e. fabrics

(9) Related Party Transactions:

A) Name of related party & description of relationship with whom transactions taken place:

a. Key Management Personnel:

1. T.M. Patel

b. Relatives of key Management person:

1. M.A. Patel

2. Tejal T. Patel

3. M. A. Patel HUF

c. Enterprises owned or significantly influenced by key management personnel or their relatives:

1. Mahendra Credit & Investments Co.P. Ltd.

2. Avantika Investment Pvt. Ltd.

3. Tejal Trading Pvt. Ltd.

Note :

a) Loan taken from Key Management person, relatives of key Management persons and enterprises owned or significantly influenced by key management personnel or their relatives are interest free. Interest bearing loan taken from enterprises owned by Key management personnel do not stipulate any repayment schedule.

b) Director''s sitting fees is shown separately in accounts.

c) Payment to Key Management personnel in form of Managing Director''s remuneration is shown in Note No. 13

d) Figures in brackets relate to previous year

(10c) Lease rent agreement of land and building has expired on 1st November 2007. However the company is hopeful to get renewal and to extend the use of land and building thereon. Hence, depreciation on original Building and additional building constructed on leasehold land is calculated at the rates and in the manner specified in schedule XIV of the Companies Act, 1956. ( Refer Schedule - 4). Rent paid for such property for the year amounts to Rs. 4,19,587 (P.Y. Rs. 4,19,587)

(11) Earnings Per Share:

a) The amount used as the numerator in calculating basic and diluted EPS is the Net Profit for the year disclosed in the profit and loss account.

b) The weighed average number of the equity shares used, as the denominator in calculating both basic and diluted earning per share is 30,00,000 shares.

Note:

(1) Government of India by the note dated 07/12/92 has abolished the provision of licence in respect of textile industry. Hence, company is not required to have a licence for installation of its machineries.

(2) Installed capacity is as certified by management and relied upon by auditors. Based on change in product mix, company has during the year re-stated the installed capacity. This capacity does not include capacity of machineries taken on rent.

(3) Actual production of Twisting, Warping & Weaving includes of 97,882 (P.Y. 48,282) kgs. and actual production of dipping includes 97,882 (P.Y.1,838) kgs produced on Job work basis for others.

(4) Actual production of Twisting, Warping & Weaving includes 1,650 (P.Y. 9,000) kgs. produced by third party on job work basis.

(12) The matters, other than referred here in, of Part II, Schedule VI, to the Companies Act, 1956 are not considered applicable to the company.

(13) The figure of previous year has been re-grouped/re-cast as far as possible to make them comparable with those of the current year.