Notes to Accounts of VTM Ltd.

Mar 31, 2025

2) The Company has no Holding or Subsidiary Companies.

3) During the last five years immediately preceding the date of Balance Sheet, the Company has neither issued any shares as bonus shares nor for consideration other than cash and has not bought back any shares.

4) Rights, preferences and restrictions in respect of equity shares issued by the Company

(a) The company has issued only one class of equity shares having a par value of Re. 1 each. The equity shares of the company having par value of Re.1/-rank pari-passu in all respects including voting rights and entitlement to dividend.

(b) The Company declares dividend on equity shares. In the event of declaration of interim dividend, the same is as per the decision of the Board of Directors. Final dividend is proposed by Board of Directors and approved by the shareholders of the Company at the Annual General Meeting. The directors have recommended a dividend of INR 0.25 per equity share of INR 1 each (including the interim dividends already paid) for the year ended March 31, 2025 (For the year ended March 31,2024 INR 0.75 per every share of INR 1 each)

(c) In the event of liquidation, shareholders will be entitled to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be proportionate to the number of equity shares held by the shareholder.

Other comprehensive income represents the balance in equity for items to be accounted in Other Comprehensive Income (OCI). The Company has opted to recognise the changes in the fair value of certain investments in equity instruments and remeasurement of defined benefit obligations in OCI. The Company transfers the amounts recognised in OCI to the Retained Earnings, except in the case of fair value recognition of equity instruments. The effect of fair valuation of equity instruments, including the profit on sale of such investments will be recognised in OCI and will be transferred to retained earnings only when the respective equity instruments are derecognised.

Note : The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken as at the reporting date.

Registration, Modification and Satisfaction of charges relating to the year under review, had been filed with the ROC, within the prescribed time or within the extended time requiring the payment of additional fees

** Terms of loan and security details

1) Term loan -1 availed from HDFC Bank by securing first charge on the specific assets procured under ATUF Scheme - repayable in 5 years on quarterly basis, commencing from December 2019.

2) Term loan - II availed from HDFC Bank by securing first charge on the specific assets procured under ATUF Scheme - repayable in 5 years on half yearly basis, commencing from February 25, 2021.

3) Term loan - III availed from HDFC Bank by securing first charge on the specific assets procured under ATUF Scheme - repayable in 5 years on quarterly basis, commencing from August 15, 2020.

(d) Proceedings under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder

There are no proceed ngs i nitiated or are pendi ng agai nst the company for holdi ng any benami property under the Benami Transacti ons (Prohi biti on) Act, 1988 (45 of 1988) and rules made thereunder

(e) Borrowings from banks

The Company has been sancti oned worki ng capi tal li mi ts i n excess of five crore rupees, in aggregate, from banks or fi nanci al instituti ons on the basi s of securi ty of current assets and the quarterly returns or statements fi led by the company with such banks or fi nanci al instituti ons are i n agreement wi th the books of account of the Company.

The Company is not declared as wilful defaulter by any bank or financial Institution or other lenders.

(f) Relationship with Struck off Companies

The Company did not have any transactions with Companies struck off under Section 248 of Companies Act, 2013 or Section 560 of Companies Act, 1956 considering the information available with the Company.

(g) Compliance with number of layers of companies

The Company do not have any parent company and accordingly, compliance with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 is not applicable for the year under consideration.

51 Additional regulatory and other information as required by the Schedule III to the Companies Act 2013 Formula adopted for above Ratios:

Current Ratio = Current Assets / (Total Current Liabilities - Security Deposits payable on Demand - Current maturities of Long Term Debt)

Debt-Equity Ratio = Total Debt / Total Equity

Debt Service Coverage Ratio = (EBITDA - Current Tax) / (Principal Repayment Gross Interest on term loans)

Return on Equity Ratio = Total Comprehensive Income / Average Total Equity

Inventory Turnover Ratio (Average Inventory days) = 365 / (Net Revenue / Average Inventories)

Trade receivables Turnover Ratio (Average Receivables days) = 365 / (Net Revenue / Average Trade receivables)

T rade Payables T urnover Ratio (Average Payable days) = 365 / (Net Revenue / Average T rade payables)

Net Capital Turnover Ratio = (Inventory Turnover Ratio Trade receivables turnover ratio - Trade payables turnover ratio)

Net Profit Ratio = Net Profit / Net Revenue

Return on Capital employed = (T otal Comprehensive I ncome I nterest) / (Average of (Equity T otal Debt))

Return on Investment (Assets) = Total Comprehensive Income / Average Total Assets

Reasons for Variation if more than 25%

Current Ratio

Increase in the trade receivables and inventories resulted in the increase in the Current Ratio Debt Equity Ratio

The significant increase in profit after tax during the year and reduction in borrowings due to repayments resulted in the decrease in the Debt Equity Ratio Debt Service Coverage Ratio

Decrease in the debt and significant increase in the profit after tax has resulted in the increase of Debt Service Coverage Ratio T rade Receivable Turnover Ratio

The increase in trade receivables not due as at the yearend compared to the previous year, has resulted in the increase in the Trade Receivable Turnover Days Net Capital Turnover Ratio

Increase in the trade receivables and inventories resulted in the increase in the Net Capital Turnover Ratio

(i) Scheme of arrangements

There are no Scheme of Arrangements approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013 during the year.

(j) Advance or loan or investment to intermediaries and receipt of funds from intermediaries

The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall (i) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

The company has also 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 (i) 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 (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(k) Undisclosed Income

The Company do not have any transaction which are not recorded in the books of accounts that has been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 during any of the years.

(l) Details of Crypto Currency or Virtual Currency

The Company did not trade or invest in Crypto Currency or virtual currency during the financial year. Hence, disclosures relating to it are not applicable.

(m) Audit Trail

The Company uses an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all transactions recorded in the software and the audit trail feature has not been tampered with at any time during the year. The audit trail has been preserved by the company as per the statutory requirements for record retention.

52 Financial Instruments Capital management

The Company manages its capital to ensure that entities in the Company will be able to continue as going concern, while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity, long term and short-term borrowings.

Fair value hierarchy

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

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

Level 2 - Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

The cost of unquoted investments included in Level 3 of fair value hierarchy approximate their fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosures are required):

Financial risk management objectives

The treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company seeks to minimise the effects of these risks by using natural hedging financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company''s policies approved by the board of directors, which provide written principles on foreign exchange risk, the use of financial derivatives, and the investment of excess liquidity. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company actively manages its currency and interest rate exposures through its finance division and uses derivative instruments such as forward contracts and currency swaps, wherever required, to mitigate the risks from such exposures. The use of derivative instruments is subject to limits and regular monitoring by appropriate levels of management.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company actively manages its currency rate exposures through a centralised treasury division and uses natural hedging principles to mitigate the risks from such exposures. The use of derivative instruments, if any, is subject to limits and regular monitoring by appropriate levels of management.

The carrying amounts of the Company''s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

Foreign currency sensitivity analysis

Movement in the functional currencies of the various operations of the Company against major foreign currencies may impact the Company''s revenues from its operations. Any weakening of the functional currency may impact the Company''s cost of imports and cost of borrowings and consequently may increase the cost of financing the Company''s capital expenditures. The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 2%, which represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 2% change in foreign currency rates. The estimated sensitivity impact will be around /- INR 103.77 lakhs (Previous year Rs. 31.46 lakhs), which is considered to be immaterial to the size of operations of the Company.

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

Interest rate risk management

The Company is exposed to interest rate risk because it borrow funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied. Further, in appropriate cases, the Company also effects changes in the borrowing arrangements to convert floating interest rates to fixed interest rates.

Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 25 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.

The 25 basis point interest rate changes will impact the profitability by INR 0.45 Lakhs for the year (Previous year INR 0.24 Lakhs)

Credit risk management

Credit risk arises when a customer or counterparty does not meet its obligations under a customer contract or financial instrument, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables and from its financing/ investing activities, including deposits with banks, mutual fund investments, investments in debt securities and foreign exchange transactions. The Company has no significant concentration of credit risk with any counterparty.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure is the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, margin money and other financial assets excluding equity investments.

(a) Trade Receivables

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and, based on the evaluation, credit limit of each customer is defined. Wherever the Company assesses the credit risk as high, the exposure is backed by either bank, guarantee/letter of credit or security deposits.

The Company does not have higher concentration of credit risks to a single customer. As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default in payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

The allowance for lifetime expected credit losses on trade receivables for the years ended March 31,2025 and 2024 and the reconciliation of allowance for expected credit losses are as follows:

March 31, 2025 March 31, 2024

Balance at the beginning of the year 18.72 11.42

Changes during the year 2.13_7.30

Balances at the end of the year 20.85_18.72

(b) Investments, Derivative Instruments, Cash and Cash Equivalents and Bank deposits

Credit Risk on cash and cash equivalents, deposits with the banks/financial institutions is generally low as the said deposits have been made with the banks/financial institutions, who have been assigned high credit rating by international and domestic rating agencies.

Credit Risk on Derivative Instruments is generally low as the Company enters into the Derivative Contracts with the reputed Banks.

Investments of surplus funds are made only with approved Financial Institutions/Counterparty. Investments primarily include investment in units of quoted Mutual Funds. These Mutual Funds and Counterparties have low credit risk. The Company has standard operating procedures and investment policy for deployment of surplus liquidity, which allows investment in debt securities and mutual fund schemes of debt and arbitrage categories and restricts the exposure in equity markets.

Offsetting related disclosures

Offsetting of cash and cash equivalents to borrowings as per the loan agreement is available only to the bank in the event of a default. Company does not have the right to offset in case of the counter party''s bankruptcy, therefore, these disclosures are not required.

Liquidity risk management

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company invests its surplus funds in bank fixed deposit and mutual funds, which carry minimal mark to market risks. The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

54 Retirement benefit plans Defined contribution plans

In accordance with Indian law, eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees’ salary. The contributions, as specified under the law, are made to the Provident fund as well as Employee State Insurance Fund.

The total expense recognised in profit or loss of INR 82.14 lakhs (for the year ended March 31, 2024 is INR 64.84 lakhs) represents contribution payable to these plans by the Company at rates specified in the rules of the plan.)

Defined benefit plans

(a) Gratuity

Gratuity is payable as per Payment of Gratuity Act, 1972. In terms of the same, gratuity is computed by multiplying last drawn salary (basic salary including dearness Allowance if any) by completed years of continuous service with part thereof in excess of six months and again by 15/26. The Act provides for a vesting period of 5 years for withdrawal and retirement and a monetary ceiling on gratuity payable to an employee on separation, as may be prescribed under the Payment of Gratuity Act, 1972, from time to time. However, in cases where an enterprise has more favourable terms in this regard, the same has been adopted.

(b) Compensated absences

As per the policy of the Company, compensated absences are not entitled to be carried forward to the subsequent financial year and lapse at the end of the reporting period. Accordingly, no liability towards compensated absences are recognised in these financial statements.

---

Mar 31, 2024

2) The Company has no Holding or Subsidiary Companies.

3) During the last five years immediately preceding trie date of Balance Sheet, the Company has neither issued any shares as bonus shares nor for consideration other than cash and has not bought back any shares.

4) Rights, preferences and restrictions in respect of equity shares issued by the Company

(a) The company has issued only one class of equity shares having a par value of Re. f each. The equity shares of the company having par value of Re.1/-rank pari-passu in all respects including voting rights and entitlement to dividend.

(b) The Company declares dividend on equity shares. In the event of declaration of interim dividend, trie same is as per the decision of the Board of Directors. Final dividend is proposed by Board of Directors and approved by the shareholders of the Company at the Annual General Meeting. The directors have recommended a dividend of INR 0.75 per equity share of INR1 each (exdudingthe interim dividends already paid) for trie year ended March 31,2024 (For the year ended March 31,2023 INR 0.70 per every share of INR 1 each)

(c) In the event of liquidation, shareholders will be entitled to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be proportionate to the number of equity shares held by the shareholder.

General Reserve represents the reserve created in accordance with Companies Act, 2013 by transferring a portion of profit of the year. This is a free reserve and the Company can use it for declaration of dividends, subject to the conditions prescribed by the Companies Act, 2013.

Other comprehensive income represents the balance in equity for items to be accounted in Other Comprehensive Income (OCI). The Company has opted to recognise the changes in the fair value of cedain investments in equity instruments and remeasurement of defined benefit obligations in OCI. The Company transfers the amounts recognised in OCI lo the Retained Earnings, except in the case of fair value recognition of equity instruments. The effect offairvaluation of equity inslruments, including the profiton sale of such investments will be recognised in OCI and will be transferred to retained earnings only when the respective equity instruments are derecognised.

Profit and Loss account represent the undistributed profits of the Company remaining after transfer to other Reserves. This is a free reserve and the Company can use it for declaration of dividends, subject to the conditions prescribed by the Companies Act, 2013.

Note : The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken as at the reporting date.

Registration, Modification and Satisfaction of charges relating to the year under review, had been filed with the ROC, within the prescribed time or within the extended time requiring the payment of additional fees

" Terms of loan and security details

1) Term loan - I availed from HDFC Bank by securing first charge on the specific assets procured under ATU F Scheme - repayable in 5 years on quarterly basis, commencing from December 2019.

2) Term loan - II availed from HDFC Bank by securing first charge on the specific assets procured under ATUF Scheme - repayable in 5 years on half yeady basis, commencing from February 25, 2021.

3) Term loan - III availed from HDFC Bank by securing first charge on the specific assets procured under ATU F Scheme - repayable in 5 years on quarterly basis, commencing from August 15,2020.

46	Commitments and contingent 1 iabilily
	Particulars	As at	As at
		March 31,3024	March 31.2023
	(a| Contingent Liabilities "
	Tax Demands and PF Arrears under dispute	6237	62.37
	Electricty peak hour penality dispute	35.68	3.80
	Income tax demands	325.17	325.17
	Claims against the Company by a customer not acknowledged as debt	110.61
	Bills discounted	235.24	735.57
	Bank Guarantees/ Letter of Credits	1.61	1.61
	(b) Commitments
	Estimated amount of contracts remaining to be executed on capital accounts and not provided for	314.95	123.19

** The management believes, based on internal assessment and/ or legal advice, that the probability of an ultimate adverse decision and outflow of resources of the company is not probable and accordingly, no provision for the same is considered necessary.

There are no unfulfilled conditions and other contingencies attached to government assistance that has been recognised in the financial statements.

The company has opted for deferred income. Accordingly, government grant is credited to profit or loss on a straight-line basis over the expected life of the related asset and presented within other income. In respect of capital grant towards specific asset, the same is adjusted in the carrying amount of the related asset as required by Ind AS 20.

(d) Proceedings under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder

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

(e) Borrowings from banks

The Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks or financial institutions on the basis of security of current assets and the quarterly returns or statements filed by the company with such banks or financial institutions are in agreement with the books of account of the Company.

The Company is not declared as wilful defaulter by any bank or financial Institution or other lenders.

(f) Relationship with Struck off Companies

The Company did not have any transactions with Companies struck off under Section 248 of Companies Act, 2013 or Section 560 of Companies Act, 1956 considering the information available with the Company.

(g) Compliance with number of layers of companies

The Company do not have any parent company and accordingly, compliance with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 is not applicable for the year under consideration.

Formula adopted for above Ratios:

Current Ratio = Current Assets / (Total Current Liabilities - Security Deposits payable on Demand - Current maturities of Long Term Debt) Debt-Equity Ratio = Total Debt / Total Equity

Debt Service Coverage Ratio = (EBITDA- Current Tax) / (Principal Repayment Gross Interest on term loans)

Return on Equity Ratio = Total Comprehensive income / Average Total Equity

Inventory Turnover Ratio (Average Inventory days) = 365 / (Net Revenue / Average Inventories)

Trade receivables Turnover Ratio (Average Receivables days) = 365 / (Net Revenue / Average Trade receivables)

Trade Payables Turnover Ratio (Average Payable days) = 365/ (Net Revenue / Average Trade payables)

Net Capital Turnover Ratio = (Inventory Turnover Ratio Trade receivables turnover ratio - Trade payables turnover ratio)

Net Profit Ratio = Net Profit / Net Revenue

Return on Capital employed = (Total Comprehensive Income Interest) / (Average of (Equity Total Debt))

Return on investment (Assets) = Total Comprehensive Income / Average Total Assets

Reasons for Variation if more than 25%

Current Ratio

Increase in the Creditors and current maturities of long term borrowings resulted in increase of current liabilities with consequential impact on the Current Ratio

Debt Equity Ratio

The significant increase in profit after tax during the year and reduction in borrowings due to repayments resulted in the decrease in the Debt Equity Ratio

Debt Service Coverage Ratio

Decrease in the debt and significant increase in the profit after tax has resulted in the increase of Debt Service Coverage Ratio Inventory Turnover Ratio

The increase in the made up unit''s stock resulted in the increase in the Inventory Turnover Days Trade Receivable Turnover Ratio

The increase in trade receivables not due as at the year end compared to the previous year, has resulted in the increase in the Trade Receivable Turnover Days Trade Payables Turnover Ratio

The year end purchases of yarn resulted in temporary increase of trade payables which impacted the Trade Payable Turnover days.

(i) Scheme of arrangements

There are no Scheme of Arrangements approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act,

2013 during the year.

(j) Advance or loan or investment to intermediaries and receipt of funds from intermediaries

The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary shall (i) directly or indirectly iend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

The company has also not received any fund from any person(s) or entity(ies), including foreign entities (Funding Parly) with the understanding (whether recorded in writing or otherwise) that the company shall (i) 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 (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(k) Undisclosed Income

The Company do not have any transaction which are not recorded in the books of accounts that has been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 during any of the years.

(l) Details of Crypto Currency or Virtual Currency

The Company did not trade or invest in Crypto Currency or virtual currency during the financial year. Hence, disclosures relating to it are not applicable.

(m) Audit Trail

The Company uses an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all transactions recorded in the software and the audit trail feature has not been tampered with at any time during the year. The audit trail has been preserved by the company as per the statutory requirements for record retention.

52 Financial Instruments Capital management

The Company manages its capital to ensure that entities in the Company will be able to continue as going concern, while maximisingthe return to stakeholdersthrough the optimisation of the debt and equity balance.

The Companydeterminesthe amountof capital required on the basis of annual operating plans and long-term productand otherstrategicinvestment plans. The funding requirements are met through equity, long term and short-term borrowings.

For the purposes of the Company''s capital management, capital includes issued capital and other equity reserves attributable to the equity holders.

Fair value hierarchy

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observableor unobservableand consists of the following three levels:

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

Level 2 - Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

The cost of unquoted investments included in Level 3 of fair value hierarchy approximate their fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosures are required):

Financial risk management objectives

The treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other pnee risk), credit risk and liquidity risk.

The Company seeks to minimise the effects of these risks by using natural hedging financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company''s policies approved by the board of directors, which provide written principles on foreign exchange risk, the use of financial derivatives, and the investment of excess liquidity. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company actively manages its currency and interest rate exposures through its finance division and uses derivative instruments such as forward contracts and currency swaps, wherever required, to mitigate the risks from such exposures. The use of derivative instruments is subject to limits and regular monitoring by appropriate levels of management.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company actively manages its currency rate exposures through a centralised treasury division and uses natural hedging principles to mitigate the risks from such exposures. The use of derivative instruments, if any, is subject to limits and regular monitoring by appropriate levels of management.

Foreign currency sensitivity analysis

Movement in the functional currencies of the various operations of the Company against major foreign currencies may impact the Company’s revenues from its operations. Any weakening of the fu notional currency may impact the Company''s cost of imports and cost of borrowings and conseq uently may increase the cost of financing the Company''s capital expenditures. The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposureof a currency and a simultaneousparallel foreign exchange rates shift in the foreign exchange rates of each currencyby 2%, which representsmanagement''s assessmentof the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 2% change in foreign currency rates. The estimated sensitivity impact will be around /- INR 31.36 lakhs (Previous year Rs. 2.93 lakhs), which is considered to be immaterial to the size of operations of the Company.

In management''sopinion, the sensitivityanalysis is unrepresentativeof the inherentforeignexchange risk because the exposure at the end of the reporiing period does not reflect the exposure during the year.

Interest rate risk management

The Companyis exposed to interest rate risk because it borrow funds at both f xed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings and by the use of interest rate swap contracts. Hedging activitiesare evaluated regularly to align with interest rate views and defined risk appetite,ensuring the most cost-effedivehedgingstrategiesare applied. Further, in appropriatecases, the Companyalso effects changes in the borrowing arrangements to convert floating interest rates to fixed interest rates.

Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reportingperiod. Forfloating rate liabilities, theanalysis is preparedassumingthe amountof the liability outstandingatthe end of the reporting period was oulstandingfor the whole year. A 25 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.

The 25 basis point interest rate changes will impact the profitability by INR 0.24 Lakhs for the year (Previous year INR 0.21 Lakhs)

Credit risk management

Credit risk arises when a customer or counterparty does not meet its obligations under a customer contract or financial instrument, leading to a financial loss. The Companyis exposedto credit risk from its operatingactivities primarily trade receivablesand from its financing/investingactivities, including deposits with banks, mutual fund investments, investments in debt securities and foreign exchange transactions. The Company has no significant concentration of credit risk with any counterparty.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure is the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, margin money and other financial assets excluding equity investments.

(a) Trade Receivables

Trade receivablesare consisting of a large number of customers.The Companyhas credit evaluation policy for each customerand, based on the evaluation, credit limit of each customer is defined. Wherever the Company assesses the credit risk as high, the exposure is backed by either bank, guarantee/letterof credit or security deposits.

The Company does not have higher concentration of credit risks to a single customer. As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default in payments and makes appropriate provision at each reporting dale wherever outstanding is for longer period and involves higher risk.

The allowance for lifetime expected credit losses on trade receivables for the years ended March 31,2024 and 2023 and the reconciliation of allowance for expected credit losses are as follows:

(b) Investments, Derivative Instruments, Cash and Cash Equivalents and Bank deposits

CreditRiskon cash and cash equivalents,deposits with the banks/financialinstitutionsis generally low as the said deposits have been made with the banks/financial institutions, who have been assigned high credit rating by international and domestic rating agencies.

Credit Risk on Derivative Instruments is generally low as the Company enters into the Derivative Contracts with the reputed Banks.

Investmentsofsurplusfunds are madeonlywithapprovedFinanciallnstitutions/CounterpartyinvestmentsprimarilyinDludeinvestmentin units of quoted Mutual Funds. TheseMutualFundsandCounterpartieshave low credit risk. The Companyhasstandardaperatingproceduresandinvestmentpolicyfordeploymentof surplus liquidity, which allows investment in debt securities and mutual fund schemes of debt and arbitrage categories and restricts the exposure in equity markets.

Offsetting related disclosures

Offsetti ng of cash and cashequivalentstoborrowingsasperthe loan agreements availableonly to thebankin the eventof a default. Companydoesnot have the right to offset in case of the counter party’s bankruptcy, therefore, these disclosures are not required.

Liquidity risk management

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company invests its surplus funds in bank fixed deposit and mutual funds, which carry minimal mark to market risks. The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

Liquidity tables

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

54 Retirement benefit plans Defined contribution plans

In accordance with I nd ian law, el igible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees'' salary. The contributions, as specified underthe law, are made to the Provident fund as well as Employee State Insurance Fund.

The total expense recognised in profit or loss of INR 64.84 lakhs (for the year ended March 31,2023 is INR 60.81 lakhs) represents contribution payable to these plans by the Com pany at rates specified in the rules of the plan.)

Defined benefit plans

(a) Gratuity

Gratuity is payable as per Payment of Gratuity Act, 1972. In terms of the same, g ratuity is computed by multiplying last drawn salary (basic salary including dearness Allowance if any) by completed years of continuous service with part thereof in excess of six months and again by 15/26. The Act provides for a vesting period of 5 years for withd rawal and retirement and a monetary ceil ing on g ratuity payable to an employee on separation, as may be prescribed underthe Payment of Gratuity Act, 1972, from time to time. However, in cases where an enterprise has more favourable terms in this regard , the same has been adopted.

(b) Compensated absences

As per the policy of the Company, compensated absences are not entitled to be carried forward to the subsequent financial year and lapse at the end of the reporting period. Accordingly, no liability towards compensated absences are recognised in these financial statements.

---

Mar 31, 2019

1. Corporate Information

VTM Limited was established in 1946 with the founding principles of setting standards in weaving by ensuring that the best of weaving technology was always available. Today, the Company is well-established with unique capabilities that allows to cater to exotic constructions in weaving. It has also expanded the capabilities to include special weaves and combinations. 254 state-of-the-art looms take pride of place in the manufacturing unit. 92 Sulzer machines, 147 Air jets , 9 Jacquard and 6 Rapier machines work in tandem to produce 1.65 million meters of fabric every month. It is also equipped with adequate equipment to cater to special fabric manufacturing in fine counts and complex specifications.

2. Basis of preparation of financial statements Statement of Compliance

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 (''the Act'') (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

Use of estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in current and future periods.

Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is the Company''s functional currency. AH financial information presented in INR has been rounded to the nearest Lakhs (up to two decimals).

The financial statements are approved for issue by the Company''s Board of Directors on April 22,2019.

2 A. Critical accounting estimates and management judgements

In application of the accounting policies, which are described in note 2, the management of the Company is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and assumptions are based on historical experience and other factors that are considered to be relevant.

Information about significant areas of estimation, uncertainty and critical judgements used in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:

Property, Plant and Equipment (PPE)

The residual values and estimated useful life of PPEs, Intangible Assets and Investment Properties are assessed by the technical team at each reporting date by taking into account the nature of asset, the estimated usage of the asset, the operating condition of the asset, past history of replacement and maintenance support. Upon review, the management accepts the assigned useful life and residual value for computation of depreciation/amortisation. Also, management judgement is exercised for classifying the asset as investment properties or vice versa.

Current tax

Calculations of income taxes for the current period are done based on applicable tax laws and management s judgement by evaluating positions taken in tax returns and interpretations of relevant provisions of law.

Deferred Tax Assets

Significant management judgement is exercised by reviewing the deferred tax assets at each reporting date to determine the amount of deferred tax assets that can be retained/'' recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Fair value

Management uses valuation techniques in measuring the fair value of financial instruments where active market quotes are not available. In applying the valuation techniques, management makes maximum use of market inputs and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.

Impairment of Trade Receivables

The impairment assessment for trade receivables are done based on assumptions about risk of default and expected loss rates. The assumptions, selection of inputs for calculation of impairment are based on management judgement considering the past history, market conditions and forward looking estimates at the end of each reporting date.

Impairment of Non-financial assets (PPE)

The impairment assessment of non-financial assets is determined based on estimation of recoverable amount of such assets. The assumptions used in computing the recoverable amount are based on management judgement considering the timing of future cash flows, discount rates and the risks specific to the asset.

Defined Benefit Plans and Other long-term employee benefits

The cost of the defined benefit plan and other long term employee benefits, and the present value of such obligation are determined by the independent actuarial valuer. An actuarial valuation involves making various assumptions that may differ from actual developments in future. Management believes that the assumptions used by the actuary in determination of the discount rate, future salary increases, mortality rates and attrition rates are reasonable. Due to the complexities involved in the valuation and its long-term nature, this obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities could not be measured based on quoted prices in active markets, management uses valuation techniques including the Discounted Cash Flow (DCF) model, to determine its fair value. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is exercised in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.

Provisions and contingencies

The recognition and measurement of other provisions are based on the assessment of the probability of an outflow of resources, and on past experience and circumstances known at the reporting date. The actual outflow of resources at a future date may therefore vary from the figure estimated at end of each reporting period.

Recent accounting pronouncements

Standards issued but not yet effective

Ind AS 116 Leases: On March 30,2019, Ministry of Corporate Affairs has notified Ind AS 116, Leases. Ind AS 116 will replace the existing leases Standard, Ind AS 17 Leases, and related Interpretations.

The effective date for adoption of Ind AS 116 is annual periods beginning on or after April 1, 2019.

The Standard sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract i.e., the lessee and the lessor. Ind AS 116 introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than twelve months, unless the underlying asset is of low value. Currently, operating lease expenses are charged to the statement of profit and loss. The Standard also contains enhanced disclosure requirements for lessees. Ind AS 116 substantially carries forward the lessor accounting requirements in Ind AS 17. The Company has evaluated the requirements of the above standards and the effect on the financial statements is not considered to be significant.

Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments : On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments which is to be applied while performing the determination of taxable profit (or loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12.

The effective date for adoption of Ind AS 12 Appendix C is annual periods beginning on or after April 1, 2019. The effect on adoption of Ind AS 12 Appendix C is not considered to be significant.

Amendment to Ind AS 12 - Income taxes : On March 30, 2019, Ministry of Corporate Affairs issued amendments to the guidance in Ind AS 12, ''Income Taxes'', in connection with accounting for dividend distribution taxes. The amendment clarifies that an entity shall recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events.

Effective date for appi ication of this amendment is annual period beginning on or after Apri 11, 2019. The Company is currently evaluating the effect of this amendment on the financial statements.

Amendment to Ind AS 19 - plan amendment, curtailment or settlement: On March 30, 2019, Ministry of Corporate Affairs issued amendments to Ind AS 19, ''Employee Benefits'', in connection with accounting for plan amendments, curtailments and settlements. The amendments require an entity: to use updated assumptions to determine current service cost and net interest for the reminder of the period after a plan amendment, curtailment or settlement; and to recognise in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus, even if that surplus was not previously recognised because of the impact of the asset ceiling.

Effective date for application of this amendment is annual period beginning on or after April 1, 2019. The Company does not have any impact on account of this amendment

1} The Company has no Holding or Subsidiary Companies

2) During the last five years immediately preceding the date of Balance Sheet, the Company has neither issued any shares as bonus shares nor for consideration other than cash and has not bought back any shares,

3) The Company had split its Rs 10/- paid up shares into Re 1/- paid up shares in October 2012

4) Rights, preferences and restrictions in respect of equity shares issued by the Company

a The company has issued only one class of equity shares having a par value of Re 1 each. The equity shares of the company having par value of Re. 1/- rank pari-passu m all respects including voting rights and entitlement to dividend.

b. The Company declares dividend on equity shares. In the event of declaration of interim dividend, the same is as per the decision of the Board of Directors. Final dividend is proposed by Board of Directors and approved by the shareholders of the Company at the Annual General Meeting.

c. In the event of liquidation, shareholders will be entitled to receive the remaining assets of the company after distribution of all preferential amounts The distribution Mill be proportionate to the number of equity shares held by the shareholder.

1) Term loan mated from Exim Bank of India by securing first charge on (he specific assets procured under ATUF Scheme - repayable in 5 years on half yearly basis, commencing from December 2016.

2) Term loan availed from Exim Bank of India by securing first charge on the specific assets procured under ATUF Scheme -repayable in 5 years on half yearly basis, commencing from September 2018

Dues to Micro and Small Enterprises have been determined to the extent such parries have been identified on the basis of information collected by the management represents tire principal amount payable to these enterprises. There are no interest due and outstanding as at the reporting date. Please refer note 42.

3. Operating Segments

The company is engaged In the business of Textiles" and therefore, has only one re portable segment in accordance with ind AS 108 ’Operating Segments''

(b) Non current assets

The manufacturing facilities of the Company are situated in India and no non-current assets are held outside India.

There are no unfulfilled conditions and other contingencies attached to government assistance that has been recognised in the financial statements.

4. Financial Instruments

Capital management

The Company manages its capital 10 ensure Shat entities in the Company will be able to continue as going concern, white maximising the return to stakeholders trough the optimisation of the debt and equity balance.

The Company determines the amount of capital required ond the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity long term and short-term borrowings.

For the purposes of the Company''s capital management capital includes issued capital and other equity reserves attributable to the equity holders.

Financial risk management objectives

The treasury function provides services to the business. Co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk including currency risk, interest rate risk and other price risk}, credit risk and liquidity risk.

The Company seeks to minimise (he effects of these risks by using natural hedging financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company''s policies approved by the board of directors, which provide written principles on foreign exchange risk, the use of financial derivatives, and the investment of excess liquidity. The Company does net enter into or (trade financial instruments. including derivative financial instruments, for speculative purposes.

Market risk

Marker risk is the risk of any loss in future earnings in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company actively manages its currency and interest rata exposures through its finance division and uses derivative Instruments such as forward controls Md currency swaps, wherever required: to mitigate the risks from such exposures. The use of derivative instruments is subject to limit and regular monitoring by appropriate levels of management.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company actively manages its currency rate exposures through a centralised treasury division and uses natural helping principles to mitigate the risks from such exposures The use of derivative instrument, if any. is suited to limits end regular monitoring try appropriate levels of management.

Foreign currency sensitivity analysis

Movement m function# currencies of the various operations at the Company against major foreign currencies may impact the Company''s revenues from its operations. Any weakening of the functional currency may impact 8ie Company''s cost of imports and cost of borrowings and consequently may increase the cost of financing this Company’s capital expenditure. The foreign exchange rate sensitivity is calculated for each currency by aggregation of tae net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 2%. which represents managements assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 2% change in foreign currency rates. The estimated sensitivity impact ml! be around 1- Rs. 2 lakhs (Previous year Rs. 0.92 lakhs), which is considered to be immaterial to the size of operations of the Comply.

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

Credit risk management

Credit risk arises when a customer or counterparty does not meet is obligations under a customer contract or financial instrument leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables and from its financing/ investing activities, including deposits with hanks, mutual fund investments, investments in debt securities and foreign exchange i?arisac.5ron$. The Company has no significant concentrator of credit risk with any counterparty.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure is the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, margin money and other financial assets excluding equity investments.

(a) Trade Receivables

Trade receivables are consisting of a large number of customers The Company has credit evaluation policy tor each customer and. based on the evaluation, credit limit of each customer is defined Wherever the Company assesses the credit risk as high, the exposure *s backed by either bank, guarantee either of credit or security deposits

The Company does not have higher concentration of credit risks to a single customer. As per simplified approach, the Company makes provision of expected credit Josses on trade receivable using a provision matrix to mitigate the risk of default in payments and makes appropriate provision at each reporting date wherever outstanding is for loiter period and Involves higher risk.

(b) Investments, Derivative Instruments, Cash and Cash Equivalents and Bank Deposits

Credit Risk on cash and cash equivalents deposit with the banks/financial institutions is generally low as the said deposits nave been made with the banks/financial institutions who have been assigned high credit rating by international and domestic rating agencies.

Credit Risk on Derivative Instruments is generally low as the Company enters into the Derivative Contracts with the reputed Banks.

Investments of surplus funds are made only with approved Financial Institution & Counterparty. Investments primarily issued investment in units of quoted Mutual Funds, quoted Bonds, Non-Convertible Debentures issued by Government Semi-Government Agencies PSU Bonda/High investment grade Corporates etc. These Mutual Funds and Counterparties W* a* credit risk. The Company has standard operating procedures and investment policy for deployment of surplus liquidity. which allows investment In debt securities end mutual fund securities of debt and arbitrage Gaieties and restricts the exposure in equity markets.

Offsetting related disclosures

Offsetting of cash and cash equivalents to borrows as per the loan agreement is available only to the hank in the event of 3 default. Company does not have the right to offset in case of the counter party''s bankruptcy, therefore, these disclosures are not required.

Liquidity risk management

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure mat funds are available for use as per requirements. The Company invests its surplus funds in bank fixed deposit and mutual kinds, which carry minimal mark to market risks. The Company also constantly monitors funding options available in tie debt and capital markets with a view to maintaining finance flexibility.

5. Retirement benefit plans

Defined contribution plans

in accordance with Indian law, eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of She covered employees'' salary The contributions, as specified under the law, are made to Die Provident fund as well as Employee Stale Insurance Fund,

The total expense recognised in profit or loss of Rs 59,36 lakhs (for the year ended March 31,2018: Rs. 66,66 lakhs} represents contribution payable to these plans by he Company at rates specified in the rules of the plan

Defined benefit plans

(a) Gratuity

Gratuity is payable as per Payment of Gratuity Act. 1972. In terms of the same, gratuity is computed by multiplying last drawn salary (basic salary including dearness Allowance if any) by completed years of continuous service with part thereof in excess of six months and again by 1526 The Ad provides for a vesting period of 5 years for withdrawal and retirement and a monetary ceiling on gratuity payable to an employee on separation, as may be prescribed under the Payment of Gratuity Act, 1972, from time to time. However, in cases where an enterprise has more favourable terms in this regard, the same has been adopted.

(b) Compensated absences

As per the policy of the Company, compensated absences are not entitled to be carped forward to (tie subsequent financial year and lapse at die end of the reporting period. Accordingly, no liability towards compensated absences are recognised in these financial statements.

---

Mar 31, 2018

Notes to Financial Statements for the year ended March 31,2018

1, Corporate Information

\ TM Limited was established in 1946 with the founding principles of setting standards in weaving by ensuring that the best ot weaving technology was always available. Today, the Company is well-established with unique capabilities that allows to eater to exotic constructions in weaving. It has also expanded the capabilities to include special weaves and combinations. 270 state-of-the-art looms take pride of place in the manufacturing ! unit. 132 Sulzer machines, 135 Air jets and 3 Jacquard machines work in tandem to produce 1 million meters of tabric every month. It is also equipped with adequate equipment to cater to special fabric manufacturing in fine counts and complex specifications.

2, Basis of preparation of financial statements Statement of Compliance

These financial statements are prepared in accordance with Indian Accounting Standards(lnd AS) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 (the Act”) (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SfcBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

Basis of preparation and presentation

For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section I3j> of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (IndianGAAP).

The financial statements for the year ended March 31, 2018 are the first financial statements the Company has prepared in accordance with Ind AS with the date of transition as April 1. 2016. Refer to note 49 for information on how the Company adopted IndAS.

Use of estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses and the disclosure ot contingent liabilities on the date of the financial statements. Actual results could differ from those estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospect! veiy in current and future periods.

Functional and presentation currency

“These financial statements are presented in Indian Rupees (INR), which is the Company’s functional currency. All financial information presented in INR has been rounded to the nearest Lakhs (up to two decimals).

The financial statements are approved for issue by the Company’s Board of Directors on April 27,2018

2A Critical accounting estimates and management judgments ;

In application of the accounting policies, which are described in note 2, the management of the Company is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.

The estimates and assumptions are based on historical experience and other factors that are considered to be relevant.

Information about significant areas of estimation, uncertainty and critical judgements used in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:

Property, Plant and Equipment (PPE)

The residual values and estimated useful life of PPEs, Intangible Assets and Investment Properties are assessed by the technical team at each reporting date by taking into account the nature of asset, the estimated usage of the asset, the operating condition of the asset, past history of replacement and maintenance support. Upon review, the management accepts the assigned useful life and residual value for computation of depreciation/amortisation. Also, management judgement is exercised for classifying the asset as investment properties or vice versa.

Current tax

Calculations of income taxes for the current period are done based on applicable tax laws and management’s judgement by evaluating positions taken in tax returns and interpretations of relevant provisions of law.

Deferred Tax Assets

Significant management judgement is exercised by reviewing the deferred tax assets at each reporting date to determine the amount of deferred tax assets that can be jetained/ recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Fair value

Management uses valuation techniques in measuring the fair value of financial instruments where active market quotes are not available. In applying the valuation techniques, management makes maximum use of market inputs and uses estimates and assumptions that ate, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.

Impairment ofTrade Receivables

The impairment assessment for trade receivables are done based on assumptions about risk of default and expected loss rates. The assumptions, selection of inputs for calculation of impairment are based on management judgement considering the past history, market conditions and forward looking estimates at the end of each reporting date.

Impairment of Non-ftnancial assets (PPE)

The impairment assessment of non-fmancial assets is determined based on estimation of recoverable amount of such assets. The assumptions used in computing the recoverable amount are based on management judgement considering the timing of future cash flows, discount rates and the risks specific to the asset.

Defined BenefitPlans and Other long term employee benefits

The cost of the defined benefit plan and other long term employee benefits, and the present value of: such obligation are determined by the independent actuarial valuer. An actuarial valuation involves making various assumptions that may differ from actual developments in future. Management believes that the assumptions used by the actuary in determination of the discount rate, future salary increases, mortality rates and attrition rates are reasonable. Due to the complexities involved in the valuation and its longtenn nature, this obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities could not be measured based on quoted prices in active markets, management uses valuation techniques including the Discounted Cash Flow (DCF) model, to determine its fair value The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is exercised in establishing fair values, judgements include considerations of inputs such as liquidity risk, credit risk and volatility.

Provisions and contingencies

The recognition and measurement of other provisions are based on the assessment of the probability of an outflow of resources, and on past experience and circumstances known at the reporting date. The actual outflow of resources at a future date may therefore vary’ from the figure estimated at end oi’each reporting period.

2B Recent accounting pronouncements Standards issued but not yet effective

“The following standards have been not ifted by Ministry of Corporate A ffairs

a. Ind AS 115 - Revenue from Contracts with Customers (effective from April 1,2018)

b. IndAS i 16-Leases (effective from April 1,2019)

The Company is evaluating the requirements of the above standards and the effect on the financial statements is also being evaluated.”

3) Rights, preferences and restrictions in respect of equity shares issued by the Company

a. The company has issued only one class of equity shares having a par value of Re. t each The equity shares of the company having par value of Re.1i- rank part-passu in ail respects including voting rights and entitlement to dividend.

b The Company declares dividend on eauity shares. In the even: of declaration of interim dividend: the same is as per the decision of the Board of Directors, Final Dividend is proposed by Board of Directors and approved by the shareholders of the Company at the Annual General Meeting, During the year, the Company proposed a dividend of INR 0 75 per equity share held (Previous year INR 0.75 per equity share held!

e In the event of liquidation, shareholders wilt be entitled to receive the remaining assets of the company after distribution of alt preferential amounts. The drstnbution will be proportionate to the number of equity shares held by the shareholder.

4 Disclosures required by the Micro, Small and Medium Enterprises Development (MSMED1 Act, 2006 are as under ’

(a) The principal amount remaining unpaid at the end of the year

(b) The delayed payments of principal amount paid beyond the appointed date during the year

(c) interest actually paid under Section 16 of MSMED Act

(d) Normal interest due and payable during the year, for delayed payments, as per the agreed terms <*> ^T°ta! interest accrued during the year and remaining unpaid

“This information has been determined to the extent such parties have been identified on the basis of information available with the Company

5 Operating Segments :

The company is engaged in the business of Textiles” and therefore, has only one reportable segment in accordance with lnd AS 108 ‘Operating Segments.

Information relating to geographical areas

(fa) Non current assets

The manufcaturing facilities of the Company are situated in India and no non-current assets are held outside India.

6 Financial Instruments Capital management

The Company manages its capital to ensure that entitles in the Company will be able to continue as going concern, while maximising the return to stakeholders through the optimisation ot the debt and equity Dalance. ~

The Company determines the amount of capital required on iH basis of annua! opsratmg plans and tong-tem product and other strategic investment plans. The funding requirements are met through equity, long term and short-term borrowings. ”

For the purposes of ine Company’s capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders.

Financial risk managament objectives

Tne ireasury function provides services to me business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks inautle market risk (including currency risk, interest rate risk and other price nslt), credit risk and liquidity nsk.

itie Company seeks » minimise me effects of these risks by using natural hedging financial instruments to hedge risk exposures, Ttte use of financial derivatives is governed by the Company’s policies approver, by the board of directors, which preside written principles on foreign excrianga risk, She use of financial derivatives, and file investment of excess liquidity. 1 He Company does no! enter ->mo or trade financial Instruments, including derivative financial instruments, for speculative purposes,

Market risk

Market nsK is tie nsk of any loss in future earnings, in realizable fair values or in future cash flows that may result from 3 change in the price of a financial instrument the Company’s adivifes, expose it primary fo me financial risks of changes in foreign currency exchange rates ana interest rates The Company actively manages -ts currency and interest rm exposures tnrough its feuw* civision and uses derivative instruments such as forward contrasts and currency swaps, wherever resulted, fo mitigate the risks from such exposures The use of derivative insirumenis h subject to limits and regular monitoring by appropriate levels of management.

Foreign currency risk management

‘he Company undertakes fiansaraons denominated in foreign currencies: consequently, exposures to exchange rate flcclnations arise. ^The Company actively irsanages its currency ~m exposures tnrouqh a ecmraliSKl treasury 3’Visioc and uses natural hedging principles to mitigate the risks from such exposures. The use of derivative instruments, if any is sijOjed fo limits ane regular monitoring »y appropriate levels of management, ’ ‘ ‘

Foreign currency sensitivity analysis

Movement in the functional currencies of She various operations of the Company against major foreign currencies may impact the Company’s revenues from its operations. Any weakening of the functional currency may impact me Company’s cost of imports and cost or Sorrowings and consequently may increase the cost of financing the Company’s capita! expenditures. The foreign exchange rats sensitivity is calculated for each currency by aggregation of the net foreign exchange rare exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 2%. which represents management’s assessment of the reasonably possibie change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 2% change m foreign currency

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

Credit risk management

Credit risk arises when a customer or counterparty does not meet its obligations under a customer contract or financial instrument, reading to a financial loss, The Company is exposed to credit nsk from its operating activities primarily trade receivables and from its financing/ investing activities, including deposits with banks, mutual fund investments, investments lit debt securities and foreign exchange transactions. The Company has no significant concentration of credit risk with any counterparty.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure The maximum exposure is the votai of the carrying amount of balances with banns, short term deposits with banks, trade receivables, margin money and other financial assets excluding equity investments,

(a) Trade Receivables

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and. based on the evaluation, credit limit of each customer is defined Wherever the Comoany assesses the credit risk as high, the exposure is backed by either bank, guanjntee/letter of credit or security deposits.

The Company does not have higher concentration of credit risks to a s»ng*e customer As per simpiifiew approach, the Comoany makes provision of expected credit losses on trade receivables using 3 provision matrix to mitigate the risk of default in payments and makes appropriate provision at each reporting dale wherever outstanding is ror longer pence and involves higher nsk.

(b) Investments, Derivative instruments, Cash and Cash Equivalents and Bank Deposits

Credit Risk on cash and cash equivalents, deposits with the hsnks/fmancial institutions is generally tow os the said deposits have been maoe with the oanks/fmancial institutions, who have been assigned high, credit rating by international and domestic rating agencies.

Credit Risk on Derivative Instruments is generally to-.v as the Company enters into the Derivative Contracts with the reputed Banys

Investments of surplus funds are made only with approved Financial Insiitutions/Counferparty. Investments primarily include investment in units of quoted Mutual Funds, quoted Bonds. Non-Convertible Debentures issued by Government’Semi-Govefnment Agencies/PSU Bonds/High Investment grade Corporates etc. These Mutual Funds and Counterparties have low credit risk. The Company has standard operating procedures and investment policy for deployment of surplus liquidity, which allows investment in debt securities and mutual fund schemes of debt and arbitrage categories and restricts the exposure in equity markets.

Offsetting related disclosures

Opting of cash and rash equivalents to borrowings as per the loan agreement is available only to the bank in the event of a default. Company does not have the right to offset in case of the counter party’s bankruptcy, therefore, these disclosures are not required.

Liquidity risk management

Liquidity risk refers to the nsk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company invests its surplus funds in bank fixed depit and mutual fends, which carry minimal mark to market risks. The Company also constantly monitors funding options available In the debt and capital markets with a view to maintaining financial flexibility.

Liquidity tables

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

7 Related party disclosure

a) List of parties having significant influence ;

Holding company The Company does not have any holding company J

Subsidiaries, associates and joint ventures The Company does not have any subsidiaries, associates and joint ventures :

Key Management Personnel and their Relatives

Sri T.Kannan Chairman and Managing Director

Dr.(Smt) Uma Kannan Director

Sri. K.Thiagarajan Director

Sri V Sundaramoorthy Cntef Financial Officer (upto June 03.2017)

Sri R Krishnan Chief Financial Officer (from April 1,2018)

Sri S Paramasivam Company Secretasy

Enterprises in which Key Management Personnel and their Relatives have significant influence

Sivakami Textile Traders (P) ltd.

Thiagarajar Mills (P) Ltd,

Tamaraiselvi Finance (P) Ltd.

Kalaithanthai Karumuttu Thiagaraja Chettiar Memorial Charitable Trust Thiagarajar College of Engineering Thiagarajar College Colour Yams limited.

Samy Automobile Sundaram Textiles Karamuthu Investments

8 Retirement benefit plans

Defined contribution plans .....

In accordance with Indian law, eligible employees of She Company are entitled to receive benefits in respect oj provident fund, a defined contribution plan, in whicn ooth ; employees and the Company make montniy contentions at a specified percentage of tiie covered employees’ salary. The contributions, as specified under the law, are made to the Provident fund as weii as Employee State insurance Fund,

The total expense recognised in profit or loss of Rs, 66,66 laktis (for the year ended March 31.201?: Rs, 61.80 lakhs) represents contribution payable to these plans by the Company at rates specified in the rules of the plan,

Defined benefit plans (a) Gratuity

Gratuity is payable as per Payment of Gratuity Act, 1972, in terms of the same, gratuity is computed by multiplying fast drawn salary (basic salary including dearness Allowance if any) by completed years of continuous service with part thereof in excess of six months and agasn by 15/26. The Act provides for a vesting penod of 5 years for withdrawal and retirement and a monetary ceiling on gratuity payable to an employee on separation, as may he prescribed under the Payment of Gratuity Act, 1S?2, from time to time. However, in cases where an enterprise has mere favourable terms in this regard the same has been adopted.

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

9 First-time adoption of lnd AS

Transition to lnd AS ;

These are the Company’s fires financial statements prepared in accordance with lnd AS.

The accounting policies set out in Note 3 have beer, applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31 2017 and in the preparation of an opening lnd AS balance sheet as at April 1. 2016 (The company’s date of transition).

In preparing its opening lnd AS balance sheet, the company has adjusted me amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP),

An explanation of how the transition from previous GAAP to lnd AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

Set out below are the applicable lnd AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to lnd AS.

A,1 lnd AS optional exemptions

A,1.1 Deemed cost for PPE and Intangibles

lnd AS 101 permits a first-time adopter to elect to fair value a class of property, plant and equipment or to continue with the carp/mg value for all of its PPE as recognised in the financial statements as at the date of transition to lnd AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities.

Accordingly, the company has elected to fair value its land as on the date of transition and retrospectively applied lnd AS 16 for other classes of property, plant and equipment.

A, 1.2. Designation of previously recognised financial instruments

lnd AS 101 allows an entity to designate investments in equity instruments at FVOC! or FVTPL on the basis of the facts and circumstances at the date of transition to lnd AS. The company has elected to apply this exemption for its investment In equity Investments,

A.1,3. Leases

Appendix C to lnd AS 17 requires an entity to assess whether a contract or arrangement contains a tease. In accordance with lnd AS 1A this assessment should be carried out at the inception of the contract or arrangement, lnd AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to lnd AS, except where the effect is expected to be not material. The company has elected to apply this exemption for such contracts/ arrangements.

A.2 tnd AS mandatory exceptions

A.2,1 Estimates ...... ,

An entity’s estimates in accordance with lnd ASs at the date of transition to lnd AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

lnd AS estimates as at April 1. 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP, i he <~nmoanv made estimates for impairment of financial assets based on expected credit soss model in accordance witn lnd AS at the ctate of transition as these were not required under previous GAAP.

B. Notes to first-time adoption B.1 Trade receivables

As per Ind AS 109, The company is required to apply expected credit loss model for recognising the allowance for doubtful debts. Accordingly, the Company has developed an assessment for allowance for expected credit loss. The same has been considered in the opening and comparative period financial statements.

B.2 Transaction costs in respect of financial instruments

Under the previous GAAP, transaction costs in relation to financial liabilities are charged to the profit and loss in the year in which they are incurred.

As per Ind AS 109. transaction costs in relation to financial liabilities are to be reduced from the related financial liabilities and amortised over me repayment period or she said liability. The same has been considered in the opening and comparative period financial statements.

B.3 Remeasurement of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. Adjustments have been made for such reclassifications.

B.4 Fair valuation of financial assets and liabilities

Under Ind AS, financial assets and liabilities are to be valued at amortised cost or fair valued through profit and loss (FVTPL) or fair valued through other comprehensive income (FVTOCI) based on the Company’s business objectives and the cash flow characteristics of the underlying financial assets and liabilities The Company has remeasured the financial assets and liabilities as on the date of transition and the consequential impact has been given in the opening retained earnings.

B.5 Government Grants

Under Ind AS, Government grants related to assets, including non-monetary grants at fair vaiue, is presented in the balance sheet by setting up the grant as deferred income The grant set up as deferred income is recognised in profit or loss on a systematic basis over the useful life of the asset,. The Company has remeasured the capital grants as aforesaid and accounted In the Ind AS financial statements.

B.6 Deferred tax

Under ind AS, the -deferred tax asset and liabilities are required to be accounted based on balance sheet approach. The Company has remeasured its deferred tax assets and liabilities as aforesaid and accounted in the Ind AS financial statements. ’

---

Mar 31, 2017

1. NOTES ON ACCOUNTS

1. Statement of Significant Accounting Policies:-Basis of preparation of Financial Statements:

Presentation of Financial Statements.

The financial statements have been prepared on the basis of going concern, under the historic cost convention, to comply in all the material aspects with applicable accounting principles in India, the accounting standards notified under the Companies Act, 1956 / Companies Act, 2013 as applicable.

Valuation of Inventories

a. Raw materials, components, and stores are valued at cost determined on weighted average basis. Work in process includes material cost and applicable direct overheads. Finished goods are valued at the aggregate of material cost and applicable direct and indirect overheads or market value whichever is lower.

b. The Excise Duty is exempt on finished grey goods.

c. There is no goods lying in customs bonded warehouses and hence the provision ot duty does not arise.

Statement of Cash flow

Cash flow statement has been prepared under “Indirect Method”.

Events occurring after the Balance Sheet Date

There are no contingencies and events after the Balance Sheet date that affect the financial position of the company. Contested liabilities are disclosed by way of a note.

Dividends

The Company declares and pays dividends in Indian rupees.

Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Board of Directors of the company.

The Board of Directors, in its meeting on April 30,2017, have proposed a dividend of Re. 0.75 per equity share for the financial year ended March 31, 2017. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on 23rd June, 2017 and if approved would result in a cash outflow of approximately Rs.364 lacs including dividend tax.

Revenue recognition

a) Income and expenditure are accounted on a going concern basis.

b) Sales are recognized at the time of dispatches of the goods to the customers and recorded net of sales returns and includes export benefits.

c) Interest income is recognized on a time proportion basis taking into account the amount of outstanding and rate applicable.

d) Dividend income: The company has derived income during the current year out of its investment and is recognized when the Company''s right to receive dividend is established.

e) Lease rentals in respect of assets given on “lease” are taken to Profit & Loss Account under the head of Non-operative income on the basis of the terms and conditions specified in the lease agreement.

f) Income of Profit/Loss on sale of investments has been accounted on the basis of realization.

Property, Plant & Equipments:

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management. Depreciation has been provided over their estimated useful lives in accordance with the provisions of Schedule II of the Companies Act, 2013 under the straight line method.

Accounting for effects in foreign exchange rates and Foreign Exchange Transactions

a. Purchase of imported components and spare parts are accounted based on retirement memos from banks.

b. In respect of exports of cloth made on or before 31.03.2017, the amount due have been accounted at the rate at which the export bills were tendered to the Bank for Collection/Discounting.

c. There is no yearend foreign currency denominated liabilities and receivables.

d. Derivative Transactions:

The Company uses forward exchange contracts to hedge its exposure in foreign currency.

As on March 31,2017 there is no Foreign Exchange Contracts outstanding exposure.

No Mark to Market component arises as the Company does not have any outstanding contract as at the end of the year.

Accounting for Government Grants:

The company is availing Duty Drawback subsidy and the same is treated as revenue receipts.

Accounting for Investments:

Investments are stated at cost. Provision for diminution in the carrying cost of investments is made if such diminution is other than temporary in nature.

Accounting for Employees Retirement Benefits:

Gratuity with respect to defined benefit schemes are accrued based on actuarial valuations, carried out by an independent actuary as at the balance sheet date and being paid to Gratuity Fund.

Borrowing Costs

All borrowing costs are charged to revenue except to the extent they are attributable to qualifying assets which are capitalized.

Segment reporting

The Company operates in only one business segment viz. Textiles.

Related Party Disclosures

Related Party disclosures as required by Accounting Standard are given below:

(I) Where Control Exists:

Subsidiary Company : NIL Associate Company NIL (II) Other related parties with whom transactions have been entered into during the year: (A) Key Managerial Personnel & their Relatives:

(i) Sri T. Kannan - Chairman and Managing Director Dr.(Smt.) Uma Kannan - Director

Sri K. Thiagarajan - Director

(ii) Sri V. Sundaramoorthy - Chief Financial Officer

(iii) Sri S. Paramasivam - Company Secretary

(B) Enterprises in which Key Managerial Personnel and their Relatives have significant influence:

1 Thiagarajar Mills (P) Ltd.

2. Tamaraiselvi Finance Pvt. Ltd.

3. Sri T. Kannan (HUF)

4. Kalaithanthai Karumuttu Thiagaraja Chettiar Memorial Charitable Trust

5. Thiagarajar College of Engineering

6. Thiagarajar College

7. Sundaram Textiles Ltd.

8. Colour Yams Limited

Disclosure is made as per the requirements of the standard and as per the clarifications issued by the Institute of Chartered Accountants of India.

Earnings per share

The Disclosure is made in the Profit and Loss account as per requirement.

Accounting for taxes on Income:

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized. Deferred tax assets arising on other temporary timing differences are recognized only if there is a reasonable certainty of realization.

Interim Financial Reporting:

Quarterly financial results are published in accordance with the requirement of listing agreement with Stock Exchanges. The recognition and measurement principle as laid down in the standard have been followed in the preparation of these results.

Intangible Assets

The company has no intangible assets. Hence this is not applicable.

Impairment of Assets

As on the Balance Sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of such assets. Hence there is no impairment loss on the assets of the company.

* For the purposes of this clause, the term ''Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

---

Mar 31, 2016

Other Information:

1. The company has issued only one class of shares referred to as equity shares having paid up value of Re 1/. per share and each shareholder is entitled to one vote per share.

2. The company declares dividend on equity shares. In the event of declaration of interim dividend, the same is as per decision of the Board of Directors. Final dividend is proposed by Board of Directors and approved by the shareholders of the company at the Annual General Meeting.

3. In the event of liquidation, shareholder will be entitled to receive remaining assets of the company after distribution of all preferential amount. The distribution will be in proportionate to the no. of equity share held by the shareholder.

4. The Company has no Holding nor any Subsidiary Company.

5. Daring the last five years immediately preceding the date of Balance Sheet, the company has neither issued any shares as Bonus shares nor for consideration other than cash and has not bought back any shares.

6. The Company splitted its Rs.10/- paid up shares into Re. 1/- paid up shares in October, 2012.

7. Equity shares include:

Additional Information:

Terra loan under TUF Scheme availed from State Bank of India by securing first charge on the specific assets procured under TUF Scheme repayable in 5 years on half yearly basis. The repayment of TUF loan commenced from October,2014. Term loan out of 426 lakhs a sum of Rs. 172 lakhs payable during the year is shown in short term borrowings

---

Mar 31, 2015

1 Contingent liabilities and Commitments:

(to the extent not provided for)

a) Contingent Liabilities:

i) Letters of credit 0.00 0.00

ii) Tax demands & PF Arrears under disputes 389.93 254.43

The management believes, based on internal assessment and / or legal advice, that the probability of an ultimate adverse decision and outflow of resources of the Company is not probable and accordingly, no provision for the same is considered necessary.

b) Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 0 0

Additional information:

Proposed dividends: Amount per Total Amount per Total Re.l/-share Rs. Re.l/-share Rs.

Amount of dividends 0.63 25,343,388 0.70 28,159,320 proposed to be distributed to equity share holders

2 Related Party disclosures as required by Accounting Standard No. 18 are given

below:

(I) Where Control Exists:

Subsidiary Company : NIL

Associated Company : M/s. Colour Yarns Ltd.

(II) Other related parties with whom transactions have been entered into during the year:

(A) Key Managerial Personnel & their Relatives:

Sri T. Kannan Dr.(Smt.) Uma Kannan Sri K. Thiagarajan Sri S. Paramashivan

(B) Enterprises in which Key Managerial Personnel and their Relatives have significant influence:

1. Thiagarajar Mills (P) Ltd.

2. Tamaraiselvi Finance Pvt. Ltd.

3. Thiagarajar Leasing Pvt. Ltd.

4. Sri T. Kannan (HUF)

5. Kalaithanthai Karumuttu Thiagaraja Chettiar Memorial Charitable Trust

6. Thiagarajar College of Engineering

7. sundaram Textiles Ltd.

8. Samy Auto Service

9. Samy Automobiles

10. Murugan Security Services

---

Mar 31, 2014

1. CONTINGENT LIABILITES AND COMMITMENTS:

(to I he extent not provided fur)

(Rs, in Lakhs)

As at As at

31.03.2014 31.03.2013

a) Contingent Liabilities

i) Letters of credit 0.00 0.00

ii) disputes 254.43 1.61

The management believes, based on internal assessment and / or legal advice, that die ultimate adverse decision and outflow of resources of the Company is not probable and provision tor the same is considered necessary.

b) Commitments

Estimated amount at contracts remaining to be executed on Capital Account and not provided for (net of advances) 0 0

2. NOTES ON ACCOUNTS;

1, Statement of Significant ant Account mg Policies: Basis of preparation of Financial Statements:

AS-I Disclosure of Accounting Policies;

The financial statements have been prepared on the basis of going concern, under the historic coal convention, to comply in all the material aspects with applicable accounting principles in India, the accounting standards notified under Section 211 (3C) of the Companies Act, 1956 and the relevant provision of the said Act.

AS-2 Valuation of Inventories:

a) Raw materials, components, stored and spares are valued at cost determined on weighted average basis. Work in process includes material cost and applicable direct overheads, Finished goods are valued at the aggregate of material pail and applicable direct and indirect overheads or market value whichever is lower.

b} The Excise Duly is exempt on finished grey goods.

c} There is no goods lying in customs bonded warehouses and hence the provision of duty does not arise,

AS-3 Cash Mom Statements:

Cash flow statement has been prepared under "Indirect Method".

AS-4 Contingencies and events occurring after the Balance Sheet Date:

There are no contingencies and events alter the Balance Sheet dale that affect the financial position of the company. Contested liabilities are disclosed by way of a note.

AS-5 Net Profit or loses For the Year, Prior Period items and Changes In accounting Policies:

This is not applicable as there is no change in accounting policies.

AS-6 Depreciation Accounting

Depreciation has been provided in the accounts on the following basis, at die rates prescribed in Schedule XIV to the Companies Act, 1956

a) Plant and Machinery other than Windmill''

i) On additions till 3th December 1977 Under the written down value method.

ii) On additions from L1 January 1978.

Under straight line method at the rates specified in Clause (II) (i) (a).

b) On all Other Assets:

Under the written down value method.

c) Windmill:

Under straight line method at The rates specified in Clause
d) In respect of additions during the year, full depreciation has been provided irrespective of the period of use. Similarly no depreciation to be provided on assets disposed off during the year.

AS-7 Accounting for Construction Contracts;

The Company is not engaged in any con strut-lien business covered by this Standard.

AS-8 Accounting fur Rest arch and He veJupmtnt:

This Standard stands withdrawn from the date of Accounting Standard 26- Intangible Assets becoming mandatory

AS-9 Revenue Recognition;

a) Income and expenditure are accounted on a going concern basis.

b) Sales are recognised on the time of despatches of the goods to the customers and recorded net of sales returns and includes export benefits.

c) Interest income is recognized on a time proportion basis taking into account the amount of outstanding and rate applicable.

d) Dividend Income: The company has derived income during the current year out of its investment and is recognized when the Company''s right to receive dividend is established.

e) Lease rentals in respect of assets given on "lease" are taken to Profit & Loss Account under the head of Non-Operative Income on the basis of the terms and conditions specified in the lease agreement.

AS-10 Accounting for Fixed Assets;

Fixed Assets are stalled at cost of acquisition which includes expenditure Incurred up to the date Mice asset is put [0 use. less accumulated depreciation Land is stated at cost or revaluation. Building is stated at cost or revaluation less depreciation. Plant and Machinery etc., are started at cost less depreciation.

AS-11 Accounting fm effects in foreign exchange rates:

a) Purchase of imported components and spare parts are accounted based on retirement memos from banks.

b) In respect of exports of cloth made on or before 31,03,2014, the amount due have been accounted at the rate at which the export bills were tendered to the Bank for Collection / Discounting.

c) There is no yearend foreign currency denominated liabilities and receivables,

d) Derivative Transactions;

The Company uses forward exchange contracts to hedge Its exposure in foreign currency,

As on 31st March. 2014 there is no Foreign Exchange Contracts outstanding exposure.

The amendment introduced to AS 11 by Government of India on 3lM March 2009 allowing the loss/profit on restatement of External Commercial Borrowings made for acquisition of Capital assets to be deducted from or added [0 cost of capital asset is not applicable to the company as it has no External Commercial Borrowings

No Mark to Market component arises as the Company do not have any outstanding contract as at the end of the year.

AS-12 Accounting for Government Grants:

The Company has not received any Government grants during the current accounting year. AS-13 Accounting IV Investments:

Investments are stated at cost. Provision for diminution in me carrying cost of investments is made if such diminution is other than temporary in nature.

AS-13 Accounting for Amalgamation :

This standard is not applicable to the company for the year under review.

AS-14 Accounting for Retirement benefits;

Gratuity with respect to defined benefit schemes are accrued based on actuarial valuations, carried out by an independent actuary as at the balance sheet date and being paid to Gratuity Fund.

The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotions ;and other relevant factors.

Provident Fund, Employees'' State Insurance Scheme and defined contribution plans are Charged to the Profit and Lose Account when incurred

AS-15 Borrowing Cost:

All borrowing costs are charged to revenue except tfl the extent they art- attributable it qualifying assets which are capitalized. During the year under review there was nu hoi-rowing attributable to qualifying assets and hence nu borrowing cost Was capitalized.

AS-16 Segment Reporting:

The Company operates in only one business segment viz.. Textiles. AS-17 Related Party Disclosure:

Disclosure is made as per the requirements of the standard and as per the clarifications issued by the Institute of Chartered Accountants of India.

AS-18 Leases:

This standard is not applicable as the Company does not have any finance lease agreement is force,

AS-19 Earning per Share:

The disclosure is made in the Profit and Loss account as per requirement.

AS-20 Consolidated Financial Statements:

There is no subsidiary company and hence this is not applicable

AS-21 Accounting Tor Taxes on Income:

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the, Income Tax Act. 1961.

Deferred tax resulting from timing differences between book and tax profits is accounted for under liability method, at the current rate of tax.

Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognized only when there is virtual certainty supported by convincing evidence dial such assets will be realized.

Deterred tax assets arising on other temporary timing differences are recognized only if there is a reasonable certainty of realization.

AS-22 Accounting for Investments in Associates in Consolidated Financial Statements: Tiles standard is not applicable to the company for die year under review, AS-24 Discontinuing Operations: This is not applicable to die Company. AS-25 Interim Financial Reporting:

Quarterly financial results are published in accordance with the requirement of listing agreement with Stock Exchanges, The recognition and measurement principle as laid down in the standard have been Followed in the preparation of these results.

A5-23 Intangible Assets:

The Com pan v has no intangible assets. Hence this is nm applicable,

AS-24 Financial Reporting of bilateral in Joint Ventures:

Thin standard is not applicable to the Company a* the company does not have any joint venture

AS-25 Impairment of Assets:

As on the Balance Sheet date the carrying amounts of the assets net of accumulated depreciation is nul less than the recoverable amount of inch assets. Hence there is no impairment loss on the assets of the Company .

AS-26 Provisions, Contingent Liabilities and Contingent Assets: Contingent Liabilities are disclosed in Note No.2.

AS-37 Financial Instruments: Recognition and Measurement:

This standard is not applicable |o the company for the year under review.

AS-28 Financial Instruments: Presentation;

This standard is not applicable to the Company far the year under review

AS-29 Financial Instruments : Disc Insures:

This standard is not applicable to the company for the year under review

3. Related Party disclosures as required by Accounting Standard No. IS are given below:

I Where Control Exists:

Subsidiary Company Nil

II Other related parties with whom transactions have been entered into during the year

(A) Key Management Personnel (Chairman):

Sri. T. Kannan Sri. K.Thiagarajan

(B) Relauves of Key Managemeni Personnel:

Smt. Uma Kannan

Smt. Lakshmi Murugesan

(C) Enterprises m which Key Management Personnel have significant influence::

1. Thiagarajar Mills (p) Ltd

2. Colour Yarns Lid.

3. Tamaraiselvi Finance Pvt. Lid.

4. Thiagarajar Telekom Solutions Lid.

5. Sree Devi Karumari Finance pvt. Ltd.

6. Sree Thiagaraja finance Pvt. Ltd.

7. Thirumagal Finance Pvt. Lid.

8. Thiagarajar Leasing Pvt. Ltd.

9. Thiagarajar Rubbers Pvt. Ltd.

10. Karuuttu Farms Pvt. Ltd.

11. Kannappan Traders Pvt. Ltd.

12. Sivakami Textile Traders Pvt. Ltd.

I3. SIMA Texltile Processing Centre Ltd.

14. Sri T.Kannan(HUF)

15. Thiagarajar Knitters,

16. Guruvayoorappan Investments,

17. Avittarn Investments,

18. Thirumagal Investments.

19. Karumuttu Investments.

20. Madurai Celebrate Committee.

---

Mar 31, 2013

Other Information

1. During the year, the company splitted/sub-divided Rs.10/- paid up per share into Re.l/-paid up per share.

2. The company has issued only one class of shares referred to as equity shares having paid up value of Re.l/- per share and each shareholder is entitled to one vote per share.

3. The company declares dividend on equity shares. In the event of declaration of interim dividend, the same is as per decision of the Board of Directors. Final dividend is proposed by Board of Directors and approved by the shareholders of the company at the Annual General Meeting.

4. In the event of liquidation, shareholder will be entitled to receive remaining assets of the company after distribution of all preferential amount. The distribution will be in proportion to the no. of equity share held by the shareholder.

5. The company has no Holding nor any Subsdiary Company.

6. During the last five years immediately preceding the date of Balance Sheet, the company has neither issued any shares as Bonus shares nor for consideration other than cash and has not bought back any shares.

7. Equity Shares include :

Particulars of equity share holders holding more than 5% of the total number of equity shares

8. CONTINGENT LIABLITIES AND COMMITMENTS:

(to the extent not provided for)

a) Contingent Liablities

i) Letters of credit 0.00 557.40

ii) Tax demands under disputes 1.61 1.61

9. Related Party disclosures as required by Accounting Standard No.18 are given below:

I Where Control Exists:

Subsidiary Company : Nil

II Other related parties with whom transactions have been entered into during the year:

(A) Key Management Personnel (Chairman) : Thiru T. Kannan

(B) Relatives of Key Management Personnel:

1. Tmt. Uma Kannan

2. Tmt. Lakshmi Murugesan

3. Sri K. Thiagarajan

(C) Enterprises in which Key Management Personnel have significant influence:

1. Thiagarajar Mills (P) Ltd.

2. Colour Yarns Ltd.

3. Tamaraiselvi Finance Pvt. Ltd.

4. Thiagarajar Telekom Solutions Ltd.

5. Sree Devi Karumari Finance Pvt. Ltd.

6. Sree Thiagaraja Finance Pvt. Ltd.

7. Thirumagal Finance Pvt. Ltd.

8. Thiagarajar Leasing Pvt. Ltd.

9. Thiagarajar Rubbers Pvt. Ltd.

10. Karumuttu Farms Pvt. Ltd.

11. Kannappan Traders Pvt. Ltd.

12. Sivakami Textile Traders Pvt. Ltd.

13. SIMA-Textile Processing Centre Ltd.

14. Sri T. Kannan (HUF)

15. Thiagarajar Knitters

16. Guruvayoorappan Investments

17. Avittam Investments

18. Thirumagal Investments

19. Karumuttu Investments

20. Celebrate Madurai Committee

(D) The following transactions were carried out with the related parties in the ordinary course of business: i) Details relating to parties referred in item I above.

-Nil-

10. Previous year''s figures have been regrouped wherever necessary.

---

Mar 31, 2012

Additional Information:

a) Cash Credit and other facilities are secured against hypothecation of stock of raw materials, goods in process, finished goods, stores, second change on all fixed assets,

b) No loans have been Guaranteed by Directors or Others

1. CONTINGENT LIABLITIES AND COMMITMENTS:

(to the extent not provided for)

a) Contingent Liabilities

i) Letters of Credit 557.40 112.83

ii) Tax demands under disputes 1.61 76.60

The management believes, based on internal assessment and / or legal advice, that the probability of an ultimate adverse decision and outflow of resources of the company is not probable and accordingly, no provision for the same is considered necessary.

2. Related Party disclosure as required by Accounting Standard No 15 are given below:

I. Where Contol Exists

Subsidiary Company: Nil

II. Other related parties with whom transactions have been entered into during the year

(A) Key Management Personnel (Chairman):

Thiru T Kannan

(B) Relatives of Key Management Personnel:

1. Dr (Tmt) Radha Thiagarajan

2. Tmt Uma Kannan

3. Tmt Lakshmi Murugesan

(C) Enterprises in which Key Management Personnel have significant influence:

1. Thiagarajar Mills (P) Ltd.

2. Colout Yarns Ltd.

3. Tamaraiselvi Finance Pvt Ltd

4. Thiagarajar Telekom Solutions Ltd

5. Sree Devi Karumari Finance Pvt Ltd

6. Sree Thiagaraja Finance Pvt Ltd

7. Thirumagal Finance Pvt Ltd

8. Thiagarajar Leasing Pvt Ltd

9. Thiagarajar Rubbers Pvt Ltd

10. Karumuttu Farms Pvt Ltd

11. Kannappan Traders Pvt Ltd

12. Sivakami Textile Traders Pvt Ltd

13. SIMA Textile Processing Centre Ltd

14. Sri T Kannan (HUF)

15. Thiagarajar Knitters

16. Guruvayorrappan Investments

17. Avittam Investments

18. Thirumagal Investments

19. Karumuttu Investments

3. Previous Year's figures have been regrouped wherever necessary.

---

Mar 31, 2010

1. SECURED LOANS:

a) Term Loan from Bank is secured by hypothecation of specified machinery of the Company.

b) Cash Credit and other facilities are secured against hypothecation of stock of raw materials, goods in process, finished goods, stores, second charge on all fixed assets.

2. Income Tax assessment from Assessment Year 2008-2009 are pending.

3. The Company has Disputed Tax liability as at March 31, 2010 as detailed below:

4. Related Party disclosures as required by Accounting Standard No. 18 are given below:

I Where Control Exists:

Subsidiary Company : Nil

II Other related parties with whom transactions have been entered into during the year:

(A) Key Management Personnel: Thiru T. Kannan

(B) Relatives of Key Management Personnel:

1. Dr. (Tmt.) Radha Thiagarajan 2. Tmt. Uma Kannan 3. Tmt. Lakshmi Murugesan

(C) Enterprises in which Key Management Personnel have significant influence:

1. Thiagarajar Mills (P) Ltd. 2. Colour Yarns Ltd. 3. Tamaraiselvi Finance Ltd. 4. Sree Devi Karumari Finance Pvt. Ltd. 5. Sree Thiagaraja Finance Pvt. Ltd. 6. Thirumagal Finance Pvt. Ltd. 7. Thiagarajar Leasing Pvt. Ltd. 8. Thiagarajar Rubbers Pvt. Ltd. 9. Karumuttu Farms Pvt. Ltd. 10. Kannappan Traders Pvt. Ltd. 11. Sivakami Textile Traders Pvt. Ltd. 12. Paramount Textile Mills Pvt. Ltd. 13. SIMA Textile Processing Centre Ltd. 14. Thiagarajar Knitters 15. Guruvayoorappan Investments 16. Avittam Investments 17. Thirumagal Investments 18. Karumuttu Investments

(D) The following transactions were carried out with the related parties in the ordinary course of business: i) Details relating to parties referred in item I above.

-Nil-

5. The portion of Deferred Tax assets and liabilities in pursuance of Account Standard 22 issued by the Institute of Chartered Accountants of India is as stated below:

6. A sum of Rs.226.17 Lakhs was paid as ex-gratia payment to workers who retired from the Company under the Voluntary Retirement Scheme for the financial years from 31.03.2005. The said expenditure is treated as Deferred Revenue expenditure to be written off over a period of 5 years. Accordingly a sum of Rs.200.98 Lakhs has been written off as in earlier years and in addition the balance of Rs.25.19 Lakhs has been written off during the year in pursuance of Accounting Standard 15.

7. Previous years figures have been regrouped wherever necessary.