Notes to Accounts of Winsome Textile Industries Ltd.

Mar 31, 2025

2.11 Provisions, Contingent Liabilities and Contingent Assets

A provision shall be recognised when:

(a) an entity has a present obligation as a result
of a past event;

(b) it is probable that an outflow of resources embodying
economic benefits will be required to settle the
obligation; and

(c) a reliable estimate can be made of the amount of
the obligation.

If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision due
to the passage of time is recognised as a finance cost.

A Contingent liability is not recognised but disclosed in the
notes to the accounts, unless the probability of an outflow
of resources is remote.

A contingent asset is generally neither
recognised nor disclosed.

2.12 Revenue Recognition

Effective April 1, 2018, the company adopted Ind AS 115,
"Revenue from contracts with customers". The effect of
adoption of Ind AS 115 was insignificant. The following
is a summary of significant accounting policies related to
revenue recognition.

Revenue is recognised upon transfer of control of promised
product or services to customer in an amount that reflects
the consideration the company expects to receive in
exchange for those product or service, regardless of when
the payment is received. Revenue is measured at the
Transaction price, excluding amounts collected on behalf
of the third parties. The amount disclosed as revenue is
net of returns, trade discounts, volume rebates, Goods
and Services Tax. The company recognizes revenue when
the amount of revenue can be measured reliably and it is
probable that the economic benefits associated with the
transaction will flow to the entity.

The specific recognition criteria for the various types of the
company''s activities are described below:

(i) Sales of goods

Revenue from sale of goods is recognised at the point
in time when control of the goods are transferred to
the customers, the customer has full discretion over
the channel and price to sell the products, there is no
unfulfilled obligation that could affect the customer''s
acceptance of the products and the company
retains neither continuing managerial involvement
to the degree usually associated with ownership
nor effective control over the goods sold. The said
conditions are generally fulfilled upon delivery of
goods to the customers.

Delivery occurs when the goods have been shipped to the
specific location, the risks and rewards of obsolescence
and loss have been transferred to the customer, and either
the customer has accepted the goods in accordance with
the sale contract, the acceptance provisions have lapsed,
or the company has objective evidence that all criteria for
acceptance have been satisfied.

(ii) Services

Revenue from sale of services is recognised on the
basis of the stage of completion. When the contract
outcome cannot be measured reliably, revenue is
recognised only to the extent that the expenses
incurred are eligible to be recovered.

(iii) Export Incentives

Revenue in respect of the export incentives incentives
are recognized on accrual basis in the period in which
the related exports have been made.

Revenue in respect of the RoDTEP export incentives are
recognized in the period in which the related exports
have been made based at an estimated value based on
historical realisations, taking into consideration the type
of transaction and the specifics of each arrangement.

(iv) Power Generation

Sale of power is recognised on the basis of meter
reading confirmed by buyers in accordance with the
respective agreement.

Renewable Energy Certificate are accounted for on
certification of energy sale quantity by the buyer and is
valued at minimum sale price fixed by Central Electricity
Regulatory Authority after adjusting expected outgo.

(v) Interest

Income from interest is recognized using the effective
interest rate (EIR). EIR is the rate that exactly discounts
the estimated future cash payments or receipts
over the expected life of the financial instrument
or a shorter period, where appropriate, to the
gross carrying amount of the financial asset. When
calculating the effective interest rate, the Company
estimates the expected cash flows by considering all
the contractual terms of the financial instrument but
does not consider the expected credit losses.

(vi) Dividend

Dividend income is recognized when the right to
receive the payment is established.

(vii) Insurance and other claims are recognized when no
significant uncertainty exists with regard to ultimate
collection thereof, and same is adjusted from
corresponding heads of expense.

2.13 Employees Benefits

(i) Short term Employee Benefits:

Liabilities for wages, salaries and other employee
benefits that are expected to be settled within twelve
months of rendering the service by the employees are
classified as short term employee benefits. Such short
term employee benefits are measured at the amounts
expected to be paid when the liabilities are settled. Short
Term Employee Benefits are recognized as an expense
on an undiscounted basis in the statement of profit and
loss of the year in which the related service is rendered.

(ii) Post Employment Benefits

(a) Defined Contribution Plans:

Provident Fund

Retirement benefit in the form of provident
fund is a defined contribution scheme. The
Company has no obligation, other than the

contribution payable to the provident fund. The
Company recognizes contribution payable to
the provident fund scheme as an expense, when
an employee renders the related service.

(b) Defined Benefit Plans

Gratuity

The Company provides for gratuity, a defined
benefit retirement plan (''the Gratuity Plan'')
covering eligible employees of the Company.
The Gratuity Plan provides a lump-sum payment
to vested employees at retirement, death,
incapacitation or termination of employment, of an
amount based on the respective employee''s salary
and the tenure of employment with the Company.
Liabilities with regard to the Gratuity Plan are
determined by actuarial valuation, performed by
an independent actuary, at each balance sheet
date using the projected unit credit method.

The Company recognizes the net obligation of
a defined benefit plan in its balance sheet as an
asset or liability. Re-measurements comprising
of actuarial gains and losses, the effect of the
asset ceiling (excluding amounts included in net
interest on the net defined benefit liability) and
the return on plan assets (excluding amounts
included in net interest on the net defined benefit
liability) are recognised in Other Comprehensive
Income which are not reclassified to profit or loss
in subsequent periods.

(iii) Long-term employee benefits

The liability of accumulating compensated absences
is determined by actuarial valuation performed by
an independent actuary at each balance sheet date
using Projected Unit Credit Method.

2.14 Borrowing Costs

Borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying
asset are capitalized as part of the cost of the asset.
Other borrowing costs are recognized as an expense in
the period in which they are incurred. Borrowing costs
consist of interest and other costs that an entity incurs in
connection with the borrowing of funds. Borrowing cost
also includes exchange differences to the extent regarded
as an adjustment to the borrowing costs.

2.15 Foreign Currency Transactions

The foreign currency transactions are recorded, on initial
recognition in the functional currency (i.e. Indian Rupee),
by applying to the foreign currency amount the spot
exchange rate between the functional currency and the
foreign currency at the date of the transaction. The foreign
currency monetary items are translated using the closing

rate at the end of each reporting period. Non-monetary
items that are measured in terms of historical cost in a
foreign currency shall be translated using the exchange rate
at the date of the transaction. Exchange differences arising
on the settlement of monetary items or on translating
monetary items at rates different from those at which they
were translated on initial recognition during the period
or in previous financial statements shall be recognised in
profit or loss in the period in which they arise.

Foreign exchange differences recorded as an adjustment
to borrowing costs are presented in the statement of
profit and loss, as a part of finance cost. All other foreign
exchange gains and losses are presented in the statement
of profit and loss on net basis.

In respect of foreign branch, which is in the nature of integral
foreign operations, all transactions are translated using the
exchange rate at the date of the transaction. The translation
of monetary assets and liabilities is performed using the
exchange rate in effect at the balance sheet date. Fixed assets
are translated as at the date of transaction. Depreciation is
translated at the rates applied for translation of fixed assets.

2.16 Leases

Effective from April 1, 2019 the company adopted Ind AS
116, "Leases". The effect of adoption of Ind AS 116 was
insignificant. The following is a summary of significant
accounting policies related to Leases.

A. Company as a Lessee

The Company assesses whether a contract contains a
lease at inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control the use
of an identified asset for a period of time in exchange
for consideration. To assess whether a contract conveys
the right to control the use of an identified asset, the
Company assesses whether: (i) the contract involves
the use of an identified asset (ii) the Company has
substantially all of the economic benefits from use of
the asset through the period of the lease and (iii) the
Company has the right to direct the use of the asset.

The company applies a single recognition and
measurement approach for all leases, except for
leasehold land, short-term leases and leases of low-value.
For short-term and leases of low value, the Company
recognises the lease payments as an operating expense
on a straight line basis over the term of the lease.

Leasehold land is carried at the acquisition cost
i.e. one-time lease premium paid at the time of
acquisition of leasehold rights. However, if there is
no reasonable certainty that the company will obtain
ownership by the end of the lease term, the asset is
amortized over the shorter of the estimated useful life
of the asset and the lease term. For all other leases,

the Company recognises lease liabilities to make lease
payments and right-of-use assets representing the
right to use the underlying assets.

The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
prior to the commencement date of the lease plus
any initial direct costs less any lease incentives. They
are subsequently measured at cost less accumulated
depreciation and impairment losses.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis over the
shorter of the lease term and useful life of the underlying
asset. Right of use assets are evaluated for recoverability
whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable.

The lease liability is initially measured at amortized cost
at the present value of the future lease payments. The
lease payments are discounted using the incremental
borrowing rate at the lease commencement date.
After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made.
In addition, the carrying amount of lease liabilities
is re-measured if there is a modification, a change in
the lease term, a change in the lease payments or a
change in the assessment of an option to purchase
the underlying asset.

Right-of-use assets are included in the Leased Assets
and lease liabilities are included in other current and
non-current financial liabilities in the balance sheet.
Lease payments have been classified as financing
cash flows in the Statement of Profit and Loss.

B. Company as a Lessor

Leases for which the company is a lessor is classified
as finance or operating leases. Leases in which the
Company does not transfer substantially all the risks
and rewards incidental to ownership of an asset are
classified as operating leases. Rental income arising is
accounted for on a straight-line basis over the lease
term, unless the receipts are structured to increase in
line with expected general inflation.

2.17 Income Taxes

Income tax expense comprises current tax and deferred
tax. Income tax expense is recognized in net profit in the
statement of profit and loss except to the extent that it
relates to items recognized directly in equity or other
comprehensive income, in which case it is also recognized
in equity or other comprehensive income respectively.

Current Taxes:

Current income tax for current and prior periods is
recognized at the amount expected to be paid to or
recovered from the tax authorities, using the tax rates and
tax laws that have been enacted or substantively enacted
by the balance sheet date.

Deferred Taxes:

Deferred income tax assets and liabilities are recognized for
all temporary differences arising between the tax base of
assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date except when the
deferred income tax arises from the initial recognition of
an asset or liability in a transaction that is not a business
combination and affects neither accounting nor taxable
profit or loss at the time of the transaction. Deferred tax
assets and liabilities are reviewed at each reporting date
and are reduced to the extent that it is no longer probable
that the related tax benefit will be realized.

Deferred income tax assets and liabilities are measured
using tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date and are
expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered
or settled. The effect of changes in tax rates on deferred
income tax assets and liabilities is recognized as income or
expense in the period that includes the enactment or the
substantive enactment date. A deferred income tax asset
is recognized to the extent that it is probable that future
taxable profit will be available against which the deductible
temporary differences and tax losses can be utilized.

The Company offsets current tax assets and current tax
liabilities, where it has a legally enforceable right to set
off the recognized amounts and where it intends either to
settle on a net basis, or to realize the asset and settle the
liability simultaneously.

Minimum Alternate Tax credit is recognised as a tax asset
only when and to the extent there is convincing evidence
that the Company will pay normal income tax during the
specified period. Such asset is reviewed at each Balance
Sheet date and the carrying amount of the MAT credit
asset is written down to the extent there is no longer a
convincing evidence to the effect that the Company will
pay normal income tax during the specified period.

2.18 Impairment of assets
a) Financial assets

The company recognizes loss allowances using the
expected credit loss (ECL) model for the financial assets
which are not fair valued through profit or loss. Loss

allowance for trade receivables with no significant
financing component is measured at an amount equal
to lifetime ECL. For all other financial assets, expected
credit losses are measured at an amount equal to the
12-month ECL, unless there has been a significant
increase in credit risk from initial recognition in which
case those are measured at lifetime ECL. The amount
of expected credit losses (or reversal) that is required to
adjust the loss allowance at the reporting date to the
amount that is required to be recognised is recognized as
an impairment gain or loss in statement of profit or loss.

b) Non-financial assets

Intangible assets and property, plant and equipment are
evaluated for recoverability whenever events or changes
in circumstances indicate that their carrying amounts
may not be recoverable. For the purpose of impairment
testing, the recoverable amount (i.e. the higher of the fair
value less cost to sell and the value-in use) is determined
on an individual asset basis unless the asset does not
generate cash flows that are largely independent of those
from other assets. In such cases, the recoverable amount
is determined for the Cash Generating Unit to which the
asset belongs. If such assets are considered to be impaired,
the impairment to be recognized in the statement of profit
and loss is measured by the amount by which the carrying
value of the assets exceeds the estimated recoverable
amount of the asset. An impairment loss is reversed in the
statement of profit and loss if there has been a change in
the estimates used to determine the recoverable amount.
The carrying amount of the asset is increased to its revised
recoverable amount, provided that this amount does
not exceed the carrying amount that would have been
determined (net of any accumulated amortization or
depreciation) had no impairment loss been recognized
for the asset in prior years.

2.19 Earnings per Share

The Basic earnings per share (EPS) is calculated by dividing
the net profit or loss for the year attributable to the equity
shareholders by the weighted average number of equity
shares outstanding during the year.

Diluted earnings per equity share is calculated by dividing the
net profit attributable to the equity holders of the company by
the weighted average number of equity shares considered for
deriving basic earnings per equity share and also the weighted
average number of equity shares that could have been issued
upon conversion of all dilutive potential equity shares. The
dilutive potential equity shares are adjusted for the proceeds
receivable had the equity shares been actually issued at
fair value (i.e. the average market value of the outstanding
equity shares). Dilutive potential equity shares are deemed
converted as of the beginning of the period, unless issued at
a later date. Dilutive potential equity shares are determined
independently for each period presented.

2.20 Dividends

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
company''s Board of Directors.

2.21 Cash flow statement

The cash flow statement is prepared in accordance with the
Indian Accounting Standard (Ind AS) - 7 "Statement of Cash
flows" using the indirect method for operating activities.

2.22 Exceptional items

Exceptional items refer to items of income or expense within
statement of profit and loss from ordinary activities which
are non-recurring and are of such size, nature or incidence
that their separate disclosure is considered necessary to
explain the performance of the company.

2.23 Critical accounting estimates
Property, plant and equipment

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

Intangible assets

The company tests whether intangible assets have suffered
any impairment on an annual basis. The recoverable amount
of a cash generating unit is determined based on value in
use calculations which require the use of assumptions.

Trade Receivables

As per Ind AS 109, the company is required to apply
expected credit losses model for recognising the provision
for doubtful debts. The expected credit losses are
determined based on past trends and assumptions.

Employee Benefits

The Union Ministry of Labour issued draft rules under section
67 of the Code on Wages Act in July, 2020 in the Gazette and
the Act is yet to be effective. The three labour codes, the
Occupational Health, Safety and Working Conditions Code
2020, the Industrial Relations Code 2020 and the Code on
Social Security, 2020 have been passed by the parliament
and have also received the assent of the President of India on
September, 2020. However, the date on which these Codes
will come into effect has not been notified. The Company will
assess the impact of these Codes and will record any related
impact in the period these Codes become effective.

Management estimations and assumptions

a) The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current
liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

b) The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions
were used to estimate the fair values:

(i) The fair values of the unquoted equity shares have been determined based on certifications from valuers who have used
Net Asset Value approach for determining the fair values.

(ii) The fair values of the derivative financial instruments have been determined based on the exchange rates prevailing
as at year end.

11.2 Fair Value Measurement
(i) Fair Value hierarchy

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

Level 2 - Inputs 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 for the assets or liabilities that are not based on observable market data (unobservable inputs).

The company''s policy is to recognize transfers into and the transfers out of fair value hierarchy levels as at the end of the
reporting period. There are no transfers between level 1 and level 2 during the end of the reported periods.

The principal financial assets of the Company include loans, trade and other receivables, and cash and bank balances that derive
directly from its operations. The principal financial liabilities of the company, include loans and borrowings, trade and other
payables and the main purpose of these financial liabilities is to finance the day to day operations of the company.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management
of these risks and that advises on financial risks and the appropriate financial risk governance framework for the Company.

This note explains the risks which the company is exposed to and policies and framework adopted by the company to
manage these risks.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market risk comprise three types of risk: foreign currency risk, interest rate risk, investment risk.

(i) Foreign currency risk

The company operates internationally and business is transacted in several currencies.

The export sales of company included in the total sales of the company, Further the company also imports certain assets and
material from outside India. The exchange rate between the Indian rupee and foreign currencies has changed substantially
in recent years and may fluctuate substantially in the future. Consequently the company is exposed to foreign currency risk
and the results of the company may be affected as the rupee appreciates/ depreciates against foreign currencies. Foreign
exchange risk arises from the future probable transactions and recognized assets and liabilities denominated in a currency
other than company''s functional currency.

The company measures the risk through a forecast of highly probable foreign currency cash flows and manages its
foreign currency risk by appropriately hedging the transactions. The Company uses a combination of derivative financial
instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on
foreign currency exposures.

(b) Forward Contracts of H2682.29 Lacs-US $ 31.38 Lacs (Previous Year H 6930.31 Lacs-US $ 83.44 Lacs) taken for the
purpose of hedging against outstanding of future orders as on 31.03.2025.

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the
Company''s debt obligations with floating interest rates.

The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations
with floating interest rates, which are included in interest bearing loans and borrowings in these financial statements. The
company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk, since
neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum
exposure to the credit risk at the reporting date is primarily from trade receivables which are typically unsecured.
Credit risk on cash and bank balances is limited as the company generally invests in deposits with banks and financial
institutions with high credit ratings assigned by credit rating agencies. The Company''s credit risk in case of all other financial
instruments is negligible.

The company assesses the credit risk based on external credit ratings assigned by credit rating agencies. The company also
assesses the creditworthiness of the customers internally to whom goods are sold on credit terms in the normal course of
business. The credit limit of each customer is defined in accordance with this assessment. Outstanding customer receivables
are regularly monitored and any shipments to overseas customers are generally covered by letters of credit.

The impairment analysis is performed on client to client basis for the debtors that are past due at the end of each reporting
date. The company has not considered an allowance for doubtful debts in case of trade receivables that are past due but
there has not been a significant change in the credit quality and the amounts are still considered recoverable.

Write off policy

The financials assets are written off incase there is no reasonable expectation of recovering from the financial asset.

(v) Perfomance obligations

Information about the Company''s performance obligations for material contracts are as summarised below:

Sale of Goods:

The performance obligation and the control is satisfied at the point in time when control of the goods are transferred to the
customers, the customer has full discretion over the channel and price to sell the products, there is no unfulfilled obligation
that could affect the customer''s acceptance of the products and the company retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the goods sold. The said conditions
are generally fulfilled upon delivery of goods to the customers.

Sale of Services:

The performance obligation has been satisfied on the stage of completion.

23 The Company had filed a claim, including interest thereon, as an operational creditor under the Insolvency and Bankruptcy
Code, 2016, before the Insolvency Resolution Professional (IRP) appointed by the Hon''ble National Company Law Tribunal (NCLT),
Chandigarh, in respect of a body corporate whose net worth has been fully eroded. The said claim was subsequently rejected.

Thereafter, the Company has filed an Interlocutory Application (IA) before the NCLT, contesting the non-admission of its claim.
The IA forms part of the ongoing Corporate Insolvency Resolution Process (CIRP) proceedings against the said body corporate
and is currently pending adjudication.

In view of the uncertainty regarding the recoverability of the amount, the management has considered it prudent to create a
provision for doubtful debts amounting to H1,089.44 lakhs against the outstanding receivables from the said entity.

28 CAPITAL MANAGEMENT

The capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the
company. The primary objective of the company''s capital management is to maintain optimum capital structure to reduce cost
of capital and to maximize the shareholder value.

The company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants which otherwise would permit the banks to immediately call loans and borrowings. In
order to maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital
to shareholders or issue new shares.

31 Additional Regulatory Information as required by Schedule III of Companies Act, 2013

(a) There are no proceedings which have been initiated or pending against the Company for holding any Benami property
under the Benami Transactions (Prohibition) Act, 1988.

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

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

(d) The company has used the borrowings from banks and financial institutions for the purpose for which it was taken at the
balance sheet date.

(e) The company has borrowings from banks or financial institutions on the basis of security of current assets, and quarterly
returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the
books of accounts.

(f) There are no transactions not recorded in the books of accounts that have been surrendered or disclosed as income during
the year in the tax assessments under the Income Tax Act, 1961.

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

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

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

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

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

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

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

(j) There are no Loans or Advances in the nature of Loans granted to promoters, directors, KMPs and the related parties,
either severally or jointly with any other person, that are repayable on demand or without specifying any terms or
period of repayment.

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

32 The company has overseas operations at its branch in Poland and the financials of the period ended 31st March, 2025 has been
incorporated in the audited financial statements of the company for the year ended 31st March, 2025.

33 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits
received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which
the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company is
in the process of assessing the impact of the code and will record the same, if any, in the year the Code becomes effective.

34 Figures for the previous year have been re-group/rearranged where ever neceessary to make them comparable with current year

The Notes referred to above form an integral part of the accounts.

In terms of our report of even date attached herewith.

For B. CHHAWCHHARIA & CO.

Chartered Accountants
Firm Registration No: 305123E

Ashish Bagrodia Anil Kumar Sharma Sanjay Kumar Kedia

(Chairman Cum (Executive Director Cum (Chief

Managing Director) Chief Executive Officer) Financial Officer)

DIN -00047021 DIN -01157106

Abhishek Gupta

Partner

Membership No: 529082

Place: Chandigarh Videshwar Sharma

Date: 17th May, 2025 (Company Secretary)

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Mar 31, 2024

2.11 Provisions, Contingent Liabilities and Contingent Assets

A provision shall be recognised when:

(a) an entity has a present obligation as a result of a past event;

(b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

(c) a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the

provision due to the passage of time is recognised as a finance cost.

A Contingent liability is not recognised but disclosed in the notes to the accounts, unless the probability of an outflow of resources is remote.

A contingent asset is generally neither recognised nor disclosed.

2.12 Revenue Recognition

Effective April 1,2018, the company adopted Ind AS 115, "Revenue from contracts with customers". The effect of adoption of Ind AS 115 was insignificant. The following is a summary of significant accounting policies related to revenue recognition.

Revenue is recognised upon transfer of control of promised product or services to customer in an amount that reflects the consideration the company expects to receive in exchange for those product or service, regardless of when the payment is received. Revenue is measured at the Transaction price, excluding amounts collected on behalf of the third parties. The amount disclosed as revenue is net of returns, trade discounts, volume rebates, Goods and Services Tax. The company recognizes revenue when the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the entity.

The specific recognition criteria for the various types of the company''s activities are described below:

(i) Sales of goods

Revenue from sale of goods is recognised at the point in time when control of the goods are transferred to the customers, the customer has full discretion over the channel and price to sell the products, there is no unfulfilled obligation that could affect the customer''s acceptance of the products and the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. The said conditions are generally fulfilled upon delivery of goods to the customers.

Delivery occurs when the goods have been shipped to the specific location, the risks and rewards of obsolescence and loss have been transferred

to the customer, and either the customer has accepted the goods in accordance with the sale contract, the acceptance provisions have lapsed, or the company has objective evidence that all criteria for acceptance have been satisfied.

(ii) Services

Revenue from sale of services is recognised on the basis of the stage of completion. When the contract outcome cannot be measured reliably, revenue is recognised only to the extent that the expenses incurred are eligible to be recovered.

(iii) Export Incentives

Revnue in respect of the export incentives incentives are recognized on accrual basis in the period in which the related exports have been made.

Revenue in respect of the RoDTEP export incentives are recognized in the period in which the related exports have been made based at an estimated value based on historical realisations, taking into consideration the type of transaction and the specifics of each arrangement.

(iv) Power Generation

Sale of power is recognised on the basis of meter reading confirmed by buyers in accordance with the respective agreement.

Renewable Energy Certificate are accounted for on certification of energy sale quantity by the buyer and is valued at minimum sale price fixed by Central Electricity Regulatory Authority after adjusting expected outgo.

(v) Interest

Income from interest is recognized using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.

(vi) Dividend

Dividend income is recognized when the right to receive the payment is established.

(vii) Insurance and other claims are recognized when no significant uncertainty exists with regard to ultimate collection thereof, and same is adjusted from corresponding heads of expense.

2.13 Employees Benefits

(i) Short term Employee Benefits:

Liabilities for wages, salaries and other employee benefits that are expected to be settled within twelve months of rendering the service by the employees are classified as short term employee benefits. Such short term employee benefits are measured at the amounts expected to be paid when the liabilities are settled. Short Term Employee Benefits are recognized as an expense on an undiscounted basis in the statement of profit and loss of the year in which the related service is rendered.

(ii) Post Employment Benefits

(a) Defined Contribution Plans:

Provident Fund

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.

(b) Defined Benefit Plans Gratuity

The Company provides for gratuity, a defined benefit retirement plan (''the Gratuity Plan'') covering eligible employees of the Company. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment with the Company. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation,

performed by an independent actuary, at each balance sheet date using the projected unit credit method.

The Company recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Re-measurements comprising of actuarial gains and losses, the effect of the asset ceiling (excluding amounts included in net interest on the net defined benefit liability) and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability) are recognised in Other Comprehensive Income which are not reclassified to profit or loss in subsequent periods.

(iii) Long-term employee benefits

The liability of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using Projected Unit Credit Method.

2.14 Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the asset. Other borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

2.15 Foreign Currency Transactions

The foreign currency transactions are recorded, on initial recognition in the functional currency (i.e. Indian Rupee), by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. The foreign currency monetary items are translated using the closing rate at the end of each reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency shall be translated using the exchange rate at the date of the transaction. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated

on initial recognition during the period or in previous financial statements shall be recognised in profit or loss in the period in which they arise.

Foreign exchange differences recorded as an adjustment to borrowing costs are presented in the statement of profit and loss, as a part of finance cost. All other foreign exchange gains and losses are presented in the statement of profit and loss on net basis.

In respect of foreign branch, which is in the nature of integral foreign operations, all transactions are translated using the exchange rate at the date of the transaction. The translation of monetary assets and liabilities is performed using the exchange rate in effect at the balance sheet date. Fixed assets are translated as at the date of transaction. Depreciation is translated at the rates applied for translation of fixed assets.

2.16 Leases

Effective from April 1,2019 the company adopted Ind AS 116, "Leases". The effect of adoption of Ind AS 116 was insignificant. The following is a summary of significant accounting policies related to Leases.

A. Company as a Lessee

The Company assesses whether a contract contains a lease at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

The company applies a single recognition and measurement approach for all leases, except for leasehold land, short-term leases and leases of low-value. For short-term and leases of low value, the Company recognises the lease payments as an operating expense on a straight line basis over the term of the lease.

Leasehold land is carried at the acquisition cost i.e. one-time lease premium paid at the time of acquisition of leasehold rights. However, if there

is no reasonable certainty that the company will obtain ownership by the end of the lease term, the asset is amortized over the shorter of the estimated useful life of the asset and the lease term. For all other leases, the Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the incremental borrowing rate at the lease commencement date. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.

Right-of-use assets are included in the Leased Assets and lease liabilities are included in other current and non-current financial liabilities in the balance sheet. Lease payments have been classified as financing cash flows in the Statement of Profit and Loss.

B. Company as a Lessor

Leases for which the company is a lessor is classified as finance or operating leases. Leases in which the Company does not transfer substantially

all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straightline basis over the lease term, unless the receipts are structured to increase in line with expected general inflation.

2.17 Income Taxes

Income tax expense comprises current tax and deferred tax. Income tax expense is recognized in net profit in the statement of profit and loss except to the extent that it relates to items recognized directly in equity or other comprehensive income, in which case it is also recognized in equity or other comprehensive income respectively.

Current Taxes:

Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred Taxes:

Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date except when the deferred income tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred tax assets and liabilities are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized.

The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Minimum Alternate Tax credit is recognised as a tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

2.18 Impairment of assets

a) Financial assets

The company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in statement of profit or loss.

b) Non-financial assets

Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit to which

the asset belongs. If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

2.19 Earnings per Share

The Basic earnings per share (EPS) is calculated by dividing the net profit or loss for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year.

Diluted earnings per equity share is calculated by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

2.20 Dividends

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 company''s Board of Directors.

2.21 Cash flow statement

The cash flow statement is prepared in accordance with the Indian Accounting Standard (Ind AS) - 7 "Statement of Cash flows" using the indirect method for operating activities.

2.22 Exceptional items

Exceptional items refer to items of income or expense within statement of profit and loss from ordinary activities which are non-recurring and are of such size, nature or incidence that their separate disclosure is considered necessary to explain the performance of the company.

2.23 Critical accounting estimates Property, plant and equipment

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

Intangible assets

The company tests whether intangible assets have suffered any impairment on an annual basis. The

recoverable amount of a cash generating unit is determined based on value in use calculations which require the use of assumptions.

Trade Receivables

As per Ind AS 109, the company is required to apply expected credit losses model for recognising the provision for doubtful debts. The expected credit losses are determined based on past trends and assumptions.

Employee Benefits

The Union Ministry of Labour issued draft rules under section 67 of the Code on Wages Act in July, 2020 in the Gazette and the Act is yet to be effective. The three labour codes, the Occupational Health, Safety and Working Conditions Code 2020, the Industrial Relations Code 2020 and the Code on Social Security, 2020 have been passed by the parliament and have also received the assent of the President of India on September, 2020. However, the date on which these Codes will come into effect has not been notified. The Company will assess the impact of these Codes and will record any related impact in the period these Codes become effective.

Nature of Reserves

a) Capital Reserve

Capital Reserve represents capital receipts, being capital subsidy, received in earlier years.

b) Securities Premium

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

c) General Reserve

The General reserve is used from time to time for transfer of profits from surplus in statement of Profit and Loss for appropriation purposes.

d) Equity Investment Reserve

This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, net off amounts reclassified to retained earnings when those assets have been disposed off.

Management estimations and assumptions

a) The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

b) The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

(i) The fair values of the unquoted equity shares have been determined based on certifications from valuers who have used Net Asset Value approach for determining the fair values.

(ii) The fair values of the derivative financial instruments have been determined based on the exchange rates prevailing as at year end.

11.2 Fair Value Measurement

(i) Fair Value hierarchy

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

Level 2 - Inputs 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 for the assets or liabilities that are not based on observable market data (unobservable inputs).

The company''s policy is to recognize transfers into and the transfers out of fair value hierarchy levels as at the end of the reporting period. There are no transfers between level 1 and level 2 during the end of the reported periods.

11.3 Financial Risk Management

The principal financial assets of the Company include loans, trade and other receivables, and cash and bank balances that derive directly from its operations. The principal financial liabilities of the company, include loans and borrowings, trade and other payables and the main purpose of these financial liabilities is to finance the day to day operations of the company.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks and that advises on financial risks and the appropriate financial risk governance framework for the Company.

This note explains the risks which the company is exposed to and policies and framework adopted by the company to manage these risks.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprise three types of risk: foreign currency risk, interest rate risk, investment risk.

(i) Foreign currency risk

The company operates internationally and business is transacted in several currencies.

The export sales of company included in the total sales of the company, Further the company also imports certain assets and material from outside India. The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently the company is exposed to foreign currency risk and the results of the company may be affected as the rupee appreciates/ depreciates against foreign currencies. Foreign exchange risk arises from the future probable transactions and recognized assets and liabilities denominated in a currency other than company''s functional currency.

The company measures the risk through a forecast of highly probable foreign currency cash flows and manages its foreign currency risk by appropriately hedging the transactions. The Company uses a combination of derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates.

The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates, which are included in interest bearing loans and borrowings in these financial statements. The company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables which are typically unsecured. Credit risk on cash and bank balances is limited as the company generally invests in deposits with banks and financial institutions with high credit ratings assigned by credit rating agencies. The Company''s credit risk in case of all other financial instruments is negligible.

The company assesses the credit risk based on external credit ratings assigned by credit rating agencies. The company also assesses the creditworthiness of the customers internally to whom goods are sold on credit terms in the normal course of business. The credit limit of each customer is defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to overseas customers are generally covered by letters of credit.

The impairment analysis is performed on client to client basis for the debtors that are past due at the end of each reporting date. The company has not considered an allowance for doubtful debts in case of trade receivables that are past due but there has not been a significant change in the credit quality and the amounts are still considered recoverable.

(v) Perfomance obligations

Information about the Company''s performance obligations for material contracts are as summarised below:

Sale of Goods:

The performance obligation and the control is satisfied at the point in time when control of the goods are transferred to the customers, the customer has full discretion over the channel and price to sell the products, there is no unfulfilled obligation that could affect the customer''s acceptance of the products and the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. The said conditions are generally fulfilled upon delivery of goods to the customers.

Sale of Services:

The performance obligation has been satisfied on the stage of completion.

23 The company has filed claim along with interest thereon before Insolvency Resolution Professional, appointed by the Hon''ble National Company Law Tribunal, Chandigarh, as operational creditors against a body corporate, whose networth is fully eroded, under Insolvency & Bankruptcy Code, 2016. Hence, in the opinion of the management, due to uncertainty of recovery, provision for doubtful debt is made against receivables of C1089.44 Lacs from them.

31. Additional Regulatory Information as required by Schedule III of Companies Act, 2013

(a) There are no proceedings which have been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988.

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

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

(d) The company has used the borrowings from banks and financial institutions for the purpose for which it was taken at the balance sheet date.

(e) The company has borrowings from banks or financial institutions on the basis of security of current assets, and quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.

(f) There are no transactions not recorded in the books of accounts that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

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

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

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

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

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

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

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

(j) There are no Loans or Advances in the nature of Loans granted to promoters, directors, KMPs and the related parties, either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment.

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

32. The company has overseas operations at its branch in Poland and the financials of the period ended 31^st March, 2024 has been incorporated in the audited financial statements of the company for the year ended 31^st March, 2024.

33. The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company is in the process of assessing the impact of the code and will record the same, if any, in the year the Code becomes effective.

34. Figures for the previous year have been re-group/rearranged where ever neceessary to make them comparable with current year

The Notes referred to above form an integral part of the accounts.

In terms of our report of even date attached herewith.

For B. CHHAWCHHARIA & CO.

Chartered Accountants _ _ _

Firm Registration No: 305123E Ashish Bagrodia Anil Kumar Sharma Sanjay Kumar Kedia

(Chairman Cum (Executive Director Cum (Chief Financial Officer)

Abhishek Gupta Managing Director) Chief Executive Officer)

Partner DIN -00047021 DIN -01157106

Membership No: 529082

Place: Dharamshala Videshwar Sharma

Date: 17^th May, 2024 (Company Secretary)

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Mar 31, 2018

Considering the past experience, management is of the view that there will not be any material impact on accounts on settlement/finalization of tax assessment.

15 Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 62.18 Lacs (Previous year Rs. 379.43 Lacs) {(net of advances of Rs. 13.31 Lacs)(Previous year Rs. 211.35 Lacs)}.

16 In view of the management, no provision is required in respect of receivable of Rs. 1089.44 lacs from a body corporate whose net worth has been fully eroded, in view of future prospects of revival and also as the company is in the process of rehabilitation. Under these circumstances, the due date of payment will be mutually decided.

17 The Company’s Hydro Power Project (3.5 MW) at Manuni, Dharamshala, Distt. Kangra Himachal Pardesh has been synchronized with H.P.S.E.B.L Grid on 31.03.2017 and supplied electricity

H.P.S.E.B.L till 31st January, 2018 and is being captively consumed thereafter. The company has filed a writ petition before the Hon’ble Himachal Pradesh High Court at Shimla challenging levy of certain charges and additional free supply of power under “supplementary implementation agreement”, On Company’s application, Hon’ble High Court has granted interim stay on 11^th Sept’ 2013 and currently the matter is sub-judice. Pending litigation amount payable; if any, cannot be estimated at this stage. Management is confident that there will not be any material impact of above on final settlement/ decision.

18 The company has taken legal and other persuasive actions for recovery of certain overdue Trade Receivables amounting to Rs. 18.29 Lacs (previous year Rs. 18.29 Lacs). In the opinion of the management, these outstanding are good and fully recoverable, hence no provision there against is considered necessary.

19 Balances of loans and advances sundry creditors and other liabilities are in the process of confirmation / reconciliation.

20 In accordance with the Accounting Standards (IndAS-36) on “Impairment of Assets” during the year the company has assessed useful life of fixed assets in use and is of the view that no impairment is considered to be necessary in view of its expected realizable value/value in use.

22 The Company has not received full information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to amount unpaid as at year end together with interest paid /payable have been given based on the information so far available with the company/ identified by the company management. As required by schedule

III of companies Act, of the above said Act the following information is disclosed:-

1. SEGMENT INFORMATION

(i) Business segments have been identified based on the nature and class of products and services, assessment of differential risks and returns. Accordingly, company is a single segment company operating in textile business (Yarn, Fabric and allied activities) and disclosure requirements as contained in Ind AS- 108 ‘Operating Segments’ are not required in the financial statements.

(ii) The segment revenue in geographical segments considered for disclosure is as follow:

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India.

2. RELATED PARTY DISCLOSURE

Related parties and transactions with them as specified in the Ind-AS 24 on “Related Parties Disclosures” presribed under Companies (Accounting Standards) Rules, 2015 has been identified and given below on the basis of information available with the company and the same has been relied upon by the auditors.

c) Other related parties

(i) Key management personnel and their relatives Relationship

Shri Ashish Bagrodia Chairman cum Managing Director

Shri Anil Sharma Chief Executive Officer^A

Shri Sanjay Kedia Chief Financial OfficerA

Shri Videshwar Sharma Company SecretaryA

Shri Satish Bagrodia Advisor (Relative of CMD)

a Pursuant to the Companies Act, 2013

(ii) Enterprise where Key Management Personnel & their relative have significant influence

Star point Financial Services (P) Ltd. India

Winsome Yarns Limited India

Roselab Commodities Pvt. Ltd India

Kailashpati Vinimay Pvt. Ltd. India

3. Managerial remuneration paid/provided to Managing Director during the year ended 31st March, 2018 which has exceeded the limit prescribed under section 197 read with schedule V to the Companies Act, 2013, by Rs. 28.29 Lakhs. The Company is in the process of filing waiver application with the Central Government for the above excess remuneration and pending application and receipt of the approval, no adjustments to financial statements have been made to show this amount as recoverable.

4. The disclosures required under Ind-AS -19, Employee Benefits, notified in the Companies (Accounting Standard) Rules, 2015 are given below, based on the Actuarial Report certified by a Practicing Actuary.

Defined Benefit Plan

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

5. During the year, the company has migrated to a new accounting system and in view of the frequent changes in the new GST regime, certain balances are in the process of reconciliation. The net amount of such unreconciled balances amounting to Rs. 56.36 lacs has been shown under Advances Recoverable in kind under the head “Other Current Assets”.

6. As per the past practice, consumption of raw material and stores and spares is derived as net of opening stock plus purchases less closing stock.

7. CAPITAL MANAGEMENT

The capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the company’s capital management is to maintain optimum capital structure to reduce cost of capital and to maximize the shareholder value.

The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants which otherwise would permit the banks to immediately call loans and borrowings. In order to maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

Further, there have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year ended 31st March 2018.

There were no changes in the objectives, policies or processes for managing capital during the year ended 31st March 2018 and 31st March 2017.

8. Figures for the previous year have been re-group/rearranged where ever necessary to make them comparable with current year

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Mar 31, 2016

1 Rights & Restrictions of Shareholders:

1.1 The Company has only one class of Equity Shares having face value of Rs. 10/each (Previous Year Rs. 10/- each) in its issued, subscribed and paid up Equity share capital. Each shareholder is entitled to one vote per share. Each shareholder have the right in profit/surplus in proportion to amount paid up with respect to share holder.

1.2. In the event of winding up, the equity shareholders will be entitled to receive the remaining balance of assets, if any, in proportion to their individual shareholding in the paid up equity capital of the company.

* Adjusted Rs. 68.86 lacs pursuant to adoption of schedule II of the companies Act, 2013 towards WDV in respect of certain Fixed Assets (Net of Deferred Tax Rs. 36.44 Lacs) whose lives have expired on 31st March, 2015.

2. Term Loans from Banks of Rs. 18506.71 Lacs (P.Y. Rs. 22352.78 Lacs) are secured by Joint Equitable Mortgage by deposit of title deeds on company’s immovable properties(present and future) which shall be on first charge basis, shall rank pari-passu with all banks and a charge by way of hypothecation of all movable fixed assets subject to prior charge on specified equipments to banks for term loan. Above Term loans are further secured by pari-passu second charge on entire current(present and future) assets of the company. The loan is repayable in quarterly installments and maturity profile is as follows:

3. Vehicle Finance carrying interest of Rs. 70.87 Lacs (P.Y. 98.45Lacs) which is secured by hypothecation of specific assets purchased under such arrangements and is repayable in equated monthly installments and maturity profile is as follows:

4. The aforesaid credit facilities mentioned above in point no. 1 are also guaranteed by Chairman cum Managing Director and also by relatives of C.M.D. for certain credit facilities .

5. Working Capital Demand loans from banks, Cash Credit and Packing Credit are secured by First Charge by Hypothecation of Raw Materials, Stock in Process, Finished Goods, Consumable Store and Spares, Goods in Transit, Book Debts and by Second Charge on entire Fixed Assets of the Company on Pari-passu basis with Working Capital lenders.

6. The aforesaid credit facilities mentioned above is also secured by guarantee given by Chairman and Managing Director and also by a relative of C.M.D for certain credit facilities.

* Shall be credited to Investor’s Education and Protection Fund when due.

7. (a) Pursuant to adoption of useful lives of fixed assets as per Schedule II of the Companies Act, 2013 in compliance with Notification No. GSR 627(E) dated 29.08.2014 during the current year, the useful lives have been assessed by company it has accordingly componentized its fixed assets and has separately assessed the life of major components forming part of main assets. Consequently, the depreciation for the year is higher by Rs. 146.68 lacs. After retaining residual value, the carrying amount of Rs.68.86 lacs of certain fixed assets ((Net of Deferred Tax Rs. 36.44 Lacs)), whose lives have expired as at previous year end, has been charged to Retained Earnings.

8. (b) Depreciation for the year is net of Rs. 14.51 lacs (Previous Year Rs. 9.89 Lacs) transferred from Reserves of Capital Subsidy under TUFFS.

Building includes capital expenditure incurred on assets not owned by the company Rs.8.90 lacs ( Previous Year Rs. 8.90 lacs) and net Rs. 3.49 Lacs ( Previous Year Rs.4.31 lacs).

During the year an amount of Rs.13.53 lacs has been received from Himachal Pradesh Electricity Board toward 66 KV transmission line capitalised during the financial year 2013-14, which is adjusted from the cost of respective Assets.

# Vehicle includes assets of Rs.111.20 lacs ( Previous Year Rs.195.02 lacs) acquired under Hire Purchase Finance.

* Margin Money against L/C’s and Bank Guarantee

$ Includes FDR’s maturity of more than 12 months Rs. Nil ( P.Y. Rs. Nil)

9. (A). Contingent Liabilities, not provided for in respect of (as certified by the management):

(v) Custom duty saved of Rs. 116.41 Lacs (Previous year Rs. 648.06 Lacs) for import of capital good made under EPCG scheme against which export obligations amounting to Rs. 698.49 Lacs (Previous year Rs. 3964.34 Lacs) is pending.

(B). In respect of certain disallowances and additions made by Income Tax Authorities, appeals are pending before the Appellate authorities and adjustment if any, will be made after the same are finally determined.

Considering the past experience, management is of the view that there will not be any material impact on accounts on settlement/finalization of tax assessment.

10. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 155.13 Lacs (Previous year Rs. 865.50 Lacs) {(net of advances Rs. 22.73 Lacs) (Previous year Rs. 142.18 Lacs)}.

11. Trade receivable includes Rs. 1089.44 lacs( Previous Year Rs. 1089.44 lacs) is recoverable from a body corporate (erstwhile associate company) whose net worth as per the audited accounts as at 30th Sept 2014 became negative and balance is subject to confirmation and who has filed application before Board for Financial Industrial Reconstruction (BIFR) for rehabilitation. The management is confident about full recovery, hence no provision there against considered necessary.

12. During the year the Company has completed construction of a Hydro Electric project (3.5 MW Power project) at Manuni, Himachal Pradesh and capitalized w.e.f. 25th Sept 2015. However, project is ready to use but could not be started pending required approvals from government/ authorities, as the company has filed a writ petition before the Hon’ble Himachal Pradesh High Court at Shimla challenging levy of certain charges and additional free supply of power under “supplementary implementation agreement”, pending for execution by the company with the Government of Himachal Pradesh for the said power project. On Company’s application, Hon’ble High Court has granted interim stay on 11th Sept’ 2013 and currently the matter is sub-judice. Pending litigation amount payable; if any, cannot be estimated at this stage. Management is confident that there will not be any material impact of above on final settlement/decision.

The management is of the view that considering the long term capital investment , future cash flows and benefits associated with the project and expected early settlement of dispute with the government/authorities there is no impairment as this stage.

13. The company has filed an application for the rebate claim which is disputed and pending at the office of the Joint Secretary, New Delhi under export promotion scheme of Rs.27.76 Lacs.( Previous Year Rs. 27.76 Lacs). In the opinion of the management , these claims are good and fully recoverable , hence no provision their against is considered necessary.

14. Prior period adjustment (net) Rs.10.41 Lacs (Previous year Rs. 8.99 Lacs) include ECGC charges Rs. 5.32 Lacs , Fees & Subscription Rs 3.57 Lacs (Previous year Rs. 0.77 Lac), Legal and Professional fees Rs. 0.18 Lac (Previous year Rs. 1.03 Lacs), Repair to Computers Rs. 0.07 Lac, Telephone expenses Rs. 0.53 Lac, Traveling Expenses Rs.0.10 Lac, Water Charges Rs 0.13 Lac (Previous year Rs. 0.27 Lac), Interest on working capital Rs. 0.51 Lac, Testing charges - Rs. NIL (Previous year Rs 0.62 Lac), Repair to building & Machinery Rs. NIL (Previous year Rs 1.17 Lacs) Recruitment Expenses Rs. NIL (Previous year Rs 0.60 Lac), Brokerage - Rs. NIL, (Previous Year Rs. 1.80 Lacs) and ERP support Charges Rs. NIL (Previous Year Rs. 2.73 Lacs).

15. The company has taken legal and other persuasive actions for recovery of certain overdue Trade Receivables amounting to Rs. 35.44 Lacs (previous year Rs. 66.27 Lacs). In the opinion of the management, these outstanding are good and fully recoverable, hence no provision there against is considered necessary.

16. Balance of certain receivables (read with note no. 27.3), loans and advances (including capital advance), trade payables (read with Note no. 27.13)and other liabilities are in the process of confirmation / reconciliation.

17. In accordance with the Accounting Standards (AS-28) on “Impairment of Assets” during the year the company has assessed useful life of fixed assets in use and is of the view that no impairment is considered to be necessary in view of its expected realizable value/value in use.

18. Pursuant to adoption of useful lives of fixed assets as per Schedule II of the Companies Act, 2013 in compliance with Notification No. GSR 627(E) dated 29.08.2014 during the current year, the useful lives have been assessed by management and accordingly, depreciation for the year is higher by Rs. 146.68 lacs. After retaining residual value, the carrying amount of Rs.68.86 lacs of certain fixed assets( Net of deferred tax amounting to Rs. 36.44 lacs), whose lives have expired as at previous year end, has been charged to Retained earnings.

19. Since it is not possible to ascertain with reasonable certainty/ accuracy the amount of accrual in respect of certain insurance and other claims, the same are continued to be accounted for on settlement/ acceptance basis.

20. Capital work in progress including civil work under construction, electric Installation and fittings, Machinery under installation/erection and following pre-operative expenditure pending allocation/capitalization :

21. The Company has not received full information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid /payable have been given based on the information so for available with the company/ identified by the company management. As required by section 22 of the above said Act the following information is disclosed:-

22. As per the past practice exchange fluctuation on loan/ liability for acquisition of capital assets continue to be charged to the Statement of Profit & Loss.

23. In the opinion of the Board, the Current Assets, Loans and Advances appearing in the Company’s Balance Sheet as at year end would have a value on realization in the normal course of business at least equal to the respective amounts at which they are stated in the Balance Sheet.

24. Employees Benefits: Defined Benefit Plan:

The employee gratuity fund is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

(i) Contribution to defined contribution plan, recognized as expenses during the year is Rs. 225.33 Lacs (P.Y. Rs. 191.01 Lacs) & as transferred to Capital Work-in-progress is Rs. Nil Lacs (P.Y. Rs. Nil Lacs).

(ii) The estimate rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

(iii) The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

(iv) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

25. Research and Development expenditure amounting to Rs. 72.03 Lacs (Previous year Rs. 67.83 Lacs) have been charged to Statement of Profit and Loss in respective heads of the accounts (As certified by the management).

26. (a) i) As per the past practice , consumption of raw material and stores and spares is derived as net of opening stock plus purchases less closing stock , as certain item-wise records are in process of updation.

ii) in view of para (i)above , closing inventories of stock in process and finished goods have been considered as taken , valued and certified by the management after providing against old / non moving inventories; if any, as assessed / estimated by the management.

(b) Profit /Loss on sale of stores and raw materials remains adjusted in their respective consumption accounts.

27. Segment Reporting

(i) The company has only one business segment namely Textile (Yarn, Fabric and allied activities).

(i) The segment revenue in geographical segments considered for disclosure is as follow:

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India.

28. As estimated and assessed by the management, certain tax allowances / deductions have been considered and accordingly Net Deferred Tax Liability of Rs. 30.63 Lacs (Previous Year Rs. 812.44 Lacs Net Deferred Tax Liability) have been accounted for the year.

* Includes Rs. 5 lacs salary as an advisor w.e.f 1st March 2015, and Rs. 29.65 lacs remuneration (including commission) in the capacity of Chairman cum Whole time Director up to 20th September, 2014

(ii) Remuneration to Shri Ashish Bagrodia ( Chairman Cum Managing Director) Rs. 86.63 Lacs (P.Y Rs. 65.11 Lacs including commission).

Remuneration to Shri Anil Sharma (Chief Executive Officer) Rs. 60.76Lacs( P.Y Rs 39.34 lacs), Shri Sanjay Kedia (Chief Financial Officer ) Rs. 28.30 Lacs (P.Y Rs. 18.89 lacs) , Shri Sourabh Gupta (Company Secretary) Rs. 11.74 Lacs (P.Y Rs. 10.23 lacs).

28. Based upon Future plans, expected sales and profitability as assessed by the management in near future (in next twelve months) which will enable company to utilize MAT credit entitlement of Rs. 2290.67 Lacs ( Previous Year Rs. 1981.48 Lacs )and accordingly the same is shown under “Short Term Loans & Advances”.

29. The company has given interest free loan/ advances in the nature of loan, to employees, in the ordinary course of its business. No loan/ advances in the nature of loans have been given to employees/ others for the purpose of investment in securities of the company.

(A) The Foreign Currency exposure that are not hedged by derivative instruments or otherwise are as follow (As certified by Management).

(B) Forward Contracts of Rs. 4265.72 Lacs, US $ 63.41 Lacs (Previous Year 3984.62 Lacs, US $ 63.53 Lacs and EURO 0.55 Lacs) taken for the purpose of hedging of Trade debtors are outstanding as 31.03.16

30. During the year the company has provided Corporate Social Responsibility (CSR) expenses of Rs.46.83 Lacs (PY Rs.17.96 Lacs ), including Rs.34.78 lacs (PY Rs.16.04 Lacs) transferred to Winsome Foundation Trust.

31. Figures for the previous year have been re-grouped/rearranged where ever necessary to make them comparable with current year.

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Mar 31, 2015

1.1 Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.865.50 Lacs (Previous year Rs. 867.00 Lacs) {(net of advances Rs. 142.18 Lacs)(Previous year Rs. 109.00 Lacs)}.

1.2 Trade receivable includes Rs. 1089.44 lacs is recoverable from a related party (erstwhile associate company) whose net worth as per the audited accounts as at 30th Sept 2014 became negative and balance is subject to confirmation and who has filed application before Board for Financial Industrial Reconstruction (BIFR) for rehabilitation. The management is confident about full recovery, hence no provision there against considered necessary.

1.3 The company is constructing a Hydro Electric Project (3.5 MW Power project) at Manuni, Himachal Pradesh which is shown under capital work in progress. The company has filed a writ petition before the Hon'ble Himachal Pradesh High Court at Shimla challenging levy of certain charges and additional free supply of power under "supplementary implementation agreement" to be executed by the company with the Government of Himachal Pradesh for the said power project. On Company's application, Hon'ble High Court has granted interim stay on 11th Sept' 2013 and currently the matter is sub-judice. Management is confident that there will not be any material impact of above on final settlement/decision.

1.4 The company has filed an application for the rebate claim which is disputed and pending at the office of the Joint Secretary, New Delhi under export promotion scheme of Rs.27.76 lacs.

1.5 TUFS Interest Subsidy amounting to Rs. 82.44 lacs is recoverable from two banks as on 31st 'March'2015 since Dec. 2011 (Rs. 35.05 lacs) and Sept. 2012 (Rs. 47.39 lacs) . In view of management these amounts are good and recoverable.

1.6 The company has taken legal and other persuasive actions for recovery of certain overdue Trade Receivable amounting to Rs. 66.27 lacs (includes of overdue overseas Trade Receivable of Rs. 30.84 lacs). In the opinion of the management, these outstanding are good and fully recoverable and hence no provision there against is considered necessary.

1.7 Balance of certain receivables (read with note no. 26.3), loans and advances (including capital advance), trade payables and other liabilities are in the process of confirmation / reconciliation.

1.8 In accordance with the Accounting Standards (AS-28) on "Impairment of Assets" as notified under Company (Accounting Standard) Rules, 2006, during the year the company has assessed useful life of fixed assets in use and is of the view that no impairment is considered to be necessary in view of its expected realizable value/value in use.

1.9 Pursuant to adoption of Schedule II to the Companies Act, 2013, the depreciation charge for the year is lower by Rs. 393.57 lacs.

1.10 Since it is not possible to ascertain with reasonable certainty/ accuracy the amount of accrual in respect of certain insurance and other claims, the same are continued to be accounted for on settlement/ acceptance basis.

1.11 Capital work in progress including civil work under construction, electric installation and fittings, Machinery

1.12 The Company has not received full information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid /payable have been given based on the information so for available with the company/ identified by the company management. As required by section 22 of the above said Act the following information is disclosed:-

1.13 As per the past practice exchange fluctuation on loan/ liability for acquisition of capital assets continue to be charged to the Statement of Profit & Loss.

1.14 In the opinion of the Board, the Current Assets, Loans and Advances appearing in the Company's Balance Sheet as at year end would have a value on realization in the normal course of business at least equal to the respective amounts at which they are stated in the Balance Sheet.

1.15 Employees Benefits: Defined Benefit Plan:

The employee gratuity fund is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

(i) Contribution to defined contribution plan, recognized as expenses during the year is Rs. 191.01 Lacs (P.Y. Rs. 149.81 Lacs) & as transferred to Capital Work-in-progress is Rs. Nil Lacs (P.Y. Rs. 8.39Lacs). (ii) The estimate of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary. (iii) The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities. (iv) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

1.16 Research and Development expenditure amounting to Rs.67.83Lacs (Previous year Rs. 59.78Lacs) have been charged to Statement of Profit and Loss in respective heads of the accounts (As certified by the management).

1.17 (a) i) As per the past practice, consumption of raw material and stores and spares is derived as net of opening stock plus purchases less closing stock , as certain item-wise records are in process of updation. ii) in view of para (i) above, closing inventories of stock in process and finished goods have been considered as taken, valued and certified by the management after providing against old/non moving inventories; if any, as assessed / estimated by the management.

(b) Profit /Loss on sale of stores and raw materials remains adjusted in their respective consumption accounts.

(c) Prior period adjustment (net) Rs.8.99 lacs (Previous year Rs. 28.47 lacs) include Testing charges- Rs 0.62 lac,(Previous year Rs 1.36 lacs)Freight& Commission- Rs NIL (Previous year Rs 0.39 lac) Fees & Subscription Rs 0.77 lac(Previous year Rs 1.97 lacs) Employee Welfare-Rs NIL(Previous year Rs 0.89 lac) Postage & Telegram- Rs NIL (Previous year Rs 0.096 lac) Repair to building & Machinery-Rs 1.17 Lacs (Previous year Rs 3.53 lacs) Recruitment Expenses Rs.0.60 lac(Previous year Rs 0.02 lac) and loss on sale of licenses Rs. NIL (Previous year Rs 20.22 lacs), Legal and Professional fee Rs 1.03 lacs, Water Charges Rs 0.27 lac, Brokerage Rs 1.80 lacs, ERP support Charges Rs 2.73 lacs.

1.18 Segment Reporting

(i) The company has only one business segment namely Textile (Yarn, Fabric and allied activities). (ii) The segment revenue in geographical segments considered for disclosure is as follow:

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India. Information about geographical segments ( by location of customers)

1.19 As estimated and assessed by the management, certain tax allowances / deductions have been considered and accordingly Net Deferred Tax Liability of Rs. 812.44 Lacs (Previous Year Rs. 1647.28 Lacs Net Deferred Tax Liability) have been accounted for the year.

ii) Remuneration (Including Commission) to Chairman Cum Managing Director Rs. 65.11 Lacs (P.Y Rs. 68.35 Lacs), Chairman Cum Whole Time Director up to 20th September, 2014 Rs. 29.65 Lacs (P.Y Rs. 64.30 Lacs).

Remuneration to Chief Executive Officer Rs. 39.34 Lacs, Chief Financial Officer Rs. 18.89 Lacs , Company Secretary Rs. 10.23 Lac.

1.20 Based upon Future plans, expected sales and profitability as assessed by the management in near future (in next twelve months) which will enable company to utilize MAT credit entitlement of Rs. 1981.48 Lacs (Previous Year Rs. 1395.78 Lacs )and accordingly the same is shown under "Short Term Loans & Advances".

1.21 The company has given interest free loan/ advances in the nature of loan, to employees, in the ordinary course of its business. No loan/ advances in the nature of loans have been given to employees/ others for the purpose of investment in securities of the company.

1.22 During the year the company has provided Corporate Social Responsibility (CSR) expenses of Rs.17.96 Lacs, including Rs.16.04 lacs transferred to Winsome Foundation Trust.

1.23 Figures for the previous year have been re-grouped/rearranged where ever necessary to make them comparable with current year.

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Mar 31, 2014

1 EXPALANATORY NOTES

1.1 (A) Contingent Liabilities, not provided for in respect of (as certified by the management):

(Rs.in lacs)

| Particulars | 2013-14 2012-13

(i) " Bills discounted with banks 3854.63 2503.58

(ii) Excise / Service Tax Matters 83.34 81.67

(iii) Outstanding Bank Guarantees 554.17 170.17

(iv) Custom duty saved of Rs. 7648.45 Lacs (Previous year Rs. 5460.96 Lacs) for import of capital good made against EPCG license against which export obligations amounting to Rs. 56695.51 Lacs (Previous year Rs. 25710.83 Lacs) is pending.

(B) In respect of certain disallowances and additions made by Income Tax Authorities, appeals are pending before the Appellate authorities and adjustment if any, will be made after the same are finally determined.

Considering the past experience, management is of the view that there will not be any material impact on accounts on settlement/finalization of tax assessment.

1.2 Estimated amount of contracts remaining to be executed on capital account and not provided for {(net of advances Rs. 109.00 Lacs) (Previous year Rs. 3027.52 Lacs)} Rs. 867.00 Lacs (Previous year Rs. 5405.43 Lacs).

1.3 During the year 2010-11, the Company had issued and alloted 12,90,000 nos. GDR''s entitling 6,45,00,000 (now 64,50,000 equity shares of Rs. 10/- each) nos. equity shares of Re.1/- each at a price of Rs. 6.94/- per share (including premium of Rs. 5.94/-, now premium is Rs. 59.40/- on Rs. 10/- per share). As on 31.03.2013, balance Rs. 4,160.43 lacs which was invested outside India (including balance in bank Rs. 13.35 lacs)

During the year the Company have received in India balance amounting to Rs. 4626.54 lacs (including exchange gain of Rs 479.47 lacs) and the same have been utilized for the purpose the issue was made.

1.4 The Company''s new spinning unit (Unit II) comprising of 41088 nos. of spindles located at Village: Kaundi, Baddi, Dist.: Solan H.P. have commenced commercial production from 15.11.2013. In Knitting Unit (Unit III), 18 machines out of Total 25 machines has commenced commercial production from 01.11.2013.

1.5 The Company has filed an application for the rebate claim which is disputed and is pending at the office of Joint Secretary, New Delhi under export promotion scheme of Rs. 26.39 lacs.

1.6 During the year, Company''s 100% wholly owned subsidiary, M/s Winsome Textile Industries, FZE have discontinued its all business operations and filed an application for termination of its license with Hamriyah Free Zone Authority, UAE.

1.7 (i) The Company has taken legal and other persuasive actions for recovery of certain overdue debtors aggregating to Rs. 85.15 Lacs (Previous Year Rs.232.70 Lacs) {(including overdue overseas debtors of amounting to Rs. 26.47Lacs) (Previous Year Rs. 94.09 Lacs)). In the opinion of the management, these outstanding are good and fully recoverable and hence considered good.

(ii) Balance of certain receivables (including associate Company Rs. 1088.19) Lacs), loans and advances (including capital advance), trade payables and other liabilities are in the process of confirmation / reconciliation.

1.8 In accordance with the Accounting Standards (AS-28) on "Impairment of Assets" as notified under Company (Accounting Standard) Rules, 2006, during the year the Company has assessed useful life of fixed assets in use and is of the view that no impairment is considered to be necessary in view of its expected realizable value/ value in use.

1.9 Since it is not possible to ascertain with reasonable certainty/ accuracy the amount of accrual in respect of certain insurance and other claims, the same are continued to be accounted for on settlement/ acceptance basis.

1.10 The Company has not received full information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid /payable have been given based on the information so for available with the Company/ identified by the Company management. As required by section 22 of the above said Act the following information is disclosed:-

1.11 As per the past practice exchange fluctuation on loan/liability for acquisition of capital assets continues to be charged to the statement of profit & loss.

1.12 (i) In the opinion of the Board, the Current Assets, Loans and Advances appearing in the Company''s Balance Sheet as at year end would have a value on realization in the normal course of business at least equal to the respective amounts at which they are stated in the Balance Sheet.

(ii) As estimated and assessed by the management certain tax deductions have been and considered accordingly Net Deferred Tax Liability of Rs. 1647.28 Lacs (Previous year Rs. 207.51 Lacs Net Deferred Tax Liability) have been accounted.

1.13 Employees Benefits:

Defined Benefit Plan:

The employee gratuity fund is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

(i) Contribution to defined contribution plan, recognized as expenses during the year is Rs. 149.81 Lacs (P.Y. Rs. 121.25 Lacs) & as transferred to Capital Work-in-progress is amounting Rs 8.39 Lacs (P.Y. Nil).

(ii) The estimate of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

(iii) The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

(iv) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

1.14 Research and Development expenditure amounting to Rs.59.78 Lacs (Previous year Rs. 48.55 Lacs) have been charged to Statement of Profit and Loss in respective head of the accounts (As certified by the management).

1.15 (a) Profit /Loss on sale of stores and raw materials remains adjusted in their respective consumption accounts. (b) Prior period adjustment (net) Rs. 28.47 Lacs (Previous year Rs.18.20 Lacs) include Quality Claims Rs. Nil (Previous year Rs. 9.11 Lacs), legal & professional Rs. Nil (Previous year Rs. 5.06 Lacs), Rent Rs. Nil (Previous year Rs. 4.03 Lacs) Testing charges- Rs 1.36 Lacs, Freight& Commission-Rs 0.39 Lacs, Fee & Subscription Rs. 1.97 Lacs, Employee Welfare-Rs 0.89 Lacs, Postage & Telegram- Rs 0.096 Lacs, Repair to building & Machinery- Rs 3.53 Lacs, Recruitment Expenses Rs.0.02 Lacs and loss on sale of licenses Rs. 20.22 Lacs.

1.16 Segment Reporting

(I) The Company is only in one line of business namely Textile (Yarn, Fabric and allied activities). (Ii) The segment revenue in geographical segments considered for disclosure is as follow:

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India. Information about geographical segments ( by location of customers)

1.17 Related party disclosures

List of "Related party & Relationship disclosures" are given below: (as identified by the management)

1. (a) Associate Company:-

- Winsome Yarns Limited

(b) Wholly owned Subsidiary Company:-

- Winsome Textile Industries FZE UAE

2. Key management personnel and their relatives.

- Shri Satish Bagrodia Chairman Cum Whole time Director

- Shri Ashish Bagrodia Managing Director

- Shri Manish Bagrodia Son of Chairman & Brother of MD

(Resigned from directorship w.e.f. 28th Sept., 2013)

3. Organisations where Key Management Personnel & their relative have Significant influence

- Star point Financial Services (Pvt.) Ltd.

1.18 Based upon Future plans, expected sales and profitability as assured by the management in near future (in next twelve months) which will enable Company to utilise MAT credit entitlement of Rs.1395.78 Lacs and accordingly the same is shown under "Short Term Loans & Advances".

1.19 The Company has given interest free loan/ advances in the nature of loan, to employees, in the ordinary course of its business. No loan/ advances in the nature of loans have been given to employees/ others for the purpose of investment in securities of the Company.

1.20 The Company has filed a writ petition before Hon''ble Himachal Pradesh High Court at shimla challenging levy of certain charges and additional free supply of power under "supplementary implementation agreement" to be executed by the Company with Government of Himachal Pradesh for its power project- Manuni Hydro Electric Project (3.5 MW).On Company''s application, Hon''ble High Court have granted interim stay on 11 Sept, 2013 and currently the matter is sub-judice. Management is confident that there will not be any material impact of above on final settlement/decision.

1.21 Figure for the previous year have been re-grouped where ever necessary to make them comparable with current year.

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Mar 31, 2013

1.1 (A) Contingent Liabilities, not provided for in respect of (as certified by the management):

(Rs. in lacs)

No. Particulars 2012-13 2011-12

(i) Bills discounted with banks 2503.58 1374.86

(ii)Excise / Service Tax Matters 81.67 81.67-

(iii) Surety Bond Executed on behalf of others (Including Entry Tax) 170.17 225.17

(iv) Custom duty saved of Rs. 5460.96 Lacs (Previous year Rs. 2287.91 Lacs) for import of capital good made against EPCG license against which export obligations amounting to Rs 25710.83 Lacs (Previous year Rs. 18209.67 Lacs) is pending.

(B) In respect of certain disallowances and additions made by Income Tax Authorities, appeals are pending before the Appellate authorities and adjustment if any, will be made after the same are finally determined.

Considering the past experience, management is of the view that there will not be any material impact on accounts on settlement/finalization of tax assessment.

1.2 Estimated amount of contracts remaining to be executed on capital account and not provided for {(net of advances Rs.3027.52 Lacs)(Previous year 1000.36 Lacs) }Rs.5405.43 Lacs (Previous year Rs. 2598.79 Lacs).

1.3 During the year 2010-11, the Company had issued and alloted 12,90,000 nos. GDR''s entitling 6,45,00,000 (now 64,50,000 equity shares of Rs. 10/- each) nos. equity shares of Re.1/- each at a price of Rs. 6.94/- per share (including premium of Rs. 5.94/-, now premium is Rs. 59.40/- on Rs. 10/- per share).

As on 31.03.2012, Rs. 4,586.69/- lacs (including exchange gain) was pending to be received in India against above issue made. During the year Rs. 777.14/- lacs {balance pending to be received on 31.03.2013 Rs. 4160.43 lacs (including balance in bank Rs. 13.35 lacs)}, as explained, have been received (credited to the account of the company) in India.

Balance amount out of above (lying outside India as on 31st March 2013), pending for utilization for the purpose for which the issue was made by the company in 2010-11, have directly been transferred/invested from EURAM Bank to a money market fund.

1.4 Capital Payables amounting to Rs. 366.35 Lacs as assessed by the company (Previous year 6.31 Lacs) have been reflected under Other Long Term Liabilities in the balance sheet as the same is payable out of the proceeds of long-term loans.

1.5 (i) The company has taken legal and other persuasive actions for recovery of certain overdue debtors aggregating to Rs 232.70 Lacs (Previous Year Rs. 185.74 Lacs) {(including overdue overseas debtors of amounting to Rs.94.09 Lacs) (Previous Year 47.13 Lacs)}. In the opinion of the management, these outstanding are good and fully recoverable.

(ii) Balance of certain receivables (including associate company Rs. 1093.07 Lacs), loans and advances (including capital advance), trade payables and other liabilities are in the process of confirmation / reconciliation.

1.6. In accordance with the Accounting Standards (AS-28) on "Impairment of Assets” as notified under Company (Accounting Standard) Rules, 2006, during the year the company has reassessed useful life of fixed assets and is of the view that no impairment/reversal is considered to be necessary in view of its expected realisable value.

1.7 (i) Since it is not possible to ascertain with reasonable certainty/ accuracy the amount of accrual in respect of certain insurance and other claims, the same are continued to be accounted for on settlement/ acceptance basis.

(ii) In the current year a fire occurred on 9th March, 2013 in the company''s rented warehouse at Ludhiana where Inventory amounting Rs. 94.91 Lacs was destroyed and the company has filed an Insurance Claim of Rs. 87.29 lacs for the same. The management is confident about full realisability considering the fact that the goods were secured by the risk covered under the policy and assessment made by the management.

1.8. (A) Addition to Fixed Assets/Capital work in progress including civil work under construction, electric installation and fittings, machinery under installation/erection and pre-operative expenses. The details of Preoperative expenditure pending allocation/appropriation are as follows:

(B) The company is in process of implementation of 3.5 MW hydro power project & a new expansion project comprising a new spinning plant, a new knitting plant and modernization of existing spinning plant and expansion of existing dye house in the state of Himachal Pradesh and expenses incurred for the same till 31st March, 2013 have been included under the CWIP.

1.9. The Company has not received full information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid /payable have been given based on the information so for available with the company/ identified by the company management. As required by section 22 of the above said Act the following information is disclosed:-

1.10. As per the past practice exchange fluctuation on loan/liability for acquisition of capital assets continued to charge to the profit & loss account.

1.11. (i) In the opinion of the Board, the Current Assets, Loans and Advances appearing in the company''s Balance Sheet as at year end would have a value on realization in the normal course of business at least equal to the respective amounts at which they are stated in the Balance Sheet.

(ii) As estimated and assessed by the management certain tax deductions, Net Deferred Tax Liability of Rs. 207.51 Lacs (Previous year Rs. 159.41 lacs Net Deferred Tax Assets) have been accounted.

1.12. Employees Benefits:

Defined Benefit Plan:

The employee gratuity fund is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

1.13 Research and Development expenditure amounting to Rs. 48.55 Lacs (Previous year Rs. 48.05 Lacs) have been debited to Statement of Profit and Loss in respective head of the accounts (As certified by the management).

1.14. (a) Profit or loss on sale of stores/raw materials remains adjusted in their respective consumption accounts. (B) Prior period adjustment (net) Rs. 18.20 Lacs (Previous year Rs.1.58 Lacs) include Quality Claims Rs. 9.11 Lacs (Previous year Nil), legal & professional Rs.5.06 Lacs (Previous year Rs. 0.61 Lacs) and Rent Rs. 4.03 Lacs (Previous year Nil)

1.15. Segment Reporting

(I) The company is only in one line of business namely Textile (Yarn, Fabric and allied activities). (Ii) The segment revenue in geographical segments considered for disclosure is as follow:

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India.

1.16. Related party disclosures

List of "Related party & Relationship disclosures" are given below: (as identified by the management)

1. (a) Associate Company:-

- Winsome Yarns Limited

(b) Wholly owned Subsidiary Company:-

- Winsome Textile Industries FZE

2. Key management personnel and their relatives.

- Shri Satish Bagrodia Chairman Cum Whole time Director

- Shri Ashish Bagrodia Managing Director

- Shri Manish Bagrodia Son of Chairman, WTD & Brother of MD

3. Organisations where Key Management Personnel & their relative have Significant influence

- Star point Financial Services (Pvt.) Ltd.

- Roselab Commodities Pvt. Limited.

- Kailashpati Vinimay Private Limited

1.17. Based upon Future plans, management expects to generate taxable income in the near future (in next twelve months) which will enable it to utilise MAT credit entitlement of Rs. 788.97 Lacs and accordingly the same is shown under "Short Term Loans & Advances”.

1.18. The company has given interest free loan/ advances in the nature of loan, to employees, in the ordinary course of its business. No loan/ advances in the nature of loans have been given to employees/ others for the purpose of investment in securities of the company.

1.19. Figures for the previous year have been re-grouped/recast where ever necessary to make them comparable with those of current year.

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Mar 31, 2012

1.1 (A) Contingent Liabilities, not provided for in respect of (as certified by the management):

(Rs. in lacs)

No. Particulars 2011-12 2010-11

(i) Bills discounted with banks 1374.86 2494.77

(ii) Excise / Service Tax Matters 81.67 258.92

(iii) Surety Bond Executed on behalf of others (Including Entry Tax) 225.17 80.80

(iv) Custom duty saved of Rs. 2287.91 Lacs ( Previous year Rs. 1657.28 Lacs) for import of capital good made against EPCg license against which export obligations amounting to Rs. 18209.67 Lacs ( Rs. 13258.29 Lacs) is pending.

(B) In respect of certain disallowances and additions made by Income Tax Authorities, appeals are pending before the Appellate authorities and adjustment if any, will be made after the same are finally determined.

Considering the past experience, management is of the view that there will not be any material impact on accounts on settlement/finalization of above.

1.2 Estimated amount of contracts remaining to be executed on capital account and not provided for {(net of advances Rs.1000.36 Lacs)(Previous year 194.43 Lacs) }Rs. 2598.79 Lacs (Previous year Rs. 1583.54 Lacs).

1.3 Out of the total issue proceeds of the GDRs in the previous year of Rs.4475.88 Lacs, pending certain compliances Rs.4586.69 Lacs (including foreign exchange gain) is parked in the Bank "Escrow" Account outside India as on year end and accordingly the balance issue proceeds are pending to be utilized. From Escrow Account, Rs. 561.60 Lacs has been received ( Company is in process of getting the FIRC) during the year in a separate account in India out of which Rs. 222.91 lacs has been utilized as per details below:

1.4 In earlier year Company's, Debt Restructuring Proposal (DRP) had been sanctioned by the respective lenders and is effective from 1st January 2009 . DRP interlaid includes reschedulement of existing term loans, relaxation in margin for working capital loan etc.

1.5 (i) The company has taken legal and other persuasive actions for recovery of certain overdue debtors

aggregating to Rs 185.74 Lacs (Previous Year Rs. 203.40 Lacs) {(including overdue overseas debtors of amounting to Rs.47.13 Lacs)(Previous Year 39.79 Lacs)}, in the opinion of the management, these outstanding are good and fully recoverable.

(ii) Balance of certain debtors (including associate company Rs.1086.96 Lacs), loans and advances (including capital advance), creditors and other liabilities are in the process of confirmation / reconciliation.

1.6. Since it is not possible to ascertain with reasonable certainty/ accuracy the amount of accrual in respect of certain insurance and other claims, the same are continued to be accounted for on settlement/ acceptance basis.

1.7. In accordance with the Accounting Standards (AS-28) on "Impairment of Assets" as notified under Company (Accounting Standard) Rules, 2006, during the year the company has reassessed its fixed assets and is of the view that no further impairment/reversal is considered to be necessary in view of its expected realizable value.

1.8. (A) Addition to Fixed Assets/Capital work in progress including civil work under construction, electric installation

and fittings, machinery under installation/erection and pre-operative expenses. The details of Preoperative expenditure pending allocation/appropriation are as follows:

(B) The company is in process of implementation of 3.5 MW hydro power project in the state of Himachal Pradesh and expenses incurred till 31st March, 2012 have been included in the CWIP.

1.9. The Company has not received full information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid /payable have been given based on the information so for available with the company/ identified by the company management. As required by section 22 of the above said Act the following information is disclosed:-

1.10. As per the past practice exchange fluctuation on loan/liability for acquisition of capital assets continued to charge to the profit & loss account.

1.11. (i) In the opinion of the Board, the Current Assets, Loans and Advances appearing in the company's Balance Sheet as at year end would have a value on realization in the normal course of business at least equal to the respective amounts at which they are stated in the Balance Sheet.

(ii) Considering prudence and as estimated by the management, Deferred Tax Assets of Rs. 159.41 Lacs have been created which management feel realizable in near future.

1.12. Employees Benefits:

Defined Benefit Plan:

The employee gratuity fund is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

(i) Contribution to defined contribution plan, recognized as expenses during the year is Rs. 102.28 Lacs (P.Y. 92.17 Lacs).

(ii) The estimate of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

(iii) The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

(iv) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

1.13 (i) Research and Development expenditure amounting to Rs. 48.05 Lacs (Previous year Rs. 58.93 Lacs) have been debited to Profit and Loss account.( As certified by the management)

(ii) During the year company has invested amounting to Rs 4.29 lacs in a new subsidiary company created/incorporated by name Winsome Textile Industries FZE, Sarah (UAE).

1.14. (a) Profit or loss on sale of stores/raw materials remains adjusted in their respective consumption accounts.

(b) Prior period adjustment (net) Rs. 1.58 Lacs (P.Y. Nil) include fees & subscription Rs. 0.48 Lacs (P.Y. Nil), legal & professional Rs. 0.61 Lacs (P.Y. Nil) and repair & maintenance Rs. 0.49 (P.Y. Nil)

Note: In view inadequacy of profit during the current year, minimum remuneration has been paid. Gratuity not included since funded with LIC along with other employees of the company. Leave encashment not been included, payable at the end of the tenure.

1.15. Segment Reporting

(i) The company is only in one line of business namely Textile (Yarn and allied activities).

(ii) The segment revenue in geographical segments considered for disclosure is as follow:

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India.

Information about geographical segments ( by location of customers)

1.16. Related party disclosures

List of "Related party & Relationship disclosures" are given below: (as identified by the management)

1. (a) Associate Company:-

- Winsome Yarns Limited

(b) Wholly owned Subsidiary Company:- - Winsome Textile Industries FZE w.e.f. 22nd June,2011

2. Key management personnel and their relatives.

- Shri Satish Bagrodia Chairman Cum Whole time Director

- Shri Ashish Bagrodia Managing Director

- Shri Manish Bagrodia Son of Chairman, WTD & Brother of MD

3. Organizations where Key Management Personnel & their relative have Significant influence

- Star point Financial Services (Pvt.) Ltd.

- Roselab Commodities Pvt. Limited.

- Kailashpati Vinimay Private Limited

*The face value of equity share has been consolidated on 19.07.2011 from Re 1/- to Rs 10/- each. Accordingly the no. of equity shares has been decreased and also EPS for the preceding period(s) have been revised/ reinstated.

1.17. Based upon Future plans, management expects to generate taxable income in the next financial year which will enable it to utilize MAT credit entitlement of Rs. 458.84 Lacs and accordingly the same is shown under "Short Term Loans & Advances".

1.18. The company has given interest free loan/ advances in the nature of loan, to employees, in the ordinary course of its business. No loan/ advances in the nature of loans have been given to employees/ others for the purpose of investment in securities of the company.

(B) Forward Contracts of Rs. 506.00 Lacs US $10.00 Lacs (Previous Year Rs. 1237.20 Lacs-US $ 26.80 Lacs) taken for the purpose of hedging of debtors are outstanding as at 31.03.12.

1.19. During the year ended 31st March 2012, the revised schedule VI has become applicable to the company. Thus previous year figures have been reclassified/ recanted suitably. The adoption of revised schedule VI does not impact recognition & measurement principle followed for preparation of financial statements except for presentation & disclosures wherever required.

2. Rights & Restrictions of Shareholders:

2.1 The Company has only one class of Equity Shares having face value of Rs. 10/- each (Previous Year Rs. 1/- each) in its issued, subscribed and paid up Equity share capital. Each shareholder is entitled to one vote per share (except GDR shareholding mentioned at point no. 2.2 below). Each shareholder have the right in profit/surplus in proportion to amount paid up with respect to share holders.

2.2 The GDR shareholding which is standing in the name of Bank of New York Mellon, as Depositary, has right to dividend, do not have any right to vote

2.3 In the event of winding up, the equity shareholders will be entitled to receive the remaining balance of assets, if any, in proportionate to their individual shareholding in the paid up equity capital of the company.

(a) During the year the company allotted NIL equity shares (P.Y. 6,06,00,000 Equity shares of Re. 1/- each at a premium of Rs. 1.40/- each) upon conversion of equal no of warrants allotted on preferential basis.

(b) During the year company has issued and allotted NIL Global Depository Receipt (P.Y. 12,90,000 GDR's representing 6,45,00,000 Equity Shares of Rs. 1/- each at a premium of Rs. 5.94/- per shares) (Refer Note No. 2.3)

@ Consolidated Re. 1/-fully paid up equity share to fully paid share of Rs. 10/- each during the year. Accordingly figures of the previous year have been revised.

Notes:

1. Term Loans and Working Capital Term Loans from Banks of Rs. 12083.32 Lacs (P.Y. Rs. 12837.97 Lacs) are secured by Joint Equitable Mortgage by deposit of title deeds on company's immovable properties(present and future) which shall be on first charge basis, shall rank pari-passu with all banks and a charge by way of hypothecation of all movable fixed assets subject to prior charge on specified equipments to banks for term loan. Above Term loans are further secured by pari-passu second charge on entire current(present and future) assets of the company. The loan is repayable in quarterly installments and maturity profile is as follows:

1. Working Capital Demand loans from bank includes Cash Credit, Packing Credit and short term loans are secured by First Charge by Hypothecation of Raw Material, Stock in Process, Finished Goods, Consumable Store and Spares, Goods in Transit, Book Debts and by Second Charge on entire Fixed Assets of the Company on Pari-passu basis with Working Capital lenders.

2. The aforesaid credit facilities mentioned above is also guaranteed by Chairman & Whole Time Director and Managing Director.

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Mar 31, 2011

31st March. 2011 31st March. 2010 (Rs. in Lacs) (Rs. in Lacs)

1. (A) Contingent Liabilities, not provided for in respect of :

(i) Bills discounted with banks 2494.77 1781.42

(ii) Excise / Service Tax Matters 258.92 334.78

(iii) Surety Bond Executed on behalf of others 80.80 80.80

(iv) Export obligation against import of Plant & Machinery Under concessional duty (EPCG scheme) 13258.29 13258.29

(USD $288.14 Lacs) (USD $288.14 Lacs)

(v) Duty saved on above 1657.28 1657.28

(B) In respect of certain disallowances and additions made by Income Tax Authorities, appeals are pending before the Appellate authorities and adjustment if any, will be made after the same are finally determined. Considering the past experience, management is of the view that there will not be any material impact on accounts on settlement/finalization of above.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances Rs. 194.43 Lacs)(Previous year 76.08 Lacs) Rs. 1583.54 Lacs (Previous year Rs. 1038.86 Lacs ).

3. Capital subsidy received under TUFS has been treated as deferred income which is recognised on systematic/rational basis in proportion of the applicable depreciation over the useful life of the respective assets and is adjusted against the credit to the Profit and Loss Account. During the year based on companys revised application, the TUFS Capital Subsidy has increased to Rs. 138.64 Lacs and accordingly balance amount of Rs. 41.11 Lacs (net) received during the current year.

4. (i) In terms of the Resolution passed u/s 81(1 A) of the Companies Act, 1956, the Board of Directors of the Company have issued 75,00,000 Nos. Convertible Warrants of Rs. 10/- each at Rs. 24/- each (including premium of Rs. 14/- per warrant) at their meeting held on 10th November, 2008 on receipt of 10% application money (aggregating to Rs. 180 Lacs) out of total amount of Rs. 1800 lacs, pending receipt of balance 90% amount (Total Rs. 1620 Lacs and Rs. 21.60 per Warrant). During the previous year 1,44,00,000 Nos. fully paid Equity Shares of Rs. 1/- each were allotted on 24th March, 2010 on receipt of Rs. 3,45,60,000/- (including Rs. 2,01,60,000/- on account of premium i.e. Rs. 1.40 per warrant). (ii) During the year, 6,06,00,000 Nos. fully paid Equity Shares of Rs. 1/- each were allotted on 9th May, 2010 on receipt full amounting to Rs. 14,54,40,000/- (including premium of Rs. 8,48,40,000/- i.e. Rs. 1.40 per warrant).

5. In terms of resolution passed in the EGM held on 16th June,2010, company has issued Global Depository Receipts(GDR) during the year. Pursuing to this, 12,90,000 nos. GDRs @ USD 7.75 each (each GDR comprises of 50 equity shares at a price of 6.94 per share (including premium of Rs.5.94 per share)) has been issued and allotted on 31st March,2011 and listed on the Luxembourg Stock Exchange. Pending certain compliance, the issue proceeds of the GDRs of Rs. 4475.88 Lacs including securities premium of Rs. 3830.88 Lacs is parked in the Bank " Escrow Account" outside India and accordingly this issue proceeds is pending to be utilized for the purpose.

6. (i) Debt Restructuring Proposal which have been sanctioned by the respective lenders and is effective from 1st January 2009 interalia includes reschedulement of existing term loans, relaxation in margin for working capital loan, carving out of working capital irregularities and additional finance is in process of implementation. The effect of Debt Restructuring have been accounted for based on sanctions received. As per the Debt Restructuring, additional funding of Rs 1800/- lacs (including premium) have been brought into as Equity Share Capital. (ii) Issue proceed utilized for the purpose as stipulated and balance amount have been parked into Working Capital.

7. The company has taken legal and other persuasive actions for recovery of certain overdue debtors aggregating to Rs 203.40 Lacs(Previous Year Rs. 158.51 Lacs) (including overdue overseas debtors of amounting to Rs. 39.79 Lacs)(Previous Year 35.96 Lacs), in the opinion of the management, these outstanding are good and fully recoverable.

8. Since it is not possible to ascertain with reasonable certainty/ accuracy the amount of accrual in respect of certain insurance and other claims, the same are continued to be accounted for on settlement/ acceptance basis.

9. Advances recoverable in cash or in kind or for value to be received includes capital advances amounting to Rs. 484.43 Lacs (Previous Year Rs. 326.08 Lacs).

10. In accordance with the Accounting Standards (AS-28) on "Impairment of Assets" issued by the Institute of Chartered Accoun- tants of India, during the year the company has reassessed its fixed assets and is of the view that no further impairment/ reversal is considered to be necessary in view of its expected realisable value.

Above amount is excluding interest on term loan Rs. 46.66 Lacs (P.Y. Rs.48.24 Lacs ) net of subsidy Rs. 26.76 Lacs (P.Y. Rs. 27.02 lacs).

(B) The company is in process of implementation of 3.5 MW hydro power project in the state of Himachal Pradesh and expenses incurred till 31st march 2011 have been included in the CWIP.

11. The Company has not received full information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid /payable have been given based on the information so for available with the company/ identified by the company management. As required by section 22 of the above said Act the following information is disclosed

Sr. No. Particulars 2010-11 2009-10

a) (i) Principal amount remaining unpaid at the end - - of the accounting year

(ii) Interest due on above

b) The amount of interest paid by the buyer alongwith amount of payment made to - - the supplier beyond the appointed date. - -

c) The amount of interest accrued and remaining unpaid - - at the end of financial year

d) The amount of interest due and payable for the period of delay in making payment (which have been paid but - - beyond the due date during the year) but without adding interest specified under this act.

e) The amount of further interest due and payable in - - succeeding year, until such interest is fully paid.

12. In view of the Company (Accounting Standard) Rules, issued by the Ministry of Corporate Affairs for treatment of gain/(loss) on account of exchange fluctuation on loan/liability for capital assets, the company continued its policy to charge exchange difference to the profit & loss account.

13. In the opinion of the Board, the Current Assets, Loans and Advances appearing in the Companys Balance Sheet as at year end would have a value on realization in the normal course of business at least equal to the respective amounts at which they are stated in the Balance Sheet.

VII. Actuarial / Demographic assumptions:-

(i) Contribution to defined contribution plan, recognized as expenses during the year is Rs. 92.17 Lacs (P.Y. 88.82Lacs).

(ii) The estimate of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

(iii) The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

(v) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

14. Research and Development expenditure amounting to Rs. 58.93 Lacs (Previous year Rs.43.14 Lacs) have been debited to Profit and Loss account.

15. Balance of certain debtors (including associate company), loans and advances (including capital advance), creditors other liabilities are in the process of confirmation / reconciliation.

16. (a) Profit or loss on sale of stores/raw materials remains adjusted in their respective consumption accounts.

(b) Prior period adjustments (net) Rs. Nil (P.Y. 0.17 Lacs ) include Processing and Dyeing Charges Rs. Nil (P.Y. Rs. 0.12 Lacs) and Repairs to Plant & Machinery Rs. Nil (P.Y. Rs. 0.05 Lacs),

Note : In view of inadequacy of profit during the current year, minimum remuneration has been paid. Gratuity not included since funded with LIC along with other employees of the Company. Leave encashment not been included, payable at the end of the tenure.

(b) During the year, Central Government approval has been received in respect of remuneration paid to Chairman and Whole Time Director.

17. Segment Reporting

(i) The Company is only in one line of business namely Yarn and allied activities.

(ii) The segment revenue in geographical segments considered for disclosure is as follow:

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India.

18. Related party disclosures

List of "Related party & Relationship disclosures" are given below: (as identified by the management)

1. (a) Associate Company:-

- Winsome Yams Limited

2. Key management personnel and their relatives.

- Shri Satish Bagrodia Chairman Cum Whole time director

- Shri Ashish Bagrodia Managing Director

- S hri Manish Bagrodia Son of Chairman & WTD & Brother of MD

- Smt. Shilpa Bagrodia Wife of MD

3. Organisations where Key Management Personnel & their relative have Significant influence

- Star point Financial Services (Pvt.) Ltd.

- Roselab Commodities Pvt. Limited.

- Kailashpati Vinimay Private Limited

19. The company has given interest free loan/ advances in the nature of loan, to employees, in the ordinary course of its business. No loan/ advances in the nature of loans have been given to employees/ others for the purpose of investment in securities of the company.

20 (B) Forward Contracts of Rs. 1237.20 Lacs US $26.80 Lacs (Previous Year Rs.797.72 Lacs-US $17.05 Lacs) taken for the purpose of hedging of debtors are outstanding as at 31.03.11.

21. Figures for the previous year have been re-grouped/recast wherever necessary to make them comparable with those of current year.

22. Schedule 1 to 14 form an integral part of the Balance Sheet and Profit & Loss Account.

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Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances 76.08 Lacs)(Previous year Rs 304.07lacs) Rs. 1038.86 Lacs (Previous year Rs. 386.12 Lacs).

2. Depreciation on certain Plant & Machinery is provided by considering it as continuous process plant based on technical assessment.

3. Capital subsidy received under TUFS has been treated as deferred income which is recognised on systematic/rational basis in proportion of the applicable depreciation over the useful life of the respective assets and is adjusted against the depreciation/credit to the Profit and Loss Account.

4.(A)(i) In terms of the Resolution passed u/s 81 (1 A) of the Companies Act, 1956, the Board of Directors of the Company have issued 75,00,000 Nos. Convertible Warrants of Rs. 10/- each at Rs. 24/- each (including premium of Rs. 14/- per warrant) at their meeting held on 10th November, 2008 on receipt of 10% application money (aggregating to Rs. 180 Lacs) out of total amount of Rs. 1800 lacs, pending receipt of balance 90% amount (Total Rs. 1620 Lacs and Rs. 21.60 per Warrant). During the year 1,44,00,000 Nos. fully paid Equity Shares of Rs. 1/- each were allotted on 24th March, 2010 on receipt of Rs. 3,45,60,000/- (including Rs. 2,01,60,000/- on account of premium i.e. Rs. 1.40 per warrant).

(ii) Subsequent to the Balance sheet date, 6,06,00,000 Nos. fully paid Equity Shares of Rs. 1/- each were alloted on 9th May, 2010 on receipt full amounting to Rs. 14,54,40,000/- (including premium of Rs. 8,48,40,000/- i.e. Rs. 1.40 per warrant). Till 31st March, 2010 received amounting to Rs. 6,44,88,000/- (including 10% received in previous year) is shown as Convertible Warrant).

5.(B) In terms of the Resolution passed by the shareholders at their meeting held on 11th September, 2009, fully paid Equity Share of Rs. 10/- each of company have been sub-divided into 10 nos. fully paid Equity Shares of Rs. 1/- each.

6. (i) Debt Restructuring Proposal which have been sanctioned by the respective lenders and is effective from 1st January 2009 interalia includes reschedulement of existing term loans, relaxation in margin for working capital loan, carving out of working capital irregularities and additional finance is in process of implementation. The effect of Debt Restructuring have been accounted for based on sanctions received. As per the Debt Restructuring, additional funding of Rs 1800/- lacs (including premium) have been brought into as Equity Share Capital, (including subsequent to the Balance Sheet date of amounting to Rs.809.52 lacs)

(ii) Issue proceed utilized for the purpose as stipulated and balance amount have been parked into Working Capital.

7. The company has taken legal and other persuasive actions for recovery of certain overdue debtors aggregating to Rs. 158.51 lacs (including overdue overseas debtors of amounting to Rs.35.96 lacs), in the opinion of the management, these outstanding are good and fully recoverable.

8. Since it is not possible to ascertain with reasonable certainty/ accuracy the amount of accrual in respect of certain insurance and other claims, the same are continued to be accounted for on settlement/ acceptance basis.

9. Advances recoverable in cash or in kind or for value to be received includes advances against capital orders amounting to Rs. 76.08 Lacs (Previous Year Rs.304.07 Lacs).

10. In accordance with the Accounting Standards (AS-28) on "Impairment of Assets" issued by the Institute of Chartered Accountants of India, during the year the company has reassessed its fixed assets and is of the view that no further impairment/reversal is considered to be necessary in view of its expected realisable value.

11. In view of the Company (Accounting Standard) Rules, issued by the Ministry of Corporate Affairs for treatment of gain/(loss) on account of exchange fluctuation on loan/liability for capital assets, the company continued its policy to charge exchange difference to the profit & loss account.

12. In the opinion of the Board, the Current Assets, Loans and Advances appearing in the Companys Balance Sheet as at year end would have a value on realization in the normal course of business at least equal to the respective amounts at which they are stated in the Balance Sheet.

13. Research and development expenditure amounting to Rs. 43.14 lacs (Previous year Rs. 45.76 lacs) have been debited to Profit and Loss Account.

14. Balance of certain debtors (including associates), loans and advances (including capital advance), creditors, Stock with job worker and other liabilities are in the process of confirmation / reconciliation.

15. (a) Profit or loss on sale of stores/ raw materials remains adjusted in their respective consumption accounts.

(b) Prior period adjustments (net) of Rs. 0.17 lacs (PY 8.57 lacs) include Processing and Dyeing Charges Rs. 0.12 Lacs (PY. Nil) Repairs to Plant & Machinery Rs. 0.05 Lacs (RY Nil), Legal & Professional Charges Rs. Nil (PY Rs.5.87 Lacs), Advertisement and Sales Promotion Rs. Nil (RY Rs 2.09 Lacs), Postage and Telegram Rs. Nil (RY Rs. 0.61 Lacs)

16. Segment Reporting

(i) The Company is only in one line of business namely Yarn and allied activities.

(ii) The segment revenue in geographical segments considered for disclosure is as follow :

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India.

17. The company has given interest free loan/ advances in the nature of loan, to employees, in the ordinary course of its business. No loan/ advances in the nature of loans have been given to employees/ others for the purpose of investment in securities of the company.

18(B)Forward contracts Rs. 797.72 lacs - US$ 17.05 Lacs (Previous Year Rs. 156.41 Lacs - US$ 3.00 Lacs) taken for the purpose of hedging of debtors are outstanding as at 31.03.2010.

19. Figures for the previous year have been re-grouped/recast wherever necessary to make them comparable with those of current year.

20. Schedule 1 to 15 form an integral part of the Balance Sheet and Profit & Loss Account.