NOTE 17.2 RIGHTS, PREFERENCES AND RESTRICTIONS:

The authorised share capital of the Company has only one class of shares referred to as ‘equity shares' having

a par value of Rs. 1/- each. The rights and privileges to equity shareholders are general in nature and defined

under the Articles of Association.

The equity shareholders shall have:

(i) One Vote and a poll when present in person (including a body corporate by a duly authorised representative) or by an agent duly authorised under a power of attorney or by a proxy his voting right shall be in proportion to his share of the paid equity share capital of the company. However, no member shall exercise any voting rights in respect of any share registered in his name on which any calls or other sums presently payable by him have not been paid or in regard to which the company has exercised any right of lien.

(ii) subject to the rights of person if any, entitled to share with special rights as to dividends, all dividends shall be declared and paid according to the amount paid or credited as paid to the shares in respect where of the dividend is paid but if and so long as nothing is paid upon any shares in the company, dividends may be declared and paid according to the amounts of the shares.

(iii) A special resolution sanctioning a sale to any other company duly passed pursuant to section 494 of the old Companies Act 1956 (corresponding to the section 319 of the new Companies Act 2013) may, subject to the provision of the act, in like manner as aforesaid determined that any shares or other consideration receivable by the liquidator be distributed against the members otherwise then in accordance with their existing rights and any such determination shall be binding upon all the members subject to the rights of dissent and consequential right conferred by the said section.

(a) The Company has received order u/s 45-A of the ESI Act 1948 for the year 2002 to 2005 raising demand of Rs. 25.35 Lacs. The company has disputed the demand raised by the corporation by filing a case in the court of Kamdar Rajya Bima Adalat, Ahmedabad and Bank Guarantee of Rs. 13.00 lakhs has been given under the direction of E.S.I Court Ahmedabad. Further in the earlier financial year ESI Court has issued order for payment of Rs. 0.59 Lacs in relation to contractor's liability and the same has been deposited by the company and shown as deposit as on March 31, 2023._

(a) Gratuity

The Company offers gratuity plan for its qualified employees which is payable as per the requirements of Payment of Gratuity Act, 1972. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined obligation calculated with the projected unit credit method at the end of reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior year.

NOTE 38 - SEGMENT INFORMATION:

The operating segment of the company is identified to be "Manufacturing and Processing of Fabrics", as the Chief Operating Decision Maker (CODM) reviews business performance at an overall company level as one segment and hence, does not have any disclosures to be made under Ind AS 108 Operating Segments.

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings offset by cash and bank balances) and total equity of the Company.

Fair value hierarchy:

The following section explains the judgments and estimates made in determining the fair values of the financial instruments that are recognized and measured at fair value through profit or loss. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial investments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Notes:

Level 1 hierarchy includes financial instruments measured using quoted prices (unadjusted) in active market for identical assets that the entity can access at the measurement date. This represents mutual funds that have price quoted by the respective mutual fund houses and are valued using the closing Net asset value (NAV).

Level 2 hierarchy includes the fair value of financial instruments measured using quoted prices for identical or similar assets in markets that are not active.

Level 3 if one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted compound instruments.

There are no transfers between any of these levels during the year. The Company's policy is to recognize transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.

C. Fair value of financial assets and liabilities measured at amortized cost:

The Management has assessed that fair value of loans, trade receivables, cash and cash equivalents, other bank balances, other financial assets and trade payables approximate their carrying amounts largely due to their short-term nature. Difference between carrying amount of Bank deposits, other financial assets , borrowings and other financial liabilities subsequently measured at amortised cost is not significant in each of the years presented.

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

The Company's risk management policies are established to identify and analyses the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The audit committee oversees how management monitors compliance with the Company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

(a) Credit risk

Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The company is exposed to the credit risk from its trade receivables, unbilled revenue, investments, cash and cash equivalents, bank deposits and other financial assets. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets.

Cash and Cash Equivalents:

Credit risk on cash and cash equivalents and other deposits with banks is limited as the Company generally invests in deposits with banks with high credit ratings assigned by external credit rating agencies; accordingly the Company considers that the related credit risk is low. Impairment on these items is measured on the 12-month expected credit loss basis.

(b) Liquidity risk:

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.

The Company's treasury maintains ?exibility in funding by maintaining liquidity through investments in liquid funds and other committed credit lines. Management monitors rolling forecasts of the group's liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows.

Liquidity Table

The Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods is given below. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. The contractual maturity is based on the earliest date on which the Company may be required to pay.

(c) Market Risk:

Market risk is the risk arising from changes in market prices - such as foreign exchange rates and interest rates - will affect the Company's income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of the investments. Thus, the exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currency.

(i) 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 and investments.

Most of the Company's borrowings are on a floating rate of interest. The Company has exposure to interest rate risk, arising principally on changes in Repo Rate (except for vehicle loan and GECL loan). The Company uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations from internal accruals.

At the behest of Hon'ble Gujarat High Court upon a suo-moto writ petition, Ahmedabad Municipal Corporation (AMC) has undertaken a drive to disconnect effluent discharge connection of all units discharging water effluent in the sewage lines of AMC. Accordingly, the treated effluent discharge connection of the Company was disconnected on 30/11/2021. ln the city of Ahmedabad, more than 400 connections were snapped by AMC by December 2021.

As result of this, the manufacturing operations of the Company had come to a standstill. The matter was disclosed to the stock exchanges on 13/12/2021 in terms of SEBI (LoDR) Regulations. It would be relevant to note that the Company has the requisite approvals from the competent authorities to discharge industrial effluents after treating the same in its inhouse effluent treatment plant. Aggrieved by the action of AMC, The Company has already filed a civil application in the matter against this disconnection. The Hon'ble court, at Ahmedabad, has passed as order against the company which has compelled the company to install MVR Water Treatment Plant to treat and get the polluted water/effluent recycled for reuse in the production process. The company has now recommenced its production with effect from 26th September, 2022._

The above mentioned information has been compiled to the extent of responses received by the company from its suppliers with regard to their registration under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006).

(b) The company has circulated letters of Balance Confirmation to Sundry Debtors, Sundry Creditors and the parties to whom loans and advances have been granted. Confirmations were received in some cases.

NOTE 45 - UN-HEDGED FOREIGN CURRENCY EXPOSURE:

The Company does not enter into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments.

NOTE 46 - LEASES:

Factory Building and Godown have been taken on lease by the Company. The terms of lease rent are for the period 30 years. Such leases are renewable by mutual consent. There is no contingent rent, no sub-leases and no restrictions imposed by the lease arrangements.

1. In Current year company has taken new loan which has resulted in significant increase in current liabilities. Accordingly, there is decrease in current Ratio.

2. In Current year company has taken new loan which has resulted in significant increase in Total. Accordingly there is Increase Debt Equity Ratio.

3. Debt Service Coverage ratio is decreased as earnings for debt services have been reduced during the current year as Company's operations and profitability have been effected due to shut down of manufacturing operations in few months.

4. Return on Equity ratio is decreased as profit for the year is decreased compare to previous year, due to shut down of manufacturing operation in few months.

5. Decrease in ratio due to increase in closing inventories compare to previous year.

6. There is significant decrease in sales for the year under review as compared to previous year which has resulted into such variation.

7. There is significant increase in average creditors which has resulted into such variance

8. There is significant decrease in sales for the year under review as compared to previous year which has resulted into such variation

9. Net Profit Ratio is reduced in current year compare to previous year as margin for sale in current year reduced compare to previous year.

10. Return on capital employed ratio is being decreased as earnings before interest and taxes is being decreased as compare to previous year due to shut down of manufacturing operations for last few months.

11. NA Represents "Not Applicable"

NOTE 48 - DETAILS OF BENAMI PROPERTY HELD:

The Company does not held any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder. Hence any proceeding has not been initiated or pending against the group companies for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

NOTE 49 - RELATIONSHIP WITH STRUCK OFF COMPANIES:

The company does not have transactions with companies struck off under section 248 of the companies act, 2013 or section 560 of the companies act, 1956.

NOTE 50 - REVALUATION OF PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS:

The Company has not revalued its Property, Plant and Equipment (including Right-of-Use Assets) and Intangible assets.

NOTE 51 - UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM:

(a) During the year, no funds have been advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) by the company to any other persons or entities, including foreign entities with the understanding whether recorded in writing or otherwise that the Intermediary shall 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 provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(b) During the year, the company has not received any fund from any persons or entities, including foreign entities (Funding Parties) with the understanding whether recorded in writing or otherwise that the company shall 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

NOTE 52 - UNDISCLOSED INCOME:

The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961).

NOTE 53 - DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY

The Company has not traded or invested in crypto currency or virtual currency during the financial year.

NOTE 54 - REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES:

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

NOTE 55 - COMPLIANCE WITH NUMBER OF LAYERS OF COMPANIES:

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

NOTE 56 - BORROWINGS OBTAINED ON THE BASIS OF SECURITY OF CURRENT ASSETS:

The Company does not have any sanctioned working capital limits from banks on the basis of security of current assets.

NOTE 57 - WILLFUL DEFAULTER

The Company has not been declared Wilful Defaulter by any bank or financial institution or any other lender.

NOTE 58 - LOANS OR ADVANCES IN THE NATURE OF LOANS ARE GRANTED TO PROMOTERS, DIRECTORS, KMPS AND THE RELATED PARTIES (AS DEFINED UNDER COMPANIES ACT, 2013), EITHER SEVERALLY OR JOINTLY WITH ANY OTHER PERSON.

The Company have not given any loans or advances in the nature of loans to promoters, directors, KMPS and the related partied (as defined under Companies Act, 2013), either severally or jointly with any other person.

NOTE 59 - APPROVED SCHEME OF ARRANGEMENTS

The Company has not entered into any scheme of arrangement approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.

NOTE 60 - CODE ON SOCIAL SECURITY, 2020:

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. The company will assess the impact of the Code when it comes into effect and will record any related impact after the Code becomes effective.

NOTE 61: STATEMENT OF MANAGEMENT:

(a) The non current financial assets, current financial assets and other current assets are good and recoverable and are approximately of the values, if realized in the ordinary courses of business unless and to the extent stated otherwise in the Accounts. Provision for all known liabilities is adequate and not in excess of amount reasonably necessary. There are no contingent liabilities except those stated in the notes.

(b) Balance Sheet, Statement of Profit and Loss, cash flow statement and change in equity read together with Notes to the accounts thereon, are drawn up so as to disclose the information required under the Companies Act, 2013 as well as give a true and fair view of the statement of affairs of the Company as at the end of the year and financial performance of the Company for the year under review.

Note 62: The figures of the previous year had been relied on the audited previous financial statements.

NOTE 63: The figures for the previous year have been regrouped / reclassified, wherever necessary, to make them comparable with the figures for the current year._