D Rights of Equity Share holders

(a) Holder of equity shares is entitled to one vote per share.

(b) The Company declares and pays dividends in Indian Rupees. The Companies Act, 2013 provides that dividend shall be declared only out of the profits of the relevant year or out of the profits of any previous financial year(s) after providing for depreciation in accordance with the provisions of the Act and the Company may transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the Company.

(c) In case of inadequacy or absence of profits in any year, the Company may declare dividend out of free reserves subject to the condition that the rate of dividend shall not exceed average of the rates at which dividend was declared by the Company in three years immediately preceding that year.

(d) In the event of Liquidation of the Company, the holders of equity shares shall be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The amount distributed will be in proportion to the number of equity shares held by the shareholders.

A Preference Shares

i. 1% redeemable non-cumulative preference shares of ' 100/- each fully paid to be redeemed at par at the end of 20 years from the date of allotment. The Company has an option to redeem the preference shares at par at any time after the end of 12 months from the date of allotment.

ii. Rights of Preference Share holders :

(a) As per Section 47(2) of the Companies Act, 2013, Preference Shareholders shall have right to vote only on resolutions placed before company which directly affect their rights attached to preference shares and any resolution for winding up of the company or for repayment or reduction of share capital shall be deemed directly to affect their rights.

(b) Voting rights of the preference shareholders shall be in the same proportion as the paid up preference share capital bears to the paid up equity share capital.

(c) Where the dividend in respect of a class of preference shares has not been paid for a period of two years or more, such class of preference shareholders shall have a right to vote on all the resolutions placed before the company.

B Non-Convertible Debenture

(i) The company has issued 4,500 (previous year 4,000) Unlisted, Secured, Unrated, Redeemable, Rupee Denominated, Non-Convertible Debentures (“the debentures”) of ' 1,00,000/- (Rupees One lakh only) each on private placement basis to part-finance the Company’s Project of High Rise Residential Apartments in the name of ‘The Sovereign’.

Major Terms of the debentures :

1 Security: (i) 4,000 debentures issued in the previous year are secured by creation of a first charge on the (a) Project Land (b) FSI thereof and the (c) Project put up/ being put up thereon, in favour of debenture trustee for the benefit of the debenture holders by execution and registration of Deed of Mortgage.

2 (ii) 500 debentures issued during the financial year 2023-24, shall be secured by creation of a first pari passu charge on the (a) Project Land (b) FSI thereof and the (c) Project put up/ being put up thereon, in favour of debenture trustee for the benefit of the debenture holders by execution and registration of Deed of Mortgage.

3 No interest is payable on the debentures.

4 Redemption and premium on redemption: On the completion of the project or 7 years from the date of allotment of debentures, whichever is earlier, the Company shall redeem the debentures along with premium (if applicable) to be calculated in a manner that the debenture holders receive Premium which is equivalent to an IRR on the Debenture Subscription Amount which is equal to the “Project IRR” as specified in the terms of debentures. The Company, at any time after completion of 12 months from the date of allotment, shall have an option to partially or fully redeem the debentures.

5 The debentures have been carried at fair value.

(ii) The company has issued 5,000 Unlisted, Secured, Unrated, Redeemable, Rupee Denominated, Non-Convertible Debentures (“the debentures”) of ' 1,00,000/- (Rupees One lakh only) each on private placement basis for financing the working capital requirements of the Company.

Major Terms of the debentures :

1 Security: The debentures are secured by creation of a first charge on the Non-Agricultural Land in favour of debenture trustee for the benefit of the debenture holder by execution and registration of Deed of Mortgage.

2 Interest is payable to debenture holders @ 12 % p.a.

3 Redemption : 5 years from the date of allotment of Debentures with Call Option. Debentures will be redeemed at par along with accrued interest on the maturity date.

4 The debentures have been carried at amortised cost.

C Term Loan from Bank

i Nature of Security:

The company has taken term loan of '23 Lacs from banks by hypothecating cars.

ii Terms of repayment:

The Loan bearing interest rate of 9.00% per annum is repayable in 60 equated monthly installments, starting from December 2019.

D Unsecured Loan

The unsecured loans include '750 Lacs in the suspense account representing amount of a cheque drawn on HDFC Bank given by the company to Bank of Bahrain & Kuwait (“BBK”) and amount credited to BBK by RBI clearing house because of the delay by HDFC Bank in returning the cheque to BBK. The proceedings at Debt Recovery Tribunal (“DRT”) were completed and order dated June 30, 2017 was passed directing BBK (Defendant No. 1) and the Company (Defendant No.2) jointly and severally

to pay the suit amount of '914.23 Lacs with further simple interest @12% per annum on principal amount of '750 Lacs. The Company had filed an appeal at Debt Recovery Appellate Tribunal, Mumbai (DRAT) against the said order, which has been heard and Order dated 26/04/2024 has been passed allowing our Appeal and the matter has been remanded back to the Presiding Officer, DRT with the direction to consider the question of jurisdiction raised by Ashima Ltd. and BBK in the O.A. together with the other issues afresh. In view of this, the said amount of '750 Lacs is continued in the suspense account.

Meanwhile, as part of recovery proceedings filed by HDFC Bank for a decretal amount of '2070.45 lacs, the Recovery Officer (“RO”) passed orders dated March 29, 2019 and April 9, 2019 allowing the application of HDFC Bank for the said decretal amount and inter alia also directed attachment of certain immovable properties of the Company situated at Ahmedabad, Kadi and Mumbai. As against the said decretal amount of ' 2070.45 Lacs, the value of the properties attached was far in excess of the decretal amount. Therefore, the company filed an application before the RO for review /recall and/or modification of the attachment order. The application was heard long back, however, no order has been passed yet.

The Company had also filed a writ petition at Hon’ble High Court of Bombay challenging the aforesaid two orders of RO dated March 29, 2019 and April 9, 2019. The Hon’ble Bombay High Court vide an Order dated November 22, 2019 allowed the Company to pursue its said appeal at DRAT without deposit of statutory amount, in view of the fact that decretal amount stood recovered from BBK due to aforesaid orders of RO and the decree was a joint and several one. The Hon’ble High Court also suspended the warrant of attachment against Company’s immovable properties and RO’s order dated March 29, 2019 till the Company’s appeal is decided by DRAT. The said appeal has been heard and a Common Order dated 26/04/2024 has been passed by the Hon’ble Chairperson DRAT in respect of Appeals filed by Ashima Ltd. and BBK and matter remanded back to the DRT with directions to consider the question of jurisdiction raised by the Defendants in the OA together with other issues afresh.

1. Note on Sales Tax demand matter

The Sales Tax authorities have issued notices for demand of Sales Tax of '748 lacs, penalty of '620 lacs and interest of ' 539 lacs, aggregating to '1906 lacs for various assessment years. The company disputes the said demand. The company has filed appeals against these notices and got stay orders against the same.

B Significant Estimates :

As regards deferred tax as per Ind AS - 12 on “Income Taxes”, there are net deferred tax assets for the past years and for the year ended March 31 2024. The company had not recognised deferred tax assets until the previous financial year considering its profitability position in the past and expected profitability of future period. The profitability of the company has improved substantially during the current financial year and based on the business prospects of the company in future, it is probable that the Company will have sufficient taxable profits in future against which the deductible temporary differences and carried forward unused tax losses including unabsorbed depreciation will be utilised. Therefore, the company has recognised previously unrecognised net deferred tax assets of ' 3500 lacs during the year under review.

Note: 38 - Disclosures as required by Ind AS 19 Employee Benefits:

The Company has classified the various benefits provided to employees as under:-

Defined benefit plans

Gratuity

The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. The gratuity plan is a funded plan administered by a recognised Trust and the Company makes contributions to the Trust. In accordance with Indian Accounting Standard 19, actuarial valuation was done in respect of the aforesaid defined benefit plans based on the following assumptions.

Economic Assumptions

The discount rate and salary increases assumed are the key financial assumptions and should be considered together; it is the difference or ‘gap’ between these rates which is more important than the individual rates in isolation.

Discount Rate

The discounting rate is based on the gross redemption yield on medium to long term risk free investments. The estimated term of the benefits/obligations works out to 3.16 Years.

Salary Escalation Rate

The salary escalation rate usually consists of at least three components, viz. regular increments, price inflation and promotional increases. In addition to this, any commitments by the management regarding future salary increases and the Company’s philosophy towards employee remuneration are also to be taken into account.

Long-Term Employment Benefits Leave Encashment:

Liability for the Leave Encashments for ' 118 Lacs (as at March 31, 2023 - ' 138 Lacs) has been fully provided for by the company.

Note: 39 - Segment Information:

(1) Identification of Segments:

Considering the nature of the Company’s business and operations, as well as based on reviews performed by chief operating decision maker regarding resource allocation and performance management, the Company has identified (1) Textiles, (2) Real Estate, (3) Investment and (4) Others as reportable segments in accordance with the requirements of Ind AS 108 -"Operating Segments”.

(2) Segment revenue and results:

Revenue and expenses directly attributable to segments are reported under each reportable segment. The expenses and income which are not directly attributable to any business segment are shown as unallocable expenditure (net of unallocable income). Unallocated expenditure consists of common expenditure incurred for all the segments and expenses incurred at corporate level.

(3) Segment assets and Liabilities:

Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. Segment assets include all operating assets used by the operating segment and mainly consist of property, plant and equipment, trade receivables, Inventories and other operating assets. Segment liabilities primarily include trade payable and other liabilities excluding borrowings.

Common assets and liabilities which cannot be allocated to any of the business segment are shown as unallocable assets / liabilities.

There are no transactions of inter-segment transfers.

Note: 42-Financial Instruments:

A Fair values hierarchy:

Financial assets and financial liabilities measured at fair value in the statements of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1 : Quoted prices (unadjusted) in active markets for financial instruments.

Level 2 : The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates.

Level 3 : If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

B Risk Management:

The Company’s activities expose it to market risk, liquidity risk, interest risk and credit risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

The Risk Management is embedded in the Company’s operating framework. The Audit Committee of the Board evaluates the Risk Management systems and the Board takes responsibility for the total process of Risk Management in the organization, which includes framing, implementing and monitoring Risk Management Plan.

The Company does not actively engage in the trading of financial assets for speculative purposes nor does it write options.

The most significant financial risks to which the Company is exposed are described below: a Credit risk:

Credit risk arises from the possibility that customer may not be able to settle its obligations as agreed. The Company is exposed to credit risk from trade receivables, bank deposits and other financial assets.

The Company periodically assesses the financial reliability of the counter party taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Party-wise credit is monitored and reviewed accordingly.

Bank deposits:

The Company maintains its Cash and cash equivalents and Bank deposits with reputed and highly rated banks. Hence, there is no significant credit risk on such deposits.

Trade Receivable:

The Company is exposed to credit risk in the event of non-payment by customers. Major part of sales is made on ‘Delivery against payment' basis, hence the credit risk is insignificant. To eliminate credit risk further, high value sales are made by adequate coverage through Letters of Credit, wherever possible, or against post-dated cheques. Clean credit is extended only in exceptional cases. The Company trades with recognized and credit worthy customers. It is the Company's policy that all customers who wish to trade on credit terms are subjected to scrutiny and periodic review. In addition, receivable balances are monitored on an on-going basis with the result that the Company's exposure to bad debts is not significant.

Further, credit risk concentration with respect to trade receivables is mitigated by the Company's large customer base, widely distributed both economically and geographically. Adequate expected credit losses are recognized as per the assessments based on historic data and prevalent market conditions.

Against doubtful trade receivables of ' 76 Lacs (Previous year - ' 76 Lacs), allowance for doubtful receivables is ' 76 Lacs as at March 31, 2024 (Previous year - ' 76 Lacs). During the year the Company has not made any allowance for doubtful receivables (Previous year: ' Nil).

b Liquidity risk:

a Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.

b Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which it operates. In addition, the Company’s liquidity management policy involves considering the level of liquid assets necessary to meet these obligations.

c Maturities of financial liabilities:

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities.

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar and GBP. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company’s functional currency. The Company uses forward contracts for high valued foreign currency transactions to hedge the foreign currency risk.

d Interest rate risk:

Interest rate risk is the risk that the fair value of future cash flow of the financial instrument may fluctuate because of the change in market interest rates.

The Company’s policy is to minimise interest rate cash flow risk exposures on long-term financing. As at March 31, 2024, the Company is not exposed to changes in market interest rates through bank borrowings as all its bank borrowings are at fixed interest rate. Also, the Company opts for investments in Fixed Deposits at fixed interest rates.

The Company has no significant exposure to price risk arising from investments in mutual funds, as the investments are usually in debt funds. Investing in equity shares of companies is based on the concept of value investing. While these investments is subject to various risks, stringent norms for investment decisions are in place for minimising risks associated to such investments.

Note: 44-Capital Management:

The Company’s capital management objectives are: a to ensure the Company’s ability to continue as a going concern. b to provide an adequate return to shareholders.

c to maintain an optimal capital structure to reduce the cost of capital.

Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company’s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.

Note: 45- Social Security, 2020 ('Code')

The code of Social Security, 2020 (‘Code’) relating to employee benefit during employment and post-employment received Presidential assent in September 2020 and its effective date is yet to be notified. The Company will assess and record the impact of Code, once its effective.

Note: 46- Previous year's figures regrouped

Previous year’s figures have been regrouped /rearranged wherever necessary.

Note: 47-Discontinued operation

As per Ind AS 105 “Discontinued Operation”, the operations of the Spinfab Division, which was closed earlier, are considered as Discontinued Operations and the financials are presented for Continuing Operations, with profitability of the Discontinued Operations disclosed as a separate line item.

Note: 48 Other Statutory Information

(i) The company does not hold any benami property as defined under Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder. No proceeding has been initiated or pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

(ii) The company has not entered into any transaction with Struck off companies under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956. Further, there is no balance outstanding with struck off companies.

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

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

(v) 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 (Such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(vi) The Company is in compliance with number of layers prescribed under clause (87) of section 2 of Companies Act, 2013 read with the companies (Restriction on Number of Layers) Rules, 2017.

(vii) As on March 31, 2024 there is no unutilised amounts in respect of any long term borrowings from banks and financial institutions. The borrowed funds have been utilised for the specific purpose for which the funds were raised.