2.14 Provisions:

Provisionsare measured at the present value of the management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the liability. The increase in the provisions due to the passage of time is recognized as interest expenses. Provision for litigation related obligation represents liabilities that are expected to materialize in respect of matters in applicable cases.

2.15 Employee benefits:

• The Company’s contribution to Provident Fund and pension fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

• Gratuity is accounted for on actual payment basis.Accordingly, a payment of Rs.56,49,761/- has been made on actual payment basis to the factory workers during the current year.

2.16 Dividend:During the year, the company has not declared the dividend on its shares.

2.17 Contribution to Equity:

Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.18 Earnings per share:

1. Basic earnings per share is calculated by dividing:

• The profit attributable to owners of the company

• By the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year.

2. Diluted earnings per share

• Diluted earningsper share adjusts the figures used in the determination of basic earnings per share to take into account:

• The after ’income Tax’ effect of interest and other financing costs associated with dilutive potential equity shares, and

• The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares

2.19 Research and Development:

Revenue Expenditure on research and development is expensed in the period in which it is incurred. Capital expenditure on research and development is shown as additional fixed assets.

2.20 Information pertaining to Profit and Loss Account :

- There were no foreign currency transactions.

2.22 Contingent Liability and Commitments:

• A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

• A present obligation arising from past events, when no reliable estimate possible;

• A possible obligation arising from pastevents, unless the probability of outflow of resources is remote.

2.23 Critical estimates and Judgments:

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgment in applying the Company’s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of item which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statement.

The areas involving critical estimates or judgments are:

I. Estimation of current expense and payable

II. Estimation of defined benefit obligations

III. Allowance for uncollected accounts receivable and advances-Trade receivable do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrevocable amounts. Individual trade receivables are written off when management deems them not to be collectible.

Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the expected life of the financial assets.

Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

2.24 Corporate Social Responsibility (CSR) Expenditure

In view of continuous losses, the Company has not incurred any expenditure on this aspect during the year under audit.

Through its defined benefit plans, the company is exposed to a number of risk, the most

significant of which are detailed below;

> Interest rate risk: The plan exposes the Company to the risk of change in interest rate of the borrowings

> Salary Escalation Risk: The present value of the defined benefit is not calculated with the assumption of salary increase rate of plan participants in future.

> Demographic Risk: The Company has to use certain mortality and attrition in assumption in valuation of the liability. The company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

> Asset Liability Mismatching or Market Risk: MarketRisk is the risk that changes in market prices such as the prices of cotton and yarn largely depend upon the changes in the market prices.

> Financial Risk Management Objectives and Policies: The Company’s activities expose it to a variety of financial risks, market risk, credit risk and liquidity risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company’s financial liabilities comprise of borrowings, trade payable and other liabilities to manage its operation and financial assets includes trade receivables and other receivables etc. that arise from its operations

> Credit Risk:Credit risk refers to the risk of default on its obligation by the customer / counter party resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is carrying value of respective financial assets. Trade receivables and unbilled revenue are typically unsecuredandarederived from revenue earned from customers. Credit risk has always been managed by each business segment through credit approvals establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in normal course of business. On account of adoption of Ind AS 109 the Company uses expected credit loss model to assess the impairment loss or gain.

> Liquidity Risk: The Company’s principle sources of liquidity are cash and cash equivalents, current investments and the cash flow that is generated from operations. Presently the Company suffers from inadequacy of working capital to meet its current requirements. Accordingly, liquidity risk is perceived but management is trying to find out the end and means to augment the same. The Company is closely monitoring its liquidity position to maintain adequate source of funding.

> Previous period’s figures have been regrouped/ rearranged wherever necessary in order to confirm to the current period’s classification.

for and on behalf of the Board of Directors Chartered Accountants,

G M PAWLE AND ASSOCIATES For and on Behalf of the Board.

CHARTERED ACCOUNTANTS Katare Spinning Mills Limited

FRN: 160253W

SD/- SD/- SD/-

GANESH M PAWLE Kishore T. Katare Sou V. K. Katare

Proprietor Managing Director Director

ICAI Membership No :032561 DIN 00645013 DIN 1443784

Solapur, Solapur Solapur

Date : 30.05.2024 Date:30.05.2024 Date : 30.05.2024

UDIN:24032561BJZXLT6803

SD/- SD/-

K. K. Katare Bhagyshree Rawani

CFO Company Secretary

Solapur Solapur

Date : 30.05.2024 Date : 30.05.2024