అకౌంట్స్ గమనికలుModern Denim Ltd.

Mar 31, 2025

(j) Provisions, contingent liabilities and contingent assets

Provisions are recognised when the Company has a present obligation
(legal or constructive) as a result of a past event and it is probable
that an outflow of resources, that can be reliably estimated, will be
required to settle such an obligation.

If the effect of the time value of money is material, provisions are
determined by discounting the expected future cash flows to net
present value using an appropriate pre-tax discount rate that reflects
current market assessments of the time value of money and, where
appropriate, the risks specific to the liability. Unwinding of the
discount is recognised in the Statement of Profit and Loss as a finance
cost. Provisions are reviewed at each reporting date and are adjusted
to reflect the current best estimate.

A present obligation that arises from past events where it is either
not probable that an outflow of resources will be required to settle
or a reliable estimate of the amount cannot be made, is disclosed as
a contingent liability. Contingent liabilities are also disclosed when
there is a possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non -occurrence
of one or more uncertain future events not wholly within the control
of the Company.

Claims against the Company where the possibility of any outflow of
resources in settlement is remote, are not disclosed as contingent
liabilities.

Contingent assets are not recognised in financial statements since
this may result in the recognition of income that may never be
realised. However, when the realisation of income is virtually certain,
then the related asset is not a contingent asset and is recognised.

(k) Foreign currency transactions

In preparing the financial statements of the Company, transactions
in foreign currencies, other than the Company''s functional currency
are recognised at the rates of exchange prevailing at the dates of the
transactions. At the end of each reporting period, monetary assets
and liabilities denominated in foreign currencies are translated at
the rate prevailing at that date. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in the
statement of profit and loss in the period in which these arise.

(l) Revenue Recognition

Revenue from Contacts with Customers
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the amount can be
reliably measured.

Sales are recognized when the significant risks and rewards of

ownership of the goods have passed to the buyer, which generally
coincides with dispatch. Revenue from the sale of goods is measured
at the fair value of the consideration received or receivable excluding
GST, net of returns and allowances, trade discounts and volume
rebates.

Revenue is recognized on satisfaction of performance obligation
upon transfer of control of promised goods or services to customers
in an amount that reflects the consideration the division expects to
receive in exchange for those goods or services.

The division satisfies a performance obligation and recognizes
revenue over time, if one of the following criteria is met:

1. The customer simultaneously receives and consumes the benefits
provided by the division''s performance; or

2. The division''s performance creates or enhances an asset that
the customer controls as the asset is created or enhanced; or

3. The division''s performance does not create an asset with an
alternative use to the division and an entity has an enforceable
right to payment for performance completed to date.

Revenue from Job work service contracts:

The revenue relating to Job Work service contracts are recognised at
point in time as control is transferred to the customer on dispatch of
goods to them and the revenue relating to supplies are measured in
line with policy set out above.

(m) Other operating revenues / other income.

(i) For all financial instruments measured at amortised cost, interest
income is recorded using the effective interest rate (EIR), which
is the rate that exactly discounts the estimated future cash
payments or receipts through the expected life of the financial
instrument to the gross carrying amount of the financial asset.

(ii) Export Incentives are recognized in the Statement of Profit and
Loss when the right to receive credit as per the terms of scheme
is established in respect of the exports made and where there is
no significant uncertainty regarding the ultimate collection of
the relevant export proceeds.

(iii) Other income is recognized on accrual basis except when
realization of such income is uncertain.

(iv) Dividend income is accounted for when the right to receive the
income is established.

(n) Employee Benefits

Short term employee benefits

Short-term employee benefit obligations are recognized as an expense
on accrual basis.

Defined contribution plans

Defined contribution plans are those plans in which an entity pays
fixed contribution into separate entities and will have no legal or
constructive obligation to pay further amounts. provident fund and
employee state insurance are defined contribution plans in which
company pays a fixed contribution and will have no further
obligation.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than
a defined contribution plan.

Company pays Gratuity as per provisions of the Payment of Gratuity
Act, 1972. The Company''s net obligation in respect of defined benefit
plans is calculated separately for each plan by estimating the amount
of future benefits that employees have earned in return for their
services in the current and prior periods; that benefit is discounted
to determine its present value. Any unrecognized past service costs
and the fair value of any plan assets are deducted. The discount rate
is based on the prevailing market yields of Indian government
securities as at the reporting date that have maturity dates

approximating the terms of the Company''s obligations and that are
denominated in the same currency in which the benefits are expected
to be paid.

The calculation is performed annually by a qualified actuary using
the projected unit credit method. When the calculation results in a
liability to the company, the present value of liability is recognized
as provision for employee benefit. Any actuarial gains or losses are
recognized in Other Comprehensive Income in the period in which
they arise.

Other long-term employee benefits

Benefits under the Company''s leave encashment constitute other
long term employee benefits.

The Company''s net obligation in respect of leave encashment is the
amount of future benefits that employees have earned in return for
their service in the current and prior periods, that benefit is discounted
to determine its present value and the fair value of any related assets
is deducted. The discount rate is based on the prevailing market
yields of Indian government securities as at the reporting date that
have maturity dates approximating the terms of the Company''s
obligations. The calculation is performed using the projected unit
credit method. Any actuarial gains or losses are recognized in profit
and loss in the period in which they arise.

(o) Income taxes
Current Tax

Current Tax is determined on income for the year chargeable to tax
in accordance on the basis of the tax laws enacted or substantively
enacted at the end of the reporting period. Current tax items are
recognised in correlation to the underlying transaction either in OCI
or directly in equity. The Company has provided for the tax liability
based on the significant judgment that the taxation authority will
not accept the tax treatment.

Deferred tax:

Deferred tax is recognised on temporary differences between the
carrying amounts of assets and liabilities in the Financial Statements
and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognised for all taxable
temporary differences. Deferred tax assets are generally recognised
for all deductible temporary differences to the extent that it is
probable that taxable profits will be available against which those
deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of
each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all
or part of the deferred tax asset to be utilized.

Deferred tax liabilities and assets are measured at the tax rates that
are expected to apply in the period in which the liability is settled or
the asset realised, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the
tax consequences that would follow from the manner in which the
Company expects, at the end of the reporting period, to recover or
settle the carrying amount of its assets and liabilities.

Deferred tax assets include Minimum Alternative Tax (MAT) paid
in accordance with the tax laws in India, which is likely to give
future economic benefits in the form of availability of set off against
future income tax liability. Accordingly, MAT is recognised as
deferred tax asset in the balance sheet when the asset can be measured
reliably and it is probable that the future economic benefit associated
with asset will be realised.

Deferred tax relating to items recognised outside profit or loss is
recognised outside profit or loss (either in other comprehensive
income or in equity). Deferred tax items are recognised in correlation
to the underlying transaction either in OCI or directly in equity.

(p) Leases

Effective from 1st April, 2019, the Company has adopted Ind AS-
116 "Lease" retrospectively with the cumulative effect of applying
this standard recognise at the date initial application.

Due to the same, the associated right-of-use assets are measured
either at the carrying amounts as if the Standard has been applied
since the commencement date or at the amount equal to the lease
liability are included in and presented as "Right to use Asset" and
"Other financial liabilities" respectively on the financial statements.
The right-of-use asset is depreciated over the shorter of the asset''s
useful life and the lease term on a straight-line basis. Lease term
includes periods of an option to extend the lease if the lessee is
reasonably certain to exercise that option and an option to terminate
the lease if the lessee is reasonably certain not to exercise that option.
Short-term leases for the underlying asset is of low value apply
exemption rules of the standards, and recognize the lease payments
associated with those leases as an expense mainly on straight-line
basis over the lease term.

The cumulative effects due to the application of this standard were
recognized on the commencement date of adoption in accordance
with the transitional arrangements, the retrospective restatement of
prior periods have not been applied.

Leases are classified as finance leases, when the terms of the lease,
transfer substantially all the risks and rewards of ownership to the
lessee. All other leases are classified as Operating Leases.
Operating Lease: Lease rentals are charged or recognised in the
statement of profit and loss on a straight-line basis over the lease
term.

Finance Lease: Assets held under finance leases are recognised as
assets of the division at their fair value at the inception of the lease
or, if lower, at the present value of the minimum lease payments.
Lease payments are apportioned between finance charges and
reduction of the lease obligation. Finance charges are charged to the
Statement of Profit and Loss, unless they are directly attributable to
qualifying assets, in which case they are capitalised in accordance
with the division''s policy on borrowing costs.

(q) Assets Held for Sale

The Company classifies assets as held for sale if their carrying
amounts will be recovered principally through a sale rather than
through continuing use of the assets and actions required to complete
such sale indicate that it is unlikely that significant changes to the
plan to sell will be made or that the decision to sell will be withdrawn.
Also, such assets are classified as held for sale only if the management
expects to complete the sale within one year from the date of
classification. Assets classified as held for sale are measured at the
lower of their carrying amount and the fair value less cost to sell.
Non-current assets are not depreciated or amortized.

(r) Impairment of non-financial assets

At the end of each reporting period, the Company reviews the
carrying amounts of non-financial assets to determine whether there
is any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss (if
any). When it is not possible to estimate the recoverable amount of
an individual asset, the Company estimates the recoverable amount
of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs of disposal
and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which the estimates of
future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is
estimated to be less than its carrying amount, the carrying amount

of the asset (or cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognised immediately in Statement
of Profit and Loss, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a revaluation
decrease.

When an impairment loss subsequently reverses, the carrying amount
of the asset (or a cash-generating unit) is increased to the revised
estimate of its recoverable amount, but to the extent that the increased
carrying amount does not exceed the carrying amount that would
have been determined had no impairment loss been recognised for
the asset (or cash-generating unit) in prior years. A reversal of an
impairment loss is recognised immediately in the Statement of Profit
and Loss, unless the relevant asset is carried at a revalued amount,
in which case the reversal of the impairment loss is treated as a
revaluation increase.

(s) Segment reporting
Identification of Segments

Operating Segments are identified based on monitoring of operating
results by the chief operating decision maker (CODM) separately
for the purpose of making decision about resource allocation and
performance assessment. Segment performance is evaluated based
on profit or loss and is measured consistently with profit or loss of
the Company.

Operating Segments are identified based on the nature of products
and services, the different risks and returns and the internal business
reporting system.

Segment Policies

The Company prepares its segment information in conformity with
the accounting policies adopted for preparing and presenting the
financial statements of the Company as a whole.

(t) Earnings Per Share (EPS)

The basic EPS is computed by dividing the profit after tax for the
year attributable to the equity shareholders by the weighted average
number of equity shares outstanding during the year.

For the purpose of calculating diluted EPS, profit after tax for the
year attributable to the equity shareholders and the weighted average
number of equity shares outstanding during the year are adjusted
for the effects of all dilutive potential equity shares.

(u) Fair value Measurement

The company measures financial instruments, such as investments
and derivatives at fair value at each reporting date.

Fair value is the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement
is based on the presumptions that the transaction to sell the asset or
transfer the liability takes place either:

• In the principal market for the asset or liability, or

• in the absence of a principal market, in the most advantageous
market for the asset or liability.

A fair value measurement of a non financial asset takes into
account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset
in its highest and best use.

The company uses valuation technique that are appropriate in
the circumstances and for which sufficient data are available to
measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.

Fair values are categorized into different levels in the hierarchy
as under:

• Level 1: Quoted (unadjusted) market prices in active markets
for identical assets or liabilities

• Level 2: Valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly or
indirectly observable.

• Level 3: Valuation techniques for which the lowest level input
that is significant to the fair value measurement is unobservable.

(v) Financial instruments

Financial assets and financial liabilities are recognized when a
Company becomes a party to the contractual provisions of the
instruments.

Initial Recognition:

Financial assets and financial liabilities are initially measured at
fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other
than financial assets and financial liabilities at fair value through
profit or loss and ancillary costs related to borrowings) are added to
or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised
immediately in statement of profit and loss.

Classification and Subsequent Measurement: Financial assets
The Company classifies financial assets as subsequently measured
at amortised cost, fair value through other comprehensive income
(“FVOCI”) or fair value through profit or loss (“FVTPL”) on the
basis of following:

• the entity’s business model for managing the financial assets
and

• the contractual cash flow characteristics of the financial asset.
Amortised Cost:

A financial asset shall be classified and measured at amortised cost
if both of the following conditions are met:

• the financial asset is held within a business model whose
objective is to hold financial assets in order to collect contractual
cash flows and

• the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

In case of financial assets at amortised costs, interest income, foreign
exchange gain or loss and impairment are recognized in Statement
of profit and loss.

Fair Value through OCI:

A financial asset shall be classified and measured at fair value through
OCI if both of the following conditions are met:

• the financial asset is held within a business model whose
objective is achieved by both collecting contractual cash flows
and selling financial assets and

• the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

Where the Company has elected to present the fair value gain on
equity instruments in other comprehensive income, there is no
subsequent classification of fair value gain or losses to profit and
loss account. Dividend from such instruments is recognized in profit
and loss account as other income where right to receive is established.
Fair Value through Profit or Loss:

A financial asset shall be classified and measured at fair value through
profit or loss unless it is measured at amortised cost or at fair value
through OCI.

All recognised financial assets are subsequently measured in their
entirety at either amortised cost or fair value, depending on the
classification of the financial assets.

Classification and Subsequent Measurement:

Financial liabilities:

Financial liabilities are classified as either financial liabilities at
FVTPL or ‘other financial liabilities’

Financial Liabilities at FVTPL:

Financial liabilities are classified as at FVTPL when the financial
liability is held for trading or are designated upon initial recognition
as FVTPL:

Gains or Losses on liabilities held for trading are recognised in the
Statement of Profit and Loss.

Other Financial Liabilities:

Other financial liabilities (including borrowings and trade and other
payables) are subsequently measured at amortised cost using the
effective interest method.

Impairment of financial assets:

The company assesses at each date of statement of financial position
whether a financial assets or group of financial assets is impaired. In
accordance of Ind AS 109, the company applies expected credit loss
(ECL) model for measurement and recognition of impairment loss.

In case of trade receivables, the Company follows a simplified
approach wherein an amount equal to lifetime ECL is measured and
recognised as loss allowance. As a practical expedient, the company
uses a provision matrix to determine impairment loss on portfolio
of its trade receivables. The provision matrix is based on its
historically observed default rates over the expected life of trade
receivables. ECL impairment loss allowances (or reversal) recognized
during the period is recognized as an expense / income respectively
in the statement of profit and loss. Provision for ECL is presented as
deduction from carrying amount of trade receivables.

For all other financial assets, expected credit losses are measured at
an amount equal to 12 month expected credit losses or at an amount
equal to lifetime expected losses, if the credit risk on the financial
asset has increased significantly since initial recognition.
Subsequently, if the credit quality of the financial asset improves
such that there is no longer a significant increase in credit risk since
initial recognition, the Company reverts to recognizing impairment
loss allowance based on 12 month ECL.

Derecognition of financial assets:

The Company derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or when it transfers
the financial asset and substantially all the risks and rewards of
ownership of the asset to another party. If the Company neither
transfers nor retains substantially all the risks and rewards of
ownership and continues to control the transferred asset, the
Company recognises its retained interest in the asset and an
associated liability for amounts it may have to pay. If the Company
retains substantially all the risks and rewards of ownership of a
transferred financial asset, the Company continues to recognise the
financial asset and also recognises associated liabilities.

On derecognition of a financial asset, other than investments
classified as FVOCI, in its entirety, the difference between the asset’s
carrying amount and the sum of the consideration received and
receivable and the cumulative gain or loss that had been recognised
in other comprehensive income and accumulated in equity is
recognised in profit or loss if such gain or loss would have otherwise
been recognised in profit or loss on disposal of that financial asset.
The Company derecognizes financial liabilities when the Company’s
obligation are discharged, cancelled or have expired. The difference
between the carrying amount of financial liability derecognized and
consideration paid and payable is recognized in the statement of
profit and loss.

On derecognition of equity investments classified as FVOCI,
accumulated gains or loss recognised in OCI is transferred to retained
earnings.

Derecognition of Financial Liabilities:

The Company de-recognises financial liabilities when and only when,
the Company’s obligations are discharged, cancelled or have expired.
The difference between the carrying amount of the financial liability
de-recognised and the consideration paid and payable is recognised
in the statement of profit and loss.

(w) Financial liabilities and equity instruments
. • Classification as debt or equity

Debt and equity instruments issued by the Company are
classified as either financial liabilities or as equity in accordance
with the substance of the contractual arrangements and the
definitions of a financial liability and an equity instrument.

• Equity instruments

An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by a Company are
recognised at the proceeds received.

Note no. 1A : Standards issued but not yet effective
The Ministry of Corporate Affairs (MCA), The MCA notified Ind AS 117
on 9 September 2024 to be applicable from 1 April 2024. However, the
same was withdrawn vide notification dated 28 September 2024 wherein
the applicability of Ind AS 117 was made subj ect to notification of IRDAI.
IRDAI has not notified Ind AS 117. Therefore, as of now, Ind AS 117 has
been issued but from when it will be applicable is uncertain. The company
is evaluating the impact of the standard on its balance sheet, statement of
profit and loss and statement of cash flows.

Note no. 1B : Significant accounting judgements, estimates and
assumptions:

The preparation of the Company''s financial statements requires management
to make judgements, estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about
these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets or liabilities affected
in future periods.

Estimates made in preparing Financial Statements:

(a) Useful life of Property, plant and equipment and intangible assets

The Company uses its technical expertise along with historical and
industry trends for determining the economic life of an asset/component
of an asset. The useful lives are reviewed by management periodically
and revised, if appropriate. In case of a revision, the unamortized
depreciable amount is charged over the remaining useful life of the
assets.

(b) Post-employment benefit plans

Employees benefit obligations are measured on the basis of actuarial
assumptions which include mortality and withdrawal rates as well as
assumptions concerning future developments in discount rates, the rate
of salary increases and the inflation rate. The Company considers that
the assumptions used to measure its obligations are approspriate and
documented. However, any changes in these assumptions may have a
material impact on the resulting calculations.

(c) Provisions and contingencies

The assessments undertaken in recognizing provisions and contingencies
have been made in accordance with Ind AS 37, ''Provisions, Contingent
Liabilities and Contingent Assets''. The evaluation of the likelihood of
the contingent events requires best judgment by the management
regarding the probability of exposure to potential loss. If circumstances
change following unforeseeable developments, this likelihood could
alter.

13.1 The Company has not redeemed preference share capital amounting to ? 650 Lakhs in view of accumulated losses. Scheme of Compromise,
Arrangement and Amalgamation u/s 230-232 of the Companies Act, 2013 is under process of approvals from concerned authorities. Based on
expected reliefs from NCLT and expert opinion taken by the management of the company, the management is of the view that the same is not
required to be redeemed and such amount is not required to be deposited in Investor Education and Protection Fund.

13.2 The Company has not paid interest on financial liability in respect of Cumulative Redeemable Preference Shares since 1996-1997. Provision for
the same for the year amounting to ? 110.75 Lakhs (previous year ? 110.75 Lakhs), upto the Balance Sheet date ? 3780.86 Lakhs [which includes
Dividend Distribution Tax of ? 569.12 Lakhs], (upto previous Balance Sheet date ? 3670.11 Lakhs, [which includes Dividend Distribution Tax of
? 569.12 Lakhs]) have not been made in view of accumulated losses. The Company is expecting waiver / relief under rehabilitation scheme
submitted to BIFR and after abatement of BIFR, Scheme of Compromise, Arrangement and Amalgamation u/s 230-232 of the Companies Act,
2013 is under process of approvals from concerned authorities. Based on expected reliefs from NCLT and expert opinion taken by the management
of the company, the management is of the view that unpaid dividend is not required to be transferred in Investor Education and Protection Fund.

13.3 The Cumulative Redeemable Preference Share holders are entitled to cumulative dividend at the rates specified. Each holder of Cumulative
Redeemable Preference Share is entiteld to one vote per share only on resolution placed before the company which directly affects rights attached
to Cumulative Redeemable Preference Shares. Since the dividend in respect of Cumulative Redeemable Preference Shares, has not been paid for
more than 2 years, Cumulative Redeemable Preference Share holders have rights to ten votes per share on every resolution placed before the
company in a meeting.

13.4 In the event of liquidation of the Company, the holder of Cumulative Redeemable Preference Share will have priority over Equity share holder in
the payment of dividend and repayment of capital.

13.5 Loans from related parties is interest free and received from the company covered u/s 189 of the Companies Act, 2013 in view of proposed
amalgamation. Since the amount received is in connection with proposed amalgamation scheme, no terms have been specified for repayment of
loans and interest. As per IND AS 109 the same is not fair valued hence Amortisation of pre received income corresponding to unwinding of
financial liability under finance cost amounting to ? 517.63 Lakhs (previous year ? 441.13 Lakhs) is not provided.

16.1 Debentures are secured by way of joint equitable mortgage of fixed assets both present and future and hypothecation of all movable assets of the
company ranking pari-pasu.

16.2 Non Convertible Debentures (Retail) amounting to ^ 309.93 Lakhs (previous year ^ 319.72 Lakhs) were redeemable on completion of 6th, 18th,
30th, 42nd and 54th months from maturity date i.e.28th December,1998 @ 30%,15%, 15%, 20% and 20% of face value respectively, as per
decision taken in the meeting of the debenture holders along with interest accrued thereon. Interest in respect of the same has remained unpaid
since 1998-99. The Company is expecting waiver/ relief under rehabilitation scheme submitted to BIFR and after abatement of BIFR, Scheme of
Compromise, Arrangement and Amalgamation u/s 230-232 of the Companies Act, 2013 is under process of approvals from concerned authorities
seeking the said waiver/ relief. Based on expected reliefs from NCLT and expert opinion taken by the management of the company, the management
is of the view that no amount is required to be transferred to the Investors Education and Protection Fund including interest thereon.

16.3 Public Fixed Deposits carry interest rate of 14 % p.a.

16.4 Company Law Board has passed the order on 21.12.2001 that ‘The repayment of fixed deposits shall be made by the Company in accordance with
the revival scheme as and when approved by BIFR under the provisions of SICA’. In view of the above, the Company has been advised that as the
repayment of the matured fixed deposits including interest thereon are covered by above referred order and the Draft Rehabilitation Scheme (DRS)
was pending for consideration before the Hon’ble Board for Industrial and Financial Restructure (BIFR) and after abatement of BIFR, Scheme of
Compromise, Arrangement and Amalgamation u/s 230-232 of the Companies Act, 2013 is under process of approvals from concerned authorities
seeking the said waiver/relief and on the basis of expert opinion taken by the management of the company, the management is of the view that no
amount is required to be transferred to the Investors Education and Protection Fund. However payment on compassionate grounds are continued
to be made as per decision of the committee formed by Hon''ble Company Law Board for this purpose.

"Disclosure of payable to vendors as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” is based on the information
available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on
requests made by the Company.

“There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no
delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest
in this regard in respect of payment made during the year or on balance brought forward from previous year."

27.1 Provision for interest for the year ? 9.24 Lakhs (Previous year ? 37.82 Lakhs) on retail non-convertible debentures have not been made as the
Company was expecting waiver / relief under rehabilitation scheme submitted to BIFR and after abatement of BIFR, Scheme of Compromise,
Arrangement and Amalgamation u/s 230-232 of the Companies Act, 2013 is under process of approvals from concerned authorities seeking the
said waiver / relief.

27.2 Provision for interest amounting to ? 48.23 Lakhs for the year (Previous year ? 85.64 Lakhs) on public fixed deposit has not been made as the
Company was expecting waiver / relief under rehabilitation scheme submitted to BIFR and after abatement of BIFR, Scheme of Compromise,
Arrangement and Amalgamation u/s 230-232 of the Companies Act, 2013 is under process of approvals from concerned authorities seeking the
said waiver / relief.

27.3 Provision for interest on financial liabilities amounting to ? 110.75 Lakhs for the year (Previous year ? 110.75 Lakhs) on cumulative redeemable
preference shares has not been made as the Company was expecting waiver / relief under rehabilitation scheme submitted to BIFR and after
abatement of BIFR, Scheme of Compromise, Arrangement and Amalgamation u/s 230-232 of the Companies Act, 2013 is under process of
approvals from concerned authorities seeking the said waiver / relief.

27.4 As per IND AS 109 the Non-Current borrowing is not fair valued and hence Amortisation of pre received income corresponding to unwinding of
financial liability under finance cost amounting to ? 517.63 Lakhs (previous year ? 441.13 Lakhs) is not provided.

Note no. 36 : Capital Commitments

There is total capital commitment of ? 82.60 Lakhs as on 31.03.2025 (Previous year ? 82.60 Lakhs), against which company has paid ? 10.52 Lakhs
(P.Y. ? 10.52 Lakhs).

Note no. 37 : Capital Management

For the purpose of Company’s Capital Management, capital includes issued equity share capital and other equity reserves attributable to equity holders.
The primary objective of Company’s Capital Management is to maximize shareholder’s wealth. The company manages it’s capital structure and makes
adjustments in the light of changes in economic environment and the requirements of financial covenants.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholder. The capital
structure of the Company is based on management’s judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain
investors, creditors and market confidence. The management and the Board of Directors monitors the return on capital. The Company may take
appropriate steps in order to maintain, or if necessary adjust, its capital structure.

Note no. 38 : Financial Risk Management

The Company’s Financial Risk Management is an integral part of how to plan and execute its business strategies. The Company’s financial risk
management is set by the Managing Board.The Company’s prinicipal financial liabilities comprise loans and borrowings, trade payables and other
payables. The main purpose of these financial liabilities is to finance the company’s operations. The company’s principal financial assets include trade
& other receivables and cash and short term deposits.
i) Credit risk

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically
assesses the financial reliability of customers, taking into account financial conditions, current economic trends and analysis of historical bad debts and
ageing of accounts receivable. Individual risk limits are set and periodically reviewed on the basis of such information.

Financial assets are wrtitten off when there is no reasonable expectations of revcovery, such as a debtor failing to engage in a repayment plan with the
Company. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the
receivable due. where recoveries are made, these are recognized as income in the statement of profit and loss.

The company has assessed that credit risk on loans and other financial assets is insignificant based on the empirical data.The credit risk on cash and
bank balances and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international
credit rating agencies.

iii) Market Risk

Market Risk mainly relates to the investment & deposits. There is no regular business of company for making investment & deposits. However,
management manage the cash resources, borrowings strategies and ensuring compliance of the same with the guidelines & directions of the
Higher Management.
a) Foreign currency risk

The company operates internationally and portion of the business is transacted in several currencies and consequently the company is exposed to
foreign exchange risk through its sales and services in overseas and purchase from overseas suppliers in various foreign currencies.

The company evaluate exchange rate exposure arising from foreign currency transaction and the company follow established risk management
policies, including the use of derivative like foreign exchange forward contracts to hedge exposure to foreign risk.

Company does not use derivative financial instruments for trading or speculative purposes.

b) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates.
In order to optimize the Company’s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs
a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total
portfolio.

According to the Company interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, the analysis is prepared assuming
the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used
when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in
interest rates.

The Company has fixed rate borrowing only and hence there is no interest rate risk.

b) Fair value hierarchy

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy,
described as follows:

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

Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

Valuation process to determine fair value

Specific valuation technique is used to determine the fair value of the financial instruments which include:

-Investment in unquoted equity shares- Lowest level input that is significant to the fair value measurement is unobservable.

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Mar 31, 2012

1. SHARE CAPITAL

1.1 Each Shareholder of Equity Share is entitled to one vote per share on a poll.

1.2 In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity shares held by the shareholder.

1.3 The Company has not paid any dividend on Cumulative Redeemable Preference Share since 1996-1997. Dividend on Cumulative Redeemable Preference Shares amounting to Rs. 110.75 lacs, (upto the period Rs. 1772.00 lacs) have not been provided in view of accumulated losses. The company expects waiver/relief under rehabilitation scheme being submitted to BIFR.

1.4 The Cumulative Redeemable Preference Share holder are entitled to cumulative dividend at the rates specified. Each holder of Cumulative Redeemable Preference Share is entiteld to one vote per share only on resolution placed before the company which directly affects rights attached to Cumulative Redeemable Preference Share. Since the dividend in respect of Cumulative Redeemable Preference Share, has not been paid for more than 2 years, Cumulative Redeemable Preference Share holder have rights to ten votes per share on every resolution placed before the company in a meeting.

1.5 In the event of liquidation of the Company, the holder of Cumulative Redeemable Preference Share will have priority over Equity share holder in the payment of dividend and repayment of capital.

2. LONG TERM BORROWINGS

2.1 Debentures, Secured Term Loans and accrued interest are secured by way of joint equitable mortgage of fixed assets both present and future and hypothecation of all movable assets of the company ranking pari-pasu subject to prior charge on the specific assets as referred to in Note no. 6.1 below. Debentures for Rs. 332.37 lacs, Secured Term Loan for Rs. 740.93 lacs and Accrued Interest there on for Rs. 538.76 lacs are further guaranteed by some of the Directors and Ex-directors.

2.2 Provision for interest amounting to Rs. 30.38 lacs (up to the year Rs. 410.18 lacs) on Optionally Fully Convertible Debentures and accrued interest convertible into 16% optionally fully convertible debentures (OFCDs) have not been made as the Company expects waiver/relief under rehabilitation scheme being submitted to BIFR.

2.3 Provision for interest amounting to Rs. 80.33 lacs (up to the year Rs. 486.01 lacs) on public retail 17% non-convertible debentures have not been provided as the Company expects waiver/relief under rehabilitation scheme being submitted to BIFR.

2.4 Debentures:

i. 17% Non Convertible Debentures (other then Retail) amounting to Rs. 459.23 lacs were redeemable in yearly (staggering) installments over a period of 8 years commencing from April 1,2001. Over the first three years from April 1, 2001, 10% of the value of NCDs were to be redeemed each year and thereafter from April 1,2004 the balance 70% of the value of NCDs were to be redeemed in equal installments over five years. Interest in respect of the same has remained unpaid since 1998-99.

ii. 16% Optionally Fully Convertible Debentures of Rs. 98.14 lacs issued were redeemable in 32 quarterly installments commencing from the quarter beginning April 1,2001 along with interest accrued thereon. The OFCDs holders have right to convert OFCDs in full/part thereof into equity shares of the company at par at any time during the currency of repayment period. Interest in respect of the same has remained unpaid since 1999-2000.

iii. 17% Non Convertible Debentures (Retail) amounting to Rs. 518.19 lacs were redeemable on completion of 6th, 18th, 30th, 42nd and 54th months from maturity date i.e. 28th December, 1998 @ 30%, 15%, 15%, 20% and 20% of face value respectively, as per decision taken in the meeting of the debenture holders along with interest accrued thereon. Interest in respect of the same has remained unpaid since 1998-99.

2.5 Secured Term loan from Financial Institutions carry interest rate of 14% p.a. Out of total outstanding, Rs. 1316.66 lacs paid towards restructring/settlement, which has been shown as "Advance against settlement" (refer note no. 10) and Rs. 333.38 lacs repayable in 2013-14 & Rs. 399.96 lacs repayable in 2012-13.

2.6 Secured Term loan from others carry interest rate of 14% p.a. Out of total Outstanding, Rs. 918.00 lacs paid towards restructring/settlement, which has been shown as "Advance against settlement," (refer note no. 10) and balance Rs. 542.00 lacs repayable in 2012-13.

2.7 Unsecured Term Loan from Financial Institutions carry interest @ 19 % p.a. and were repayable from 1998-99 in 30 monthly installments. Interest in respect of the same has remained unpaid since 1998-99. It is guaranteed by some of Directors.

2.8 Public Fixed Deposits carry interest rate of 14 % p.a.

2.9 Company Law Board has passed the order on 21.12.2001 that "The repayment of fixed deposits shall be made by the company in accordance with the revival scheme as and when approved by BIFR under the provisions of SICA'. In view of the above, the Company has been advised that as the repayment of the matured fixed deposits including interest thereon are covered by above referred order and the Draft Rehabilitation Scheme (DRS) is pending for consideration before the Hon'ble Board for Industrial and Financial Reconstruction (BIFR), the same have not remained unclaimed and unpaid within the meaning of section 205C of the Companies Act, 1956, However payment on compassionate grounds are continued to be made as per decision of the committee formed by Hon'ble Company Law Board for this purpose.

2.10 The Company is under Rehabilitation with Hon'ble BIFR under provisions of "SICA" 1985. The Company is in process of submitting Draft Revival Scheme (DRS) with Hon'ble BIFR for its approval to make the payment to public debenture holders as per DRS in full & final settlement of their entire dues on surrender of Original Debenture Certificates to the Company. In view of above the Company has been advised that Company is not required to deposit unclaimed & unpaid redemption amount of debentures and accrued interest thereon to Investor Education & Protection Fund under section 205C of the Companies Act, 1956.

2.11 Provision for interest amounting to Rs. 120.96 lacs (upto the year Rs. 783.90 lacs) on public fixed deposit has not been made as the company expects waiver/relief under rehabilitation scheme being submitted to BIFR.

2.12 Loans from Corporate bodies do not carry any interest and are repayable in 2014-15.

2.13 Compound interest, penal interest & liquidated damages have not been considered on all borrowings, amount of which is unascertainable, pending confirmation/reconciliation. The Company expects waiver/relief under rehabilitation scheme being submitted to BIFR.

2.14 Balances of secured and unsecured lenders have been taken as per books and are subject to reconciliation/confirmation pending settlement with respective lenders.

3. TRADE PAYABLES

3.1 The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 hence disclosures relating to amounts unpaid as at year end together with interest paid/payable under this Act have not been given.

3.2 Balances of Trade Payable have been taken as per books and are subject to reconciliation/confirmation and consequential adjustments, if any.

4. TRADE RECEIVABLES

4.1 Trade Receivable includes Rs. 165.40 lacs under litigation (Previous year Rs. 336.60 lacs) for which adequate provision has been made,

4.2 Balances of Trade Receivable have been taken as per books, are subject to reconciliation/confirmation and consequential adjustments, if any.

5. TAX EXPENSES

5.1 In view of accumulated losses, provision for taxation for the current year has not been made.

5.2 The Company is entitled for set off of carried forward losses and unabsorbed depreciation against the future income under the Income Tax Act. However as a matter of prudence, the Company is not recognizing the deferred tax assets as provided in the Accounting Standard 22 issued by The Institute of Chartered Accountants of India.

6. Contingent liabilities not provided for:

a) Guarantee given by the Bank on behalf of the Company Rs. 3.32 lacs (Previous year Rs. 3.32 lac).

b) Excise/Custom duty demand disputed by the Company Rs. 41.94 lacs (Previous year Rs. 41.94 lacs) against which amount paid Rs. 0.45 lacs (Previous year Rs. 0.45 lacs).

c) Value added tax/Central sales tax demand disputed by the Company Rs. NIL (Previous year Rs. 6.28 lacs).

d) Claims and liabilities against the Company not acknowledged as debts Rs. 198.13 lacs (Previous year Rs. 3.01 lacs).

e) Income tax demand disputed by the Company Rs. 128.09 lacs (Previous year Rs. 128.09 lacs) against which appeal is pending.

f) Certain pending labour cases against the Company, for which amount is not ascertainable.

g) In respect of restructured debts, future payment obligation are to be fulfilled as stipulated, failing which the original liability will fall back with interest and penal interest amount of which is not ascertainable.

7. An amount of Rs. 3.81 lacs (net credit) on account of exchange difference consequent to the realignment of rupee value in terms of foreign currency values of revenue nature is credited/debited to respective heads of accounts in Statement of Profit & Loss (Previous year Rs. 1.83 lacs).

8. The Company is a sick company within the meaning of section 3 (1) (o) of the Sick Industrial Companies (Special Provision) Act 1985 (SICA). The Board for Industrial and Financial Reconstruction (BIFR) has declared the Company as a sick Company. Accordingly, pending approval of rehabilitation proposal, the accounts of the Company have been prepared on a going concern basis.

9. Profit for the year has been arrived at after adjusting prior period debits on account of Material cost Rs. 5.07 lacs (Previous year Rs. NIL), Administrative expenses Rs. 0.97 lacs (Previous year Rs. NIL), Financial expenses Rs. NIL (Previous year Rs. 0.04 lacs) and Credits on account of Material cost Rs. NIL (Previous year Rs. 8.24 lacs).

10. The Company has only one business segment and catering mainly to the domestic market. Its revenue from overseas operations does not exceed 10% of the total revenue therefore, the disclosure as per Accounting Standard 17 is not applicable to the Company.

11. Related party disclosure as per Accounting Standard 18:

(i) Related party relationships:

(a) Where controls exist: Modern Terry Towels Ltd.

Modern Insulators Ltd.

(b) Key management personnel: Shri Sachin Ranka (Chairman & Managing Director)

(c) Relatives of key management personnel and their enterprises Where transactions have taken place: NIL

(d) Other Associates : Shubham Corporate Advisory Services Pvt. Ltd.

12. The Company has identified the integrated plant for manufacturing the fabric as its sole Cash Generating Unit (CGU). There are primary indications that the recoverable amount of CGU is less than its carrying cost, however no provision has been made for impairment of assets as required by Accounting Standard 28 "Impairment of assets" issued by The Institute of Chartered Accountants of India as the management is of the view that the recoverable amount is expected to improve in due course.

13. Previous year's figures have been regrouped and rearranged wherever necessary, to make them comparable with those of current year. Till the year ended 31st March 2011, the company was using pre-revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended 31st March, 2012, the revised schedule VI notified under the Companies Act, 1956, has become applicable to the company. The Company has reclassified previous year figures to conform to this classification. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statement. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of Balance Sheet.

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Mar 31, 2011

1. Contingent liabilities not provided for:

a) Guarantee given by the Bank on behalf of the Company Rs.3.32 lacs (Previous year Rs: NIL).

b) Excise / Custom duty demand disputed by the Company Rs. 41.94 lacs (Previous year Rs. 42.14 lacs) against which amount paid Rs. 0.45 lacs (Previous year Rs. 0.45 lacs).

c) Value added tax/ Central sales tax demand disputed by the Company Rs. 6.28 lacs (Previous year Rs. NIL) against which appeal is pending.

d) Claims and liabilities against the Company not acknowledged as debts Rs. 3.01 lacs (Previous year Rs. 2.52 lacs).

e) Income tax demand disputed by the Company Rs. 128.09 |acs (Previous year Rs. NIL) against which appeal is pending.

f) Certain pending labour cases against the Company, for which amount is not ascertainable.

g) In respect of restructured debts, future payment obligation are to be fulfilled as stipulated, failing which the original liability will fall back with interest and penal interest amount of which is not ascertainable.

2. In view of accumulated losses, provision for taxation for the current year has not been made. "'

3. Sundry debtors include Rs 336.60 lacs (Previous Year Rs 337.27 lacs) under litigation for which adequate provision have been made.

4. Pending fulfillment of terms and conditions of restructuring/settlement and/or satisfaction of charge Rs 1356.25 lacs (up to previous year Rs 5307.50 lacs) paid to various secured lenders towards restructuring / settlement, has been shown as advances recoverable in cash or kind or for value to be received and secured loan amount has been shown accordingly.

5. Anamount of Rs. 1.83 lacs(netcredit)on account of exchange difference consequent to the realignment of rupee value in terms of foreign currency values of revenue nature is credited / debited to respective heads of accounts in Profit & Loss account (Previous year Rs. 0.14 lacs).

6. Compound interest, penal interest & liquidated damages have not been considered on all borrowings, amount of which is unascertainable, pending confirmation7 reconciliation. The Company expects waiver / relief under rehabilitation scheme being submitted to BIFR

7. Dividend on cumulative redeemable preference shares amounting to Rs. 110.75 lacs (upto the year Rs. 1661.25 lacs) have not been provided in view of losses. The , Company expects waiver / relief under rehabilitation scheme being submitted to BIFR.

8. Provision for interest amounting to Rs. 30.38 lacs (up to the year Rs. 379.80 lacs) on accrued interest converted / convertible into 16% optionally fully convertible debentures (OFCDs) have not been made as the Company expects waiver/ relief under rehabilitation scheme being submitted to BIFR

9. Provision for interest amounting to Rs. 80.55 lacs, (up to the year Rs. 755.01 lacs) on public retail non-convertible debentures and Rs. 124.77 lacs (up to the year Rs. 1262.21 lacs) on public fixed deposits have not been provided as the Company expects waiver / relief under rehabilitation scheme being submitted to BIFR

10. In view of accumulated losses, Debenture Redemption Reserve has not been created.

11. a. Balances of debtors, creditors and advances have been taken as per books and are subject to reconciliation /confirmation and consequential adjustments, if any. b. Balances of secured and unsecured lenders have been taken as per books and are subject to reconciliation / confirmation pending settlement with respective lenders.

12. In the opinion of the Board of Directors, Current assets, Loans and Advances have a value on realization at least, equal to the amount at which they arc stated in Balance sheet Adequate provisions have been made for all known liabilities except stated otherwise.

13. Effect of restructuring / re-schedulement of debts, liabilities and preference share capital as per the scheme considered by the financial institutions during March, 1998 have been given in accounts. In some cases instruments are yet to be issued, pending approval / documentation,

14. In some cases, Company has defaulted in fulfilling the payment obligation of restructured debts as per schedule, however the liability is kept according to settlements as the Company is in negotiation with respective lenders.

15. Exceptional items consist of amount written back on account of settlements of some of the loans and interest thereon Rs. 6994.33 lacs (Previous year Rs. NIL).

16. The Company is a sick company within the meaning of section 3 (1) (o) of the Sick Industrial Companies (Special Provision) Act, 1985 (SICA). The Board for Industrial and Financial Reconstruction (BIFR) has declared the Company as a sick Company. Accordingly, pending approval of rehabilitation proposal, the accounts of the Company have been prepared on a going concern basis.

17. The Company Law Board has passed order on 05/12/2001 that "The repayment of fixed deposits shall be made by the Company in accordance with the revival scheme as and when approved by BIFR under the provisions of SICA,"

In view of the above, the Company has been advised that as the repayment of the matured fixed deposits are covered by the above referred order and the DRS is pending for consideration before the Hon'ble BIFR, the same are not remained unclaimed and unpaid within the meaning of section 205C of the Companies Act, 1956, and such no amounts are required to be transferred to the Investor Education and Protection Fund. However payment on compassionate ground is being made regularly as per decision of the committee formed by Hon'ble Company Law Board for this purpose.

18. The Company has not received information from venders regarding their status

19. The Company has only one business segment and catering mainly to the domestic market Its revenue from overseas operations does not exceed 10% of the total revenue therefore, the disclosure as per Accounting Standard 17 is not applicable to the Company. - '<.

20. Related Party Disclosure as per Accounting Standard 18: (i) Related Party Relationships:

(a) Where Controls exists: Modern Terry Towels Ltd. Modern Insulators Ltd.

(b) Key Management Personnel:

Shri Sachin Ranka (Chairman & Managing Director)

(c) Relatives of Key Management Personnel and their enterprises where transactions have taken place:

NIL

(d) Other Associates: ' . Shubham Corporate Advisory Services PvtLtd

21. The Company is entitled for set off of carried forward losses and unabsorbed depreciation against the future income under the Income Tax Act. However, as a matter of prudence, the Company is not recognizing the deferred tax assets as provided in the Accounting Standard 22 issued by The Institute of Chartered Accountants of India.

22. The Company has identified the integrated plant for manufacturing the fabric as its sole Cash Generating Unit (CGU). There are primary indications that the recoverable amount of CGU is less than its carrying cost, however no provision has been made for impairment of assets as required by Accounting Standard 28 "Impairment of assets" issued by The Institute of Chartered Accountants of India as the management is of the view that the recoverable amount is expected to improve in due course.

23. The figures of the previous year have been regrouped and rearranged wherever considered necessary.

24. Additional information pursuant to the provisions of paragraph 3 and 4 of part-II and part-IV of Schedule VI of the Companies Act, 19S6.